According to the National Petrochemical Company, CEO Hassan Abbaszadeh spoke Sunday at the signing ceremony of a cooperation agreement to reduce fuel intensity and improve energy efficiency in power plants, with investment from the petrochemical sector. The ceremony was held on the sidelines of the Energy Cycle specialized exhibition and event.

Abbaszadeh said the petrochemical industry’s production capacity has surpassed 100 million tons and is projected to reach about 131 million tons by the end of the country’s Seventh Development Plan in 2028.

He identified feedstock shortages as one of the main challenges facing industrial production, noting that despite Iran’s vast energy resources, full utilization of installed capacity is not always possible due to inefficient energy consumption.

Need to Accelerate Renewable Energy Development

Abbaszadeh said Iran’s electricity generation mix remains heavily dependent on hydrocarbon resources, while renewable energy still accounts for a relatively small share. He expressed hope that renewable energy development will accelerate in the future.

He emphasized the strategic importance of feedstock for the petrochemical industry, noting that fuels currently used for power generation could create greater value if directed into petrochemical value chains. Allocating more feedstock to petrochemical production could boost economic growth, increase foreign currency revenues and create jobs, provided energy consumption in other sectors is managed more efficiently.

Abbaszadeh also noted global refining trends toward petrochemical-focused production, with petrochemical products accounting for up to 70% of refinery output in some regions.

Higher Value Creation Through Petrochemical Production

He said the regional average stands at about 45%, while in Iran only about 3% to 5% of crude oil processed in refineries is converted into petrochemical products. Increasing this share could generate substantial added value.

Abbaszadeh said developing integrated petro-refineries and upgrading existing refineries is a key strategy of the Oil Ministry to increase value creation. He added that Iran’s energy distribution relies heavily on natural gas, and high consumption in the residential sector and inefficient uses place significant pressure on the energy network.

He noted that gas supply to some petrochemical complexes is restricted during the cold season to meet residential demand, causing economic losses. He said the National Petrochemical Company has prioritized consumption optimization to ensure stable feedstock supply and fulfill its economic responsibilities.

Cooperation With Power Plants to Improve Efficiency

Abbaszadeh said power plants consume about 26% to 30% of the country’s gas supply, with many operating at low efficiency. As a result, valuable gas that could be converted into higher-value products is instead consumed as fuel without maximizing its potential.

He said cooperation with the Energy Ministry and implementation of optimization projects can reduce fuel consumption, lower emissions and increase feedstock availability for the petrochemical sector.

Abbaszadeh added that petrochemical companies investing in these initiatives will benefit directly, while the country will gain significant national economic advantages.

He expressed hope that implementation will begin quickly following the agreement and that measurable benefits from improved gas efficiency in power plants will be visible before the next cold season.

Abbaszadeh also thanked petrochemical companies, government agencies, specialists and knowledge-based firms for their continued cooperation, emphasizing that sustained efforts and the use of scientific and technological capabilities are essential to improving energy efficiency and strengthening the national economy.