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• Factories close but energy costs keep rising
• Solar power could help industry green up
• Smaller firms need help with energy transition

DHAKA - Rising energy prices are piling pressure on Bangladesh's textile sector, pushing dozens of factories to close and forcing a big rethink on how best to power the nation's No. 1 industry in terms of export and jobs.

Be it solar roof panels up top or green boilers on the factory floor, the textile sector is looking at new ways to deliver cloth more cheaply and with stronger green credentials.

Otherwise they risk going bust.

"While the crisis may be temporary, it shows that we need to address some core, underlying problems," Amirul Amin, president of Bangladesh's National Garment Workers Federation (NGWF), told Context.

As the world’s second largest fashion supplier, Bangladesh exported clothes worth some $38.5 billion last year, supplying high-street giants from H&M to Zara.

It aims to raise its export volume to this year.

Other apparel hubs are catching up - and overtaking.

Its closest competitor, Vietnam, expects to surpass Bangladesh with projected exports of this year, unhindered by the sort of energy crunch and political instability that have rocked Bangladesh in recent months.

In a country that relies on fashion for at least 80% of its exports and more than 4 million jobs, the crises have led to a that have left more than in recent months, according to the NGWF, which represents the nation's textile workers.

What green transition?

Slow adoption of cheap and green energy options has made the country increasingly dependent on costly fossil fuel imports, straining its 1,800 energy-guzzling textile mills.

In January, the state-owned energy importer, Petrobangla, suggested more than of industrial gas – a prospect that set alarm bells ringing on factory floors.

The proposed change came as Bangladesh seeks to of the energy and power subsidies it provides to foster economic stability, as prescribed by the International Monetary Fund.

The proposed hike would come on top of a 150% hike in gas prices for large industries and a in workers' minimum wages between 2022 to 2024.

Textile factories are heavily dependent on fossil fuels for energy, especially during the most intensive stages of production such as dyeing and finishing processes, which alone make up some 80% of the sector's entire emissions.

Saving energy here could and reduce the sector's carbon footprint, said a report by the consulting firm FSG that was commissioned by the H&M Foundation and Laudes Foundation.

More costs, more competition

Bangladesh's key strengths in textiles have been cheap labour and affordable energy - advantages that are steadily being eroded, said Abdullah al Mamun, the director of a local mill, Abed Textile.

"Further energy price hikes will lock us in a death trap," he said.

Local mills are also facing more competition from outside the country. Cotton - mostly from neighbouring India - have grown by 40% in the last year.

"With costs rising across the board and imports growing, making profits has become very difficult," said Monower Hossain, head of sustainability for Team Group, a garment and textile supplier in Bangladesh.

The rising cost of energy is partly due to Bangladesh's growing reliance on to make electricity, against dwindling domestic natural gas reserves.

If the country does not use more renewables, the rising cost of fuel imports will put the economy in , according to a report by environmental campaign groups.

One suggested solution for factories and mills is to use more power that has been generated by the sun.

A factory owned by Team group has already installed rooftop solar panels that can potentially meet half its electricity needs. But when it rains or the sunlight dims, solar panels have limited efficiency, which means they may not offset higher energy costs, said Hossain from Team Group.

Even if solar power met 100% of electricity needs, massive amounts of fossil fuels to and generate steam for dyeing and finishing fabric.

Many mills have generators - known as - to ensure uninterrupted power. But on average, these only score an average of 36% efficiency, so eat up a large amount of gas.

Industry must act smarter if it is to cut its costs, said Shafiqul Alam, lead energy analyst for Bangladesh at the Institute for Energy Economics and Financial Analysis (IEEFA).

It says installing more efficient gas-fired generators and recovering waste heat could by 25% to 31%.

Replacing with electric boilers or using more water-efficient methods of dyeing could also help.

But these measures mean large, up-front investments, said Hossain from Team Group.

More than will be needed for the global fashion industry to achieve net zero by 2050, said a study by Apparel Impact Institute (AII), a non-profit promoting sustainable investments.

Such investments are barely affordable for most suppliers, which are instead campaigning for fashion brands and financial institutions to help .

"Brands and banks should work together to package concessional loans in a way that can meet the urgent needs of smaller textile firms to invest in solar as well as energy efficient technology," said Alam from IEEFA.  

($1 = 121.9000 taka)

(Reporting by Md. Tahmid Zami; Editing by Lyndsay Griffiths and Jack Graham.)