Bangladesh on Track to Achieve Energy Efficiency Goals Ahead of 2030, IEEFA Report Finds

Bangladesh’s decade-long efforts to improve energy efficiency are showing significant results, with the country on course to achieve its 2030 targets ahead of schedule, according to a new report by the Institute for Energy Economics and Financial Analysis (IEEFA).

Titled “Bangladesh’s Energy Efficiency Goals Within Reach”, the report, authored by Shafiqul Alam, Lead Energy Analyst for Bangladesh, IEEFA South Asia, highlights that targeted energy efficiency measures have saved the country billions of dollars in fossil fuel imports while delivering economic and environmental benefits.

Between FY2014-15 and FY2023-24, Bangladesh’s energy efficiency improved by 13.64%, moving towards the 2030 target of 20%. In FY2023-24 alone, energy efficiency gains helped the nation reduce fossil fuel consumption by 7.02 million tonnes of oil equivalent, saving around USD 3.34 billion in import bills.

The report notes that progress was initially uneven but accelerated after the global energy price shocks and supply disruptions in FY2021-22, which made energy security and efficiency an urgent national priority. The Energy Efficiency and Conservation Master Plan, developed in 2016, laid the foundation for this progress.

Alam highlighted that Bangladesh’s average annual energy efficiency improvement rate of 1.52% is likely to allow the country to meet its 2030 target a year early. The report also indicates that the updated Nationally Determined Contributions (NDCs), which set an energy efficiency target of 19.2% by 2035 from 2022 levels, could similarly be achieved ahead of schedule.

Household and industrial sectors, responsible for two-thirds of national energy consumption, offer further potential for efficiency gains. The widespread adoption of LED lighting, replacing compact fluorescent lamps and incandescent bulbs, and the increasing use of energy-efficient air conditioners, are cited as key examples.

Alam emphasized the importance of energy efficiency labels to drive appliance adoption, particularly amid information gaps on minimum energy performance standards. He also called for prioritizing efficiency enhancements in industrial motors, motor-driven systems, captive generators, and transitioning from gas to electric boilers. In the commercial sector, passive building design and energy-efficient cooling are key to reducing energy demand.

The report also highlights high import duties—around 62% on LED components and higher duties on inverter compressors—as a barrier to wider adoption of efficient appliances, recommending government action to make energy-efficient technologies more affordable for consumers.

Recommendations from the report include:

-Conducting periodic public awareness programmes on energy efficiency.

-Expanding energy savings targets to more large-scale energy consumers.

-Enforcing the National Building Code 2020 to encourage passive design in new constructions.

-Establishing a super energy service company (ESCO) to oversee energy efficiency projects comprehensively.

-Ensuring greater access to low-cost finance and exploring new financing schemes with support from multilateral development banks (MDBs).

Alam concluded:
“Energy efficiency goes beyond reducing bills. It can quickly transform the national energy system. Bangladesh must pursue a coordinated approach to establish synergy among regulators, energy consumers, financial institutions, and technology providers.”