Kazakhstan

Country Information

Important Dates

Joined the PMR: 
March 2014

Key Documents & Presentations

Market-based Approach

MRV

Kazakhstan has focused on developing the MRV system. 40 sectoral guidelines for GHG monitoring and reporting have been developed to date but the work is still in progress; more detail and clarity in monitoring and reporting i.e. templates, methodologies are being developed. The verification framework is not fully in place yet; Kazakhstan needs to develop a methodology and guidance for conducting verification, enforce the international standards and oblige monitoring of verifiers.

Registry

Kazakhstan no longer plans to use the Seringas technology it had acquired in 2010 and is working to develop Kazakhstan’s own registry and link it to the data management system. Further work is needed to determine a registry that fits the Kazakh context.

Regulatory and Institutional Framework

A regulatory framework began to develop from the start of Kazakh ETS as it was initiated by amendment to the Ecological Code. Currently, continued efforts are being made to formulate further amendments to the Ecological Code through consultations with relevant Ministries and industry. Such amendments cover all of the main ETS components including:

  • Allocation issues related to new entrants and installation extension;
  • Determination of the relevant threshold for each sector covered;
  • Clarify the boundaries of “installations”;
  • The accreditation rules and mechanisms for third party verifiers must be significantly strengethened; and
  • Penalties for not reporting, or delays in reporting, must be considered to ensure better data and document collection.

The proposed amendments will be finalized in February 2014 and then reviewed and discussed by stakeholders and eventually enforced early 2015.

Kazakhstan seeks the PMR support in

  • Upstream analysis on ETS and policy mapping;
  • Scoping study of barriers to trade and options to deal with them; and
  • Adaptation of benchmarks for allowances allocation for specific sectors in Kazakhstan

Resources: Kazakhstan’s Proposal for Targeted Technical Support; Kazakhstan’s Status of ETS Development and Need for Support (October 2013)

Emissions Trading

  • The national emissions trading scheme (Kazakh ETS) was introduced in December 2011 as the country’s main instrument to regulate domestic GHG emissions, and drive the development of low-carbon technologies, energy efficiency, and renewables.
  • Kazakhstan, through ETS, seeks to improve energy efficiency, create a market mechanism to help enterprises modernize their production processes and facilities, and provide a more flexible mechanism than carbon tax.
  • Kazakh ETS started operation in January 2013. Phase I in 2013 was a pilot year covering 178 companies from the power, oil and gas, mining and chemical industry representing 55% of total GHG emissions. While aiming to keep the 2013 CO2 emissions at a 2010 level (147.2 million tons), non-compliance was not penalized.
  • The National Allocation Plan (NAP) for phase II for the years 2014 and 2015 was adopted by governmental decree in December 2013. Free allocation is given as in phase I but the second NAP enforces a CO2 emissions reduction by 1.5% compared to the average 2011-2012 levels and covers 166 enterprises with caps of 155.4 and 153 million tons of CO2 in each year. The covered entities are permitted to use domestic offsets on an unlimited basis for compliance purposes.
  • Kazakh ETS faces some challenges that need to be addressed over phase II. These include a number of discrepancies and gaps in the ETS legislative framework, methodology for allowance allocation (currently grandfathering), work performed by the independent accredited entities (i.e., verifiers), and the fiscal regime of emissions allowances.

Kazakhstan seeks collaboration with the PMR in

  • Upstream analysis on ETS and policy mapping;
  • Scoping study of barriers to trade and options to deal with them; and
  • Adaptation of benchmarks for allowances allocation for specific sectors in Kazakhstan

Resources: Kazakhstan’s Proposal for Targeted Technical Support; Kazakhstan: Draft Proposal for Targeted Technical Support; Kazakhstan’s Status of ETS Development and Need for Support (October 2013)

 

Offset and/or Other Emission Reduction Crediting Programs

The entities covered by the national emissions trading scheme (Kazakh ETS) are allowed to use domestic offsets for compliance purposes on an unlimited basis. The development and operationalization of the domestic offset program is one of the challenges that Kazakh ETS faces and will be a key to the success of Kazakhstan’s ETS. As there are no methdologies, tools, or guidelines to allow for concrete projects to be developed, Kazakhstan is working with Norway and USAID to develop offsets protocols.

Resource: Kazakhstan’s Proposal for Targeted Technical Support; Kazakhstan’s Status of ETS Development and Need for Support (October 2013)

National Context

International Commitment

At the 18th session of the Conference of the Parties (COP 18) to the United Nations Framework Convention on Climate Change (UNFCCC) in December 2012 in Doha, Qatar, Kazakhstan declared its intention to join the list of Annex B countries of the Kyoto Protocol for the second commitment period, with a target to reduce its Greenhouse Gases (GHG) emissions by 5% from 1990 levels. Preliminary estimates, however, unveil significant challenges for the country to meet this target as it is anticipated that GHG emissions could reach 1990 levels as soon as 2017.

Kazakhstan’s Emissions Profile

Kazakhstan is the largest emitter of GHG in Central Asia with annual emissions of 274 MtCO2e in 2011, and twice as energy intensive as the average OECD economy. The rapid economic growth that followed the recession of the 1990s has led GHG emissions to climb 60% over the last ten years.

The largest contributor to GHG emissions is the energy sector accounting for 84% of total GHG emissions, followed by industrial processes responsible for 8% as in figure 1. Coal is widely used in power and heat generation; however, the power generation and industrial equipment is often outdated and inefficient. As a result, Kazakhstan’s CO2 emissions per capita range amongst the highest in Europe and Central Asia with 15.2 tCO2/capita in 2013.

 

Figure 1. GHG Emissions by Sector

Source: UNFCCC (2011)

 

Sets of Policies

In order to tackle domestic GHG emissions, President Nazarbayev signed the “Concept for Transition of the Republic of Kazakhstan to Green Economy” on May 30, 2013. To support and implement the Green Economy Concept, the Ministry of Environment and Water Resources (MEWR) developed and approved the "Action Plan for implementation of the Concept of the Transition of the Republic of Kazakhstan to the "Green Economy" for 2013 - 2020" on July 31, 2013. The Green Economy Concept is incorporated in strategic programs such as the “Kazakhstan 2050 Strategy” (also called “2050 Strategy”) and sets targets

  • To decrease energy intensity of GDP by 50% by 2050 from the 2008 level;
  • To reduce current CO2 emissions in electricity production by 40% by 2050; and
  • To increase the share of non-conventional energy sources in the electricity production by 50% by 2050.

Sources: Kazakhstan’s Proposal for Targeted Technical Support; Kazakhstan’s Status of ETS Development and Need for Support (October 2013); Kazakhstan: Draft Proposal for Targeted Technical Support

  • In 1996 a special government program on energy savings was developed and approved by a resolution of the Government of Kazakhstan.
  • The Law of the Republic of Kazakhstan “On Environmental Protection”of July 15, 1997 is the base law that determines the legal, economic, and social bases for environmental protection.
  • “The Hydrocarbon Initiative” was initiated in 1997 by the Ministry of Ecology and Natural Resources, prioritizing energy savings.
  • In 1999, the Ministry of Energy, Industry and Trade developed and adopted the energy sector development program through the year 2030. The main energy sector development strategy for 2000-2030 is to modernize existing power plants and to improve their energy efficiency.
  • In July 2009 the President of Kazakhstan signed the Law “On Support for the Use of Renewable Energy Sources” aiming at greater use of renewable energy sources.
  • On February 1, 2010, the Strategic Development Plan of the Republic of Kazakhstan 2020 was approved by the Decree of the President of the Republic of Kazakhstan No. 922. It emphasizes increase of the national economy’s stability for a decade in relation to negative consequences of world or regional crises.
  • Kazakhstan’s national emissions trading scheme was enacted into law on December 3, 2011 through an amendment to Kazakhstan’s “Ecological Code. ”
  • In January 2012, the Law "On energy saving and energy efficiency" was adopted and established a set of rules and requirements related to energy efficiency and saving for new construction and renovation of existing buildings.
  • On December 15, 2012, the President Nazarbayev announced the Kazakhstan-2050 Strategy, a multifaceted approach targetingat 6 primary sectors; economic growth, entrepreneurship, social policy, education, foreign policy, and patriotism for Kazakhstan’s future to join the club of the 30 most developed countries of the world by 2050.This strategy builds on the Kazakhstan 2030 Strategy, developed in 1997, which defined the country’s strategic goals and was implemented ahead of time.
  • On May 30, 2013,President Nazarbayev signed Concept for Transition of the Republic of Kazakhstan to Green Economy”
  • On July 31, 2013, the Ministry of Environment and Water Resources (MEWR) developed and approved the "Action Plan for Implementation of the Concept of the Transition of the Republic of Kazakhstan to the "Green Economy" for 2013– 2020 " to support and implement the Green Economy Concept.
  • In July 2013, the Law "On supporting the use of renewable energy sources" was amended aiming to incentivize the use of renewable energy, support potential investors in renewable energy project development, and increase transparency and clarity in the implementation of renewable energy projects.
  • More legislation in the energy sector is available here.
ETS Legislations

Kazakhstan’s national emissions trading scheme (Kazakh ETS) was enacted into law by amendment to the Ecological Code in December 2011, thereby including a legal foundation for establishing ETS in Kazakhstan.

Secondary legislation including 18 Government Decrees and 14 Ministerial Orders (figure 2) has since been adopted as of August 2012 to regulate the governance and operational framework of ETS, as well as to establish a domestic offset program. Further development of the legislation is required over the coming months and years.

Figure 2. List of Secondary Legislative Documents for ETS in Kazakhstan (as of August 2012)

Source: Draft Proposal for Targeted Technical Support

Sources: Kazakhstan’s Proposal for Targeted Technical Support; Kazakhstan’s Status of ETS Development and Need for Support (October 2013); Kazakhstan: Draft Proposal for Targeted Technical Support; UNECE, Increasing Energy Efficiency to Secure Energy Supplies in the CIS region, 2011

Focal Point

The Ministry of Environment and Water Resources (MEWR) (formerly the Ministry of Environment Protection) is the central executive body leading and coordinating state policies on environmental protection, management of nature and natural resources, development of renewable energy sources and “green economy" development.

News

For the first time in Kazakhstan, “Green Academy” will conduct the workshop-training on the theme “Verification of greenhouse gases according to international standards” on March 10-15, 2014. “Green Academy” is mandated by the Ministry of Environment and Water Resources to organize regular trainings for businesses.

According to President Nazarbayev’s Kazakhstan 2050 Strategy, Kazakhstan will use renewable and alternative energy sources to create 50% of the electric capacity generated in Kazakhstan. Kazakhstan’s transition also focuses on water resource conservation, agriculture and waste management, and measures aimed at reducing carbon emissions. Kazakhstan will be the first CIS country to launch a cap and trade system to curb greenhouse gas emissions. Environmental Protection Minister Nurlan Kapparov has stated that the total public and private costs to implement such sweeping programs will total an average of $3.2 billion a year until 2050 – approximately 1 percent of GDP.

President Nazarbayev has laid out a clear plan to increase the country’s reliance on renewable sources to 50% of all domestic usage by 2050.

 

More news from the Ministry of Environment and Water Resources is available here.

More news about Kazakhstan 2050 Strategy is available here.

All Documents & Presentations

Knowledge Sharing: Market-based and Carbon Pricing Instruments
Document Language Date
PDF icon Kazakhstan: Domestic Emissions Trading Development in Kazakhstan English May 2013
Knowledge Sharing: Market Readiness
Document Language Date
PDF icon Kazakhstan: Donor Coordination English January 2014
PDF icon Kazakhstan: Status and Challenges Monitoring Facility-Level Emissions English
Other Documents & Presentations
Document Language Date
PDF icon Kazakhstan: Proposal for Targeted Technical Support English March 2014
PDF icon Kazakhstan: Proposal for Technical Targeted Support (Presentation) English March 2014
PDF icon Kazakhstan: Status of ETS Development and Need for Support English October 2013
Document Language Date
PDF icon Kazakhstan: Country Program Update English November 2018
PDF icon Kazakhstan: PMR Project Implementation Status Report 2018 English October 2018
PDF icon Kazakhstan: Second Proposal for Targeted Technical Support English October 2015
PDF icon PMR Secretariat Proposal for Targeted Technical Support to Kazakhstan English

Photos from the Ministry of Environment and Water Resources are available here.

Several bilateral and multilateral development partners have supported ETS preparation in Kazakhstan, including EBRD, USAID, Norway, and Germany. Their support covers assistance on a wide spectrum of institutional and technical ETS components.

 

Figure 3. List of Technical Assistance Programs Supporting Kazakhstan's ETS

Source: PMR Draft Proposal for Targeted Technical Support, October 2013

  • Kazakh Scientific Research Institute for Ecology and Climate (KAZNIIEK): a branch institute for the MInistry of Environment and Water Resources (MEWR) of Kazakhstan
  • Climate Change Coordination Center (CCCC)

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