Energy efficiency saves Bangladesh $3.3b in fuel imports in a year: Study
According to IEEFA, the early establishment of a policy and regulatory framework allowed Bangladesh to respond more effectively when energy costs surged. Subsequent measures — including regulatory reforms, concessional financing and sector-specific programmes — helped accelerate efficiency improvements.
Bangladesh saved an estimated $3.3 billion in fossil fuel import costs in FY2023-24 by improving energy efficiency, highlighting the growing economic value of efficiency measures at a time of foreign exchange pressure and rising energy demand, according to a new study by the Institute for Energy Economics and Financial Analysis (IEEFA).
The country avoided the consumption of about 7.02 million tonnes of oil equivalent (Mtoe) of fossil fuels in the last fiscal year alone as a result of efficiency gains, the study says. This reduction helped ease import dependence and cushioned the impact of volatile global energy prices.
Titled "Bangladesh's energy efficiency goals within reach", the study examines trends in primary energy consumption and gross domestic product (GDP) over the past decade. It finds that energy efficiency improved by 13.64% between FY2014-15 and FY2023-24, against a national target of 20% by 2030.
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"Energy efficiency gains are already translating into tangible economic benefits for Bangladesh," said Shafiqul Alam, lead energy analyst for Bangladesh at IEEFA and author of the report.
"In FY2023-24 alone, efficiency improvements helped the country avoid fossil fuel consumption worth more than seven million tonnes of oil equivalent."
Bangladesh's average annual energy efficiency improvement rate of around 1.52% puts the country on track to meet its 2030 target at least a year early, the report notes. The study also finds that Bangladesh is likely to reach its updated Nationally Determined Contribution (NDC) target of a 19.2% efficiency improvement by 2035 ahead of schedule.
The report notes that Bangladesh's progress has not been linear. Initial gains following the launch of the Energy Efficiency and Conservation Master Plan in 2016 were uneven, and momentum slowed in the years that followed. However, the global energy price shock and supply disruptions during FY2021-22 pushed energy security and efficiency to the top of the policy agenda.
The study identifies households and industry, which together account for nearly two-thirds of total energy consumption, as the most critical sectors for future efficiency gains.
One of the most visible successes has been the rapid shift to energy-efficient LED lighting across households, commercial establishments and industrial facilities. Consumers are also increasingly adopting energy-efficient air conditioners, driven by rising electricity tariffs and greater awareness.
However, the report warns that information gaps and weak enforcement of minimum energy performance standards are limiting faster adoption of efficient appliances. Clear and widely enforced energy efficiency labels could play a key role in addressing this challenge.
In the industrial sector, IEEFA highlights significant opportunities to reduce energy use by improving motors and motor-driven systems, upgrading captive power generation, and switching from gas-fired to electric boilers.
