Bangladesh cuts fuel imports by US$3.3b through energy efficiency gains

IEEFA said Bangladesh is on track to meet its energy-efficiency targets about a year ahead of schedule.

Bangladesh’s improvements in energy efficiency helped avoid about US$3.3b in fossil fuel imports in the 2023–24 financial year, according to the Institute for Energy Economics and Financial Analysis (IEEFA).

IEEFA said the savings were achieved by avoiding roughly 7.0 million tonnes of oil equivalent (Mtoe) of fossil fuel consumption. It added that the gains highlight the growing role of energy efficiency in reducing import dependence and easing pressure on the country’s energy system.

Over the decade from FY2014–15 to FY2023–24, IEEFA said Bangladesh’s energy efficiency improved by 13.64%, compared with a national target of 20% by 2030. This implies an average annual improvement of about 1.52%.

The group said efficiency gains accelerated in the years after FY 2016–2017, slowed subsequently, and then picked up again around FY 2020–2021, when supply disruptions and higher energy tariffs pushed efficiency higher up the policy agenda.

IEEFA said Bangladesh is on track to meet its energy-efficiency targets about a year ahead of schedule.

This includes an updated nationally determined contribution (NDC) target of a 19.2% improvement by 2035 from 2022 levels, which the institute said also appears achievable around a year earlier than planned.

Looking ahead, IEEFA said households and industry account for about two-thirds of Bangladesh’s total energy consumption and should therefore be the focus of further efficiency efforts.

It pointed to wider adoption of LED lighting and more efficient air conditioners as examples of measures that have already delivered savings.

The institute also noted additional gains could be achieved through stronger appliance standards and labelling, as well as passive design features to reduce energy use in buildings.

IEEFA also called for policy measures to lower the cost of efficient technologies. It said import duties of around 62% on imported LED components, along with higher minimum duties on inverter compressors, raise prices for consumers and slow the adoption of energy-efficient appliances.

Among its recommendations, IEEFA urged periodic public awareness programmes, an expansion of the pool of large energy consumers covered by savings targets, stricter enforcement of the National Building Code 2020 to support passive design, and the establishment of a “super ESCO” to scale up efficiency projects.