Bangladesh's Garment Sector Faces EU Carbon Tariffs Amid 2030 Decarbonisation Deadline

Bangladesh risks losing 30% of its EU garment exports by 2030 if it fails to meet decarbonisation targets. The EU's carbon border adjustment mechanism (CBAM) will impact exporters unable to demonstrate significant emissions reductions. The Bangladesh Nationalist Party aims for 35,000 MW of power generation by 2030, with renewables contributing 20%. However, a prohibitive tariff structure threatens these goals, leaving Bangladesh at a disadvantage compared to competitors like India and Cambodia, which have higher renewable energy shares.

Published Mar 29, 2026

Bangladesh's garment industry may face a 30% drop in EU exports by 2030 due to the EU's carbon border adjustment mechanism (CBAM). The Bangladesh Nationalist Party targets 35,000 MW of power generation, with 20% from renewables.

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However, a tariff structure including Tk 2-3 per kilowatt markup hinders renewable development, risking commercial viability. Competitors like India and Cambodia have higher renewable shares, putting Bangladesh at a disadvantage.

Current renewable targets focus on capacity but overlook the demand from export-oriented industries. Rising reliance on imported fossil fuels further complicates energy security. The government faces calls for a cost-reflective tariff to support the garment sector's competitiveness and sustainability.