Cambodia Urged to Fast-Track Clean Energy or Risk Losing Garment Brands
2025-10-02 17:00
Cambodia must urgently accelerate its clean energy transition to keep pace with global brands’ strict net-zero commitments, as an expert warns that without clear policies on renewable energy certificates, rooftop solar and corporate power purchase agreements, the country risks losing competitiveness in its multi billion dollar garment industry
As global brands double down on net-zero commitments, Cambodia must strengthen the garment sector’s clean energy transition or risk losing ground to garment-producing rivals in the region, an expert warns.
Speaking at the Clean Energy Week Summit on October 2, Peter Ford, Energy Policy Lead for Garment and Clean Energy Skills at EnergyLab Asia, said Cambodia’s National Grid emission factor is low and falling, which is “something to celebrate”.
Unlike regional peers, Cambodia does not rely on onsite coal, and its garment factories - smaller and mainly focused on final production stages - have relatively low energy demands.
Combined with the country’s vast solar potential, “especially rooftop solar paired with battery storage”, Ford said Cambodia has attractive conditions for renewables.
However, significant barriers remain. “While the green emission factor is very low, there’s currently no way for garment factories to demonstrate they’re using renewable energy,” Ford cautioned.
He added that many factories rely partly on biomass, which poses “quite significant risks to deforestation”, while rooftop solar adoption is hampered by costs and shifting regulations.
Ford said decarbonisation is now urgent. “Under the UNFCCC’s Fashion Charter, brands have committed to a 50 percent cut in absolute emissions by 2030 and net-zero by 2050,” he noted.
“Unlike other industries, the garment sector is holding to these commitments. As the garment sector represents about 50 percent of Cambodia’s export GDP, it should be front of mind for policymakers.”
With about 90 percent of fabrics currently imported, both the industry and government plan to expand domestic fabric production in a move that will sharply increase energy demand, meaning expansion will need to be fuelled by clean energy.
Many global brands sourcing from Cambodia have already committed to 100 percent renewable energy by 2030, with others targeting net-zero by 2040. “2030 is not very far away,” Ford warned.
“The only way to transparently demonstrate net-zero action is to be 100 percent electric as a sector. This removes the risks around biomass, which will increasingly carry higher emission factors.”
A recent EnergyLab study of 800 export-oriented factories found they consume about eight percent of Cambodia’s electricity - roughly $350 million annually in revenue for Electricité du Cambodge (EDC).
“If all of these factories were 100 percent electric, that figure would rise to about $650 million,” Ford said. “These are significant sums, especially considering energy bills represent only about five percent of operating costs. This illustrates the economics around the industry.”
Ford urged swift policy action, noting, “Every major garment-producing country already has three key tools in place; Cambodia currently has none.”
These include providing clarity on Renewable energy certificates (RECs) to allow companies to match grid electricity with certified renewable energy. “The lack of clarity in Cambodia is a concern,” Ford said.
Clearer rooftop solar rules are also required to unlock Cambodia’s abundant solar resources. And corporate power purchase agreements (PPAs) need to be created to let factories buy certified renewable electricity through long-term contracts.
“Every other major garment country has PPAs, either established or in pilot stages - most recently Bangladesh. Cambodia stands out as an exception,” Ford told the audience.