The high import duties and taxes -- ranging between 50 and 60 per cent -- on renewable energy equipment are emerging as a major barrier to investment in the country's clean energy sector, says the Bangladesh Sustainable and Renewable Energy Association (BSREA).
It also warns that such constraints are undermining efforts to address the deepening energy crisis and mounting pressure on foreign exchange reserves.
Amid the ongoing energy crunch, BSREA has called for prioritising renewable energy to ensure long-term energy security.
They noted that the high cost of liquefied natural gas (LNG), coal, and oil used in power generation was forcing the government to provide subsidies exceeding Tk 2.0 billion per day, posing significant long-term risks to the economy.
In a written statement, BSREA President Mostafa Al Mahmud said renewable energy, particularly solar power, offered the most cost-effective and environmentally sustainable solution in the long run.
However, the sector was not receiving adequate policy support, he said.
BSREA Senior Vice President Zahidul Alam, General Secretary Ataur Rahman Sarkar Rozel, and Director (Finance) Nitai Pad Saha, among others, were present at the event.
Citing international examples, BSREA said countries like Pakistan, India, Vietnam, and China had made significant progress by offering tax exemptions, lower duties, and easier financing.
In Bangladesh, however, high tariffs on lithium-ion batteries and energy storage systems were further hindering sectoral growth, it said.
The association also flagged global geopolitical tensions, including those involving the US and Iran, as a key factor behind volatility in energy markets.
Brent crude prices surged to $115-120 per barrel, while risks surrounding the Strait of Hormuz threatened global energy supply routes.
Bangladesh's energy security has become increasingly vulnerable as more than 60 per cent of its energy demand is import-dependent.
LNG imports, around 70 per cent of which come from Qatar, are also at risk of disruption, raising concerns over power generation capacity.
According to BSREA, daily gas demand in the power sector exceeds 2,500 MMCFD, while supply has dropped to 850-900 MMCFD, potentially leading to a shortfall of 1,500-1,800 MW in electricity generation.
Strategic fuel reserves were also limited, sufficient for only 35-40 days, far below the international standards, it stated.
The crisis was already impacting industries, particularly ready-made garment (RMG), where production had declined by 30-40 per cent due to gas shortages and load shedding, said the association.
This could adversely affect export earnings and foreign exchange reserves, it added.
Speakers at the event stressed that the current crisis was not temporary and it reflected deeper structural weaknesses in the country's energy framework.
BSREA placed several recommendations, including reducing duties and taxes on renewable energy equipment, setting zero tariffs on lithium-ion batteries, ensuring long-term low-interest financing, and expediting stalled solar projects.
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