Mohammad Rabiul Kabir, Associate Professor, Stamford University Bangladesh, & Sustainability Consultant
Bangladesh faces a deepening energy crisis, driven by fuel shortages, rising import costs, and geopolitical tensions around the Strait of Hormuz, a critical global energy chokepoint. Any disruption in this corridor affects crude oil and LNG supplies, driving up costs and threatening industrial stability. The country spends nearly $7 billion annually on fossil fuel imports, placing heavy pressure on the economy, particularly the ready-made garments (RMG) sector—the backbone of exports and employment.
The RMG industry is highly vulnerable. Frequent power outages, rising LNG prices, and declining domestic gas reserves increase production costs and disrupt supply chains. Many factories rely on diesel generators, raising both costs and emissions, while unequal gas tariffs and underdeveloped LNG infrastructure further undermine competitiveness, especially for newer and smaller factories.
Seasonal demand adds further strain. Boro cultivation alone consumes 10 lakh tonnes of diesel annually, about 15% of total imports, costing nearly $1 billion, intensifying competition for limited energy resources. Prioritizing energy efficiency across high-impact sectors like RMG is therefore essential.
Despite these challenges, the sector has made notable progress. Bangladesh hosts the highest number of LEED-certified green garment factories, which adopt energy-efficient designs, natural lighting, improved insulation, and renewable energy solutions. Rooftop solar can reduce industrial diesel and LNG use by 15–20%, while efficiency measures in a typical factory consuming 200,000 kWh monthly at Tk 10/kWh can save Tk 300,000 per month, or Tk 3.6 million annually—funds that can be reinvested in training, sustainability, or machinery upgrades.
However, isolated efforts are not enough. A Just Transition must be treated as a strategic imperative—a coordinated shift from fossil fuel dependence to cleaner energy that balances economic growth, social equity, and environmental sustainability. For the RMG sector, this means reducing emissions while ensuring that workers, smaller factories, and emerging clusters are included, so no one is left behind. It strengthens energy security, enhances competitiveness by aligning with global sustainability standards, and ensures resilience across the sector.
Achieving this requires coordinated action from all stakeholders:
- Government: Lead with fair gas tariffs, expanded renewable infrastructure, low-interest green financing, tax incentives, streamlined approvals, net metering, and public-private partnerships.
- Factories: Adopt energy-efficient machinery, rooftop solar, and sustainable production practices, including circular economy measures.
- Global brands: Provide technical support, enforce sustainability standards, and maintain sourcing agreements rewarding low-carbon production.
- Financial institutions: Expand access to green financing, de-risk investments, and support factories of all sizes in renewable adoption.
- International organizations and development partners: Provide climate finance, technology transfer, and policy guidance.
System-wide shifts are also critical. Transitioning transport to electric mobility and expanding solar irrigation potentially saving 10 lakh tonnes of diesel annually—can reduce national energy demand. Workforce training and ESG compliance will ensure the transition remains inclusive and future-ready.
Reliable, affordable energy is essential for RMG resilience. By embracing a Just Transition as a strategic national priority, led by the government and supported by factories, brands, financial institutions, and international partners, Bangladesh can turn energy vulnerabilities into opportunities—strengthening competitiveness, ensuring sustainability, and securing long-term growth for its most vital industry.
