Speaking Tuesdayat a joint expert meeting of the Oil and Energy ministries on solar power development, Kazem Kashefi stressed the need to adopt modern financing methods for renewable projects. “Alongside current investment models, carbon financing should also be considered,” he said. “Carbon mechanisms offer significant potential for technology transfer, financial incentives and capacity building.”

He noted that renewable projects are exempt from sanctions, adding: “We should not dismiss carbon financing simply because foreign facilities may seem inaccessible. Renewables are among the few areas outside the scope of sanctions, allowing for serious review and cooperation.”

How Carbon Markets Work — and Iran’s Position

Kashefi explained that carbon markets are built around “carbon dioxide equivalent,” which includes seven greenhouse gases. These markets are divided into mandatory and voluntary systems. Mandatory (compliance) markets operate under government oversight, setting emission caps for industries. Companies that exceed their limits must pay penalties or buy certificates from those emitting below their cap. “Global trade has effectively formed around reducing carbon emissions,” he said.

He added that in compliance markets, the price of one ton of emissions ranges from $50 to $187. Iran, however, has not formally entered these markets.

Qatar’s GCC: Iran’s Entry Point into Carbon Markets

Kashefi said UN-affiliated carbon markets, such as those under the Paris Agreement, are active, but Iran cannot access them because it has not joined the accord. Even so, he noted that voluntary carbon markets exist and are project-based.

He added that major markets in the United States and most of Europe do not work with Iran, but one that does is Qatar’s Global Carbon Council (GCC), which offers notable potential for solar and wind projects. GCC issues certificates and hosts a wide range of registered projects.

Missed Revenue Opportunities in Gas Flaring Projects

Kashefi said the GCC market offers more than 170 types of certification in eight categories, covering everything from solar and wind projects to equipment efficiency improvements, industrial process upgrades and energy recovery. Each category has its own structure and pricing, and Iranian projects could enter many of them.

He warned that pursuing large energy projects without using carbon markets would be a mistake. “Some of our projects have capacities that, if left out of carbon markets, could lose billions of dollars in revenue,” he said.

Pointing to the potential of gas flaring projects, he stated: “Flaring projects could register around 5 million tons of emission reductions. At the current GCC price of $9 per ton, that amounts to $450 million a year. Over 10 years, the value multiplies. Why overlook such significant revenue?”

Untapped Potential for Carbon Certification in Iran

Kashefi warned that after one year of operating a flaring project, its initial documentation can no longer be registered in carbon markets. “None of our flaring projects have used this opportunity,” he said.

He added that waste-to-energy systems, smart irrigation wells, water and soil management projects, and retail sector initiatives all fall under categories recognized by GCC and can generate substantial carbon credits.

He also said that large capacities exist in reforestation, afforestation and blue carbon projects, and that a wide range of transportation initiatives — including metro, BRT, electric and hybrid fleets — also qualify for carbon certification.

Renewable Projects: Prices Ranging from $2 to $20

Kashefi noted that carbon prices fluctuate. “Renewable energy projects currently receive $2 per ton, down from $4,” he said. Energy efficiency projects, such as heater replacement programs, currently price at $7. “If these capacities are not used, opportunities will be lost.”

He explained that GCC project prices vary across a 10-year registration period. The base price for renewables is about $2 in the first year, but the 10-year market average ranges from $3 to $7, and rising trends could push prices to $20–$50. “A $2 project today could be worth $4 next year and reach $20 within a decade,” he said.

Citing an example, he added: “A 100-megawatt solar plant reduces emissions by nearly 100,000 tons. At $2 per ton, that is $2 million over 10 years. If prices rise to $10, that becomes $10 million.”

Turkey, Iraq and Afghanistan Ahead of Iran

Kashefi said GCC has registered 1,500 projects so far, with about 100 receiving certificates. A large share of demand comes from the International Civil Aviation Organization (ICAO), which purchases credits for its carbon portfolio.

Of the 30 gigawatts registered in GCC, 28 million tons of emission reductions come from solar projects. Of 505 total projects, 203 are solar, led by Turkey, Iraq and Afghanistan.

Kashefi said solar project registration requires a PDD (Project Design Document). After expert review and project listing on the GCC website, certificates are issued one year later based on metered production.

Lack of Awareness Among Iranian Investors

Kashefi cited limited awareness among Iranian investors as a major challenge: “Many investors do not know how certificates are issued, which markets are active, or what revenues they could generate.”

He also mentioned other challenges, including project ownership issues, revenue-sharing mechanisms, sanctions-related restrictions, limited domestic experience, security concerns over data sharing with foreign consultants, and requirements for verification and validation.

Despite these challenges, he emphasized that carbon markets are worth exploring. “Initial assessments are completely free,” he said. “With full knowledge of carbon market capacities, we can meet technical and security requirements and use these tools to advance renewable energy development in our country.”