Deal to Replace 10k Old Taxis

The Iranian Fuel Conservation Company and the Association of Iran's Taxi Unions signed a deal on Monday to renovate the country's aging public transportation fleet, in the latest push to combat air pollution in major cities.

Based on the deal signed at the Energy Ministry in Tehran, the company will use funds saved through energy efficiency schemes to provide loans to taxi unions that have until 2023 to repay, IRNA reported.

According to the agreement, 2,000 hybrid sedans and 8,000 hybrid vans will be added to the country's taxi fleet.

The deal is part of a comprehensive scheme to replace a total of 140,000 dilapidated taxis across the country by 2023, which experts say will help reduce gasoline consumption by 3.2 billion liters and decrease carbon dioxide emissions by 1.54 million tons. The Energy Ministry, which oversees the IFCC, has set aside $635 million for the scheme.

Analysts say clunkers way past their service life are the main cause of air pollution in metropolises such as Tehran and Isfahan. 

In the Iranian capital, outdated vehicles are said to be responsible for a staggering 80% of the air pollution. Taxis, which hardly account for 2% of the public transportation fleet, contribute a whopping 18% to air pollution.

The deal comes a day after the government announced it was ready to replace 17,000 urban diesel buses.

Buses account for 23% of all transportation in Tehran. The city needs at least 10,000 buses for its daily commuting needs, while there are 7,000, a portion of which are "off duty" for repairs, according to the municipality.  According to the Department of Environment, 915,000 old cars have been scrapped since President Hassan Rouhani took office in August 2013.

Replacement of 20,000 pickup trucks is also on the Iranian government's agenda, alongside plans to promote the manufacture of electric and hybrid cars and motorcycles.