The need to tackle climate change necessitates an increase in energy efficiency. Global energy intensity has been declining annually since 2015, with significant implications for businesses, governments, consumers, and the environment. Energy security, climate change, and economic stability are more pressing than ever, and both developed and developing countries must take action to address these issues amid rising concerns over energy price volatility and the worldwide focus on reducing carbon dioxide (CO2) emissions.

In developing countries, where energy consumption and the search for clean energy sources continue to grow, energy efficiency is becoming an increasingly important tool for both financial stability and energy security. Furthermore, in developing countries like Bangladesh, energy efficiency has emerged as a crucial component, owing to its commercial and industrial competitiveness and energy security advantages. In addition, the environmental benefits, such as lowering CO2 emissions, make it increasingly valuable.

In FY23, over 10.35 percent of Bangladesh's GDP was derived from its ready-made garment (RMG) industry. This sector employs millions of people and is the main driver of economic growth. Also, in terms of satisfying the increasing demand for environmental, social, and governance (ESG) standards for international clients, energy efficiency is essential for Bangladesh's industries. For example, Bangladeshi garment manufacturers need to meet foreign consumers' requirements to reduce greenhouse gas (GHG) emissions.

However, the pattern of energy use in Bangladesh indicates a significant reliance on non-renewable resources. Recent data shows that the industrial sector alone is responsible for a large amount of the overall energy consumption, with textiles, clothing, and chemicals being the main contributors. Collectively, the garment (15.4 percent), textile (12.4 percent), and chemical fertiliser (12.2 percent) sub-sectors account for over 40 percent of the total energy consumption of the industrial sector.

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Strengthening our blue economy

Given this high level of consumption, energy-saving strategies could significantly lower costs and improve these businesses' competitiveness globally. Limiting energy use in the industrial sector lowers operational costs, boosts economic efficiency, and frees up capital for growth and innovation. Reducing CO2 emissions and other pollutants also encourages environmental responsibility and helps the country meet its environmental commitments under international agreements. By lowering dependency on foreign fuels and increasing energy efficiency, national energy security and stability can be improved. Effective energy use also boosts Bangladeshi products' competitiveness in the global market, where sustainability is increasingly important for cooperation and trade.

Although energy efficiency has many advantages, several obstacles hinder its widespread use in the industrial sector of Bangladesh. Many industrial operators are unaware of the financial and environmental advantages of energy efficiency, and there is a lack of qualified workers to handle and deploy these technologies. Another major obstacle is the high upfront cost of energy-efficient technologies and the absence of financial incentives. Furthermore, energy performance requirements and incentive gaps persist, while enforcement of some laws to foster energy efficiency remains weak. Another barrier is the challenge for businesses to shift to modern energy-efficient systems without major investment and technical know-how, as many still cling to outdated equipment and manufacturing practices.

One of the key obstacles industries face is the high upfront costs associated with implementing energy-efficient technology. The swift development of energy-efficient technologies creates a knowledge gap since some industries do not have the expertise needed for successful deployment.

Existing infrastructures and legacy systems in industries may not readily integrate with newer, more energy-efficient technologies. Moreover, industries may be reluctant to comply with new laws or mandated guidelines meant to increase energy efficiency. In addition, a lack of knowledge about the advantages and opportunities accessible to organisations is a widespread obstacle to energy efficiency. A major gap still exists in the application of standardised frameworks for energy efficiency.

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Blue economy for Bangladesh's sustainable development

Governments worldwide understand the critical significance of energy-efficient technologies in combating climate change and decreasing industrial energy usage. Tax incentive schemes can encourage businesses to invest in energy-efficient equipment. Grants can fund projects that improve energy efficiency, encourage renewable energy integration, and develop novel technology with environmental benefits. Providing funding channels, incentives, and support systems helps reduce the initial investment burden. Mandatory energy efficiency targets encourage businesses to invest in technological upgrades, operational improvements, and environmentally friendly practices. International collaborations enable the exchange of knowledge and experiences, allowing countries to learn from one another's successes and failures in boosting energy efficiency.

Moreover, collaborative projects bring together experts from several countries, encouraging innovation and the development of cutting edge technology that improves energy efficiency and promotes waste reduction to help develop a more sustainable and environmentally conscious industrial landscape. Governments should foster a conducive environment for joint ventures, research collaborations, and knowledge-sharing. Also, increasing investment in research and development can address new technical problems and gaps, encourage innovation in energy-efficient technology, enhance existing solutions, and develop new techniques.

As Bangladesh aims to become a higher-middle-income country and be increasingly integrated into the global economy, maintaining growth and competitiveness will depend heavily on efficient energy use. To remove obstacles and realise the full potential of energy efficiency, government regulations, business dedication, and international assistance must come together. It's time to take action. For industries, the economy, and future generations, the risks are high, but so are the rewards.

Afia Mubasshira Tiasha is senior research associate at the South Asian Network on Economic Modeling (SANEM). She can be reached at [email protected].

Views expressed in this article are the author's own. 

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