Dhaka: Bangladesh’s garment sector can significantly improve cost predictability and competitive standing by embracing renewable energy, though persistent “carbon lock-in” due to existing machinery, financial structures, and regulatory frameworks presents a formidable barrier, a recent study by the Centre for Policy Dialogue (CPD) has revealed.
According to United News of Bangladesh, the study’s findings were unveiled during a dialogue titled “Industrial Decarbonization in the RMG Sector: How to Take it Forward?” at the BRAC Centre, forming part of CPD’s National Dialogue on Industrial Decarbonization series. The dialogue highlighted that the transition from traditional to renewable energy sources cannot be achieved through incremental efficiency improvements alone.
Sami Mohammad, Programme Associate at CPD, presented the research paper, “Renewable Energy as a Competitiveness Strategy for Industrial Decarbonization in Bangladesh’s RMG Sector,” with Khondaker Golam Moazzem, CPD’s Research Director, chairing the event. The study, based on primary data from 350 RMG factories covering 78 types of machinery across nine production sections, is the most extensive factory-level production and energy dataset ever assembled for the sector.
The research indicates that the RMG sector is responsible for 15.4 percent of Bangladesh’s total greenhouse gas emissions and has committed to a 30 percent reduction in emissions by 2030 under the UN climate charter. The sector faces increasing pressure from the European Green Deal, the EU’s Carbon Border Adjustment Mechanism, and Bangladesh’s upcoming graduation from LDC status, in addition to rising demands from buyers for Scope 3 emissions reductions.
Econometric modeling within the study revealed that capital and energy function as complements in RMG production, with the expansion of machinery under current technology increasing energy use rather than reducing it. This scenario is described as the empirical signature of technological lock-in by the researchers.
The study identified sewing machines as “irreplaceable,” despite accounting for 85.2 percent of installed machine capacity, they offer less than 3 percent of potential energy savings from substitution. Conversely, cutting machinery, which makes up only 5.5 percent of the machine stock, accounts for 27.3 percent of total savings potential. Washing and dyeing processes were noted as the most energy-intensive stages of production.
The research further indicated that rooftop solar is financially viable and can mitigate the impact of fluctuating LNG-linked energy prices, with a Monte Carlo simulation demonstrating that renewable offsets reduce cost volatility for 96 percent of factories. However, solar energy is not a solution for gas-fired thermal processes used in washing and dyeing, leaving certain emissions unaddressed by current renewable electrification methods.
The cost of implementing the study’s recommended machinery reallocation ranges from Tk 6,604 crore to Tk 13,209 crore, with the largest factories bearing over 70 percent of the sector-wide financial burden. The study advocates for directing substitution incentives toward well-researched categories like cutting and finishing, advancing renewable electrification alongside R and D for lower-energy sewing technology, targeting blended finance for smaller factories, and transitioning regulation from procedural compliance to measurable emissions reporting.
Speakers at the dialogue emphasized that decarbonizing the RMG sector necessitates coordinated technological, financial, institutional, and behavioral interventions, asserting that partial measures alone will not suffice to overcome the sector’s carbon lock-in.