Last year, the National Iranian Gas Company signed 22 contracts with energy service companies, opening a new path for private-sector participation in energy-efficiency projects. The initiative aims to reduce energy consumption by 25% to 35% in targeted sectors through efficiency projects, equipment upgrades and changes in consumption patterns. Saeed Tavakoli, managing director of the National Iranian Gas Company, has estimated annual natural gas savings of 980 million cubic meters from projects carried out by the companies. Saeed Pakseresht, director of integrated planning at the company, has also projected savings of about 1 billion cubic meters of gas in the Iranian calendar year beginning March 2026.

Under the model, the Oil Ministry has brought specialized energy service companies into the field to help reduce energy intensity, improve efficiency and free up valuable natural gas for productive sectors of the economy. The companies use technical expertise, new technologies and incentive mechanisms, while helping shift consumption from low-value, low-tariff sectors to industrial sectors with higher economic value. Their activities cover a broad range of sectors, including households, commercial and administrative buildings, agriculture, greenhouses, poultry farms, bakeries, brickmaking units and industries.

With the Oil Ministry and the National Iranian Gas Co. providing oversight and direction, nongovernmental companies are participating for the first time through the energy service company model in a range of technical, operational and cultural initiatives aimed at reducing energy losses and improving efficiency across the consumption chain in provinces throughout the country.

Oil Minister Mohsen Paknejad said the issuance of the certificate is an important step toward commercializing energy savings and developing the gas-efficiency market. Such a market could create economic incentives for greater private-sector participation and investment in gas-consumption optimization projects.

The initiative is expected to help reduce the gas supply-demand imbalance and direct more gas toward industries that generate foreign-exchange earnings. It could also benefit the private sector by creating a transparent and profitable investment market through the Iran Energy Exchange, while households could benefit from equipment upgrades, lower utility bills and improved air quality.

Under the model, gas savings are accompanied by energy-saving certificates. Energy service companies receive certificates for each cubic meter of gas saved, which can then be offered on the Iran Energy Exchange to large industrial consumers. The difference between household gas tariffs and the market value of saved gas on the exchange provides a key incentive for private-sector investment in consumption-reduction projects, creating a transparent and reliable economic cycle for energy efficiency.

The companies' mandate also includes managerial and technical measures based on analysis of historical consumption data and forecasts of future demand. These measures include smart scheduling of equipment use, consumer education on reducing consumption and economic incentives to encourage changes in consumption behavior. The approach is designed not only to achieve measurable reductions but also to promote a culture of conservation and efficient energy management.

Two cooperation models have been defined under the contracts. In the first, an energy service company acts as a gas retailer and assumes responsibility for distribution and consumption management within a designated area. In the second, companies focus solely on optimizing consumption and generate revenue through energy-saving certificates.

At the same time, the National Iranian Gas Co. has emphasized continuous performance monitoring and verification of savings. Accurate measurement of reduced consumption, recording data through smart systems and linking the results to the Iran Energy Exchange are among the requirements established for the initiative. Energy service companies will also provide analytical reports, assess consumption trends and forecast future demand to support smarter and more efficient resource management.

This data-driven approach can help policymakers make better decisions while creating the conditions for expanding the energy service company model to other energy-intensive sectors. In the medium term, the model could become a key tool for sustainable energy management and help institutionalize a culture of energy efficiency and conservation nationwide.

More importantly, Paknejad said the issuance of the certificate transforms natural gas savings from a purely managerial effort to reduce consumption into an economic opportunity that can be valued and traded. That shift could provide a stronger incentive for private companies to invest in energy-efficiency projects.