Bangladesh’s garment industry is confronting an acute energy crisis just as new research warns that manufacturers’ dependence on natural gas and aging machinery could leave the country’s largest export sector increasingly vulnerable to rising costs and disruptions in supply.
Gas shortages have interrupted textile and apparel production across major industrial areas, idling garment lines and raising concerns about whether export orders will ship on time.
The immediate disruption has been exacerbated by problems with Bangladesh’s imported liquefied natural gas infrastructure. One of the country’s two floating LNG terminals went offline following a fire in July, sharply reducing supply. Though the terminal partially resumed operations earlier this month, gas shortages and power cuts have persisted, prompting the government to impose additional electricity-conservation measures last week.
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For Bangladesh’s apparel industry, however, the problem extends beyond keeping sewing machines running.
Natural gas is deeply embedded upstream in textile manufacturing, supplying captive electricity generation as well as the boilers and steam required for processes including dyeing, washing, drying and finishing. A disruption at a dyehouse can therefore halt garment assembly even when the sewing factory itself has power.
The effects have spread across the sector. Industry officials have estimated that gas shortages have reduced garment production by roughly 30 percent to 40 percent, prompting the Bangladesh Garment Manufacturers and Exporters Association, or BGMEA, to seek one- to two-week shipment extensions from international buyers.
The crisis is giving new urgency to an energy problem that Bangladesh’s garment manufacturers were already confronting.
New research from the Centre for Policy Dialogue, or CPD, argues that the ready-made garment sector is structurally locked into carbon-intensive production even as declining domestic gas availability increases its exposure to imported LNG.
“Relying solely on imported LNG will not be sustainable in the long run,” Khondaker Golam Moazzem, CPD research director, said Sunday during a national dialogue on industrial decarbonization.
The study draws on primary data from 350 RMG factories, combining factory surveys, energy modeling, machine-substitution analysis, renewable-energy scenarios and stakeholder consultations. CPD said manufacturers face pressure to decarbonize not only from climate commitments but from global buyers increasingly pushing emissions-reduction requirements down their supply chains.
Its findings suggest there is no single technological fix.
Washing and dyeing, for example, emerged as the most energy-intensive production stage, despite accounting for only a small portion of installed machinery. Sewing represents more than 85 percent of installed machine capacity but offers relatively little potential for energy savings through machine substitution alone. Cutting represents just 5.5 percent of machine stock but accounts for 27.3 percent of the potential savings CPD identified.
Renewable energy presents another opportunity.
CPD estimated that offsetting 30 percent of factory energy needed through solar could reduce average monthly energy costs by 15.7 percent. But that scenario remains illustrative: the highest solar offset observed in the sample was 10 percent, which produced estimated average savings of 5.5 percent.
Renewable power could also provide manufacturers with some protection against volatile energy prices. CPD’s modeling found that renewable-energy adoption reduced energy-cost volatility for 96 percent of factories, with benefits across factory sizes.
Even those savings do not solve manufacturers’ entire energy problem.
Rooftop solar can offset electricity drawn from the grid or produced through captive generation, but it cannot currently replace the gas-fired boilers used for thermal finishing, washing and dyeing, according to CPD. That leaves some of the sector’s most energy-intensive processes outside the reach of renewable electrification under existing technology.
Financing presents another obstacle.
CPD found the smallest factories in its sample had an energy-efficiency gap of 57.3 percent compared with 8.9 percent among the largest, a disparity it linked to older machinery and tighter financing constraints. Larger factories, however, offered the greatest absolute savings potential.
Fazlee Shamim Ehsan, executive president of the Bangladesh Knitwear Manufacturers and Exporters Association, or BKMEA, said financing is available, but manufacturers have struggled to access it, calling for clearer pathways to available funds.
Some brands are attempting to address that gap directly. H&M said five of the 24 projects currently financed through its Green Fashion Initiative are located in Bangladesh. The program makes funding available to supplier factories for investments intended to reduce energy demand and transition to renewable alternatives.
The retailer is also advocating for corporate power purchase agreements, or CPPAs, in Bangladesh, which would allow businesses to procure renewable electricity through longer-term contracts. H&M said its policy engagement is focused on expanding access to renewable electricity and accelerating grid decarbonization.
CPD similarly recommended expanding blended finance through private investment, concessional lending and government-backed credit, particularly for smaller manufacturers facing greater capital constraints. It also called for standardized appraisal frameworks, which would make it easier for factories to obtain financing for renewable-energy and efficiency projects.
Manufacturers say government policy can present hurdles of its own.
Vidiya Amrit Khan, vice president of BGMEA, called for the elimination of taxes on renewable-energy investments, arguing that fiscal policy is not aligned with the country’s renewable-energy ambitions.
The stakes extend beyond factories’ utility bills.
Mohammed Zahidullah, chief sustainability officer at DBL Group, warned that Bangladesh risks losing orders to competitors including India, Pakistan and Vietnam as those sourcing markets move more quickly to adopt renewable energy.
That pressure is arriving as Bangladesh’s current gas shortage demonstrates another potential cost of fossil-fuel dependence: production itself can become vulnerable to disturbances in supply.
CPD concluded that machinery upgrades and renewable electricity can reduce energy consumption, costs and exposure to price volatility, but neither can eliminate the sector’s reliance on thermal energy. Breaking that lock-in, it said, will call for coordinated technological, financial and regulatory interventions rather than a single technology choice.
For Bangladesh’s garment sector, that increasingly makes decarbonization about more than meeting brands’ emissions targets. As factories struggle to keep dyehouses running and sewing lines supplied with fabric, cleaner and more efficient energy is becoming a question of competitiveness and whether manufacturers can keep producing at all.
