Climate groups urge major energy reforms to cut Pakistan’s reliance on imported fuels

The Alliance for Climate Justice and Clean Energy and the Pakistan Renewable Energy Coalition have urged the government to introduce sweeping reforms to reduce Pakistan’s dependence on imported fossil fuels and accelerate the shift toward a sustainable, locally driven energy system, according to a press release.

The demand was made in an “Energy Security Charter” issued on Wednesday, following recent geopolitical tensions, particularly the US-Iran conflict, which highlighted Pakistan’s vulnerability to global fuel shocks.

According to the charter, Pakistan has long carried the economic burden of imported energy, while a recent rise in citizen-led solar adoption helped ease the pressure by saving an estimated $12 billion in fuel imports since 2018.

The coalition said this momentum should not be lost and called for a “fundamental shift” in energy planning, with greater focus on renewable energy, battery storage, and electrification of transport.

READ MORE: Pakistan needs structural reforms to reduce reliance on fossil fuels: experts

It stressed that a flexible and reliable national grid is essential to integrate renewable energy at scale and ensure long-term energy security.

Among the key emergency measures proposed is the launch of a national battery and energy storage initiative, including the removal of taxes on battery storage systems and incentives for domestic manufacturing.

The charter also called for reversing recent solar taxation policies and restoring the previous net-metering regime, arguing that current pricing structures discourage small and medium enterprises and could push consumers away from the national grid.

It further recommended halting all new fossil fuel and large hydropower projects, citing concerns over overcapacity, environmental damage and financial inefficiency.

The document noted that a major share of Pakistan’s capacity payments, estimated at Rs1.8 trillion for FY2024-25, is linked to underutilised fossil fuel plants operating at just over 40% capacity.

The coalition urged the government to cancel or renegotiate costly independent power producer (IPP) contracts and gradually retire imported coal plants.

On the industrial side, the charter proposed developing a domestic electric vehicle (EV) ecosystem through fiscal incentives and simplified regulations.

It also recommended creating a centralised clean energy financing facility under the State Bank of Pakistan to help households, farmers and businesses adopt solar and EV technologies.

In fiscal policy, the coalition suggested reducing the Petroleum Development Levy and redirecting at least half of its revenue toward EV infrastructure and public transport electrification.

It also urged the government to renegotiate international financial agreements, particularly with the International Monetary Fund (IMF), to better align them with Pakistan’s climate and energy transition goals.

The charter placed strong emphasis on community-level solutions, including microgrids, cooperative energy models and solarisation programmes for vulnerable groups such as farmers and fisherfolk.

It also called for a “just transition framework” to ensure energy reforms remain socially equitable and environmentally responsible.

Backed by several civil society organisations, the Energy Security Charter presents what the coalition described as a comprehensive roadmap for achieving long-term energy independence, economic stability and climate resilience in Pakistan.