Tashkent, Uzbekistan (UzDaily.com) — Based on the results of a study on improving carbon regulation in Central Asian countries, EY experts have outlined the steps each government is taking to reduce greenhouse gas (GHG) emissions in line with international commitments.

If the current policies for reducing GHG emissions are continued, they will lay the foundation for a carbon-neutral future for the entire region and provide a clear roadmap for achieving sustainable, low-emission growth. However, this will be unattainable without market-based carbon regulation methods, including attracting funds for economic decarbonization with a particular focus on the energy sector.

Carbon Regulation in Uzbekistan

In the Central Asian region, Uzbekistan is the second-largest emitter of greenhouse gases after Kazakhstan, with total emissions amounting to 187.5 million CO2-equivalent. Specifically, the energy sector accounts for 76-80% of the country’s GHG emissions, including 50% from fossil fuel combustion and 26-30% from methane leaks in the coal and oil and gas industries.

Over the past decade, emissions from the energy sector have decreased, while GHG emissions from agriculture have increased due to the rising livestock population, accounting for 18% of the total. Industrial processes account for 5% of total emissions. Despite waste management emissions representing only 1%, they are also increasing rapidly.

Given that in 2021 Uzbekistan raised its commitments under the Nationally Determined Contributions (NDC) and aims to reduce GHG emissions per unit of GDP by 35% by 2030 from 2010 levels, instead of the 10% reduction outlined in the NDC, the country remains one of the most energy- and resource-intensive in the world. With the existing resource-intensive economic model, the expected rapid population and economic growth will lead to a significant increase in emissions, creating excessive pressure on key resources and ecosystems.

Despite the lack of carbon pricing mechanisms in the Republic of Uzbekistan (such as carbon trading systems or carbon taxes), the government is actively advancing towards decarbonizing the country's economy. This progress is achieved through implementing projects for international greenhouse gas emissions trading under Articles 6.2 and 6.4 of the Paris Agreement. Previously, the country had experience with voluntary projects under the Kyoto Protocol.

In addition, in 2019, an Interdepartmental Council was established to promote and implement a "green" economy in Uzbekistan. In 2024, a Climate Council was created under the President of Uzbekistan, which will serve as the highest advisory body on climate change mitigation and adaptation, as well as on effective implementation of Uzbekistan's commitments under the Paris Agreement.

Carbon Regulation in Kazakhstan

Following the publication of the updated Environmental Code of Kazakhstan in 2021, the government approved the Strategy for Achieving Carbon Neutrality by 2060 in 2023 and updated the Nationally Determined Contribution (NDC). This set the future development direction for the country’s industry and economy, with the medium-term goal of reducing GHG emissions by 15% by the end of 2030 compared to 1990 levels, and the long-term goal of achieving carbon neutrality by 2060.

Currently, the only state control and GHG emission reduction tool is the Kazakhstan Emissions Trading System (KazETS). It covers six main sectors of the economy: electricity generation, oil and gas, mining, metallurgy, chemical, and manufacturing industries. The total KazETS limit is 161.1 million CO2-equivalent, which represents 47% of national emissions.

Moreover, under the Paris Agreement, the Kazakh government has committed to strengthening global response to climate change in the context of sustainable development, which has become a key task of the new environmental legislation and the consideration of various tools aimed at decarbonizing the country.

Carbon Regulation in Kyrgyzstan

Compared to its neighbors, Kyrgyzstan’s GHG emissions are relatively low, around 16.1 million tons CO2-equivalent excluding land use, land-use change, and forestry (LULUCF), which account for 0.03% of the total, placing it 137th in the world by this indicator. Nevertheless, the country continues to actively work on fulfilling its international commitments to reduce GHG emissions. For instance, in October 2021, Kyrgyzstan presented a revised NDC that envisages a 36.61% reduction in emissions by 2025 and a 43.62% reduction by 2030 in line with current development trends.

Kyrgyzstan plans to achieve these results through the construction of renewable energy sources, increasing energy efficiency, implementing sustainable transportation, providing alternatives for reduced usage, and improving coal quality.

However, as of now, carbon regulation tools such as emissions trading systems and/or carbon taxes have not been implemented in the country.

Viktor Kovalenko – EY Partner, Head of Climate Change and Sustainability Services for Central Asia, the Caucasus, and Ukraine.

Aibek Tulepbergenov – Senior Consultant, Sustainability and Climate Change Practice EY Kazakhstan.