ISLAMABAD: The All Pakistan Textile Mills Association (Aptma) has urged the government to reclassify Combined Heat and Power (CHP) units using waste heat recovery for process use under the industrial gas tariff category.
The Association has also offered to propose credible, immediate measures to optimize gas use and support the competitiveness of textile and apparel exporters—especially composite and value-added units.
In a letter addressed to Petroleum Minister Ali Pervaiz Malik—who also chairs the Committee on Structural Reforms in the Petroleum Sector—APTMA highlighted the need to correct the gas sector trajectory and curb the growing circular debt. The committee is tasked with reviewing and formulating reform recommendations for the sector.
APTMA noted that the Grid Transition Levy, applied to all captive users including single-cycle and CHP generators, has unfairly penalized the most energy-efficient export-oriented industrial units.
“These units have made significant investments in high-efficiency CHP systems to reduce energy costs and emissions. Their entire production ecosystems are built around CHP generation. With gas prices now prohibitively high, these investments are going to waste and have severely hurt export competitiveness,” wrote APTMA Secretary General Shahid Sattar.
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The Association argued that high gas tariffs and new levies have made it uneconomical for large textile units to operate CHP systems, forcing a costly and inefficient shift to the national grid. In competing markets like India and Bangladesh, there are no restrictions on captive power, and industrial users access gas/RLNG at $10–12/MMBtu—compared to over $15/MMBtu in Pakistan.
The shift to grid electricity (which costs 12 cents/kWh versus 5–9 cents/kWh in regional markets) has also compelled industries to import alternate equipment—boilers, chillers, and biomass-fired power plants—costing over $100 million. At the same time, these units must continue to rely on gas boilers (at Rs 2,300/MMBtu) for thermal process needs, increasing operating costs.
APTMA further cited chronic grid instability—including outages and voltage fluctuations—as another major challenge. In June 2025, several mills under HESCO reported repeated tripping and equipment damage due to unstable voltage. Similar incidents have been reported in LESCO’s jurisdiction. Each outage can result in production losses of over Rs 3 million, with entire cycles and materials rendered useless.
The Association emphasized that CHP systems have the most efficient use of scarce gas resources, offering combined thermal and electrical efficiency of 65–85%, compared to around 52% for RLNG-based government plants, which suffer additional grid losses. APTMA criticized the blanket penalization of captive users, noting that it contradicts the Cabinet Committee on Energy’s (CCoE) 2021 decision supporting continued CHP operations—subject to independent third-party energy audits.
Pakistan’s textile exports remain stagnant at around $18 billion, with net exports decreasing from $13.6 billion in FY24 to $14.0 billion in FY25. APTMA warned that without affordable, reliable energy, Pakistan risks further erosion of its export base. Global buyers now prioritize low-emission sourcing, and with the EU’s Carbon Border Adjustment Mechanism (CBAM) looming, the adoption of clean energy such as CHP (in combination with solar) is crucial for export survival.
Copyright Business Recorder, 2025
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