RMG's net-zero problem: Why switching to renewables is easier said than done

During COP26, which was held in 2021, the UNFCCC Fashion Industry Charter for Climate Action made commitments to achieve net-zero emissions by 2050 across the value chain, in order to support the ambition of the Paris Agreement to limit global temperature rise to 1.5 degrees Celsius above pre-industrial levels. 

Fashion Industry Charter for Climate Action is an industry-led campaign that has participants from both brands and manufacturers. They also committed to sourcing environmentally friendly raw materials by 2030. 

Since then, global brands have been encouraging garment manufacturers to cut emissions.

In line with the Fashion Charter commitments, the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) recently announced its Sustainability Vision 2030, which aims to reduce 30% of carbon emissions, ensure 50% use of sustainable raw materials and 50% reduction of groundwater usage.

The association also commits to zero discharge of hazardous chemicals, a 30% reduction of energy usage, and a 20% use of renewable energy by 2030.

Bangladesh's RMG industry has seen impressive growth in the number of green garment factories in recent times. There are over 200 LEED-certified green garment factories in Bangladesh, the highest in the world, of which 73 are platinum-rated. 

LEED-certified buildings use fewer resources like energy and water, create less waste, and preserve land and habitat. 

Achieving net zero is a whole new game though. It requires investing a lot in renewable energy.

Choosing renewable energy over fossil fuel is a huge financial burden for the RMG industry of Bangladesh. Although the world's second-largest in terms of export earnings, the 40-year-old industry still depends on cash incentives from the government.

But the challenge of switching to renewables is not limited to financing.

"We don't have enough rooftop space for capturing solar energy. So, we will have to set up solar power plants in other places, capable of producing many megawatts of electricity," Mohammed Zahidullah, Chief Sustainability Officer at DBL Group told The Business Standard. 

DBL Group is a signatory to the Fashion Industry Charter for Climate Action. 

According to Zahidullah, energy consumption in garment factories is not very high, but backward linkages such as dye houses and spinning mills require intensive use of energy.

"The factories in EPZ areas have large rooftop areas, so it is not tough for companies like Youngone to set up big solar rooftop projects. But the factories outside the EPZs are mostly vertical, having less space on the roof. It will be difficult for them to meet the target," said Zahidullah.

"They will have to offset the shortage by buying Renewable Energy Certificates (REC) or by setting up renewable power plants somewhere. It will also need a large amount of land, which cannot be agricultural land, but will have to have grid connectivity," he added. 

RECs are a market-based instrument that can be earned by one party and sold like carbon credits to other entities that are polluting and thus offset the latter's emissions.

With all three elements combined, it is a difficult proposition.

Asked what alternatives are being thought out, the sustainability officer said discussions with different stakeholders, including the buyers, and various government ministries and agencies like Sreda were ongoing.

Despite the difficulties, Bangladesh's apparel companies are continuously investing in environment-friendly technologies to ensure their commitment towards sustainability.

Another such company is Team Group. Its 4A Yarn Dyeing Ltd - an outerwear manufacturing company - is a participant in the Fashion Charter. The group's chief sustainability officer, Mohammad Monower Hossain, also talked to TBS and shared his insights on the matter.

Monower said there are both opportunities and challenges in emission reduction by adopting renewable energy sources.

"The newer generations of consumers are climate-aware, they prefer sustainably manufactured products. So when our factories go green, it gives us marketing advantages. Also, investing in solar power has a business case- it helps ease the situation during summer when power cuts are frequent, " he said.

The challenges, however, Monower says, are huge.

"There are three categories of emission that a company is liable for – first, its own power generation at the factory; second, the grid electricity that it uses; and third, the carbon footprint of the raw materials used in the factory's operations. 

Now the big problem is, we source our raw materials from China and India, and they are yet to align their carbon footprint with emission reduction commitments," Monower said, adding, "a robust change has to be brought in here."

"Additionally, there are carbon emissions from logistics, which also has to be dealt with," he continued.

Monower pointed out that UNFCCC is working with the manufacturers and he is hopeful that things will change for the better. Besides, new technologies are coming continuously which he thinks will help solve sustainability problems.

But the biggest challenge of all is the investment, he said.

"Against the investment, the appreciation or the burden sharing is absent from the buyers' side. Changes would have been faster if that happened," remarked Monower, who is also the former Lead of BGMEA Environment Cell.

"We are getting preference thanks to our green factories, but we need price benefits against the investments we are making. Otherwise, the investors will be discouraged," he said.

Garment manufacturers and BGMEA leaders have been complaining that when it comes to offering a better price for the products, buyers always drag their feet. 

Late last month, while speaking at the launching of a report titled 'The case for just transitions in energy, agricultural and RMG sector in Bangladesh,' BGMEA President Faruque Hassan said, "When the brands are setting ambitious targets, it is their responsibility to make sure that no one is left behind in the supply chain."

"Climate change is not a future threat, it's happening now. The best way one can make an impact in this regard is "doing-our-bits" to curb carbon emissions and reduce environmental pollution," he remarked.