ISLAMABAD: The World Bank, in a new report, has designed strategies for five key industrial sectors in Pakistan, highlighting significant opportunities for energy efficiency and decarbonisation to help the country manage soaring energy costs and meet its climate goals.

The report ‘Pakistan Energy Efficiency: Industrial Energy Efficiency and Decarbonisation (EE&D)’, outlines strategies, targeting the cement, steel, fertiliser, textile, and paper and pulp industries.

These plans aim to advance Pakistan’s energy conservation objectives and shape policy discussions between the WB Group and the government.

The strategies are based on a comprehensive study the bank conducted from mid-2022 to 2023.

While some manufacturers have already implemented EE&D technologies, the report identified major information, policy and financial barriers hindering wider adoption.

“Many companies in Pakistan believe that investments in energy efficiency raise production costs and erode competitiveness,” the report noted. “This wariness substantially increases when the term ‘decarbonisation’ is used instead of ‘energy efficiency’.”

Textile

In the textile industry, the dyeing and finishing stages are the most energy-intensive, offering the greatest potential for EE&D gains.

It can be achieved through multiple pathways such as energy efficiency and conservation interventions, fuel switching, electrification of heat, process improvement, implementing circularity and deploying innovative technologies.

According to the bank, the existing technologies can save 50pc to 60pc energy and cut emission by up to 13pc.

Cement, fertiliser

Several Pakistani cement plants have already implemented EE&D interventions, including installing waste heat recovery systems and adopting alternative energy sources.

The WB estimates that the industry can further reduce its emissions impact by 3pc to 35pc and decrease energy consumption by 6pc to 20pc by adopting existing and emerging technologies.

The fertiliser sector’s heavy reliance on natural gas makes it vulnerable to price volatility.

The report suggests that government policies providing a fixed and considerably low gas price for fertiliser manufacturers discourage investments in energy efficiency.

Steel, paper and pulp

All steel in Pakistan is produced from scrap metal in an electric induction furnace, the more efficient of the two applicable technologies.

The World Bank suggests that additional investments could reduce emissions from steel plants by 5pc to 12pc and lower energy consumption by 8pc to 10pc.

A better understanding of the financial impacts of decarbonisation could prompt more interest in these investments, the report added.

Paper and pulp industry has seen a compound annual growth rate of 7.2pc over the past five years. While some plants have invested in efficiency measures, the sector can further improve by adopting new technologies.

Published in Dawn, July 21st, 2025