Fast economic growth coupled with an increasing population, economic development and energy demand has pushed the Government of Pakistan to explore cost-effective, clean, and alternative energy sources to respond to the current power demand-supply gap. In the long-run, the Pakistani government has the plan to uplift renewable energy’s share to 30% until 2030 (WEEA, 2019).
Renowned as an agricultural country and the fifth world’s largest sugarcane producer, Pakistan is tapping its biomass energy potential through the sugar industry – the second largest agriculture-based industry (preceded by the textile industry). Sugarcane is grown on about 1.2 million hectares and serves as the raw material for 90 sugar mills. However, most sugar mills in Pakistan use outdated technologies and practices for sugar production, resulting in high inefficiencies, wastage of resources and increased cost of production. For instance, if compared with sugar mills in other Asian countries, an average sugar mill in Pakistan consumes about 1250 MJ/ton (much higher than an Indian sugar millconsuming only about 935 MJ/ton). This translates into higher emissions of greenhouse gases and greater economic costs.
While the country’s energy mix is mainly dependent on fossil fuels, utilisation of biomass energy from the sugar industry not only holds the great potential to reduce carbon emissions, environmental pollution and waste; but can also increase industrial efficiency and access to sustainable energy, create green jobs and bring economic benefits to farmers.
Recognizing this potential, since 2018, the EU funded SWITCH-Asia Sugar REET Project (Implementation of Resource and Energy Efficient Technologies in the Sugar Sector of Pakistan) has been promoting sustainable production of sugar through sugar mills’ reduction of specific energy consumption practices. The project has also been invested in promoting sustainable consumption of bagasse (renewable sugar mill waste) by supporting sugar mills in adopting energy efficient technical innovations, resource efficient technologies, enabling access to finance for SMEs to invest into Resource & Energy Efficient (R&EE) measures, and mobilising public sector authorities for the formulation of a conducive regulatory regime for the promotion of R&EE in the sugar sector.
A series of capacity building training programmes and demonstrations have already been conducted among farmers and solution and service providers to raise their awareness on the positive utilization and benefits of biomass energy, the selection of resource and energy efficient equipment, their operation and maintenance, and energy auditing in sugar mills. Throughout the project’s implementation, detailed energy audits have been carried out at 39 sugar mills and business cases have been developed; Boiler Retrofitting audits have been carried out for 20 sugar mills; and eight sugar mills have taken the financial decision to implement R&EE measures.
One of the main challenges the Pakistani biomass industry is currently facing is the lack of a comprehensive legal and regulatory framework. This restricts technology penetration and further development of the sector. As part of SWITCH-Asia Sugar REET activities, the project undertook a detailed analysis of the key policies impacting R&EE in the sugar industry in Thailand and India and highlighted key instruments used in each country’s regulatory framework. The results were presented in the Regional Best Practices Report and shared with the National Energy Efficiency & Conservation Authority (NEECA) of Pakistan. Knowledge and findings from Thailand and India supported the revisions made to the National Energy Conservation Policy. A policy advocacy workshop was also conducted among sugar sector stakeholders and NEECA.
As identified in the Review of Clean Finance Instruments (CFI) and Recommendations for their Adoption in Pakistan, financial constraints and lending provisions to set up biomass energy projects are another challenge hindering the development of the biomass industry. In response to this challenge, the Sugar REET team trained credit lending institutes and banks in applying sustainability risk assessment tools. This enabled the latter to evaluate SME’s applications for credit for technology upgrades. Furthermore, the State Bank was also supported in the revision of its policy for financing R&EE investment in the sector.
Moreover, skills and capacities of 45 representatives of Pakistani financial institutions (FIs) have been strengthened with regard to evaluation and mitigation of risk to financing clean technologies and tapping into green investment opportunities. External co-financing opportunities were also presented and explained as important incentives for financial institutions.
What is ahead or us?
As envisaged by the Government of Pakistan, biomass energy could assist in realizing the target of increasing the renewable energy share in the total energy mix of the country from 1.1 % to 5% by 2030. The EU SWITCH-Asia Sugar REET project will continue its activities until 2022 including:
-
Conducting an R&EE policy gap analysis and formulating recommendations for the promotion of R&REE in the sugar sector of Pakistan;
-
Preparing a Life Cycle Assessment Report of Sugar Production;
-
Preparing Carbon Footprint Reports for individual sugar mills;
-
Formulating Case Studies on R&EE Pilot Projects
-
Disseminating the Revised National Energy Conservation Policy
