Energy Crisis Threatens Bangladesh's Textile Industry

Bangladesh's textile industry is facing a deepening energy crisis. High energy prices, caused by the war in the Middle East, combined with a fire at one of the country's two liquefied natural gas (LNG) import terminals, have reduced supplies to just over half of demand.

The sector employs approximately four million people, accounts for about 80% of the country's exports and contributes 13% of its GDP. Gas is needed primarily for washing, dyeing and finishing garments.

Due to the shortage, many factories in the Savar, Ashulia and Narayanganj areas are operating at up to 40% below capacity. Some are therefore using more expensive compressed natural gas from gas stations or diesel fuel.

The uncertainty has been exacerbated by an announced reduction in LNG supplies from Qatar due to the conflict with Iran and disruptions to shipping through the Strait of Hormuz.

Companies are considering biomass, electric boilers, heat pumps or solar panels. However, due to limited supplies and poor logistics, biomass cannot meet the needs of the entire sector. Heat pumps could reduce energy consumption by up to 45%, but they require significant investment and a reliable power grid.

Industry representatives are therefore calling for support for renewable energy sources, the elimination of tariffs on energy-efficient technologies and more intensive exploration of domestic gas reserves.

(Reuters, luc)