ISLAMABAD: Pakis­tan lacks a central mechanism for monitoring energy efficiency in its steel sector, making it difficult to measure progress or tap into global green financing and carbon credit opportunities, according to a new World Bank report.

The report, titled Steel Sector: Energy Efficiency and Decarbonisation, released under the Pakistan Sustainable Energy Series, highlights several barriers hindering sustainable development in the country’s steel industry. Chief among them is a communication gap between policymakers and industry stakeholders, which continues to obstruct the formulation of effective policies.

While large steel producers have formed an industrial association to liaise with the government, the World Bank notes that key challenges remain unaddressed. These include unchecked smuggling of steel from neighbouring countries, limited access to imported scrap, and inadequate oversight of quality standards among manufacturers in the informal sector.

The report finds that most steel firms lack the technical knowledge and expertise to make informed decisions about energy-efficient investments. Consequently, outdated and high-emission technologies remain widely used, particularly in the informal segment of the industry.

Given that energy is one of the most significant cost components in steel production, a clearer understanding of the financial implications of decarbonisation could drive greater interest in adopting cleaner technologies. However, the report states that awareness of process optimisation technologies remains very limited.

Published in Dawn, June 27th, 2025