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WNAM REPORT: Experts at the high-level workshop underlined the urgent need for decarbonizing Pakistan’s steel sector and boosting industrial efficiency in light of global climate goals and national economic challenges to chart a course toward a more sustainable industrial future for Pakistan.
The workshop on ‘Energy Efficiency in Energy Intensive Industries in Pakistan Focusing on the Steel Sector’ was organized by Sustainable Development Policy Institute (SDPI) in partnership with the Embassy of Denmark and the Danish Energy Agency under the Danish Energy Transition Initiative, said a press release issued on Monday.
H.E. Jakob Linulf, the Ambassador of Denmark to Pakistan, expressing his views with heartfelt reflections from his three-year tenure, said: “Pakistan is a country rich in culture, beauty, and potential.” Emphasizing the urgency of climate action, he said “Climate change is not a distant threat, but it’s reshaping Pakistan before our eyes. You have the natural resources — solar, wind, hydro — to go green. Now it is the time to use them.”
Lauding the growing momentum in Pakistan’s renewable energy sector, he also called for stronger public-private partnerships and long-term policy commitments to attract foreign investment. “Energy efficiency isn’t just good for the planet — it’s a good business,” he said, urging industry leaders and citizens to embrace sustainable habits.
Dr Sardar Mohazzam, Managing Director of National Energy Efficiency & Conservation Authority (NEECA), advocated for stronger business-to-business partnerships between Denmark and Pakistan to transform local industries into energy-efficient models through collaborative technology transfer. Dr Mohazzam highlighted the importance of addressing future challenges, including climate-driven energy demands and the need for innovative financing mechanisms. He underscored the ongoing efforts like energy efficiency policies, EV infrastructure, and industrial regulations while urging deeper collaboration with Danish investors to help transform Pakistan’s industry.
Earlier, Dr Khalid Waleed, Senior Energy Economist at SDPI, emphasized that energy transition is not merely a policy issue but an economic imperative. “Steel is often seen as the backbone of industrial growth, but without decarbonization and efficiency, it risks becoming a liability,” he warned. Dr Waleed highlighted the rising threat of the EU’s Carbon Border Adjustment Mechanism (CBAM), which could penalize carbon-intensive exports and undercut Pakistan’s global competitiveness. He called for urgent adoption of best practices in energy management and the integration of sustainable technologies in the steel sector.
“Learning from countries like Denmark and Vietnam can help Pakistan contextualize and adopt energy-saving innovations,” he said, adding that initiatives like Pakistan Industrial Decarbonization Program are crucial for aligning economic growth with environmental responsibility.
Nadeem Nawaz, a Danish energy expert, shred his insights into Denmark’s own transition journey — moving from a centralized to a decentralized power system since the 1980s. With 63% of its power now sourced from wind and solar, Denmark’s energy vision is backed by political consensus and regional interconnectivity. He emphasized that energy efficiency, often called “the first fuel” by the International Energy Agency, is the cheapest and most effective path toward sustainability.
Fridolin Holm, Senior Technical Expert from Viegand Maagøe, presented a detailed case study on energy use in Pakistan’s steel industry, identifying opportunities for efficiency gains, including heat recovery, improved process monitoring, and low-carbon technologies. Mr Holm, highlighted how the EU’s Carbon Border Adjustment Mechanism (CBAM) could levy steep tariffs on carbon-intensive imports. Under a standard scenario, importing 100 metric tons of steel into Europe could result in a €90,000 carbon tax without a domestic carbon tax in place — three times higher than if Pakistan had a local levy of €20 per ton. This shows how domestic carbon pricing can influence trade competitiveness, he maintained.
Waqas Idrees, Energy Specialist of the World Bank, emphasized that energy efficiency and decarbonization are no longer optional. “They’re central to future trade competitiveness,” he said, and added that Pakistan’s industry, while efficient in some areas, still has major gaps — consuming 2.4 megajoules per USD of GDP, far higher than neighboring countries.
Saleha Qureshi from SDPI highlighted the lack of a structured decarbonization plan in Pakistan’s industrial sector. She underscored the importance of integrating emission reduction goals into upcoming policy frameworks, especially ahead of the Nationally Determined Contributions (NDCs) submission. She sought limited data availability in “hard-to-abate” sectors like steel and noted untapped opportunities for private sector involvement. Ms Qureshi shared SDPI’s work on modeling emissions scenarios, policy pathways, and capacity-building across cement, steel, and textile sectors. “We aim to develop sector-specific roadmaps and pilot 12 industry projects compatible with carbon market mechanisms,” she said. She added that upcoming priorities include exploring green hydrogen potential and decarbonization of mining sector.
Dr. Arif Goheer, Executive Director at the Global Change Impact Studies Centre (GCISC), stressed that current GHG inventories focus primarily on energy, agriculture, and forestry, while industrial data remains weak. Appreciating the steel decarbonization initiative, he noted that energy-intensive industries like steel, cement, and textile account for nearly 37% of national energy use. “Our long-term development pathways must balance emissions cuts with economic growth,” he said.
Abubakar Ismail of Amreeli Steels warned against underestimating the existing low carbon footprint of Pakistan’s steel industry, attributing it to electric induction furnace technology. He called for increased renewable energy adoption and policy incentives, highlighting that weak demand and economic instability discourage investment in newer efficient technologies.
Dr Nabil Amin from the Ministry of Commerce pointed out the informal nature of much of Pakistan’s steel sector, particularly in the Punjab, and emphasized the need for integrating SMEs into national compliance frameworks. He said the Ministry’s new National Compliance Centre aims to enhance traceability and capacity-building for export readiness.
Sobia Becker, advisor to the Pakistan-Germany Climate and Energy Partnership, urged the establishment of a national industry emissions dashboard. She advocated for smarter subsidies and highlighted the upcoming emissions trading framework for Pakistan. “Without robust reporting and pricing, the energy transition will remain stalled,” she said.
Prof. Iftikhar Ahmed from National University of Science and Technology highlighted the role of Industry 4.0 technologies in improving energy management and reducing human error in steel operations. He cited international examples of IoT-based digital energy audits and called for academia-industry collaboration in pilot programmes.
