Iran Urged to Boost Petchems for Global Competitiveness

Iran Urged to Boost Petchems for Global Competitiveness
(Sunday, March 9, 2025) 10:28

TEHRAN (NIPNA) – The CEO of Shastan Commercial Investment Company has called for sustainable development, energy optimization, and technological advancement as essential measures to enhance Iran’s petrochemical sector and strengthen its global standing.

Speaking at the 11th Petrochemical Industry Excellence Awards, Afshar Baziar underscored the sector’s critical role in Iran’s economy, highlighting the need for transformation in response to global trends and internal challenges.

"The petrochemical industry significantly contributes to foreign exchange earnings, technology, and employment; however, it faces challenges such as 19% idle production capacity, feedstock constraints, high energy consumption, excessive carbon emissions, and non-competitive pricing," Baziar said.

Addressing Structural Inefficiencies

Baziar emphasized that Iran’s petrochemical industry, despite having a nominal production capacity exceeding 90 million tonnes annually, is only utilizing around 70 million tonnes. "The 19% idle capacity, driven by feedstock shortages and infrastructure deficiencies, poses a serious obstacle to industry growth," he noted.

High energy consumption remains a pressing issue, with certain production units using up to 30% more energy than the global average. Additionally, Iran’s petrochemical sector contributes over 20 million tonnes of carbon dioxide emissions annually, accounting for 25% of the country’s total CO2 output.

"The industry must adopt sustainable practices to enhance efficiency and reduce its environmental footprint," Baziar stated.

Diversification and Value Chain Development

Iran’s petrochemical industry has long relied on products such as methanol, urea, and polyethylene, which offer relatively low value-added benefits. "A shift towards advanced polymers, nanocomposites, and high-value materials is essential for improving global competitiveness," Baziar said, pointing out that leading international firms are already prioritizing such products.

He also warned against over-reliance on a single market, noting that over half of Iran’s petrochemical exports are destined for China. "This concentration poses trade risks; we must expand into new markets and enhance export strategies," he said.

Moreover, Iran remains heavily dependent on imported catalysts, with 70-80% of its needs being sourced externally, costing the country around $500 million annually.

Strategic Solutions for Industry Growth

Baziar outlined several strategies to enhance efficiency and sustainability in the sector. "Energy management, domestic technology development, process optimization, and circular economy initiatives are critical to improving industry performance," he said. As an example, he cited a petrochemical plant that reduced energy consumption by 7% through olefin unit optimization, potentially saving billions of cubic meters of gas and generating billions of dollars in additional revenue.

Developing petro-refineries to ensure a stable and diverse feedstock supply was another priority highlighted by Baziar. "These integrated facilities can strengthen the petrochemical value chain and reduce dependence on limited resources," he added.

Digital Transformation for Competitiveness

Baziar also stressed the importance of digitalization and integrated management systems. "Leading global firms are leveraging smart technologies to optimize production and maintenance processes. Investing in these advancements can significantly boost Iran’s petrochemical competitiveness," he asserted.

To strengthen exports and profitability, Baziar recommended innovative market strategies such as joint production agreements for niche products, long-term sales contracts for less-demanded goods, and entering new markets through retail distribution networks.

Despite the challenges, Baziar expressed optimism about the industry’s future, citing Iran’s vast energy resources, skilled workforce, and strong petrochemical infrastructure. "With committed leadership and the right support, Iran’s petrochemical industry can sustain its pivotal role in the national economy while expanding its global influence," he concluded.


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