ETS Status: Kazakhstan
Oil refinery factory in Kazakhstan
The Kazakhstan Emissions Trading System (KazETS), launched in January 2013, is Asia's first nationwide carbon trading scheme. It regulates emissions from the power and industrial sectors, which together contribute to about half of the country's total emissions. Initially designed to support the transition to cleaner and more efficient technologies in industry, manufacturing, and electricity generation, KazETS now plays a role in helping Kazakhstan achieve its Nationally Determined Contribution (NDC) targets. These targets include a 15% reduction in emissions by 2030 compared to 1990 levels, with the potential for a 25% reduction under specific conditions, and a goal of reaching carbon neutrality by 2060.
Phase I was a one-year trial period. Phase II spanned 2014-2015, but the system was temporarily suspended in 2016 and 2017 to resolve operational challenges and reform allocation rules. Despite the suspension, monitoring, reporting, and verification (MRV) obligations remained in effect. Amendments to the 'Environmental Code' in 2016 enhanced the MRV system and overall regulation of GHG emissions, while further amendments in 2017 introduced benchmarking. The KazETS resumed in 2018 with Phase III, which continued until 2020, followed by Phase IV in 2021. The current Phase V extends from 2022 to 2025.
Modeled after the EU ETS, the KazETS functions as a mandatory cap-and-trade system. Initially, the system was overseen by Kazakhstan’s Department of Climate Change (DCC) and Joint Stock Company Zhasyl Damu, both under the Ministry of Energy. In 2019, the responsibility for managing the ETS was transferred to the Climate Policy and Green Technologies Department within the newly created Ministry of Ecology, Geology, and Natural Resources.
The legal foundation for the KazETS was established in December 2011, through an amendment to the "Environmental Code of the Republic of Kazakhstan," which created a national mechanism for GHG emission reductions, allowed for both national and international trading of emissions allowances, and initiated a domestic offset scheme. The program's rules were developed and officially approved in 2012. The Environmental Code was updated in 2021, with additional updates to the "Rules of GHG Emissions Trading" and the "Rules of State Regulation of Emissions and Absorption of GHGs" in 2021 and 2022, respectively.
A brief summary of basic details of the KazETS is given below.
