Pakistan’s lack of a centralized energy efficiency monitoring system is hindering efforts to modernize its steel sector and attract international green financing, according to a new World Bank report.
Titled Steel Sector: Energy Efficiency and Decarbonisation, part of the Pakistan Sustainable Energy Series, the report highlights key barriers to sustainability, including a disconnect between industry stakeholders and policymakers, which has delayed meaningful reforms.
Although some progress has been made, such as the formation of an industrial association by major steel producers, several critical issues persist. These include illegal steel imports, limited access to quality scrap metal, and poor quality control within the informal sector, which still accounts for a large share of national output.
The report also points to a widespread lack of technical knowledge among manufacturers, particularly smaller and informal players, who continue to rely on outdated, high-emission technologies. This not only increases environmental damage but also raises production costs.
Energy costs remain a major expense in steelmaking, yet many firms are unaware of the cost-saving potential of decarbonization and clean technologies.
The World Bank recommends greater awareness and technical support to help businesses adopt energy-efficient practices. To enable this shift, the report calls for the creation of a centralized monitoring framework, clear policy reforms, and stronger coordination between public and private stakeholders. These steps, it argues, are essential for unlocking green investment, enhancing global competitiveness, and steering Pakistan’s steel industry toward a more sustainable future.
