RMG stakeholders call for reduced import duties on renewable energy materials
They also stress the need for government policy support to establish domestic factories producing renewable energy equipment.
Garment industry experts and representatives from ready-made garment (RMG) companies are urging the government to reduce import duties on solar power equipment and other renewable energy materials.
They also stress the need for government policy support to establish domestic factories producing renewable energy equipment.
This appeal was made today during a focus group discussion organised by the Business Initiative Leading Development (BUILD) on "Energy Transition in Bangladesh Apparel Sector: The Case of Market Access to the EU," held at BUILD's conference room in the city.
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A study on "Energy Transition in the Bangladesh Apparel Sector," conducted by BUILD, was highlighted during the event. The study involved input from government regulatory organisations, private RMG entrepreneurs, financial institutions, supporting organisations, and research organisations.
In her presentation, BUILD Senior Research Associate Farjana Yasmin said that import duties on raw materials for setting up renewable energy plants are steep, ranging from 25% to 28%, and sometimes reaching as high as 85%.
The European Green Deal aims for a continent-wide shift to emission-free products by 2050. In line with this goal, European buyers are pressuring Bangladeshi suppliers to switch to renewable energy sources in apparel or RMG factories.
To address this, BUILD conducted a study under the Textile Competitiveness Platform to assess the transition of Bangladesh's textile sector to renewable energy sources. The study found that RMGs require support in exploring alternative energy sources for long-term sustainability.
Farjana also noted that the documentation process for accessing financing from the Green Transformation Fund is rigorous and time-consuming.
BUILD CEO Ferdaus Ara Begum highlighted the apparel industry's consistent success as Bangladesh's primary export, ranking second globally after China.
Over the past decade, apparel exports have consistently accounted for 80-85% of Bangladesh's total export share, reaching $47 billion in 2023. The EU market stands as a crucial export destination for this sector.
Ferdaus Ara said that RMG factories can currently only derive 10-15% of their total energy from rooftop solar, necessitating the purchase of renewable energy certificates to meet the remainder, incurring significant costs. However, purchasing certificates does not reduce local emissions.
H&M Environment Sustainability and Governance Program Manager Ashraful Islam Ashraful Islam stressed the importance of reducing our products' carbon footprint and increasing renewable energy usage to avoid concerns about exporting RMG products to the EU market.
Shams Mahmud, director of BGMEA and managing director of Shasha Denims Limited, highlighted that approximately 750 BGMEA members operate as SMEs and will face challenges in ramping up renewable energy usage due to the substantial investment required.
The event's chief guest, Munira Sultana, chairman of the Sustainable and Renewable Energy Development Authority, underscored the importance of these discussions for the future of RMG sector.
