The Planters’ Association of Ceylon (PA) has called for the implementation of a more sustainable electricity tariff framework and energy generation policy, citing the severe economic strain faced by the plantation sector and other export-oriented industries due to prohibitively high electricity tariffs.

The PA’s appeal comes at a critical juncture, with public consultations on the Ceylon Electricity Board’s (CEB) most recent proposal to the PUCSL for a 13.6% hike in tariffs by the second quarter (Q2) of 2026 scheduled over the coming month.

Following the regulator’s rejection of the previously proposed Q1 hike, the industry now faces the risk of a ‘price cliff’ in April as the utility seeks to recover infrastructure losses and operational deficits.

While agri-businesses require minimal energy inputs during cultivation, plantation operations become highly energy-intensive once crops reach the factory stage, where continuous processing is essential for operational continuity.

The PA noted that, unlike several other key export-earning sectors, RPCs are excluded from any form of concessionary or differential tariff structures. While other export industries often benefit from subsidized infrastructure within dedicated Export Processing Zones or negotiated sector-specific relief, RPCs are billed under standard Industrial (I-2/I-3) General rates.

Consequently, due to the 24-hour nature of tea and rubber processing, RPCs are disproportionately impacted by Time of Use (TOU) peak-hour surcharges. This lack of a dedicated 'Agricultural Export' tier means the plantation sector bears some of the highest effective unit costs within the non-domestic category, directly undermining the global price competitiveness of Sri Lankan exports.

This recent proposal around tariff hikes follow’s a previous January 2026 decision by the PUCSL to freeze tariffs for the first quarter, citing procedural defects in the CEB’s initially proposed 11.6% hike.

While the pause provided a temporary reprieve, the PA called for careful consideration of the impact on export competitiveness given the potentially catastrophic impact on the already high Cost of Production in tea and rubber processing.

The PA further noted that elevated energy costs would likely constrain the sector’s ability to reinvest in sustainability initiatives and weaken its competitiveness in international markets, particularly where rival producers benefit from lower energy costs, preferential tariffs and economies of scale.

How the Plantation Sector is Responding to Rising Energy Costs?

In the face of sustained tariff pressure, the plantation industry has proactively pursued strategies to reduce dependence on grid electricity. Across six leading RPCs, extensive energy efficiency and renewable energy projects are already underway. These include the widespread adoption of LED lighting, high-efficiency boilers, variable speed drives for motors and advanced energy management systems deployed across factories and estates.

Technology upgrades have enabled plantations to progressively lower energy intensity, reducing both emissions and operating costs. Several companies are participating in international certification and verification programmes, including ISO standards and frameworks such as the Science Based Targets initiative (SBTi), to independently validate emission reductions. By systematically tracking Scope 1 emissions from direct operations and Scope 2 emissions from purchased electricity, RPCs are aligning operations with global best practices, strengthening ESG credentials, and enhancing investor confidence.

Renewable Energy and Efficiency Gains Across the Plantation Industry

Several RPC’s have invested in mini-hydro, rooftop and ground-mounted solar, biogas systems, high-efficiency motors, boilers and advanced energy management technologies. Bogawantalawa alone has committed over LKR 300 million to solar and hydro projects, while Talawakelle Tea Estates invested Rs. 59.3 million in rooftop solar expansion in 2024/25.

These initiatives generate tens of millions of kilowatt-hours annually, enabling some companies to produce well over 100% of their grid electricity consumption from renewable sources. In certain cases, surplus power is exported to the national grid, generating revenue streams alongside cost savings. Mini-hydro and micro-hydro facilities further contribute substantial clean energy output, particularly in estate-based factory operations, while biogas units and fuelwood continue to offset fossil fuel use.

Energy efficiency measures have also delivered measurable gains. Across estates and factories, RPCs have installed over 90 variable frequency drives, replaced outdated motors with IE3 energy-efficient models, introduced building and motor system optimisation programmes and upgraded to ISO 50001-certified energy management systems in selected locations. These interventions have resulted in significant reductions in electricity consumption, alongside verified declines in greenhouse gas emissions, running into thousands of tonnes of CO₂-equivalent annually when aggregated across companies.

The Case for Policy Alignment

Through sustained investment in clean energy, adoption of international standards and innovation across solar, hydro and efficiency technologies, RPCs are building a future-ready export model that supports both economic resilience and Sri Lanka’s climate commitments.

However, despite its export earnings, contribution to rural livelihoods and growing role in decarbonization, the plantation sector is yet to receive rightful recognition.

Accordingly, The PA stressed that electricity tariffs must reflect the plantation industry’s dual role as a major export earner and a key contributor to national sustainability goals. A concessional or green tariff structure would enable RPCs to reinvest savings into expanding renewable capacity, accelerating energy efficiency upgrades and progressing toward net-zero targets, delivering benefits for Sri Lanka’s broader economic and environmental objectives as a whole.