No alternative to curbing carbon emission for RMG to secure export market: Experts

• Currenetly, Bangladesh has more than 200 Leed-certified factories
• Total source of industrial energy from renewable energy 4%
• High cost of energy-efficient infrastructure, lack of technical skills major challenge
• More than 50% of the country's total export earnings come from EU regions
• Currently, a renewable energy certificate (REC) is required by many international buyers

Reduction of carbon emissions at factories is a must to secure Bangladesh's share in the global market for readymade garments, for which government policy support as well as long-term partnership between brands, buyers and manufacturers are essential, experts have said.

They made the observation on Friday (13 December) while speaking on the concluding day of the 2nd Bangladesh Energy Prosperity 2050 conference organised by the Bangladesh Working Group on External Debt in Dhaka.

The three-day event, which began on 11 December at the BIAM Foundation, emphasised transitioning to renewable energy and achieving a sustainable power policy amid critical global and domestic challenges.

During a session on decarbonising apparel and transport sectors in Bangladesh, Munir Uddin Shamim, senior manager for programme evidence and learning at Ethical Trading Initiative, presented papers on energy transition in the garment sector of Bangladesh.

Responding to a query, he said currently, the carbon emission graph of Bangladesh is on the rise. "Readymade garments sector must reduce emissions to sustain business. There are no other alternatives."

Referring to an upcoming European law, "Human Rights and Environmental Due Diligence (HREDD)", he said after 2027, when the law is implemented, all brands must comply with it. "There will be legal obligation for environmental compliance and reduction in carbon footprints."

Currently, a renewable energy certificate (REC) is required by many buyers, according to the presentation on international and national regulations and policy framework.

The Ethical Trading Initiative (ETI) is a leading alliance of trade unions, NGOs, and companies, working together to advance human rights in global supply chains.

Presently, Bangladesh boasts over 200 garment factories that are Leed certified, categorized as green factories, and they account for 4% of the total units in the industry, Munir noted.

He said besides considering the quality of products, buyers are now attentive about the protection of workers' rights throughout the production process.

"Therefore, to secure the European market, the manufacturers have to adhere to compliance. Also, Leed certified RMG factories need to be increased."

As an alliance, the European Union represents the largest export market for Bangladesh, generating more than 50% of the country's total export earnings. The garment sector contributes to more than 80% of the country's overall export income.

Lindex is one of Europe's leading fashion brands.

Kazy Mohammad Iqbal Hossain, South Asia sustainability manager of Lindex Bangladesh Liaison Office, said Lindex is a Swedish brand that operates production offices in several countries, including Bangladesh, India, Pakistan, Sri Lanka, Vietnam, Türkiye, China, Hong Kong, and Italy.

He said European consumers prioritise social and environmental issues associated with production over price considerations. They pay close attention to the impact on individuals in the regions where products are manufactured. 

"They also assess the sustainability of the suppliers providing goods to the brands, a concept that can be referred to as 'Green claims.' It is very important for a company," he added.

Iqbal further said in the European market, meanwhile, over the last two-three years, many new laws have emerged, such as the Corporate Sustainability Due Diligence Directive, Extended Producer Responsibility (EPR). Under these laws, it will be mandatory by the years 2026-2028 to sell products in compliance with social and environmental rules.

He further said a target of reducing carbon emissions by 50% by 2030 has been set to contribute to creating a sustainable environment and combating climate change. "Bangladesh has to act in a speedy manner to achieve it."

Key competitors to Bangladesh such as Vietnam, Cambodia, India and Pakistan are working very aggressively on renewable energy. "If they can meet the target of reducing carbon emissions by 2030 and Bangladesh does not succeed, products from here will not be procured even if offered at low prices," warned the Lindex Bangladesh official.

Because if a product is not allowed to sell in Europe, there is no point in buying it, he explained.

"The demonstration of social and environmental excellence serves as a great marketing tool to impress European buyers. The percentage of emission reduction is a big marketing tool," he added.

Speaking at the session, Syed Ishtiaque Ahmed, director of Engineering & Innovation at climate-tech company Solshare, stressed concerted efforts and solar power acceleration to reduce carbon emissions in a speedy manner.

Presenting his papers, Munir Uddin Shamim, senior manager for programme evidence and learning at Ethical Trading Initiative, recommended long-term relationships between brands, buyers, and suppliers, responsible purchasing practice, mainstreaming energy transition and shared responsibilities on climate issues, and technical expertise.

Other recommendations include supporting SMEs, effective bridge between government buyer and factory, sustainability reporting for all factories, awareness and capacity building, policy advocacy.

He also recommended strengthening economic diplomacy, easy access to finance, budgetary allocation for industrial decarbonisation, tax exemption, and policy and institution support from the government.

Fazlee Shamim Ehsan, executive president of Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), told The Business Standard that they have already started working on initiatives to strengthen Bangladesh's position in the European market.    

"We are working to make every factory energy efficient."

He said a pilot project has been initiated in this regard under which mapping of each factory will be done with their locations.

He said they have also communicated with a software firm and the International Apparel Federation. "The BGMEA and BKMEA are also working. We are seeking funds from buyers."  

He said a study will be conducted to ascertain how much carbon is emitted in the factories to produce each piece of clothing. "When the European Union (EU) sets the range for carbon emissions for products, then work on reducing carbon emissions [at factories] will be carried out accordingly."

He also called for government support, including prompt implementation of smart grids so that the apparel factories can purchase green energy and keep an account for consumption.