At a workshop, they said that after the graduation of the country from least developed to developing in 2026, attaining energy efficiency would not only be crucial from an economic outlook, but also for meeting the environmental, social and governance requirements of global stakeholders. The commerce ministry arranged the workshop on ‘LDC graduation and implementation of action plan: transition towards efficiency and green energy in industries in Bangladesh’ at the Foreign Service Academy in the capital Dhaka.

Speakers at the workshop suggested that the government should go for introducing carbon border adjustment mechanism to remain competitive on the global market as the carbon pricing would start applying as of January 1, 2026 in the European Union. ‘Now we are complying with 27 international conventions for enjoying duty-free market access in the European Union, but after the LDC graduation, Bangladesh would have to comply with 32 conventions including the Paris Climate Accords,’ commerce ministry senior secretary Tapan Kanti Ghosh said. Strategies should have to be set keeping the geopolitical trend, global obligations and national aspiration in mind, he said.

Ijaz Hossain, a former professor at the Bangladesh University of Engineering and Technology, made a presentation in the event, recommending that the government set energy efficiency standards for industries to ensure less carbon emission. He also suggested compulsory auditing and environmental management system for medium and large industries. Many countries are incentivising industries for promoting energy efficiency, but Bangladesh has imposed duty on the imports of solar panel and other equipment, he said. Ijaz also urged the government to make financial institutions accustomed to finance energy saving projects.

Mohammad Abdur Razzaque, chairman of the Research and Policy Integration for Development, said that after the LDC graduation, 11.6 per cent duty might be applicable to Bangladeshi readymade garments in the EU market and if the carbon tax was imposed, the total duty burden would be 18-20 per cent. He said that the price of carbon stood at $100 dollar a tonne in February, which was almost 7 per cent tariff equivalent. ‘If the tax burden is 18-20 per cent, Bangladesh’s RMG exports to the EU might fall by 20 per cent,’ the economist said. Md Tofazzel Hossain Miah, principal secretary to the prime minister, said that the carbon border adjustment mechanism was becoming a big issue and Bangladesh would have to consider it.

He said that energy efficient industry should be incentivised to attain the goal of energy conservation. Tofazzel said that after the graduation, it would not be possible to provide direct incentive to industry but the government would give indirect incentive through development. He also said the government provided tax facilities to the domestic industry and investors got benefit, but there was a question whether the consumers were benefited from the incentive. ‘If we think about the geopolitical situation, Bangladesh is in a position to become a manufacturing hub as many countries are shifting from China,’ Tapan said. Regarding global obligations, if Bangladesh wants to get GSP Plus in the EU market after its graduation, the country will have to comply with Paris agreement, he said. The commerce secretary said that under the Paris agreement, energy efficiency and green energy would have to be maintained strictly.

‘Our national aspiration is to become higher income country by 2041 and to achieve the goal, Bangladesh would have to be a $3 trillion dollar economy,’ Tapan said. To become $3 trillion economy, Bangladesh’s exports would have to more than $800 billion and the use of energy would jump to increase the production capacity, he said. At this stage, export-oriented industries will need to move towards renewable energy in order to gain competitive advantage on the global market, he said.

‘Setting up solar panel in all readymade garment industry could save 5,000 megawatts of electricity, but we cannot do it due to lack of supportive policy,’ the commerce secretary said. There is a room for making changes in policies to attain energy efficiency and conservation as 58 per cent duty on solar accessories is not justified, Tapan added. Shams Mahmud, a director of the Bangladesh Garment Manufacturers and Exporters Association, said that the government was increasing the price of energy, but quality electricity was yet to be ensured.

He demanded making energy audit mandatory and 2 per cent waiver on electricity bill for the energy efficient industry. ‘When renewable energy is being incentivised all over the world, Bangladesh is imposing high duty on the process. Three years ago, the duty on the import of solar accessories was 15 per cent and now it has increased to 58 per cent,’ a former member of the Sustainable and Renewable Energy Development Authority Sidique Zobair said. He urged the government to bring financing of renewable energy projects under the regular banking practices.

News Link: Policy change needed to attain energy efficiency: stakeholders