98% of energy budget still for fossil fuels: Experts

Leading civil society organisations on Sunday expressed concern that Bangladesh's energy budget remains heavily dependent on fossil fuels, warning that the country risks missing its renewable energy targets without significantly increasing investment in the sector.

Speaking at a press conference titled “Energy Sector in the National Budget: Civil Society Perspectives” at Green Lounge in Dhaka, representatives of several organisations said nearly 98% of the country’s energy budget continues to favour fossil fuels, while renewable energy receives only a marginal share.

The event was jointly organised by the Coastal Livelihood and Environmental Action Network (CLEAN) and the Bangladesh Working Group on Ecology and Development (BWGED), with support from the Bangladesh Environmental Lawyers Association (BELA), Ethical Trading Initiative (ETI) Bangladesh and Manusher Jonno Foundation (MJF).

Presenting the keynote paper, Hasan Mehedi, chief executive of CLEAN and member secretary of BWGED, said Bangladesh requires at least Tk21,750 crore annually to achieve its renewable energy targets by 2030, including a minimum public investment of Tk6,750 crore every year.

According to the organisations, although the government has allocated Tk17,193 crore for the power and energy sector in the FY2026-27 budget, only Tk379.24 crore, or 2.2%, has been earmarked for renewable energy.

The groups welcomed the government’s decision to exempt import duties, Value Added Tax (VAT) and Advance Income Tax (AIT) on renewable energy equipment, particularly solar technologies. They said the move could reduce rooftop solar installation costs by 30-37%, making clean energy more affordable for households, businesses and farmers.

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However, they expressed concern over a National Board of Revenue (NBR) Statutory Regulatory Order (SRO) issued on 8 June, arguing that it may prevent millions of residential consumers, farmers and small entrepreneurs from benefiting from the tax exemptions.

“While the government has taken a bold step toward expanding renewable energy, the NBR's restrictive SRO risks becoming a major obstacle to that transition. The benefits must be available to all citizens, not only a handful of large corporate developers,” Hasan Mehedi said.

Civil society representatives also criticised what they described as contradictory policies that continue to favour fossil fuels. They noted that tax exemptions for LNG imports remain in place, while incentives for coal imports and fossil-fuel infrastructure expansion have also been extended.

Syeda Rizwana Hasan of BELA said renewable energy targets must be supported by adequate budget allocations and effective implementation measures.

Munir Uddin Shamim, director of ETI Bangladesh, stressed the need for an inclusive energy transition, while Monowar Mostofa, networking adviser of CLEAN, called for removing policy barriers that hinder renewable energy expansion.

The organisations recommended revoking the NBR SRO, establishing a Tk25,000 crore Renewable Energy Fund, introducing subsidies for rooftop solar systems, operationalising Corporate Power Purchase Agreements and imposing emissions taxes on fossil-fuel-based industries.

They warned that Bangladesh now stands at a critical juncture, where policy choices made today will determine the country's future energy security, economic resilience and climate commitments.