ASTANA – The Astana International Financial Centre (AIFC) recommends key reforms to enhance Kazakhstan’s carbon regulation system, including the paid allocation of carbon allowances, expanding emissions trading platforms, and creating a carbon fund in a report published on Feb. 17.
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“International experience demonstrates that emissions trading systems (ETS) in developed and industrially emerging countries operate on a model of the partial distribution of allowances through auctioning, which helps establish a market price for carbon,” reads the report.
Fig. 1. Key Carbon Market Indicators by country. Photo credit: aifc.kz
Kazakhstan’s ETS (Kaz ETS), launched in 2013, covers 47% of emissions from 135 energy, mining, and manufacturing companies. However, all allowances are currently allocated for free, leading to a low carbon price of approximately $1 per unit, compared to $90 in the European ETS in 2023.
Fig. 2. Carbon unit prices in 2023, USD per tCO₂-equivalent. Photo credit: aifc.kz
Carbon trading in Kazakhstan has been suspended since 2022, limiting incentives for decarbonization.
The report highlights the potential of the AIFC Carbon Platform, which aims to facilitate carbon credit trading in the medium term and serve as a marketplace for emissions allowances within Kaz ETS in the future. The platform could also evolve into a regional hub for Central Asia and the Caucasus.
Developing Kazakhstan’s carbon market is essential for achieving carbon neutrality by 2060 and meeting its international commitments to reducing greenhouse gas emissions.
