Iraq prepares to court Article 6 and CORSIA buyers with gas flaring reduction project
By Article 6 Network
Iraq’s government has high hopes for a gas flaring reduction project that could be registered by early 2027. It plans to seek international buyers under Article 6 and CORSIA, a senior executive told Carbon Pulse. If it succeeds, Iraq, one of the world’s largest gas flarers, would enter compliance-grade carbon markets with a potentially very large source of supply.
A senior executive told Carbon Pulse that the Iraqi government expects a gas flaring project to reach registration by early next year. The government plans to market the resulting credits to international buyers under Article 6 of the Paris Agreement and the UN’s CORSIA aviation offsetting scheme.
Iraq has a very large flaring problem. The World Bank ranks it as the second-worst flaring country after Russia, with more than 17.9 billion cubic metres of gas flared in 2022. Flaring is Iraq’s second-largest source of carbon emissions after oil. Baghdad aims to eliminate routine flaring by 2028, and Basrah Gas Company is advancing a major associated-gas capture project in the south.
Carbon finance is part of that strategy. A pilot planned for the East Baghdad oil field cluster, operated by China’s EBS Petroleum, would use carbon credits to finance gas processing infrastructure able to handle up to 12 million standard cubic feet per day of associated gas. Iraq’s government began reviewing carbon project proposals and discussing Article 6 cooperative approaches in early 2025. In August 2026, an Iraqi state enterprise and a German recycling company signed a government-backed waste management agreement expected to generate 2 million credits a year.
Signals to watch
- Large-scale industrial supply: Flare-gas recovery can generate big credit volumes from a small number of sites. If authorised with corresponding adjustments, Iraqi flaring projects could become a major new source of ITMOs and CORSIA-eligible units in the Middle East.
- Additionality will be the central question: Buyers and ratings providers will check whether credits pay for capture that would not otherwise happen. This matters because Iraq has a national goal to end flaring by 2028, and captured gas has commercial value for power generation and to reduce imports. Projects will need to show that carbon revenue is decisive, and baselines must take account of government policy.
- Authorisation infrastructure is untested: Iraq has no track record of issuing LoAs, operating a registry or applying corresponding adjustments. Investors should treat the registration timeline as ambitious and track the steps toward a national Article 6 framework and a first bilateral cooperative approach.
- Demand fit: CORSIA buyers are looking for eligible supply before the Phase 1 deadline. Sovereign Article 6 buyers increasingly prioritise methane mitigation. Given the oil and gas link, expect buyers to look closely at safeguards, how revenue is shared, and whether projects risk subsidising expanded oil output.
- Regional precedent: A successful Iraqi flaring project could serve as a template for other high-flaring producers in the Middle East and North Africa. It would position upstream methane and flaring reduction as a key Article 6 category, alongside PACM’s growing range of methane methodologies.
Sources:
- Iraq Oil Report – Iraq explores carbon credits to reduce gas flaring
- Energy Intelligence – Iraq gas capture plans advance
- Carbon Pulse – Iraq steps up Article 6 push
- Carbon Pulse – Iraq, Germany back waste project
