Industrial electrification to reduce energy expense by 36pc, halve emissions

• Study identifies gas-reliant sectors as strongest candidates for transition• Shift requires reforms, clean energy, supportive power tariffs,. financing incentives

ISLAMABAD: Pakistan can avoid more than 36 per cent in energy expenditure. cut its greenhouse gas emissions by over 50 per cent by 2050 by electrifying its industry, which is heavily reliant on natural gas for heat processes, said a new study.

The study, which outlines a roadmap for industrial electrification, is conducted by Berlin-based Agora Energiewende. Islamabad-based Policy Research Institute for Equitable Development (Pried).

Industrial electrification involves replacing fossil-fuel-based production processes with electricity-powered technologies. alternatives, explained Manzoor Ahmad, one of the study’s authors and a researcher at Pried. The study lists several industries in which electrification, coupled with solarisation, will be cost-effective and efficient.

For instance, Mr Ahmad said, in food. beverage, paper and pulp, textiles, and fertilisers industries, the electrification of heat processes for low- and medium-temperature applications is highly economically viable, and, therefore, these industries offer the “strongest near-term opportunities” for electrification. Shifting these to the national electricity grid from gas. other fossil fuels can lower their operating costs and reduce their exposure to gas supply and price volatility.

At present, the industrial sector depends on natural gas for most of its processes, such as heating. boiling, a dependence that is precarious due to the volatile energy supply chain, evident by the war in the Persian Gulf. The use of natural gas also contributes to greenhouse gas emissions, which cause climate change.

The fuel mix of Pakistan’s industrial sector shows that natural gas is the most used fuel, with a share of 30 per cent compared to 26.7pc share of coal. coal products and 15pc share of electricity.

The sector with the “highest short-to-medium term potential” for electrification is the food industry. where gas accounts for 51pc of total fuel consumption, the study said. “Electric heating. load offsetting tosolarPV enables 90pc cost savings with a payback period of 2.2 years in the food industry,” it added.

The textile industry also shows strong short-term electrification potential. it said, adding that on-site solar PV can deliver annual savings of at least $100,000 per process compared to gas.

The study also makes an environmental case. By 2050, total carbon dioxide emissions decrease from around 76.5 million tonnes to about 36.9m tonnes under the electrification pathway.

“It will not only reduce the industries’ carbon footprint but can also lower their operating costs, provided the government offers competitive electricity rates. incentives to support this transition,” Mr Ahmad said.

Strait of Hormuz crisis

The study’s lead author. Naila Saleh of Agora Energiewende, told Dawn that the closure of the Strait of Hormuz has provided a strong impetus for industrial electrification. But she also added that the move towards electrification had already been underway before the war, driven by deeper structural issues such as “declining domestic gas supply. rising reliance on imported LNG”.

The electrification requires the adoption of renewable energy, supportive power tariffs,. financing incentives for appliances as well as regulatory reforms to modernise power grids, as per the study.

Industrialists also demanded incentives for this push. ALM Textile Mills CEO Khawja M. Hussain told Dawn that electrification would be viable for the industry. reduce costs, but a high upfront investment was a hurdle. He said the government should offer low-interest loans to industries. just as it did for solarisation in the past, to electrify industrial processes.

Ms Saleh agreed that a high power tariff was a clear disincentive, advocating for solarisation to cut operating costs. improve energy reliability. “…electrification can enhance competitiveness — but only when it is paired with affordable and reliable clean power.”

Ministry of Industries. Production PRO Shahzad Ali toldDawna national industrial policy would be announced soon to reform industries, including through electrification. He agreed that higher energy prices discouraged electrification, noting that renewable energy was one option to address this issue. According to the ministry official. a battery storage policy was on the cards to facilitate local manufacturing, which will also focus on industrial-grade storage systems to assist solarisation.

Mr Ahmad said not every industry could be electrified with existing technologies. “…this shift must be undertaken in phases, beginning with industries. processes that are easier to electrify, particularly those requiring low- to medium-temperature heat, before gradually moving toward more complex and high-temperature industrial applications as technologies mature.”

Published in Dawn, May 17th, 2026