According to the Energy Exchange, the technical and operational
infrastructure for trading these certificates has already been established, but
formal trading awaits final approval of implementing regulations under Article
22 of Iran’s Seventh Development Plan. The rules are being prepared jointly by
the Department of Environment, the Securities and Exchange Organization, and
other relevant agencies.
Mohammad Ahmadi, Director of Operations and Market Supervision at the
Iran Energy Exchange, said in a note published in the Iran Investment Institutions
Association Bulletin that the initiative represents “a strategic step
toward integrating environmental responsibility with economic efficiency.”
Market Mechanism
The new certificates will operate under a cap-and-trade
framework — a globally recognized system designed to control emissions through
market-based incentives. Each certificate grants the holder the right to emit a
specific amount of pollutants.
Industries that reduce emissions below their assigned cap will be able
to sell excess credits, while high-emission industries will be required to buy
additional certificates or face penalties. This mechanism effectively puts a
price on carbon, turning pollution from a hidden cost into an economic factor
in corporate decision-making.
Economic and Environmental Impact
Ahmadi noted that the system offers benefits at both micro and macro
levels. For individual companies, it creates new revenue streams by monetizing
emission reductions and provides flexibility in managing environmental
compliance costs. For the national economy, it supports Iran’s sustainable
development goals by channeling investments into clean technologies and
renewable energy.
He added that establishing a transparent carbon price would help
businesses assess future environmental risks more accurately and integrate them
into long-term planning.
The market is expected to encourage investment in energy-efficient
technologies, renewable power generation, and green innovation projects such as
waste gas recovery and afforestation.
Global Perspective
Globally, carbon markets exceeded $900 billion in value in 2023, while
government revenues from carbon pricing instruments surpassed $100 billion in
2024. More than 80 carbon pricing mechanisms are currently in operation
worldwide, covering around 28% of total greenhouse gas emissions.
Iran aims to build a domestic market compatible with international
standards, paving the way for future integration into global carbon trading
systems. Such participation could attract foreign investment, enable the sale
of surplus carbon credits, and generate foreign currency income.
Strategic Significance
Analysts say Iran’s high energy consumption intensity and the
dominance of energy-intensive industries give the country significant potential
for emission reduction and participation in carbon markets.
The Energy Exchange said it stands ready to launch trading as soon as
the regulatory framework is approved. Officials see the new certificates not
only as an environmental obligation but as a catalyst for green investment,
export competitiveness, and long-term economic resilience.
“The Carbon Credit Certificate is more than a compliance tool — it’s
an economic opportunity,” Ahmadi said. “It allows Iran to move closer to
sustainable growth while aligning with emerging global climate standards.”