RMG faces carbon lock-in Warns CPD
Bangladesh’s garment industry could strengthen its competitiveness and better manage energy costs by expanding renewable energy, but entrenched dependence on existing machinery, financing structures and regulations is making the transition to lower-carbon production more difficult, a new study by the Centre for Policy Dialogue (CPD) has found.
The study warns that incremental energy-efficiency measures alone will not be enough to overcome the sector’s structural “carbon lock-in”, as investment decisions and production technologies continue to reinforce dependence on energy-intensive systems.
The findings were presented at a dialogue titled “Industrial Decarbonization in the RMG Sector: How to Take it Forward?” at the BRAC Centre in Dhaka on Sunday (August 16).
The event was part of CPD’s National Dialogue on Industrial Decarbonization series.
CPD Programme Associate Sami Mohammad presented the paper, “Renewable Energy as a Competitiveness Strategy for Industrial Decarbonization in Bangladesh’s RMG Sector”, while CPD Research Director Khondaker Golam Moazzem chaired the session.
The study draws on primary data from 350 RMG factories, covering 78 types of machinery across nine production sections, making it, according to the researchers, the largest factory-level production and energy dataset assembled for Bangladesh’s garment industry.
RMG faces mounting carbon pressure
The research estimates that the RMG sector accounts for 15.4% of Bangladesh’s total greenhouse gas emissions.
The industry has pledged to reduce emissions by 30% by 2030 under the UN climate framework.
The pressure to decarbonise is also increasing as Bangladesh prepares for LDC graduation, while the European Green Deal, the EU’s Carbon Border Adjustment Mechanism (CBAM) and growing buyer demands for Scope 3 emissions reductions are reshaping market requirements.
The study found that capital and energy act as complements rather than substitutes in garment production.
In other words, expanding machinery under existing technologies tends to increase energy consumption rather than reduce it — what the researchers describe as an empirical indication of technological lock-in.
Machinery creates uneven savings potential
Not all machinery offers the same scope for energy savings, according to the study.
It identified a group of “irreplaceable” machines, concentrated largely in the sewing category.
Sewing machinery accounts for 85.2% of installed machine capacity, but replacing it would generate less than 3% of potential energy savings.
By comparison, cutting machinery represents only 5.5% of the total machine stock, but accounts for 27.3% of the sector’s potential energy savings.
Washing and dyeing, meanwhile, was identified as the most energy-intensive stage of production despite representing a relatively small share of the machinery footprint.
The findings suggest that simply replacing large numbers of machines may not deliver the greatest emissions reductions.
Instead, investment needs to be directed towards production categories where technological substitution can generate the largest energy savings.
Solar can reduce energy-price risks
The study found rooftop solar to be financially viable for garment factories and capable of reducing exposure to volatile LNG-linked energy prices.
A Monte Carlo simulation showed that renewable energy offsets could reduce energy-cost volatility for 96% of factories.
However, the researchers cautioned that solar power alone cannot address gas-fired thermal processes, particularly those used in washing and dyeing.
A portion of the sector’s emissions will therefore remain beyond the reach of current renewable electrification technologies.
The estimated cost of implementing the recommended machinery reallocation ranges between Tk6,604 crore and Tk13,209 crore.
The financial burden would fall disproportionately on larger factories, which account for more than 70% of the total estimated cost.
CPD calls for targeted investment
The study recommends directing machinery-substitution incentives towards evidence-based categories such as cutting and finishing, where the potential energy savings are comparatively high.
It also calls for renewable electrification to be expanded alongside research and development into lower-energy sewing technologies.
For smaller factories with limited access to capital, the study recommends targeted blended finance to help them invest in cleaner technologies without creating excessive financial pressure.
The researchers also urged policymakers to move away from regulatory systems focused mainly on procedural compliance and towards outcome-based regulation, supported by measurable and transparent emissions reporting.
Speakers at the dialogue said decarbonising Bangladesh’s RMG sector would require coordinated technological, financial, institutional and behavioural changes.
They stressed that isolated efficiency measures or partial interventions would not be sufficient to break the industry’s existing carbon lock-in, particularly as global buyers and trade regulations increasingly link competitiveness with environmental performance.
For Bangladesh’s export-dependent garment sector, the study suggests that decarbonisation is therefore becoming not only an environmental obligation but also a competitiveness strategy, with the ability to control energy costs and meet emerging international carbon requirements increasingly tied to future market access.
