Fossil fuel enjoys discriminatory advantages in nat’l budget: CPD

Bangladeshi think tank Centre for Policy Dialogue (CPD) observed that the proposed national budget for FY2026-27 allowed discriminatory fiscal advantages for fossil fuel, potentially undermining the country’s energy transition objectives.

Expressing deep concern on government’s planning to go for domestic coal exploration, including setting a production target of 6 lakh metric tonnes for FY2026-27 and undertaking new projects for Barapukuria Second Phase and Dighipara Coal Field, it said, “Such fiscal favours given to coal are nothing but a hindrance towards energy transition.”

The local think tank also found the proposed national budget for FY2026-27 took several steps to promote renewable energy, but it allows fossil fuels continue to enjoy discriminatory fiscal advantages at the same time.

CPD Senior Research Associate Helen Mashiyat Preoty came up with the observations while presenting a paper titled “Proposed National Budget for FY2026-27: What is there on the Power and Energy Sector?” held at its Dhanmondi office on Wednesday.
CPD Research Director Khondaker Golam Moazzem chaired the event.

CPD warned that this trajectory makes the government’s target of achieving 20 per cent renewable energy by 2030 extremely difficult, as it would require installing 1,662 MW of solar capacity per annum between January 2026 and December 2030.
CPD, however, acknowledged that, for the first time, the proposed budget offered substantial fiscal support to solar-based electricity generation.

CPD also criticized the limited attention given to solar-powered irrigation in agriculture, noting that the budget mentions only 98 solar irrigation pumps and 27 solar wells.

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