The World Bank has identified significant opportunities for reducing energy consumption and emissions across five of Pakistan’s core industrial sectors. In a newly released report titled Pakistan Energy Efficiency: Industrial Energy Efficiency and Decarbonisation (EE&D), the institution outlines the challenges and potential solutions for the cement, steel, fertiliser, textile, and paper & pulp industries. The analysis suggests that while some technological advancements have been introduced, broader and more consistent implementation is hindered by policy gaps, limited financial incentives, and informational barriers.
Pakistan’s industrial sectors are central to the country’s economic output and employment, yet they are also major contributors to national energy demand and carbon emissions. The report stresses that enhancing efficiency across these sectors is not only critical for environmental sustainability but also offers financial gains through reduced operational costs and improved global competitiveness.
In the textile sector, which is the country’s largest export industry, the dyeing and finishing processes have been flagged as the most energy-intensive. The World Bank estimates that energy usage in these areas could be slashed by 50 to 60 percent. Additionally, emissions could be reduced by up to 13 percent if firms implement energy-saving measures, improve process design, shift toward electrification, and adopt circular production methods.
The cement sector has already started experimenting with technologies like waste heat recovery systems and alternative fuels. However, the report notes that more widespread deployment could reduce energy use by 6 to 20 percent and emissions by 3 to 35 percent. Given the sector’s reliance on fossil fuels, the transition toward low-carbon alternatives is seen as both necessary and feasible with the right incentives.
For the fertiliser industry, the primary challenge is the continued reliance on subsidized natural gas. According to the World Bank, this pricing structure discourages efficiency investments and perpetuates outdated production models. Without reform in gas pricing and policy support, the sector is unlikely to make significant progress in energy optimisation or emission control.
The steel industry, though comparatively efficient due to its use of electric induction furnaces, still has room for improvement. The report suggests that energy usage can be cut by 8 to 10 percent, and emissions could drop by 5 to 12 percent through modernisation and better operational practices. Such improvements would also help the sector align with international environmental standards.
In the paper and pulp sector, which has grown at an average of 7.2 percent annually over the past five years, some efficiency gains have been observed. Yet, there remains considerable scope for technological upgrades and process refinement. The World Bank points out that investing in modern machinery and streamlining production could yield further energy and cost savings.
The report concludes that while opportunities for improvement exist across all five sectors, real progress will depend on comprehensive policy reforms, improved access to green financing, and stronger private sector participation. The World Bank urges policymakers to adopt a unified strategy that links industrial growth with climate action, ensuring that economic development proceeds hand-in-hand with energy efficiency and emission reduction.