WASHINGTON, D.C. (The Thursday Times) — Pakistan consumes more energy per unit of economic output than any other country in the region, according to the World Bank’s latest report ‘Pakistan Energy Efficiency, Industrial Energy Efficiency and Decarbonization (Ee&D)’. The report states that Pakistan’s energy intensity stands at 4.2 megajoules (MJ) per US dollar of GDP—more than double that of Bangladesh (1.9 MJ/USD) and significantly higher than Sri Lanka (1.7 MJ/USD).
This inefficiency underscores a pressing need for energy-saving reforms, especially in the industrial sector, which accounts for 37% of the country’s total energy use. The report highlights that surging energy costs—including a doubling of electricity tariffs and a fivefold hike in gas prices—have intensified operational pressures across industries, making energy efficiency investments not just beneficial but essential.
With over 14 million tonnes of oil equivalent (MTOE) consumed in 2023, Pakistan’s industry remains heavily reliant on coal and other high-emission energy sources. This dependence makes industry a significant contributor to both air pollution and greenhouse gas emissions. Pakistan’s carbon intensity of industrial energy use is nearly 38% higher than North America’s and 50% higher than the EU’s, at 55.13 grams of CO₂ per MJ.
The country’s Nationally Determined Contributions (NDCs) under the Paris Agreement aim to reduce industrial emissions by 5.33 metric tonnes of CO₂ equivalent by 2030. The roadmap for this includes modernising equipment, improving process efficiency, and conducting energy audits in high-emission sectors. However, misconceptions remain a barrier: many firms believe that energy efficiency and decarbonisation raise costs and threaten competitiveness, particularly when the latter term is used.
The World Bank notes that this perception is misleading. While some upgrades may involve upfront costs, the long-term savings in energy bills and operational efficiency ultimately reduce production costs. Still, policy and financial obstacles remain. Many banks lack expertise in evaluating energy-saving technologies, and the Energy Conservation Fund is underfunded for the scale of reform needed—especially for SMEs, who face the biggest hurdles in accessing credit.
To realise Pakistan’s industrial potential and climate commitments, the report urges clear policy direction, incentives for efficiency, and robust financing mechanisms. Integrated EE&D policies could enhance competitiveness, reduce emissions, and help Pakistan transition to a low-carbon, energy-secure future.
