Industry

Since 2000, industrial energy use in Pakistan has seen two periods of rapid growth (between 2002-07 and again in 2013-18), with a period of declining consumption in between.¹ Historically, industrial energy consumption has been highly correlated with GDP growth.²^,³ Unfortunately, due to the industrial energy structure, GDP growth has also been correlated with industry related emissions. Fossil fuel use increased during periods of increased industrial output, with natural gas use growing by 72% between 2002-07 and coal use growing by 162% between 2013-18. Consequently, emissions intensity of the industrial sector grew with energy use during these periods. Coal consumption in Pakistan has increased significantly from historically low levels, with most of this increase occurring in the last five years.⁴ As noted in the country’s updated NDC, industry accounts for around 73% of the consumption of imported coal, with cement production accounting for 65% of that.⁵

Fuel share provided refers to energy demand only from the industry sector.

Graph description

Energy mix composition in the industry sector in consumption (EJ) and shares (%) for the years 2030, 2040 and 2050 based on selected IPCC SR1.5 global least costs pathways.

Methodology
- Downscaling the energy mix in the final energy demand sectors
Data References
- Historical energy consumption : IEA WEB 2021

Under 1.5°C compatible pathways, industrial emissions begin to decrease immediately but in earnest after 2030. Energy related emissions drop to half of 2019 levels (54 MtCO₂) before 2035, and are halved again by 2050. This is driven by a structural change in energy consumption. Coal is phased out for industrial energy use by 2040 as the use of solid biomass and electricity increases, the latter reaching a share of 34-36% in that year (up from 11% in 2019). As hydrogen and biomass use ramp up after 2050, gas use, already in decline from 2030, decreases even more rapidly. As such, industrial direct CO₂ emissions drop to between 14-15 MtCO₂ by 2040.

While the government has not set any firm mitigation targets for the industrial sector, it has, in its National Action Plan on Sustainable Development Goal 12, included several measures to promote renewable energy uptake and incentivise carbon trading between industries.⁶ However, it is not yet certain what the emissions reduction potential of these measures could be.

Direct CO₂ emissions only are considered (see power sector for electricity related emissions, hydrogen and heat emissions are not considered here).

Graph description

Direct CO₂ emissions of the industry sector in selected 1.5°C compatible pathways.

Methodology
- Downscaling power carbon intensity
Data References
- Historical energy consumption : IEA WEB 2021
- Historical energy emissions : IEA GHG emissions from Energy database 2021

Graph description

1.5°C compatible CO₂ emissions pathways. This is presented through a set of illustrative pathways and a 1.5°C compatible range for total CO₂ emissions excl. LULUCF. The 1.5°C compatible range is based on global cost-effective pathways assessed by the IPCC SR1.5, defined by the 5th and 5th percentiles.

Data References
- Sectoral emissions from PRIMAP-Hist 2021 scaled to total GHG emissions of the country

Indicator	2019	2030	2040	2050	Decarbonised industry sector by
Direct CO₂ emissions MtCO₂/yr	56	25 to 32	14 to 15	10 to 10	2045 to 2047
Relative to reference year in %		-55 to -43%	-75 to -73%	-81 to -81%

Indicator	2019	2030	2040	2050
Share of electricity per cent	11	19 to 24	34 to 36	49 to 54
Share of electricity, hydrogren and biomass per cent	29	46 to 50	58 to 88	73 to 95

Fuel share provided refers to energy demand only from the industry sector. BECCS are the only Carbon Dioxide Removal (CDR) technologies considered in these benchmarks.
Only direct CO₂ emissions are considered (electricity, hydrogen and heat emissions are not considered here; see power sector for emissions from electricity generation). All values are rounded. Year of full decarbonisation is based on carbon intenstiy threshold of 5gCO₂/MJ.

Pakistan’s updated NDC notes that 2018 marked an end to the high economic growth which drove increased cement production. Carbon intensity of industrial energy consumption (gCO₂/MJ), which began increasing in 2013, seems to have peaked in 2018. See the IEA’s country profile for further details. ↩
Chandio, A. A., Rauf, A., Jiang, Y., Ozturk, I. & Ahmad, F. Cointegration and causality analysis of dynamic linkage between industrial energy consumption and economic growth in Pakistan. Sustain. 11, (2019). ↩
Interestingly, recent studies have shown that in the long run, consumption of oil in the industrial sector negatively impacts GDP while electricity consumption positively impacts GDP.[^7] ↩
See the IEA’s country profile for further details on historical consumption of coal and total energy supply generally. ↩
The Government of Pakistan. Pakistan: Updated Nationally Determined Contributions 2021. (2021). ↩
The Government of Pakistan. Pakistan: Updated Nationally Determined Contributions 2021. (2021). ↩

What is Pakistan's pathway to limit global warming to 1.5°C?

Pakistan's energy mix in the industry sector

petajoule per year

Pakistan's industry sector direct CO₂ emissions (of energy demand)

MtCO₂/yr

Pakistan's GHG emissions from industrial processes

MtCO₂e/yr

1.5°C compatible industry sector benchmarks

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