Pakistan’s steel sector lacks a central system to monitor energy efficiency, making it difficult to track progress and access global green financing and carbon credit opportunities, according to a recent World Bank report.
The report, titled Steel Sector: Energy Efficiency and Decarbonisation, part of the Pakistan Sustainable Energy Series, identifies several barriers to sustainable development in the country’s steel industry. The most significant challenge is the communication gap between policymakers and industry stakeholders, which continues to obstruct the development of effective policies.
Although large steel producers have formed an industrial association to engage with the government, key issues remain unresolved, including smuggling of steel from neighbouring countries, limited access to imported scrap, and insufficient quality control in the informal manufacturing sector.
The report also highlights that many steel firms lack the technical expertise to make informed decisions on energy-efficient investments. As a result, outdated, high-emission technologies are still widely used, particularly in the informal sector.
Energy costs are a major component of steel production, and the report suggests that understanding the financial benefits of decarbonization could encourage the adoption of cleaner technologies. However, it also notes that awareness of energy-saving process optimization technologies is limited.
