Experts from the international team at Global Factor have shared their perspective on Kazakhstan’s transition to a low-carbon future. In an interview with QazaqGreen, they discussed the country’s major challenges in decarbonization, highlighted notable achievements, and explored opportunities to attract investment in green energy. Additionally, they proposed practical solutions to accelerate Kazakhstan’s transition to a sustainable economy.
– How do you assess Kazakhstan’s efforts on the way to achieving carbon neutrality? What successes and in what areas can you note, as well as challenges facing the state and the private sector?
Abdul Qader, Decarbonization expert, Global Factor: First of all, we need to understand that Kazakhstan’s total emission is only ~0.8% of world’s total, however, per capita emission is high close to USA and Australia (14-15 t/cap). Kazakhstan has also committed to the NDC to reduce emission by 15% from 2019 level and pledged to reach carbon neutrality by 2060. So, if we examine Kazakhstan’s action list as per those commitments, then we can see not much visible progress has been made other than the above-mentioned government commitments and efforts undertaken by some private entities, like Qazaq Green, ECOJER, ERG и Solidcore Resources. As for example, ERG’s recently approved (2024) net zero strategy has outlined broad measures which is promising. The main areas of some success is in the area of decarbonization of electricity. However, both the government and the private sector are facing lots of challenges, which were discussed in details during the training sessions delivered by international consultancy Global Factor during September 24-27, 2024. Of all challenges, lack of serious public-private agreement stands out.
– Our country has a high proportion of enterprises that produce products with a long carbon footprint. It is obviously not easy to reduce atmospheric emissions, install special equipment at production facilities, etc. at once. Moreover, these measures require additional costs for business. What can be the way out in this situation?
Abdul Qader: We have to look at your question in two ways – one for small enterprises and the other for large ones. For the first category, yes, it is difficult to impose mandatory requirement of installing special equipment, however, it is not that difficult if the state comes forward with help, mainly in funding for that equipment and/or creating financial incentives by tax cuts or grants. For the large entities, also government help is required but it must be shared between the state and enterprises, better at a national level. In both cases, government should take the lead.
– Representatives of the MMC industry fear that the introduction of a carbon tax will reduce their competitiveness on world markets. What do you think about this? What other risks can business face in the process of implementing the current climate agenda?
Craig Menzies, Head of Energy Department, Global Factor: Concerns regarding loss of competitiveness due to the introduction of carbon pricing are not without foundation or precedent. Many industries have harboured similar concerns during the run up to the introduction of carbon pricing systems that will affect their products or services. But, in general terms, carbon pricing can be well designed in order to successfully manage issues related to loss of competitiveness, for example through a phased-in pricing approach and the strategic reinvestment (of the funds raised through carbon pricing) in measures to actually increase companies’ overall competitiveness.
Furthermore, it is important to understand that world markets for metals and mining products are evolving and will continue to do so. Witness for example the EU’s imposition of its carbon border adjustment mechanism. It is also increasingly likely that other key regional markets with high demand for metals and minerals, including those of China and India, will implement carbon pricing systems, thereby negatively affecting the economics of companies that produce goods in high-carbon production processes, because they will be at a clear disadvantage when it comes to competing. The important aspect here is to understand that carbon pricing systems are set to be introduced in a greater number of markets, and countries and companies that fail to prepare for that eventually will sooner or later be penalized.
– How are industrial companies in other countries navigating the transformational period? What modern technologies that contribute to the greening of production exist in the world, and which of them can we introduce in the near future in Kazakhstan?
Abdul Qader: In developed countries, government is taking the leading role in facilitating climate action measures by incentivizing private sectors and formulating conducive regulations. Private sectors are also enthusiastically participating in the dialogues and continuously negotiating for a better outcome. As a result, we can see no new coal fired industries will be approved in those countries. All the best available technologies (BATs) are under development in those countries, some are at higher TRL levels in some countries. As for example, Germany and Japan are taking concrete steps towards hydrogen-based economy. All 5 pillars: technology, infrastructure, creating demand for environmentally friendly products, policies and funding capital are being addressed in most developed countries.
When it comes to the developing countries, like Kazakhstan, it has been a slow process. The lack of state’s concrete approach to tackle this as well as lack of meaningful efforts by the private sector are the main barriers. Both need to accept the fact that we have to deal with the decarbonization efforts mainly for reducing climate change effects for the benefits of the whole of mankind. So, climate change awareness and getting worldwide mandatory agreement is a pre-requisite to have positive effects. The next immediate two actions should be in 1) establishing an auditable and transparent MRV system, and 2) decarbonization of energy (mainly by renewables). In parallel energy and operational efficiencies should be as ongoing measures.
– In your opinion, how can the government stimulate the transition to a low-carbon economy?
Craig Menzies: Government has a key role to play in several ways. It should provide clear signals to the private sector, investors and supply chains that the country is committed to achieving clear, realistic, timebound and meaningful decarbonization targets. Governments should design rules, regulations, incentive and penalty systems and support frameworks that incentivize meaningful actions among industry and consumers to support low-carbon production and consumption patterns. This is linked to government’s role in supporting the creation of markets for low-carbon industrial products for internal consumption, and for exporting to relevant international markets. Furthermore, governments can support the timely development of low-carbon supply and value chains, and training and skills development needed to support low-carbon industrial development. Finally, governments can play an important role in allocating financial resource to industry and flagship low-carbon production projects.
– Renewable energy is still a small percentage of Kazakhstan’s energy mix. However, energy consumption is growing every year. How do you assess the potential for the use of alternative sources in Kazakhstan’s metallurgical industry and other sectors?
Alex Bologa, RES Expert, Global Factor: Shifting from fossil fuels to electric energy to power mining operations is one of the most important current topics in green mining. Switching to green electricity is a powerful method for instantly reducing the level of carbon emissions produced by mining. It is estimated that switching to green electricity can drop 30 to 50% of scope 2 emissions.
Replacing fossil-fueled vehicles with electric vehicles has a huge potential. The use of electric vehicles can reduce total mining emissions by 50%.
Recently, the first hybrid-electric loader for underground mining was developed. The hybrid engine decreases the volume of noxious gas emissions by 40 to 70%.
Mining relies heavily on the use of numerous underground vehicles fueled by diesel. Since this pollution is being released underground, it also requires vast amounts energy to power ventilation systems. Due to the decreased need for ventilation, a further 20 to 40% reduction in energy use can be obtained by reducing ventilation systems to meet the needs of the lower emissions vehicles.
RE Resource Potential in Kazakhstan
Wind: 820 billion kWh/year
Hydro: 62 billion kWh/year
Solar: 2.5 billion kWh/year
– Recently Kazakhstan and GIZ signed a project implementation agreement aimed at expanding cooperation in the field of green energy between our countries. What specific actions will be taken to implement the agreements? And how, in your opinion, will it affect the development of Kazakhstan’s RES sector?
Alex Bologa: Kazakhstan has every chance to become a leader in the field of green energy in Central Asia. The transition to renewable energy sources will not only help reduce dependence on fossil fuels extracted from the earth in various ways, but also strengthen the country’s energy security.
The agreement, signed on September 17, 2024, is an important stage in the implementation of Kazakhstan’s strategy for the transition to green energy. It provides for the creation of favorable conditions for the regional and national expansion of the use of renewable energy sources (RES), which is in line with the global goals of sustainable development and combating climate change.
Cooperation with GIZ can help to open access to advanced technologies and international experience, which will significantly accelerate the transition to sustainable energy sources.
– How do you see Kazakhstan’s industries positioning themselves in the global shift toward decarbonization, and what role should the government and private sector play in fostering the necessary investments?
Dana Yermolyonok, Senior Advisor of CDCPIII in Kazakhstan, GIZ: The global decarbonization trend is undeniable and will require massive investments. Kazakh industries have the potential to emerge as significant players in the global low-carbon market. To achieve this, it is essential for the Government of Kazakhstan to create an enabling environment with harmonized regulations and infrastructure development. Currently, new business models that would allow Kazakh industries to adapt to and capitalize on the global economy’s decarbonization, remain unseen. It is also critical that investments from both the private sector and the government avoid being directed toward assets that may become stranded, such as those relying on fossil fuels.
– What steps do you believe are necessary to ensure effective implementation of Kazakhstan’s Carbon Neutrality Strategy?
Dana Yermolyonok: The approval of the Carbon Neutrality Strategy represents a significant step forward in Kazakhstan’s journey toward decarbonization. However, the lack of specific emission reduction targets for individual sectors poses a risk to achieving the overarching goal of reducing emissions across the economy. It is essential to establish a clear vision, develop concrete plans for each sector, and define relevant indicators to track progress effectively.
Additionally, Kazakhstan’s commitment to the Global Methane Pledge has been well received by many experts. However, it is crucial not to become overly reliant on international assistance for implementation. To effectively achieve these targets, Kazakhstan should focus on strengthening domestic capabilities.
