Kazakhstan ETS to be suspended until 2018

Central Downtown Astana, Kazakhstan

Kazakhstan Vice Energy Minister, Asset Magauov, announced that Kazakhstan will suspend its ETS, until 2018, Carbon Pulse reported on February 26.

The ETS scheme was introduced in the country in 2013, and in 2016 it should have entered its third phase. It involves 140 big companies in the energy sector (including oil and gas), mining and chemical industry, covering around 50% of country’s CO2 emissions.

Last December the final allocation plan for 2016-2020 was approved, conceding 9 million more allowances than established in the initial plan, trying to conciliate the industry sector. However, the ETS will be suspended due to system imbalances that need to be fixed, said Minister Magauov, although the emitters should go on communicating their GHG emission levels.

But, according to Carbon Pulse anonymous observer, this was mainly caused by the industry protests on the plan to be too strict and with weak legal foundation. In addition, Kazakh economy is suffering because of the oil and metal prices collapse, which is downgrading its growth and oil outputs, and putting restraint on government budget.

The ETS presents even weaknesses to be addressed: lack of flexibility in adjusting the allocation levels overt the time, legal definition of emission sources, lack of banking possibility, and an over allocation of allowances in the first years.

(Image: Central Downtown Astana, Kazakhstan. Photo credit: Ken and Nyetta on Flickr)