Iran belongs to the top ten greenhouse gases emitting countries in the world and the Iranian economy is the most energy intensive of all oil and gas producing nations. Domestic energy tariffs are set by administrative decree far below export market prices. Over the last decade, the energy productivity in Iran declined further. Iranian policy makers are aware of the need to the increase energy efficiency (EE) of the economy.
With the adoption of the Article 12 of the “Law on elimination of barriers to competitiveness and improving the country’s financial system” the legal basis was created for specific economic incentives for energy efficiency investments. Because the implementation mechanism is still to be developed no such investment projects have yet been implemented.
The project shall support Iran’s Vice-Presidency for Science and Technology to implement an integrated energy efficiency market in practice.
The IREEMA project therefore aims at developing together with the responsible Iranian stakeholders an efficient implementation mechanism and to lower transaction costs for potential investors. In addition, the project aims at testing this approach in practice by developing the huge energy efficiency potential in the country in two main areas: the gas sector with special focus on the South Pars Special Economic Energy Zone (PSEEZ) in Assaluyeh and the sustainable energy supply in selected rural pilot areas. In case of necessity, adjustments of the implementation mechanism will be suggested accordingly to ensure proper functioning. The implementation mechanism shall become the corner stone of the integrated market for energy efficiency in Iran. Such a functioning mechanism could foster the implementation of Iran’s INDC and even raise the ambitions of policy makers.