Introduction and Key Challenges
Iraq faces formidable obstacles in shifting to a cleaner and more equitable energy system. In 2023, Iraq ranked third globally in gas flaring – behind Russia (~59 billion m³) and Iran (20.4 billion m³) – burning roughly 17 billion cubic meters of associated gas, according to the World Bank’s Global Gas Flaring Tracker. This flaring not only wastes potential fuel and revenue but also pollutes the air and exacerbates climate change. Most of this flaring involves associated gas produced alongside oil, which could be captured and utilized. Non‑associated flaring is comparatively minor and usually linked to operational upsets, so Iraq’s pervasive flaring is largely avoidable if policy and infrastructure gaps are addressed. A significant portion – around 20% of Iraq’s flared gas – comes from the semi-autonomous Kurdistan Region (KRG) in the north. Unlike in remote deserts, many KRG oil fields are near towns and villages, meaning local populations are heavily exposed. An estimated 1.19 million Iraqis (mostly in the north) live within 1 km of multiple flare sites, suffering elevated health risks. These conditions underscore the environmental justice issues at stake: rural and minority communities near oil sites bear the brunt of pollution and health impacts. In fact, Iraq flares more gas than it imports from Iran to power its electricity grid, underscoring an energy‑security paradox: the country wastes domestic gas while relying on costly imports.
Beyond flaring, Iraq’s broader energy transition challenge stems from heavy dependence on oil for revenues and power generation, weak infrastructure for gas capture, and decades of conflict and underinvestment. Iraq’s national grid is underpowered and often supplemented by diesel generators, while renewable energy is only beginning to be introduced. Crucially, political fragmentation between Baghdad’s federal government and the KRG has led to disjointed energy policies. However, deeper than this territorial divide is the closed nature of Iraq’s energy policymaking. Decisions about oil and gas are dominated by a narrow set of actors with minimal parliamentary oversight and no comprehensive legal framework, creating a “limited access order” that hampers investment, transparency and regulatory enforcement across both federal Iraq and the KRG. This briefing focuses on Iraq’s main energy transition challenges and the power dynamics impeding progress, with a special lens on the KRG. It also examines implications for gas flaring policy and offers recommendations – including engaging regional coalitions – to advance a just energy transition, one that is fair, inclusive, and transparent.
The views represented in this paper are those of the author(s) and do not necessarily reflect the views of the Arab Reform Initiative, its staff, or its board.
