A crucial consultation session titled “Textiles at the Crossroads: Navigating CBAM, CTBCM & Tariff Shifts” was held at the National Textile University (NTU) in Faisalabad yesterday. The dialogue, organized by Alternate Development Services (ADS), an Islamabad-based think tank, brought together key stakeholders from the textile industry, academia, and government bodies. The session addressed key issues and challenges relevant to the textile sector.
In her welcome remarks, Dr. Hafsa Jamshed, Associate Professor, National Textile University – NTU, emphasized the importance of this dialogue in forging a unified approach to the challenges and opportunities presented by evolving global trade policies and domestic energy reforms. Dr. Muzzamil Hussain, from the same university, echoed this sentiment, highlighting the timeliness of the discussion on the Carbon Border Adjustment Mechanism (CBAM) and the Competitive Trading and Bilateral Contract Market (CTBCM), stressing the urgent need for proactive measures as the window for adaptation rapidly closes.
Amjad Nazeer, CEO, Alternate Development Services – ADS, explained the purpose of the consultation, focusing on the present situation and pathways for the industry to achieve decarbonization, net-zero emissions, and carbon neutrality. He emphasized the potential of CTBCM to incentivize a shift towards renewable energy sources, provided that regulatory hurdles such as unfair wheeling charges and stranded costs are addressed through the active engagement of all concerned parties, not solely the National Electric Power Regulatory Authority (NEPRA).
Khadija Zahra, Project Lead AREC at ADS, talked about the potential impact of CTBCM on the industries, outlining the strategic gains, latent risks, and the cost of delaying its proper implementation. She stressed the importance of designing CTBCM to support hybridization and advocated for formula-based, rather than administratively revised, wheeling and system charges.
Mr. Ahsan Umar, Commercial Director, Bata Pakistan, viewed CBAM as a catalyst for innovation and decarbonization, ultimately leading to cost reduction. He highlighted its potential to prevent carbon leakage and promote global decarbonization, noting Pakistan’s significant role in global emissions and the subsequent impact of CBAM.
Mr. Raffay Bin Rauf, Head of Compliance, Sustainability, HSE and Digital Marketing & Communications at Sapphire Finishing Mills, provided a critical industrial perspective on CBAM, particularly for export-oriented industries heavily reliant on European and US markets. He cautioned that the anticipated costs of 75-100 euros per ton of emitted CO2 under an expanded CBAM could be detrimental to SMEs. He also pointed out the challenge of limited transparency in sustainability journeys due to competitive concerns and the significant hurdle of Scope 3 emissions, where suppliers often lack awareness, technical expertise, infrastructure, and manpower.
Mr. Bilal Jamil, Chairman Standing Committee on Council of Textile, Federation of Pakistan Chambers of Commerce & Industry – FCCI, appreciated the session, emphasizing the industry’s lack of fundamental understanding of the implications of emerging tariff regimes. He expressed skepticism towards tariffs, viewing them as potentially politically motivated, with quality considerations taking a backseat. He underscored the critical need for collaboration between textile academia and the government, particularly in strategic planning for potential opportunities, such as anticipated business from the US.
Mr. Hazar Khan, Chairman, Pakistan Hosiery Manufacturers Association – PHMA North, shared his perspective that while policies are formulated, their effective implementation remains a significant challenge. He suggested that the current global scenario, including tariffs and geopolitical tensions, could potentially strengthen Pakistan’s position and attract more markets. However, he also highlighted Pakistan’s reactive nature and economic instability, often leading to the acceptance of imposed tariffs, and the nation’s current unpreparedness to effectively respond to tariff increases.
The consultation session concluded with a strong call for continued dialogue and concrete actions to equip Pakistan’s textile industry with the knowledge, strategies, and policy support needed to navigate the complexities of CBAM, CTBCM, and evolving tariff landscapes, ensuring its long-term sustainability and competitiveness in the global market.
