On approval of the Strategy for Achieving Carbon Neutrality of the Republic of Kazakhstan until 2060
Decree of the President of the Republic of Kazakhstan dated February 2, 2023 No. 121
I DECREE:
1. To approve the attached Strategy for achieving Carbon Neutrality of the Republic of Kazakhstan until 2060.
2. The Government of the Republic of Kazakhstan shall take the measures resulting from this Decree.
3. Control over the implementation of this Decree is entrusted to the Administration of the President of the Republic of Kazakhstan.
4. This Decree shall enter into force from the date of its signing.
President of the Republic of Kazakhstan
To.Tokayev
Approved by Decree of the President of the Republic of Kazakhstan on February 2, 2023 No. 121
Strategies for achieving carbon neutrality of the Republic of Kazakhstan until 2060
Content
1. Introduction
2. Analysis of the current situation
3. Main provisions: purpose and principles, economic effect, approaches and vision
3.1. Purpose and principles
3.2. Investment needs
3.3. Approaches and vision
3.3.1. Sectoral approaches and vision of low-carbon development
3.3.1.1. Energy
3.3.1.2. Industry
3.3.1.3. Agriculture and forestry
3.3.1.4. Waste management
3.3.1.5. Cross-sectoral vision for low-carbon development
3.3.2. Cross-cutting approaches to low-carbon development
3.3.2.1. Fair transition and job creation
3.3.2.2. Financing and "green" investments
3.3.2.3. Research and development activities and education
3.3.2.4. Changing public consciousness
3.3.2.5. International cooperation
3.3.2.6. Adaptation to climate change
3.3.2.7. Carbon regulation system
4. Conclusion
1. Introduction
Low-carbon development is a prerequisite for sustainable development and is aimed at preventing the catastrophic consequences of global climate change.
According to the Sixth Assessment Report of the International Panel of Experts on Climate Change (hereinafter referred to as the IPCC), anthropogenic greenhouse gas emissions (hereinafter referred to as GHGs) have reached the highest levels in human history, which is already having a significant negative impact on the Earth's climate system. This carries direct physical risks and threats to ecosystems, infrastructure, human life and health. In response to these challenges and to mitigate these risks, countries around the world are actively adopting international commitments.
The resolution "Transforming our World: The 2030 Agenda for Sustainable Development" was adopted at the meeting of the United Nations General Assembly on September 25, 2015. According to this resolution, the 193 UN member States committed themselves to ensuring sustainable, inclusive and progressive growth, social integration and environmental protection in partnership and peace.
In December 2015, the Paris Agreement was adopted, aimed at supporting environmental integrity, a "green" economy, the transfer of high-performance technologies and adaptation to a changing climate. The main objectives of this Agreement are to keep the increase in global average temperature below 2 °C above pre-industrial levels (the level of 1850-1900) and to make efforts to limit the increase in temperature to 1.5 °C.
According to the IPCC assessment from 2021, climate change will intensify in all regions in the coming decades and in the absence of immediate and large-scale action to reduce GHG emissions, a 2°C warming limit will be unattainable.
In this regard, for the implementation of the Paris Agreement, all parties submit their climate action plans - nationally determined contributions (hereinafter referred to as ONUV) every five years. Countries are also developing low-carbon development strategies that provide a long-term horizon for sustainable development. The main goal of these strategies is to achieve a balance between anthropogenic emissions from sources and their absorption by GHG sinks.
By September 2022, 52 countries had approved their low-carbon development strategies. At the same time, the European Union (hereinafter referred to as the EU) and the United States of America (hereinafter referred to as the USA) have set goals for achieving carbon neutrality by 2050, and China by 2060.
At the same time, 13 countries with a 25% share of global gross domestic product (hereinafter referred to as GDP) have established legal obligations to achieve zero-emission targets (Canada, Spain, Portugal, Germany, Great Britain, Norway, Japan and others).
33 countries with a 50% share of global GDP have included their zero emissions targets in policy documents/declarations (USA, Australia, Turkey, Chile, Italy, Netherlands, India, Saudi Arabia, Brazil, Argentina and others).
Climate strategies (strategies for sustainable development) are also being developed at the level of cities and large companies. Taking into account the fact that urban areas account for 65% of global energy consumption and 70% of GHG emissions, more than 120 cities have announced achieving carbon neutrality by 2050 (100 of them by 2030).
According to the Carbon Disclosure Project, in 2021, 13,000 companies (or 64% of the global market capitalization) disclosed certain information about climate impacts, of which about 200 have specific data about their carbon footprint and strategies to achieve carbon neutrality. These companies regularly report on their development of the "green agenda".
Initiatives are being formed in certain areas of low-carbon development. Thus, 200 countries have announced a gradual reduction in coal generation without CO2 capture and a complete elimination of inefficient fuel subsidies that artificially lower prices for coal, oil or natural gas.
At the same time, 29 countries, including Canada, Denmark, the United States, Italy, Switzerland, and the United Kingdom, committed to stop financing the energy sector (in particular, projects related to fossil fuels) by the end of 2022 and preferred more environmentally friendly areas. Denmark, France, Greenland, Ireland, Quebec, Sweden and Wales announced the termination of licensing of oil and gas exploration and production.
100 countries have signed a commitment initiated by the United States and the EU to reduce methane emissions by 30% by 2030.
120 countries, accounting for about 90% of the world's forests, have committed to stopping deforestation by 2030. This list includes Canada, Brazil, China, Indonesia, the United States, Great Britain, and Russia.
More than 100 governments, cities, states and large enterprises have signed a declaration on the transition to zero-emission vehicles and the cessation of sales of vehicles with internal combustion engines worldwide by 2040.
Countries are introducing separate forms of regulation, including GHG emission quotas, carbon taxes and fees for non-subsidized entities, developing their own carbon regulation systems, and introducing protective mechanisms, including carbon labeling systems and cross-border mechanisms.
The most decisive climate policy is being pursued by the EU, which is putting into effect a number of measures to transition to a carbon-free economy by 2050.
As part of the "European Green Deal", it is planned to expand the sectoral coverage of the emissions trading system (hereinafter referred to as the ETS) and introduce a carbon tax on most other unregulated GHG emissions.
The European Commission has developed a mechanism for cross-border carbon regulation (hereinafter referred to as the MTG) as part of an ambitious package of "Green Deal" measures (policy areas range from ambitious emission reductions to investments in advanced research and innovation). This mechanism implies the levying of an additional fee on goods depending on the volume of specific GHG emissions from their production in relation to imports of carbon-intensive products.
The adoption of the MTDG is already leading to the abandonment of large export-oriented companies from environmentally dirty raw materials and semi-finished products, which are used to produce final goods. This also happens for goods whose carbon footprint is unknown.
In addition, as part of the Action Plan on Financing Sustainable Growth, the EU Commission has created a clear and detailed EU taxonomy, a system for classifying economic activity according to the Sustainable Development Goals. The purpose of the taxonomy is to direct investments into "sustainable" projects and activities while reducing investments in carbon-intensive assets.
A new EU "green" trade strategy is being prepared, designed to integrate the economic and climate priorities of the bloc, reflected in the "Green Deal".
Given the international importance of the climate agenda, there has been a significant increase in sustainable investments based on ESG principles, the volume of which has tripled over the past 8 years and doubled over the past 5 years, amounting to 46 trillion US dollars by the end of 2021.
The financial sector is paying more and more attention to ESG investments and the risks associated with climate change, including the risks of "bad" assets. The reassessment of investments is carried out taking into account their compliance with climate goals. Major investors, including international development banks, are announcing their plans to withdraw investments from the fossil fuel sectors. Companies are facing increasing pressure to disclose climate information and risks, including information on the carbon footprint of products and on supply chain decarbonization measures. All these trends will continue in the coming years and decades, and will have a significant impact on the global and regional economies.
By 2025, ESG funds will have more assets under management than other non-ESG funds, while the market share of ESG funds will grow to 57% in 2025, compared with the current 15%. Moreover, a financial alliance of 450 companies from 45 countries (investment, insurance and pension funds, banks, stock exchanges, etc.), whose members manage 40% of global financial assets, has declared a goal to completely reduce GHG emissions by 2050.
Kazakhstan signed the Paris Agreement on August 2, 2016 and ratified it on December 6, 2016. Before the official signing of the Paris Agreement in September 2015, Kazakhstan demonstrated its commitment to its goal by submitting its ONUC under the UN Framework Convention on Climate Change, which presupposes the achievement of the following goals:
unconditional reduction of GHG emissions by 15% by December 2030 compared to 1990;
A conditional reduction of GHG emissions by 25% by December 2030 compared to 1990, subject to additional international investments, access to a low-carbon technology transfer mechanism, funds from the Green Climate Fund and a flexible mechanism for countries with economies in transition.
In December 2020, at the Ambitious Climate Change Summit (organized by the United Nations, Great Britain, France in partnership with Chile and Italy) President of the Republic of Kazakhstan Tokayev K.K. announced a new goal - Kazakhstan's achievement of carbon neutrality by 2060, confirming Kazakhstan's obligations under the Paris Agreement.
Thus, the present Strategy for Achieving Carbon Neutrality in the Republic of Kazakhstan until 2060 (hereinafter referred to as the Strategy) has been developed taking into account global climate trends and in compliance with relevant international obligations. The Strategy defines national approaches and the strategic course of public policy for the consistent transformation of the economy to ensure well-being, sustainable economic growth and equitable social progress, and is adopted to ensure the coherence and coordination of public policies.
The strategy takes into account the need to adapt Kazakhstan's economy to global climate trends, such as the introduction of MTGMS, the dissemination of ESG principles, the promotion and attraction of "green" investments, energy-efficient production, electrification and others.
2. Analysis of the current situation
Since the middle of the 20th century, Kazakhstan has been facing the negative effects of climate change.
Every decade since 1940, the average annual temperature in the country has increased by 0.28 °C. The growth is especially high in the autumn period (0.31 °C). At the same time, there has been a significant decrease in average annual precipitation by more than 0.2 mm over 10 years.
The economic situation of the last decade of the 20th century led to a decrease in the consumption of fuel and energy resources, which was reflected in the reduction of GHG emissions.
Since the early 2000s, as the economy recovered faster, GHG emissions also showed an upward trend until the global financial and food crisis of 2008.
In 2018, net emissions amounted to 401.7 million tons of CO2 eq., exceeding the 1990 emissions level by 5.2%.
In 2019, there was a downward trend in GHG emissions: their volume amounted to 364.7 million tons of CO2-eq, which was 9.2% lower than in 2018 and 4.5% lower than in 1990. The reduction in emissions was due to lower fuel consumption.
In 2020, national net emissions of 351.2 million tons of CO2 eq. were 12.6% lower than in 2018 and 8% lower than in 1990. The decrease is due to the COVID-19 pandemic (Figure 1).
Figure 1. GHG emission dynamics
Note: Based on data from the national inventory in 2022
The structure of national GHG emissions is dominated by three GHGs with a total share of more than 99.5 %:
81.6% of national GHG emissions are represented by carbon dioxide (CO2), which is mainly released during the combustion of organic fuels, as well as in arable farming.;
12.4% is methane (CH4), released mainly in the processes of extraction, transportation, transshipment/ storage of fuel, biodegradation of organic waste and raising animals for the production of meat, milk, wool and hides.;
5.6% - nitrous oxide (N2O).
The remaining types of GHGs enter the atmosphere as a result of industrial processes.
The largest share of GHG emissions in Kazakhstan belongs to the Energy sector (77.6% of national net emissions), followed by the Agriculture sector with a share of 11.6% in terms of contribution to national emissions, and then in descending order: Industrial Processes and Product Use (hereinafter referred to as PPIP) (6.3%), "Land use, land-use change and forestry" (hereinafter referred to as LULUCF) (2.4%) and "Waste" (2.1%) (table 1).
Table 1. Change in GHG emissions in Kazakhstan by IPCC sector in 1990 and 2020, million tons of CO2-eq.
Download
GHG source and sink sectors
1990
2020
Changing 2020 to 1990, %
Energy industry
316,92
272,50
-14,02
PPIP
19,29
22,29
+ 15,54
Agricultural industry
44,74
40,72
-8,98
LULUCF
-3,91
8,38
+314,30
Wastes
4,65
7,35
+58,17
TOTAL net GHG emissions
381,69
351,24
-7,98
Energy industry
According to the IPCC, the Energy sector (equivalent to the energy sector or energy system) covers emissions from fuel combustion, as well as volatile fuel emissions.
The energy sector includes the extraction of primary energy (oil, coal, peat, shale, natural gas, waste, hydropower, biomass, wind, solar, and geothermal energy), transportation, conversion to secondary energy (electricity, heat, gasoline, diesel, hydrogen, and biofuels), transmission, and distribution. The final demand for energy services in transportation, buildings, and industry, as well as volatile emissions from primary energy production, transportation, and distribution.
Kazakhstan has the largest deposit of thermal coal in the world, which practically lies on the surface of the earth, respectively, the cost of its production is the lowest in the world.
The country is also rich in reserves of coking coal with high methane content in coal seams, which is mined underground.
At the same time, along with the presence of significant reserves and the active use of fossil energy resources, Kazakhstan has significant potential for the development of renewable and alternative energy, namely wind, solar, geothermal, nuclear, hydrogen and bioenergy.
The energy sector is the largest source of GHG emissions in Kazakhstan. In 2020, 77.6% (272.5 million tons of CO2 equivalent) of all annual GHG emissions in Kazakhstan accounted for the energy sector, due to the widespread use of fossil fuels.
III emissions from primary energy production (extraction sector) account for 16.6% of all GHG emissions (58.3 million tons of CO2 equivalent). Of these, 8.1 percentage points are volatile emissions, with 6.7 percentage points covered by volatile emissions from coal mining (23.7 million tons of CO2 equivalent in 2020).
The final demand for energy consists of direct fuel combustion in industry, transport, agriculture, as well as residential and non-residential buildings; the use of electric and thermal energy. In the structure of fuel and energy resources used in the country (150.7 million tons of oil equivalent), oil and petroleum products account for 41%, coal and coal products - 29.4%, natural gas, including compressed (motor fuel) - 7.6%, electricity - 16.2%, heat - 5.8%. The share of renewable energy sources (hereinafter referred to as RES) in the country's domestic energy consumption was 2%. At the same time, the same share of renewable energy sources in electricity generation was 3.0% in 2020 and 3.6% in 2021.
Despite the fact that coal and coal-refined products account for 29.4% of the used fuel and energy resources (in comparable energy units), coal's contribution to national net emissions exceeds 55.7%. Therefore, the phased withdrawal of the Kazakh economy from coal dependence is important for low-carbon development and achieving carbon neutrality by 2060.
Electricity and heat generation
The production of electricity and heat covers enterprises whose main activity is to supply the population with public utilities: electricity and heat generation, combined heat and electricity production.
The sector of heat and electricity production is relatively small from an economic point of view, accounting for 1.6% of total value added and 1.7% of employment in Kazakhstan. However, it is vital for the normal functioning of the Kazakh economy and society. In 2020, the country's power plants and thermal power plants (boilers) generated 108.1 billion kWh and 91.2 million Gcal. The sector's contribution to national net GHG emissions amounted to 31.6% or 110.9 million tons of CO2 equivalent.
In 2020, 68.9% of electricity and 99% of heat were generated by burning coal. 20% of electricity was generated on natural gas, 0.05% on fuel oil. Hydroelectric power plants (HPPs) generated 8.8% of the electricity. Wind power plants (hereinafter referred to as wind farms), solar power plants (hereinafter referred to as SES) and biogas plants (hereinafter referred to as BSU) provided 2.2% of the generated electricity (including small hydroelectric power plants, the share was 3.0%).
Most power plants operate on outdated technologies that exceed their design life. In 2020, there were 179 power plants in Kazakhstan: 68 thermal power plants (hereinafter referred to as TPPs) (28 coal-fired, 38 gas-fired, 2 with fuel oil), 41 of them are thermal power plants (hereinafter referred to as CHP); 51 HPPs (45 of them are small HPPs with a capacity of up to 35 MW), 28 wind farms, 31 SES and 1 BSU. The average age of coal-fired power plants was 55 years, gas-fired power plants - 40 years, and hydroelectric power plants - 56 years. About 39% of installed generating capacities are over 40 years old and 64% are over 30 years old.
The distribution systems of both electricity and heat are also worn out, which lead to high losses in energy distribution (up to 35% of total electricity losses in some regions) and are one of the factors increasing GHG emissions from the sector.
Outdated sector funds lead to the need to modernize and upgrade electricity and heat generation technologies and provide an opportunity to replace existing outdated carbon-intensive equipment and infrastructure with modern low-carbon and carbon-free technologies, such as gas-fired thermal power plants at the initial stage, as well as the active and comprehensive introduction of alternative and renewable energy sources.
Kazakhstan has created the necessary conditions for the development of renewable energy sources:
1) a single electricity buyer has been identified - the quasi-state enterprise RES Settlement and Financial Support Center LLP;
2) the standard form of the contract for the purchase of renewable energy has been defined - the Power Purchasing Agreement contract;
3) the terms of the priority investment contract for
Renewable energy sources;
4) tariffs are determined at RES auctions;
5) priority dispatching of renewable energy sources and unhindered access to the National Electric Grid of the Republic of Kazakhstan.
Currently, 142 renewable energy facilities with an installed capacity of 2,332 MW are operating in the republic.:
43 wind farm facilities with a capacity of 894 MW;
54 SES facilities with a capacity of 1,150 MW;
40 HPP facilities with a capacity of 280 MW;
5 bioelectric power plants with a capacity of 8 MW.
The created conditions for the development of renewable energy are aimed at supporting large-scale production of electricity from renewable energy sources. Existing mechanisms to support small-scale electricity generation from renewable energy sources are not fully operational.
In Kazakhstan, thermal energy production is carried out by 37 thermal power plants and about 2500 boiler houses of different capacities. The total available electric capacity is 6,517 MW (33.8% of the total available capacity of power plants), the thermal capacity is 20135 Gcal/h. Currently, 38% of steam and 17% of hot water boilers, 24% of steam and 60% of gas turbines are operated with the extension of the park resource established by the manufacturers, and require phased modernization. 76% of thermal power plants have been operating for more than 50 years, and their average wear is 66%.
The total length of the heating supply networks is 11.4 thousand km, their average wear is 57% (6.5 thousand km), including 3.2 thousand km in need of complete replacement.
Transport
In the general IPCC reporting format, the energy sector covers fuel combustion in the Transport group, which includes all types of transport activity (excluding military transport). Fuel emissions from any air or sea transport involved in international transport should be excluded and reported separately.
Currently, the transport sector accounts for 6.6% of value added and about 6.9% of employment in the economy. The economic development of recent decades has stimulated activity in the transport sector and, as a result, increased the number of vehicles used and the corresponding GHG emissions. Over the past 15 years, car ownership by both households and businesses, as well as passenger traffic in road transport, has tripled.
At the same time, the transport sector operates almost exclusively on fossil fuels and is therefore one of the main sources of GHG emissions.
In addition, private cars make up a significant proportion of automobile transport in Kazakhstan. This is reflected in the structure of GHG emissions from this sector.
The large share of road transport in GHG emissions from fuel combustion reflects the relatively high level of motorization in the country, while the fleet largely consists of old and outdated vehicles.
Buildings (housing and communal services sector)
In the IPCC's general reporting format, the energy sector covers fuel combustion in the "Residential Sector" and "Commercial Sector" groups, which together form the buildings sector. This sector includes fuel consumption in residential buildings of the population, in commercial and institutional buildings.
The climatic conditions of Kazakhstan, with very cold winters and hot summers, stimulate high demand for energy for heating and cooling buildings. The average level of energy consumption in the building sector is about 270 kWh/m2 and is more than twice as high as in Europe (100-120 kWh/m2), as well as significantly higher than energy consumption in Russia (210 kWh/m2).
The main reason for such low energy efficiency of buildings, in addition to harsh climatic conditions, is high energy losses due to insufficient thermal insulation of buildings. Heat losses in buildings are caused by defects in the planning of the ventilation system (56% of all losses), losses through (insufficiently insulated) walls (22%), windows (14%) and floors (8%). At the same time, residential and non-residential buildings accounted for 43.3% of total final energy consumption in Kazakhstan in 2020.
The proportion of buildings that do not meet modern energy standards is quite high. In total, out of 2.4 million buildings in Kazakhstan, 31.5% are over 50 years old and another 32.9% are over 25 years old.
Investments in thermal modernization of buildings are hindered by low tariffs for heat and electricity, as this implies a very long horizon for refinancing investments in energy efficiency through energy savings.
Given the climatic conditions and the problem of thermal insulation, heat production is the most important source of emissions from buildings. Most of the heat is produced by direct combustion of fossil fuels or in small boiler houses. In rural areas, most of the heat is produced by burning coal and petroleum products.
In large cities, district heating covers about 50% of consumption. However, the lack of investment in worn-out distribution networks leads to energy losses of up to 30% of the energy supply.
Industry
In Kazakhstan, the manufacturing industry accounts for about 12.9% of total domestic production and 6.6% of employment.
Over the past 20 years, industrial production in Kazakhstan has increased significantly, which has led to an increase in GHG emissions. By 2020, emissions from fuel combustion in industry reached 144.2% compared to 1990 levels. Industry is also the largest consumer of final energy (31.1%, or 12.5 million tons of oil equivalent in 2020).
Industry produces more than a fifth (21.6%) of all GHG emissions in the economy. At the same time, GHG emissions in ferrous and non-ferrous metallurgy accounted for 70.4% of GHG emissions in industry in 2020.
The share of GHG emissions from PPIP in total net emissions is 22.3 million tons of CO2 equivalent, or 6.3%. Emissions from PPIP have been growing since 1996 mainly due to the mineral industry, whose emissions have increased 2.1 times since 1990. Overall, by 2020, emissions from PPMS were 15.5% higher than in 1990.
The largest share of GHG emissions from industrial processes occurs in the production of basic materials - cement, aluminum, cast iron and steel. In Kazakhstan, these industries produce 91% of all emissions from industrial processes (54.0% in metallurgy and 37.1% in the mineral industry).
Agriculture and forestry
The subsection covers two sectors in the IPCC reporting format.
The subsector of the energy sector "Agriculture, forestry, fisheries, fish farming" includes fuel combustion in agriculture, forestry, fisheries and fish farming, for example, on fish farms.
The Agriculture and Forestry and other land uses sector covers GHGs generated by agriculture, net CO2 emissions from soils used in agriculture, and net CO2 emissions from deforestation and other land uses.
Agriculture and forestry provide about 6.2% of Kazakhstan's GDP and 13.5% of jobs in the country. 41.1% of Kazakhstan's population lives in rural areas.
Agricultural activities are affected by the effects of climate change and at the same time have an impact on climate conditions, water availability, land degradation, deforestation and other processes.
In 2020, the agriculture and forestry sector (including land use) Together with fuel combustion, it emitted 52.1 million tons of CO2 equivalent, or 14.8% of national net GHG emissions. Fuel combustion itself amounts to 3.0 million tons of CO2 equivalent, or 0.8% of national net GHG emissions.
Livestock accounts for the majority of GHG emissions not related to fuel combustion in agriculture (62.5%). GHG emissions from internal fermentation have grown by an average of 3.5% per year since reaching a minimum in 1998. This increase in GHG emissions reflects both an increase in the number of animals and an increase in the productivity of dairy and other livestock over time.
The mitigating effect of GHG emissions in this sector - GHG absorption by carbon sequestration in soil and biomass - occurs in forests, arable lands, meadows, wetlands, human settlements and other lands throughout the country. If we talk about LULUCF, forestry is the largest carbon sink in Kazakhstan (10 million tons of CO2 equivalent in 2020). The Forest Fund of the Republic of Kazakhstan manages 30.1 million hectares of forests, forest plantations (public and private) and sustainable forest restoration are necessary steps to expand forest cover. At the end of 2020, an ambitious plan was announced to plant more than two billion trees by 2025.
Improper soil management in agriculture (non-compliance with crop rotation, insufficient and untimely fertilization, and so on) has led to a decrease in the level of humus in soils, which continues to decrease from year to year, respectively, the ability of soils to capture carbon dioxide from the atmosphere and deposit it also decreases.
The sector is affected by the climate. Climate change affects the structure of precipitation and biomes in Kazakhstan, the frequency and intensity of extreme weather events are increasing, the average temperature is rising and the availability of water for irrigation is decreasing. Currently, agriculture accounts for two thirds of national water consumption. Climate change can have negative consequences for the yield growth of most crops in almost all regions.
The development of agriculture is considered one of the main priorities, as it plays an important role in providing employment, especially in rural areas, as well as for reasons of social and food security, while its importance for mitigating the effects of climate change is increasingly recognized. However, limited access to finance prevents many farmers from developing a more productive and sustainable agricultural sector. More than 80% of the agricultural infrastructure is outdated. Currently, only 1% of agricultural land in Kazakhstan is devoted to organic agriculture.
Waste management
The waste management system is mainly dominated by the disposal and incineration of waste. Today, the waste management sector accounts for 0.3% of total value added and 0.9% of total employment in the economy, while GHG emissions from waste account for 2.1% of total emissions.
The waste sector accounts for emissions of methane (CH4) and carbon dioxide (CO2) released as a result of the anaerobic decomposition of organic waste and sludge in landfills of solid household waste (hereinafter referred to as MSW) or during wastewater treatment under anaerobic conditions.
GHG emissions from waste have been continuously increasing since 1994. 52.2% of GHG emissions in this sector come from solid waste management, 47.4% from wastewater treatment, and 0.4% from incineration.
Waste generation is increasing due to population growth and an increase in the amount of waste per capita. In 2020, 54.7% of solid waste was disposed of in landfills, 24.4% was sorted for further processing. In addition, despite the high proportion of wastewater treatment, the sediment remaining after treatment (about 20% of the dry matter) is sent to silt sites and landfills.
There is practically no separate collection of various streams of solid waste (for example, paper, glass, organic waste) and their preliminary sorting before disposal, which increases the flow of waste to landfills. It is estimated that about 37% of the generated MSW (about 2 million tons per year) can be used for biogas production.
Most landfills are in poor condition, have exhausted their capabilities and require reclamation. Low tariffs for the collection and sorting of solid waste make investments in waste management projects economically unprofitable and hinder compliance with regulatory requirements.
A similar situation exists with regard to wastewater: insufficient provision of sewage treatment plants in cities and large urban-type settlements. The condition of the existing sewage treatment plants is unsatisfactory with out-of-date equipment and often outdated cleaning technologies and methods.
There is no infrastructure for sludge treatment and disposal. Currently, sludge from sewage treatment plants is not processed, but is collected and buried on silt sites or landfills, regardless of the content of organic substances in it.
Risks and opportunities
The current situation is complicated by the presence of internal and external risks.
Over the past decades, Kazakhstan has given high priority to the rapid increase in the production of fossil fuels and mining products, creating an economic model that is based on the country's rich natural resources and depends on exports of fossil fuels and minerals. This strategy has provided significant economic growth, and since 1998, Kazakhstan's economy has almost tripled.
Global trends in recent years have led to stricter environmental requirements for manufactured products, which is a signal for enterprises with low energy efficiency and high carbon intensity. These include plans by financial institutions and investors to withdraw investments from fossil high-carbon assets in favor of "green" investments; the growing demand for disclosure of information on GHG emissions and measures to reduce them, including throughout the supply chain; plans to introduce carbon boundary adjustment mechanisms.
Decarbonization in major export markets could dramatically reduce future global demand for high-carbon goods, which in turn increases the risk of incurring bad assets related to the extraction, processing and use of fossil fuels (in particular, in energy, construction and industry).
This risk is particularly high for Kazakhstan, whose economic model is based on the export of fossil fuels. This model has led to historically high levels of investment in extractive sectors and a lack of investment in other sectors of the economy. As a result, significant depreciation of fixed assets and the exploitation of outdated technologies are observed, which lead to high energy intensity of both the economy as a whole and in the context of its industries, and, accordingly, large-scale modernization is required.
The key barrier to the upcoming modernization is the imperfection of the tariff setting system. In particular, the current system is limited in stimulating investments in distribution networks and technologies for generating electricity and heat.
At the same time, new opportunities are opening up for the country in attracting green finance, transferring carbon-free technologies, integrating into the global carbon market, implementing carbon and climate projects under the auspices of the Paris Agreement, as well as participating in new international markets for green energy resources, products and innovative technologies.
The tangible threats associated with global climate change, the economic and political challenges posed by the growing international ambitions to combat climate change, and the emerging opportunities make it necessary for Kazakhstan to accelerate the process of decarbonization of the national economy. The successful implementation of decarbonization will depend on the success of initiatives to develop the gas resource base.
3. Main provisions: purpose and principles, economic effect, approaches and vision
3.1. Purpose and principles
The main goal of the Strategy is to achieve sustainable development of Kazakhstan's economy to climate change and carbon neutrality by 2060.
The medium-term goal of the Strategy (in accordance with the National Policy of the Republic of Kazakhstan) is to reduce GHG emissions by 15% by 2030 relative to 1990 emissions (an unconditional goal) and achieve a reduction of 25%, subject to international support for decarbonization of the economy (a conditional goal).
The achievement of the Strategy's objective will be measured by the following target indicators (table 2).
Table 2. Target indicators for GHG emissions, capture and absorption
Download
1990
2020
2030
2040
2050
2060
The actual level of emissions reached
Unconditional purpose*
Indicative level of emissions **
Strategic goal
National net GHG emissions, million tons of CO2-eq.
381,7
351,2
324,4
209,9
95,4
0,0
Net GHG uptake (-)/net GHG emissions (+) in the LULUCF sector, million tons of CO2-eq.
-3,9
8,4
-20,3
-28,3
-40,3
-45,2
GHG emissions, million tons of CO2-eq. excluding LULUCF
385,6
342,9
344,7
238,3
135,8
45,2
Note:
* The conditional target of the ONUV is minus 25% of the 1990 level (286.3 million tons of CO2-eq.);
** The indicative level will be reviewed with subsequent updates of the Strategy.
The implementation of the Strategy is based on the following principles:
1) purposefulness, unity and integrity: all planned initiatives are aimed at achieving the goal and are coordinated with each other;
2) Feasibility study: suggests a technologically feasible but least costly way to achieve low-carbon development and carbon neutrality;
3) Transition equity: creating new opportunities in regions affected by decarbonization policies, with targeted support from the population;
4) Circular economy: an economy based on the use of secondary resources and reduction of consumption;
5) Phased approach: implementation of strategic initiatives through short- and medium-term plans, with ongoing analysis of previous stages and the entire strategic cycle;
6) Openness and interaction with society: broad involvement of all stakeholders at all levels of monitoring and decision-making, including representatives of central and local authorities, the quasi-public sector, science, business (associations and enterprises), non-governmental organizations and local communities;
7) rationality (balance): maintaining a balance between achieving the goal and ensuring security (economic, energy, social) and stability.
3.2. Investment needs
Economic development driven by investment activity in the new emerging conditions will increasingly require the creation of market conditions in order to increase attractiveness for capital and financial markets, as well as for investments by domestic and foreign companies and private households.
It is important to emphasize that a significant part of low-carbon and carbon-free investments will be carried out instead of high-carbon projects. This substitution effect is illustrated in Figure 2, which makes it possible to compare historical investment levels relative to GDP and the forecast for the carbon neutrality scenario.
In recent decades, the share of investments in Kazakhstan's GDP has, with rare exceptions, been consistently lower than the average for the group of upper-middle-income countries (the World Bank classifies countries with per capita incomes between $4,096 and $12,695 as upper-middle-income countries).
Carbon-intensive investments are increasingly declining, and investment funds are being redirected to low-carbon and carbon-free activities. In terms of GDP, "green" investments will require a similar share of the total investments currently being made in the mining and metallurgical complex.
Given the extremely high depreciation of fixed assets, the investment level will have to increase significantly by 2030. However, if "green" technologies are chosen to replace outdated equipment, these investments will contribute to a significant reduction in GHG emissions without the need to mobilize additional investments specifically in decarbonization.
Figure 2. The ratio of total investments in the economy to GDP (statistical data and scenario forecast of carbon neutrality), %
* Prior to 2003, total investments, including mining
** The scenario forecast data may differ slightly from the World Bank data due to differences in accounting for reinvested profits
*** Mining industry, from 2022 – scenario forecast
****The gross national product per capita per year is between 4,096 USD and 12,695 USD
Source: World Bank data, Bureau of National Statistics (1992-2019).
The share of investments in GDP is not much higher than historical levels. In the phase of the most intensive investments until 2030, the share of investments in GDP reaches 34%, which is slightly higher than the average for the group with an above-average income and investment level in Kazakhstan in 2006 - 2007. After 2030, the share of investments in GDP decreases and by 2060 it will reach the current level again.
Net investments in low-carbon technologies that promote low-carbon development and achieve carbon neutrality are estimated at USD 610.0 billion, or 19.6% of gross fixed capital accumulation. Direct government investment in achieving carbon neutrality will account for only a small fraction of 3.8% of the total investment.
More than half of the required investments, or 386.3 billion US dollars, are existing and circulating investments in the economy, which will be reoriented from the raw materials sectors to more "green" sectors of the economy, the remaining part, or 223.7 billion US dollars, are new investment resources.
At the same time, the investment demand until 2030 is 10 billion US dollars. The remaining 600 billion US dollars will be invested by the end of 2060.
Considering that the expected total GHG emissions savings over the same period amount to 9.335 billion tons of CO2 equivalent in the carbon neutrality scenario, the decarbonization price is relatively low at $65.4 per ton of CO2 equivalent.
Most of the investments will be carried out by private and public enterprises and households, as well as from a specially created carbon fund consolidating all environmental payments, international grants and investments for greening and decarbonization of the economy.
In general, low-carbon development and the achievement of carbon neutrality will affect the economy of Kazakhstan in the following ways:
steady economic growth;
increasing the investment attractiveness of the economy;
high level of technological development and competitiveness;
formation of new high-performance jobs while maintaining a high level of employment;
growth of Kazakhstan's non-primary exports;
improving the quality of the environment and the ecological well-being of the population.
3.3. Approaches and vision
The achievement of the Strategy's goal will be achieved through the integrated implementation of low-carbon policies and the application of sectoral (in energy, industry, agriculture, forestry, waste management) and cross-cutting approaches (fair transition, green financing, research and development (R&D) and education, public awareness, international cooperation, adaptation to climate change, carbon regulation system).
At the same time, the low-carbon policy will be accompanied by steps to ensure a favorable investment climate.
For this purpose, it is envisaged to create a favorable legislative and institutional environment, support the creation and development of the necessary financial and physical infrastructure of the "green" economy. Special attention will be paid to efforts to continuously attract and support private investment (including international investment) in the decarbonization process.
The state will stimulate the accelerated modernization of existing industries and infrastructure, and provide targeted support measures to socially vulnerable groups of the population.
Important aspects of the transition to carbon neutrality are the development of regulation through the introduction of information technology and the transition to digital platforms for processing, control and monitoring based on the principles of objectivity and transparency.
To this end, digitalization of GHG composition and volume monitoring is envisaged, including the development of a targeted program for monitoring satellite data on emission control at the national, sectoral and regional levels.
Space-based monitoring of emissions via remote sensing satellites will ensure transparency, objectivity and comparability of data for participation in international economic mechanisms in accordance with the Paris Agreement.
Digitalization of business processes in mining, metallurgy, oil and gas, fuel and energy and agro-industrial complexes will be phased out, which will allow scaling up the development and implementation of low- and carbon-free technologies, taking into account international standards. All processes of energy production, transportation, and consumption, including housing and communal services (hereinafter referred to as housing and communal services) and households, will be digitized gradually.
The energy transition will be accompanied by the introduction of advanced international approaches and standards in all sectors of the economy in order to make the transition to alternative and renewable energy sources. These include standards for ecological modes of transport, reduction of fuel and energy consumption, waste recycling, and energy efficiency.
A GHG validation infrastructure will be created in order to recognize verified reports of domestic companies on GHG emissions in other countries.
3.3.1. Sectoral approaches and vision of low-carbon development
Kazakhstan's achievement of carbon neutrality is an ambitious goal that will be achieved through the implementation of initiatives in three key areas.:
1) Decarbonization of industries and processes related to fossil fuels;
2) Decarbonization of non-fossil fuel industries and processes;
3) increasing natural sources of emission absorption and the introduction of industrial solutions for carbon capture, use, long-term storage, and deposition.
GHG emissions related to fossil fuels will be reduced by:
1) the transition from the use of fossil fuels and their derivatives to alternative and renewable energy sources;
2) improve energy efficiency and energy conservation;
3) electrification - the replacement of installations that burn fuel with technologies based on electricity.
Non-energy GHG emissions will be reduced by increasing carbon efficiency - the use of materials and technologies with low or zero GHG emissions. Carbon efficiency will be enhanced through the application of the best available techniques in industrial processes and the use of carbon-free products, the development of sustainable agriculture and waste management.
GHG emissions are also planned to be reduced by increasing the absorption capacity of ecosystems, as well as using carbon capture, use and storage technologies. This will use the ability to store carbon in forests, soils, wood products, or industrial processes. Carbon capture, use and storage technologies are planned to be used for the capture and sequestration of carbon and methane.
3.3.1.1. Energy
Low-carbon development and the achievement of carbon neutrality in Kazakhstan by 2060 will require a deep transformation of the energy system and will consist of three main elements:
1) Decarbonization of primary energy supplies;
2) Decarbonization of electric and thermal energy production;
3) Decarbonization and highly efficient end-use of energy in buildings, transportation and industry.
The greatest reduction in GHG emissions in the energy sector will be achieved through a shift towards more sustainable energy sources: by gradually reducing the amount of fossil fuels, switching to the use of electricity and heat instead of direct burning of fossil fuels. The decarbonization of the energy sector requires the use of natural gas as an intermediate fuel, and exploration work will be carried out to identify new gas fields. Alternative and renewable energy sources will be actively developed in the decarbonization process.
Increased energy efficiency and the transition to low-carbon technologies in all sectors of the economy will cause significant changes in the supply of primary energy.
The decarbonization of the fossil energy sector has its own characteristics. The oil and gas industry, which accounts for 2.7% of global emissions, will continue to be reduced by reducing methane leaks, using more energy-efficient technologies and improving production processes.
In the field of coal mining, GHG emissions will be reduced by reducing the use of coal in other sectors of the economy. At the same time, due to the country's sufficient coal reserves, a long-term vision for alternative coal use will be developed.
The final demand will shift towards the use of low-carbon fuels (biofuels and hydrogen) in areas where switching to electricity is still difficult. In this regard, a long-term vision for the development of hydrogen energy will be developed.
Reducing the final demand for energy requires significant transformations in sectors such as transport, housing and communal services, agriculture (in terms of fuel combustion) and industry.
Improving energy efficiency with low-carbon development and achieving carbon neutrality will be significant in all sectors. Such improvements include, for example, improved thermal insulation and the use of modern energy-efficient appliances in buildings, the transition to modern fuel-efficient vehicles, and the gradual replacement of industrial equipment after its service life with newer, energy-efficient technologies. At the same time, a vision for their tariff regulation will be developed to accelerate the implementation of low-carbon projects.
Decarbonization will require widespread abandonment of fossil fuels and inefficient fuel subsidies. Thus, there will be the maximum possible transition of final energy consumption to electricity and heat, as well as to low-carbon and carbon-free fuels.
Taking into account the goals set out in this Strategy, it is necessary to accelerate the process of transferring energy-producing capacities from coal to natural gas.
Other approaches to decarbonization of the energy sector will also be developed, which will be developed as scientific and technological progress in the field of low-carbon technologies and processes progresses.
As a result of the Strategy's implementation, there should be a change in the priorities of the energy system in the sectors of electricity, transport, housing and communal services (buildings) and industry (Table 3).
Table 3. Priorities of current and decarbonized energy systems by sector
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Sector
Current system (2022)
Carbon-neutral system (2060)
Electric power industry
The predominance of coal
Alternative and renewable energy sources, carbon capture and storage
Transport
Predominance of oil products
Electricity, hydrogen, biofuels
Building
The predominance of coal and gas in heating systems
Electrification, energy efficiency, heat supply from alternative and renewable energy sources
Industry
High demand for fossil fuels
Electrification, energy efficiency, hydrogen, carbon capture and storage
Thus, low-carbon development and the carbon-neutral system of 2060 involve the following transformations::
1) phased replacement of coal with alternative and renewable energy sources;
2) displacement of the burning of fossil fuels in the structure of final consumption to the lowest possible level through the electrification of energy consumption in all sectors of the economy;
3) transition to the use of hydrogen, biofuels and synthetic low-carbon fuels in processes that will be difficult or impossible to electrify;
4) Application of carbon capture and storage technologies.
Electricity and heat generation
The transformation of the electric and thermal power industry will be driven, on the one hand, by changes in the technological structure of electric and thermal energy production and, on the other hand, by the growing demand for electricity from other decarbonized sectors. At the same time, the primary role in decarbonization will be played by reducing losses in the generation and transmission of electrical and thermal energy.
For low-carbon development and achieving carbon neutrality, a phased, planned reduction in the share of coal generation with an increase in the share of renewable energy and alternative energy, as well as the use of natural gas as an intermediate fuel, will be carried out by 2060. The capacity structure will include nuclear power plants as a stable source of energy, therefore, a long-term vision for the development of nuclear energy will be developed.
Due to the growing share of renewable energy generation and alternative sources, additional introduction of maneuverable generation sources is required. In this regard, a long-term vision for the development of solar and wind generation will be developed.
In the medium and long term, there is uncertainty about the availability of sufficient water resources, so a long-term vision for the development of hydropower will be formed.
In the medium and long term, carbon capture and storage technology (hereinafter referred to as CCS) is expected to be used to capture GHGs. In this regard, a vision will be developed for the decommissioning of coal-fired power plants with a current operating life of more than 30 years and the introduction of carbon capture and storage technology for those units that will continue to operate after 2035. At the same time, the coal-fired facilities being withdrawn will be given priority right to implement "green" energy projects.
At the same time, gasification of existing coal-fired facilities can also contribute to reducing emissions.
The production of centralized thermal energy will be decarbonized by switching from coal to natural gas, using renewable energy in the form of geothermal energy (heat pumps) and biofuels. Decentralized (individual) autonomous heat supply systems will become the main goal of technological change. In the medium and long term, the use of geothermal energy and hot water supply from solar energy will be actively developed, therefore, a vision for their development will be developed.
In order to decarbonize the production of electricity and heat, a transition will be made to a tariff-setting system that encourages the introduction of energy-saving technologies and changes in consumer behavior.
An important point is the development of the wholesale and retail market of electric energy, thermal energy, as well as the network infrastructure of the National Electric Grid, network energy storage stations.
In addition, the development of small-scale renewable energy sources, the development of a "smart" electric power industry, as well as other approaches to decarbonization of the electricity and heat generation sector will be used.
Transport
Low-carbon development of the transport sector should be carried out in accordance with the concept of "avoidance - shift - improvement". Thus, decarbonization will be carried out in three main directions:
1) eliminating or reducing the need for travel (avoidance);
2) transition to more environmentally friendly modes of transport (shift);
3) Improving energy efficiency and reducing emissions from vehicles (improvement).
Avoidance refers to a drop in energy demand from passenger cars, optimization of passenger and freight flows, development of public transport systems, optimal urban planning, which will reduce the need for car travel as such.
The shift involves the active use of alternative fuels and large-scale electrification of transport.
Improvement refers to the renewal of the fleet and the modernization of existing vehicles. This step will be combined with avoidance and shifting.
Urban planning systems and transport infrastructure will be improved to decarbonize the transport sector. Sustainable urban mobility and the public transport system will be actively developed by optimizing passenger transportation, large-scale electrification and gasification.
Further electrification of railways and optimization of freight transportation will be carried out.
The transition to transport using alternative and renewable energy sources will be stimulated by creating appropriate infrastructure and applying other incentive mechanisms.
A significant role in the decarbonization of transport will be played by the development of domestic transport production using alternative and renewable energy sources.
Other approaches to decarbonization of the transport sector will be used, which will be developed in international practice on decarbonization of the transport sector.
Buildings (housing and communal services sector)
Buildings are among the largest sources of GHG emissions and are therefore of the greatest importance for reducing emissions. The decarbonization of the buildings sector will be carried out by switching from fossil fuel-based heating to renewable energy-based heating and more efficient technological equipment.
To reduce GHG emissions from buildings, significant investments will be made in gasification and electrification of heating, as well as the use of renewable energy sources (for example, photovoltaics, thermal, solar, and geothermal energy).
Steps will be taken to introduce a system for monitoring, reporting, verifying the energy efficiency of buildings and establishing strict energy efficiency requirements for new residential, public and industrial buildings of at least Class C.
Thermal modernization of buildings and the introduction of new heating technologies are necessary to significantly reduce the demand for energy for heating purposes, therefore, large-scale implementation of automated systems for monitoring and accounting of thermal energy will be carried out.
Improving energy efficiency through thermal modernization of buildings and the introduction of new energy-efficient technologies will lead to a reduction in energy consumption and the associated negative public costs from burning fossil fuels in buildings.
The introduction of renewable energy sources and efficient technologies for indoor heating and hot water supply will also be actively developed.
At the same time, other developed approaches to decarbonization of the housing and communal services sector in international practice will be used.
3.3.1.2. Industry
Decarbonization of industrial processes requires significant changes. The main elements of such transformations include:
1) the use of alternative building materials instead of cement, steel, aluminum with lower or zero GHG emissions;
2) increasing the volume of waste processing (including scrap) to reduce the need for processing raw materials as the main source of emissions from the sector;
3) the introduction of new production technologies with zero GHG emissions combined with carbon capture and storage.
Many decarbonization options for industrial processes involve upgrading equipment and restructuring production in such a way as to separate production processes or allow easy equipment upgrades from low-carbon to carbon-free processes (switching from natural gas to hydrogen in DRI).
Therefore, even if some technologies are still expensive for some manufacturers (DRI on hydrogen or CCS in cement plants), transitional technologies (DRI on natural gas) and process improvements (injection of CO2 into concrete, which will later be supplied by their own CCS installations) pave the way for the complete elimination of technological GHG emissions in these industries.
Innovative low-carbon developments in mechanical engineering will also be widely implemented and other approaches to decarbonization of the industrial sector will be used, which will be available in international practice.
In general, steps will be taken to reduce heat loss in production processes and recycle low-temperature heat to decarbonize the industry.
Specialization and cooperation in the use of the most modern energy-efficient technologies and materials will be developed.
3.3.1.3. Agriculture and forestry
The structure of energy consumption in the sector will change from the use of fossil resources to alternative and renewable forms of energy such as biofuels and geothermal energy.
It is important to use the potential of bioenergy production from agricultural waste on the way to decarbonization. The use of controlled decomposition technologies in anaerobic digestion plants to produce biogas for heating and electricity generation will reduce waste and GHG emissions. The solid residues of anaerobic digestion can be used as an organic fertilizer and to some extent replace chemical fertilizers.
In general, an increase in agricultural production will lead to an increase in GHG emissions, although decarbonization measures will slow this trend.
The main decarbonization actions include:
1) sustainable agriculture and livestock management, irrigation improvement;
2) Sustainable forest management and reforestation.
Sustainable agriculture will need to be expanded, especially in terms of improved livestock management and expanded irrigation systems, including (but not limited to) crop rotation and crop diversification. Sustainable livestock management practices will be actively implemented, such as the sustainable use, development and conservation of livestock genetic resources, the use of technological solutions to reduce methane emissions from livestock, and sustainable pasture management.
The planting of cover crops and the integration of animal husbandry and crop production are important to benefit from the synergy between them.
It provides for the expansion of the scale of climate-optimized agriculture, in particular, the development of carbon farming, the introduction of precision farming principles, the breeding of new climate-resistant crops, and the development of organic farming practices.
In terms of sustainable forest management and reforestation, steps will be taken to stop the process of deforestation, preserve forests, and restore degraded lands. A vision will be developed for the development of public and private afforestation, sustainable land management, and improved water supply and irrigation.
To further ensure food security, agroforestry and organic farming practices will be expanded, and producer-consumer chains will be reduced. Building food systems based on the principles of circular economy and developing regenerative farming methods will be of great importance.
An important point is the integration of biodiversity into agriculture.
As a result of land-use changes, the sector may become a net CO2 sink, which will cover GHG emissions from agricultural production and partly from other sectors by 2060.
Thus, investments in sustainable agriculture and climate change resilience bring double benefits - not only reduce GHG emissions from agriculture and contribute to climate change mitigation, but also increase productivity.
3.3.1.4. Waste management
The main steps towards decarbonization of the waste management system will be:
1) reduction of waste generation;
2) accelerated implementation of full coverage of solid waste collection and sorting;
3) an increase in the proportion of recyclable and compostable waste.
The reduction of total GHG emissions from MSW will be achieved through the gradual elimination of open waste disposal and a significant reduction in landfill disposal. These reductions more than offset the small increase in emissions resulting from the increased use of organic waste for composting and energy generation. Accelerated implementation of full coverage of waste collection, sorting and recycling will be promoted.
It is important to ensure the transition to the use of more efficient water-saving devices and equipment in order to reduce the volume of wastewater. Therefore, additional incentives will be implemented to minimize waste and wastewater generation. Changing the technology of wastewater sludge treatment will increase its use for the production of biogas and fertilizers. This will not only reduce GHG emissions from wastewater, but will also help increase renewable energy generation, reducing the use of fossil fuels and further contributing to the reduction of GHG emissions from energy use.
In general, a vision for the development of a circular economy model and waste gasification (with energy generation and/or chemical production) will be developed to decarbonize the waste management sector.
3.3.1.5. Cross-sectoral vision for low-carbon development
In the process of implementing the energy transition, it is envisaged to implement approaches to reduce GHG emissions that are applicable to the above sectors. They will include the introduction of financial and tax policy measures to encourage the reduction of anthropogenic GHG emissions in carbon-intensive sectors of the economy.
Government support will be provided for the implementation, replication and scaling of carbon-free and low-GHG technologies.
Tax, customs and budget policies will be changed to take into account the challenges of low-GHG development and take into account the consequences for changing the GHG balance in the implementation of budget expenditures and investments.
The adoption and implementation of sectoral and regional emission reduction plans are important areas. Sectoral goals will be set for the transition to low-GHG development and improving energy and environmental efficiency in economic sectors.
Incentives will be applied to use secondary energy resources in the production of goods and to support and disseminate technologies for GHG capture, disposal and further use.
Mechanisms will be developed to promote energy conservation and the introduction of low-carbon and carbon-free technologies.
The formation and development of national scientific and engineering potential are envisaged for the successful implementation of the energy transition.
A system of white and "green" certificates, a system of public non-financial reporting of companies, and a regulatory framework to accelerate the energy transition will also be developed.
3.3.2. Cross-cutting approaches to low-carbon development
In order to effectively and timely implement the Strategy, close cross-sectoral and interdepartmental coordination of actions between government agencies will be carried out.
Low-carbon development and the transition to carbon neutrality will be accompanied by broad involvement of stakeholders at all levels of decision-making, including representatives of central and local governments, the quasi-public sector, science, business (associations and enterprises), non-governmental organizations and local communities. Such participation of stakeholders is intended to promote a greater understanding and support of processes in achieving positive results in the medium and long term, the implementation of joint initiatives for low-carbon development and the transition to carbon neutrality.
Business structures can voluntarily initiate the development of corporate strategies for low-carbon development and carbon neutrality. Business initiatives will give an additional impetus to low-carbon development.
At the same time, the government will take measures to support the development and implementation of corporate strategies in the form of connection to the "green" taxonomy, the base of the best available technologies and mechanisms of special economic zones.
3.3.2.1. Fair transition and job creation
Low-carbon development leads to the transformation of the country's economic structure, in particular, the industrial sectors. As a result, workers engaged in activities in these sectors of the economy related to fossil fuels will be fully provided with social protection measures.
In addition, these employees will have access to retraining and obtaining "green" jobs in low-emission industries, and assistance will be provided in organizing small "green" businesses.
At the same time, low-carbon development will stimulate increased employment in the sectors of agriculture, bioenergy production and waste management. In addition, additional jobs are expected to be created through the introduction of renewable energy sources, modernization of buildings and infrastructure development.
Large-scale modernization of fixed assets in the energy sector and active development of renewable energy sources are impossible without a systematic reform of tariff policy.
At the same time, possible negative effects for households will be largely mitigated by comprehensive energy efficiency improvements, targeted financial assistance to socially vulnerable household consumers, and cheaper other types of energy.
In order to raise public awareness, timely planning and information on the ongoing tariff reforms will be carried out in combination with an information campaign on the benefits of energy efficiency.
Social risk mitigation mechanisms will be developed to ensure a fair and effective transition (including targeted assistance to households).
In addition, as decarbonization steps are implemented in Kazakhstan and other countries, further research will be conducted on the labor market and job creation in new sectors, which will serve as the basis for the deployment of programs and support mechanisms, including retraining and retraining programs for workers in declining industries.
Support for workers who do not have the skills to work in new industries (including using low- and carbon-free technologies), as well as training and retraining of labor resources, especially in basic industries, will be included in government measures in the field of workforce development.
3.3.2.2. Financing and "green" investments
Attracting additional private investment from domestic and international sources to transition to a green and carbon-neutral economy will be a strategic priority for the country.
Investments in the transition to a green and carbon-neutral economy not only stimulate GDP growth, but also bring great benefits to the economy. Environmentally sustainable farming methods reduce GHG emissions and at the same time conserve water resources, reduce soil erosion, increase yields, generate additional income, increase production and reduce the risks of damage from negative weather and climatic factors.
Investments in energy efficiency of buildings lead to energy savings and lower costs for households and businesses, reduction of air pollution by harmful and dangerous substances, and an increase in household incomes.
Waste reuse (circular economy) creates synergetic effects in other sectors, reducing the cost of raw materials. Investments in the development of carbon-free transport reduce noise pollution and the concentration of pollutants in the atmosphere, as well as provide tangible benefits for households in the form of savings in fuel costs.
According to the World Bank, the right investments now can provide short-term benefits - jobs and economic growth, and long-term benefits, including decarbonization and increased sustainability. Low-carbon development incentive programs can create new jobs that are sustainable, inclusive, and contribute to reducing inequality and increasing infrastructure sustainability - benefits for the economy.
Kazakhstan is well positioned for international climate finance and is able to attract investments through various channels, taking into account corporate projects, ETS, green financing schemes, government financing and international financial institutions. However, the investment resources needed for low-carbon development and achieving carbon neutrality require increased funding. Therefore, a vision will be formed for financing the transition to carbon neutrality with a detailed study of the elements of financing by type of sources, tariff policy, and the phased involvement of financing elements.
Close cooperation between the public and private sectors, active participation in international project financing schemes, including the Paris Agreement Sustainable Development mechanism, and the use of innovative digital technologies will accelerate the processes of green transformation and actions to reduce GHG emissions and adapt to the effects of climate change.
In order to attract additional resources necessary for low-carbon development and the transition to carbon neutrality, the regulatory and institutional framework will be improved, as well as conditions for the development of innovative tools and standards for green financing, and taxonomies of green projects will be updated, taking into account international experience in developing such taxonomies and investor expectations.
To encourage private investment in low- and carbon-free technologies, pricing schemes in a number of sectors should be reviewed, in particular for electricity and heat, garbage collection and sorting.
Economically optimal policies will allow markets to determine prices that take into account all capital, operational and environmental costs, motivate the rational and careful use of resources, and encourage private investment in energy efficiency and the transition to alternative fuels. In addition, GHG pricing internalizes the environmental costs of carbon-intensive products and stimulates investments in renewable energy and low-carbon production technologies. At the same time, a significant price on GHG emissions will lead to government revenues that can be redistributed to support decarbonization and provide preferences for green projects.
Thus, the creation of a "carbon" (carbon) fund is of great importance, which will accumulate funds from the sale of carbon units and the carbon tax, which will further finance projects to reduce emissions and increase GHG uptake.
Improving the framework conditions and providing clear signals about future policy will reduce the uncertainty and risks perceived by domestic and international investors, and thus reduce the investment costs associated with decarbonization. This can be enhanced by active engagement with the international community (e.g., development banks, Governments, and international organizations) to ensure support for green investments.
To increase investment attractiveness, international standards will be introduced, including in the field of "green" construction, "green" transport, energy efficiency of buildings and residential premises, and environmental management.
Fiscal incentives should be available to domestic businesses to increase incentives for the introduction of low- and carbon-free technologies.
The policy of stimulating green investments should be complemented by measures to improve the overall business environment and investment climate in Kazakhstan, taking into account transparent criteria for green investments - ESG criteria. The taxonomy of "green" projects should clearly define, taking into account international approaches, relevant indicators of the "environmental friendliness" of enterprises, such as improving energy efficiency and energy conservation, reducing GHG emissions, and adapting to climate change.
Pilot projects will be implemented to determine the possibility of using new decarbonization technologies in Kazakhstan.
In this regard, the possibilities of decarbonization in various sectors will be tested in a pilot project to further decide on the scaling of such technology and the development of legislative changes to provide government support in the form of fiscal incentives, financial and non-financial measures.
Technologies that have not yet been widely used in Kazakhstan will be tested taking into account various aspects: climatic features, architecture of Kazakhstan's energy system, structure of consumption of fuel and energy resources, lifestyle of households, etc.
3.3.2.3. Research and development activities and education
Research and development, innovation, and education are essential for low-carbon development and the transition to carbon neutrality and adaptation to the effects of climate change.
The transformation of Kazakhstan's economic structure within the framework of low-carbon development and transition to carbon neutrality will require scientific, technological and professional staffing.
In addition, the pace of decarbonization and the energy transition already requires advanced scientific support, the organization of targeted fundamental and applied research in various sectors and spheres of the economy, the study of labor markets and the creation of new jobs.
To form and develop our own low-carbon infrastructure in the manufacturing sector and reduce dependence on foreign technologies and the best available techniques, training of domestic specialists will be provided, including through public-private partnerships.
The amount of funding for science will be increased, taking into account modern processes of technological modernization based on the principles of decarbonization, while paying attention to the development of scientific research in the field of low-carbon development, cyclical economy and alternative energy.
Research in areas of priority for the transition to low-carbon development (RES, energy efficiency, biogas, nuclear and hydrogen energy, energy efficiency, energy conservation, etc.) will be actively supported, where Kazakhstan can achieve a comparative advantage in international markets.
Research programs will be organically linked to the development of new industries, stimulate the launch of low-carbon projects, and support collaboration between researchers and business stakeholders.
Grants for entrepreneurs and start-ups will be provided to strengthen the integration of domestic scientists with the foreign research community in strategic innovative areas and promote the development of high-quality, relevant scientific research for Kazakhstan, as well as the commercialization of new technologies.
As part of the implementation of measures to decarbonize economic sectors and further low-carbon development of the country, measures will be taken to provide personnel and train specialists in such areas as climate policy, green energy, environmental economics, sustainable design, digitalization, etc. Innovative methods, solutions and tools will be introduced into the national education system. Technological changes will increase the demands on professional skills in sectors adopting new technologies. Digital competencies will become a mandatory element of all professional standards.
As one of the priority measures, access to modern knowledge and data in the field of climate change and low-carbon development will be expanded and ensured for all stakeholders (decision makers, the expert community, business, and so on) through increased investment and increased scientific and technological potential.
The active involvement of citizens, representatives of non-governmental organizations and other social groups in decarbonization processes through educational programs, scientific research and innovative developments is an important step towards Kazakhstan's low-carbon development.
3.3.2.4. Changing public consciousness
The transition to a low-carbon economy will require society to significantly change its attitude towards the challenges of "green" development, lifestyle and consumption in the medium and long term. These changes should be based on the values of sustainable development, which will be promoted consistently - from mass education and awareness-raising to increasing interest and awareness, engagement, and practical participation of civil society in the implementation of the objectives of the Strategy.
A policy of promoting a "low-carbon" culture and lifestyle will be pursued.
Thus, issues of sustainable development, especially related to climate change, energy transition and GHG emissions reduction, will be included in the educational curricula of primary, secondary and higher education institutions.
Information campaigns will be launched to raise awareness about climate change, highlighting the benefits of low-carbon policies for health and the environment.
It is important to form and promote a low-carbon culture of government agencies, in particular through the development of energy management systems, policies of openness and public participation. It seems effective to organize national and regional climate and energy days on an ongoing basis for government and budget organizations.
The interest of the younger generation will be increased by attracting youth and volunteer organizations to participate in large-scale environmental projects.
The state will support citizens' activism in the transition to low-carbon development through:
encouraging the population to consume goods rationally;
Developing and distributing digital tools that allow citizens to calculate their own climate impacts and propose personalized actions to reduce emissions based on individual lifestyles.;
promote and inform about the importance and benefits of rational waste management (separate collection, recycling, etc.).
Effective Strategy implementation is impossible without ensuring maximum transparency and feedback. All stakeholders will have the opportunity to monitor the progress of the Strategy projects. It is important to constantly collect public proposals on new draft Strategies and to conduct a discussion on low-carbon development issues on a national scale.
Effective feedback will be provided through the conduct of sociological research in the development and implementation of state policy in the field of decarbonization and regular public consultations on various dialogue and expert platforms.
3.3.2.5. International cooperation
In order to achieve its objectives, Kazakhstan needs financial and institutional support from the international community to ensure a smoother energy transition for all sectors. In this regard, Kazakhstan will implement projects on the mechanism of sustainable development of the Paris Agreement.
Kazakhstan will continue to cooperate with the United Nations Climate Technology Center and Network and the Green Climate Fund. Substantive requests will be formulated and specific projects initiated with an appropriate appeal to these organizations.
An important area will be the attraction of technology within the framework of the commitments made by some developed countries. Developed countries support developing countries in building capacity in the field of emission measurement, reporting and verification, "blue carbon", national emission inventory and accounting systems, carbon capture and storage, etc.
Kazakhstan will cooperate with the international community in the field of innovation to engage in international research programs and projects.
Professional development of those responsible for political decision-making will become an important element of international cooperation. Such programs include technical assistance, for example, in the field of energy security and clean technologies, the development of technological standards (in construction, energy efficiency, and so on), the integration of climate change issues into national development policies, the updating of environmental management systems and the inclusion of adaptation measures.
Kazakhstan will continue to actively develop international cooperation in the field of energy security and clean technologies, and the development of technological standards. This will facilitate the exchange of best practices and transfer of carbon-free technologies, combine scientific achievements and expertise from different countries, and potentially improve the quality, speed, and efficiency of research and development.
It is planned to conduct joint research, including programs for macroeconomic assessment of climate policy, assessment of public investment management taking into account climate issues, and management of public finances taking into account environmental aspects.
Procedures for attracting international investments, as well as importing technologies and highly qualified personnel will be simplified.
Cooperation will continue with international financial organizations - the United Nations Development Program, the International Monetary Fund, the Organization for Economic Cooperation and Development, the World Bank, the European Bank for Reconstruction and Development, the Asian Development Bank, the German Society for International Cooperation, the Eurasian Development Bank and other organizations. This will make it possible to attract international mechanisms to promote the "green" growth of national economies with a high carbon footprint (tools for accelerated decarbonization of the energy industry, energy transition mechanisms, cancellation of sovereign (corporate) debts to international financial institutions in exchange for "green growth" and others).
Kazakhstan will continue to build strategic relationships with partners who share similar climate ambitions, form knowledge exchanges in global supply chains, and accelerate the joint development and implementation of low-emission technologies. This will contribute to the development of the country's technological approach to reducing emissions by strengthening global cooperation in the development and implementation of low-carbon technologies.
3.3.2.6. Adaptation to climate change
The restructuring of the national economy in order to achieve low-carbon development and carbon neutrality should take into account the risks associated with the effects of climate change in all sectors of the economy. This will increase the resilience of decarbonization measures to climate change. An integral part of climate action, along with Kazakhstan's efforts to reduce GHG emissions, should be the adaptation of the economy and society to the transition to low-carbon development.
It has been empirically proven that adaptation measures have a significant positive impact on the economic development of a country.
Thus, investments in improving irrigation infrastructure significantly reduce crop losses during droughts, increase the export potential of agricultural products and create additional jobs.
In the infrastructure sector, investments in climate-resilient roads reduce damage from extreme precipitation and flooding, and reducing travel time by improving road conditions will reduce transportation costs.
When planning the development of industries and territories, the authorized central executive body and local executive bodies should ensure the implementation of all stages of the climate change adaptation process, as well as close intersectoral and interdepartmental cooperation.
The most vulnerable sectors of the economy should be a priority for adaptation measures.
For the purposes of low-carbon development in the field of adaptation to the effects of climate change, the processes of planning and implementing climate change adaptation measures will be institutionalized, including expanding the responsibilities of government organizations and creating mechanisms for financing adaptation measures within the framework of national planning and budgeting processes.
The system for collecting and providing up-to-date and accessible climate data, including data on physical and economic damage from the effects of climate change, will be improved. The data collection system will enable the assessment of risks and vulnerabilities in various sectors, as well as facilitate decision-making at various levels.
Of great importance is the development and improvement of methodologies for assessing climate risks and vulnerability to the effects of climate change, monitoring the effectiveness of adaptation measures, as well as economic assessment and modeling of climate change impacts and adaptation measures; as well as ensuring a holistic approach to climate action in Kazakhstan, taking into account the close relationship between adaptation and mitigation measures.
3.3.2.7. Carbon regulation system
Carbon regulation provides a powerful impetus to the development of low-carbon technologies. The development of a sustainable carbon regulation system in the country will allow solving a whole range of urgent problems: reducing the "carbon footprint" in goods, harming the environment, saving resources, and motivating domestic technological re-equipment.
To implement the Strategy, a sustainable Carbon Management System (hereinafter referred to as the RMS) will be created, which will consist of the following main elements:
monitoring, reporting and verification system;
national quota system and ETS;
carbon taxation of installations (processes, goods, and services) whose emissions are not regulated under the national ETS;
climate finance system, including carbon (carbon) fund, taxonomy of projects, bank of ready-to-implement low-carbon projects, "green" financing, "green" procurement;
interaction with NDT;
a unified digital ecosystem of carbon regulation.
The key element of the RMS will be the ETS, the importance of its effective functioning has increased taking into account Kazakhstan's national commitments to reduce GHG emissions under the Paris Agreement, as well as plans to implement the MTG mechanism.
The main priority for improving the ETS will be the phased introduction of paid quota allocation by reducing carbon quotas for GHG emissions.
The scope of carbon pricing tools will be expanded, and approved specific emission factors will be revised towards their tightening in order to encourage quota entities to improve their individual GHG emissions per unit of production.
Control over the verification of reporting by quota entities on GHG emission inventories and the activities of validation and verification bodies will also be strengthened. GHG emission calculation methodologies will be improved by using enterprises' own source data.
4. Conclusion
To participate in the efforts of the international community to address climate change, the Republic of Kazakhstan has decided to develop its Strategy for Achieving Carbon Neutrality.
The strengthening of international climate policy leads to the fact that investments poured into energy-intensive and resource-intensive projects may very soon turn into "lock-out" assets. Removing the carbon price from carbon-intensive goods at the border of importing countries, if it is not paid in the country of origin of the goods, will lead to a decrease in investors' income.
A gradual global reduction in demand for fossil fuels will inevitably lead to a reduction in exporters' foreign exchange earnings and, consequently, a drop in government budget revenues, which may significantly limit the ability to finance education, healthcare, and social security systems, and reduce the potential for job creation and economic growth.
As a major exporter of fossil raw materials, Kazakhstan needs to decarbonize its economy and build a sustainable low-carbon economic development model to create new growth drivers.
Low-carbon development and achieving carbon neutrality by 2060 for a country as large and sparsely populated as Kazakhstan require careful planning of follow-up actions over four decades.
This Strategy is the foundation of such large-scale transformations.
The strategy aims at low-carbon development and achieving carbon neutrality by 2060 by building an effective low-carbon development model.
Achieving ambitious climate goals is a huge challenge for Kazakhstan. Reducing GHG emissions will require fundamental changes in production and consumption patterns, a rapid and efficient transition from non-ecological burning of fossil energy resources to carbon-free technologies, large-scale technological modernization, and attracting "green" investments in all sectors of the national economy, including regions, cities, and various business sectors.
Low-carbon development and the achievement of carbon neutrality will take place in three main directions.
1. Decarbonization of industries and processes related to energy use.
This area covers large-scale measures to transform energy sectors, in particular, a shift towards more sustainable energy sources by gradually reducing the amount of fossil fuels, switching to the use of electricity and heat instead of direct burning of fossil fuels, increased use of natural gas during the interim transition period, as well as alternative energy sources and renewable energy sources.
Today, coal-fired generation retains a dominant position in the production of electricity and heat, but for low-carbon development and achieving carbon neutrality by 2060, a phased and planned reduction in the share of coal generation will be envisaged.
The development of renewable energy sources will be a key condition for successful decarbonization. Thus, wind, given its quality and availability in the country, will become the main resource for development at an earlier stage, while solar energy will become a key technology at a later stage, when the cost of investments in SES will noticeably decrease.
In the long term, the use of renewable energy sources will be accompanied by energy conservation systems, which will regulate the supply of electricity and better integrate renewable energy sources into the energy system.
An important point is the technological modernization of industry and, above all, its basic industries, taking into account the principles of energy conservation and energy intensity. The principles of energy conservation will also be applied in other sectors of the economy.
One of the key elements of decarbonizing emissions from energy production and use is large-scale electrification.
The use of biofuels and hydrogen is expected in those modes of transport that are difficult or impossible to fully electrify (for example, in water and air transport).
2. Decarbonization of industries and processes unrelated to energy use.
Within the framework of this direction, it is planned to increase "carbon" efficiency - the use of low- or zero-emission methods in industrial processes, the development of sustainable agriculture and waste management.
Agriculture will make the transition to sustainable farming and animal husbandry practices.
Further industrial development should involve upgrading equipment and modernizing production in such a way as to separate production processes or make it easy to upgrade equipment from low-carbon to carbon-free processes.
The reduction of total GHG emissions in the waste sector will be achieved through the gradual elimination of open waste disposal, an increase in the proportion of recyclable and compostable waste, and accelerated implementation of full collection and sorting coverage.
3. Takeover and compensation projects.
Within the framework of this direction, it is planned to increase the ability to accumulate carbon in forests, soils, and the active use of carbon capture, use, and storage technologies since their economic feasibility has increased.
The implementation of sustainable forest management and reforestation will make it possible to cover GHG emissions from agricultural production and partially in other sectors by 2060.
The active use of carbon capture and storage in economic sectors is expected precisely when the technology becomes economically feasible.
The described directions will make it possible to effectively transform economic sectors and reduce GHG emissions. But the decarbonization process will be accompanied by certain difficulties and risks that require the right approaches to their leveling.
The most important priorities of low-carbon development should be a fair transition and job creation. To ensure a fair transition, additional legislative, political and economic measures will be taken to distribute the burden and benefits of climate action in a fair and acceptable manner among different social groups, and create new opportunities in industries and regions affected by decarbonization policies and adaptation to climate change.
In this regard, workers involved in the extraction of fossil fuels who are vulnerable to job loss in the process of energy transformation should be protected by social protection measures, retraining and retraining programs, and the creation of new jobs in low-emission industries. Programs will be developed for this category of people offering alternative employment and retraining in order to carry out activities in new "green" areas.
The process of transition to low-carbon development tracks will require the mobilization of large investment resources in clean energy and additional low-carbon technologies. Kazakhstan needs to redirect current carbon-intensive investments towards these low-emission solutions and at the same time improve market conditions that will encourage private domestic and foreign entities to enter the market that can accelerate the energy transition.
The decarbonization process at the country level requires systematic work and the adoption of appropriate investment, regulatory and institutional reforms both in the field of public administration and in planning the development of the national economy and its basic sectors. Due to the intersectoral nature of low-carbon development and the importance of ensuring the country's energy security, extensive coordination work will be ensured among all interested bodies.
The strategy for achieving carbon neutrality of the Republic of Kazakhstan until 2060, being a strategy for economic diversification and its technological breakthrough, should become a new long-term strategic document during the renewal of the country's socio-economic policy.
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