Experts at a recent workshop emphasized the urgent need to decarbonize Pakistan’s steel industry and improve energy efficiency to safeguard the sector’s global competitiveness and align with international climate goals.
The event, titled “Energy Efficiency in Energy Intensive Industries in Pakistan: Focus on Steel,” was organized by Sustainable Development Policy Institute (SDPI) in partnership with the Danish Embassy and Energy Agency under the Danish Energy Transition Initiative.
Speakers highlighted growing risks like the EU’s Carbon Border Adjustment Mechanism (CBAM), which could impose steep tariffs on carbon-intensive exports. Dr. Khalid Waleed of SDPI warned that without efficiency and decarbonization, steel, a cornerstone of industrial growth, could become a liability. He called for urgent adoption of best practices and sustainable technologies.
Fridolin Holm of Viegand Maagoe revealed that under current EU carbon pricing, Pakistani steel exports could face over USD 100,000 tax per 100 tons without local carbon regulation, triple what it would be with a domestic levy. The insight underscores how smart climate policies could protect trade competitiveness.
Experts including World Bank’s Waqas Idrees and SDPI’s Saleha Qureshi stressed the need for a clear national decarbonization strategy, better data, and policy alignment. They emphasized the steel industry’s major role in energy consumption and the importance of private sector engagement and investment.
Amreli Steels’ Abubakar Ismail noted that Pakistan’s use of electric induction furnace technology already offers a lower carbon footprint. However, experts warned that weak demand and policy gaps continue to hinder investment in cleaner production. Stakeholders also flagged the informal nature of the steel sector and pushed for better compliance frameworks, data transparency, and incentives to support export-readiness and long-term industrial sustainability.