Environment and Climate Regulation

Kazakhstan's environmental policy and law, rooted in its Constitution, aim to protect the environment for human life and health.

The Environmental Code, adopted on 2 January 2021, is the cornerstone of environmental policy and law, with three parts addressing general provisions, specific subject matter, and international cooperation and environmental liability.

Other specific environmental regulations are also governed by laws such as the Law On Specially Protected Natural Areas.

Sectoral laws also regulate environmental protection, including the Water Code, Land Code, Forest Code, Subsoil Code, Health Code, Law On Architectural, Urban Planning and Construction Activities, Law On Radiation Safety of the Population, Law On the Protection, Reproduction, and Use of Wildlife, Law On Flora, and others.

Administrative procedures related to environmental protection are regulated by the Entrepreneurial Code and the Administrative Procedural and Process-Related Code. Environmental payments are regulated by the Tax Code, and responsibility for environmental offenses is established by the Code On Administrative Offenses and the Criminal Code.

To implement these laws, subsidiary regulatory acts have been adopted. The country's environmental goals, priorities, and target indicators are set in policy papers approved by the President or the government, including the Concept of the Republic of Kazakhstan’s Transition to the Green Economy, the National Development Plan until 2025, the National Project “Green Kazakhstan”, and the Strategy for Achieving Carbon Neutrality in the Republic of Kazakhstan by 2060.

Multilateral Conventions:

1. On Control of Transboundary Movements of Hazardous Wastes and their Disposal
2. Concerning the Protection of the World Cultural and Natural Heritage
3. Aarhus Convention and the PRTR Protocol
4. On Biological Diversity and The Cartagena Protocol
5. Espoo Convention
6. On International Trade in Endangered Species of Wild Fauna and Flora
7. On Long-Range Transboundary Air Pollution
8. On the Conservation of Migratory Species of Wild Animals
9. On the Prohibition of Military or Any Other Hostile Use of Environmental Modification Techniques
10. On the Protection and Use of Transboundary Watercourses and International Lakes
11. On the Transboundary Effects of Industrial Accidents
12. Ramsar Convention
13. Energy Charter Treaty
14. MARPOL
15. On Civil Liability for Oil Pollution Damage
16. Kyoto Protocol
17. Montreal Protocol
18. Paris Agreement
19. Rotterdam Convention
20. Stockholm Convention
21. The UN Framework Convention on Climate Change
22. The UN Convention to Combat Desertification
23. The Vienna Convention for the Protection of the Ozone Layer

Regional:

Framework Convention for the Protection of the Marine Environment of the Caspian Sea, including Protocols.

Bilateral:

1. Kazakhstan-Russia Environmental Protection Intergovernmental Agreement
2. Kazakhstan-China Cooperation on Environmental Protection Intergovernmental Agreement
3. The European Union - Kazakhstan Enhanced Partnership and Cooperation Agreement

In Kazakhstan, environmental policy-making and regulatory competencies are primarily centralized at the national level, while enforcement competencies are shared between the central and municipal authorities.

The general approach is based on the protection of human rights and freedoms, as well as the protection of the environment. The basic principles of environmental legislation and the approach to its enforcement are as follows:

• Prevention
• Correction
• Precautionary
• Proportionality
• “Polluter pays”
• Sustainable development
• Integration
• Accessibility of environmental information
• Public participation
• The ecosystem approach

The Environmental Code encompasses all environmental assets including air, soil and subsoil, fresh water, sea water, flora and fauna conservation, natural habitats and landscapes:

1. Air: The regulatory framework includes strict emission standards for industries and vehicles, monitored through continuous air quality assessments. Permits stipulate emission limits, with enforcement through regular inspections and penalties for violations, ensuring compliance with national air quality standards.
2. Soil: Regulations focus on preventing soil contamination, with stringent controls on industrial and agricultural practices. Remediation of contaminated sites is mandated, integrated with land use planning to minimize risks and manage soil quality effectively.
3. Fresh Water: Water quality standards govern pollutants in rivers, lakes, and groundwater, with permits required for water extraction and discharge. Monitoring programs track water quality parameters, supporting enforcement actions to maintain pristine freshwater ecosystems.
4. Sea Water: Marine pollution controls prevent contamination from shipping and offshore activities, with coastal monitoring ensuring water quality preservation. Marine spatial planning integrates environmental considerations to sustain marine biodiversity and habitats.
5. Flora and Fauna: Biodiversity conservation laws protect endangered species and habitats, complemented by regulations on hunting, fishing, and wildlife trade to sustain populations. Protected areas, including national parks and reserves, safeguard diverse ecosystems and wildlife habitats.
6. Natural Habitats and Scenic Landscapes: Kazakhstan manages protected areas like nature reserves, national parks, and wildlife sanctuaries to conserve biodiversity and landscapes. These areas restrict harmful activities, including subsoil use. Sustainable tourism guidelines ensure responsible visitation, preserving cultural and historical sites within natural environments.

The Environmental Code provides for the regulation of certain types of physical impacts on the environment.

The State is expected to establish environmental standards in the form of maximum levels for certain types of physical impacts (noise, vibration, electric, electromagnetic, magnetic fields, radiation, heat) on animals, plants, ecological systems, and biodiversity. However, such standards for environmental impact have not yet been approved. Currently, only hygienic standards have been approved, which are from the perspective of human health impact, for infrared radiation, sound and minimum lighting, infrasound and ultrasound, ultraviolet radiation, and air ions, as well as electric, magnetic fields, and laser radiation.

The effects of odours are regulated solely by establishing maximum permissible concentrations of pollutants in atmospheric air. In all other cases, nuisances in the form of odours and light pollution are not sufficiently regulated by law.

Within the framework of the EIA, information about expected negative anthropogenic impacts on water, atmospheric air, soils, subsoil, as well as vibrations, noise, electromagnetic, thermal and radiation impacts is studied.

In addition, the legislation contains a few specific requirements regarding noise (for example, restrictions on the conduct of blasting operations in places of animal reproduction, the requirement of protective plantings along railway tracks, roads, canals, main pipelines for noise reduction, a general requirement for landfills to take measures to minimize the spread of odours and noise).

Consequently, the regulatory framework for protection against environmental nuisances, such as noise, odours, and light pollution, requires further development in Kazakhstan.

The consequences of breaching environmental protections depend on the nature of the infraction. While Kazakh legislation typically imposes administrative fines for environmental offenses, it also provides for criminal liability for specific violations. Currently, there is a growing trend in the evolution of Kazakhstan's legislation towards increasing fines and penalties for breaches of environmental regulations. In some instances, regulatory non-compliance may necessitate that the offending party undertake remediation efforts to rectify the damage caused.

By 31 December 2030, Kazakhstan aims to reduce its carbon balance by at least 15% from the 1990 level. Additionally, in 2023 Kazakhstan adopted the Strategy for Achieving Hydrocarbon Neutrality in the Republic of Kazakhstan by 2060.

Kazakhstan's state regulation of greenhouse gas emissions and absorption focuses on reducing emissions and increasing absorption to ensure sustainable development and meet international obligations. The regulation employs state instruments and a carbon trading mechanism.

Key regulatory tools include:

1. The carbon budget: the State sets allowable carbon levels over five-year periods, requiring annual emission reductions of at least 1.5% from 1990 levels for 2021-2025 and 2026-2030, and 15% reductions for subsequent periods.
2. Carbon quotas: the State establishes quantitative emission limits for regulated sectors like energy, oil and gas, mining, metallurgy, chemicals, and manufacturing. Installations emitting over 20,000 tons of CO2 annually must obtain quotas, which are tradable on the carbon market. Unauthorized operation without quotas is prohibited.
3. Administration of installations: Installations emitting 10,000-20,000 tons of CO2 annually must submit annual greenhouse gas inventory reports and can participate in emission reduction or absorption projects for carbon offsets, monitored by the environmental authority.

The Carbon Trading Mechanism (“CTM”) in Kazakhstan is structured into primary and secondary markets, governed by the Rules of Trading Carbon Units approved by the MENR.

1. Primary Carbon Market:
   
   • The CTM operator sells carbon quota units from the National Carbon Quota Plan's reserve category to market participants through auctions.
   • Auction procedures are determined by commodity exchanges according to the Exchange Trading Rules, set by the Acting Minister of National Economy's Order.
   • The CTM operator approves and publishes the annual auction calendar on its website by December 1 of the preceding year.
2. Secondary Carbon Market:
   
   • Market participants trade carbon units among themselves via direct deals or through commodity exchanges.
   • The authorized body selects the commodity exchange for carbon unit trading through a competitive process.
   • Exchange trading procedures are regulated by the Exchange Trading Rules.
   • Entities can sell carbon quota units and offset units directly at prices not lower than the exchange quotation on the transaction day. If no current quotation exists, the price is based on the last available quotation.

Regarding international trade, agreements for trading carbon units between Kazakhstan and foreign markets are yet to be established. Presently, no such agreements are in place.

The Law On Supporting the Use of Renewable Energy Sources provides the legal framework for the support mechanisms, incentives and regulations related to RES generation and integration into the power system. The legislation ensures stable pricing for RES.

Recent amendments (2024) introduce the following:

• The concept of ‘small-scale renewable energy facilities’ with a capacity of up to 200 kilowatts that generate electric and/or thermal energy using renewable energy sources (RES).
• Owners of small-scale RES can use the generated energy for their own needs and sell excess electricity to energy supply organizations.
• Excess electricity will be purchased by electricity supply organizations at a ceiling price, set by the State.
• Energy supply organizations are required to enter into purchase agreements, and energy transmission organizations must provide unhindered access to their networks.
• Small hydropower plants (SHPPs) with a total capacity of up to 10 megawatts, commissioned before 1 July 2023, are allowed to sell the electricity they generate directly to electricity supply organizations, bypassing a single buyer. It will be purchased on a priority basis at a ceiling tariff, set by the Ministry of Energy and that will be reassessed every 7 years.
• Investment agreements for the modernization, reconstruction, and/or expansion, which involve the construction of generating installations using gas as an alternative fuel, will only be concluded with existing energy-producing organizations.
• The Ministry of Energy has prepared draft amendments introducing concepts related to energy storage systems for renewable energy sources with an installed capacity of more than 10 MW (currently under discussion).

In Kazakhstan, a range of measures and regulatory acts are in place to promote energy efficiency. In accordance with Energy Efficiency Law, key directions of state regulation in energy conservation and efficiency enhancement include:

1. Technical Regulation: Implementing norms and standards to promote the adoption of energy-efficient technologies and materials.
2. Balanced Tariff Policy: Establishing fair pricing strategies across energy production and consumption to incentivize responsible energy use.
3. Stimulation of Energy Conservation: Introducing incentives and rewards for utilizing energy-saving equipment and technologies.
4. State Oversight: Ensuring effective energy resource utilization through rigorous state control to uphold regulatory standards.
5. Promotion of Benefits: Conducting educational campaigns to highlight the economic, ecological, and social advantages of efficient energy practices.
6. Legislative Compliance: Enforcing adherence to Kazakhstan's energy conservation laws through stringent supervision and monitoring.

The Environmental Code provides for the transition of large enterprises to the Best Available Techniques, which include, among other things, ensuring energy efficiency.

The Environmental Code combats climate change with market mechanisms like carbon trading and mandates a 1.5% yearly reduction in greenhouse gas emissions until 2030. Supporting this are the Green Economy Transition Action Plan (2021-2030), the Concept for the Development of the Fuel and Energy Complex (2023-2029), and the Strategy for Achieving Carbon Neutrality by 2060, which focus on increasing the use of gas, renewables, and nuclear energy.

Tangible actions include completing the "Saryarka" gas pipeline, converting Astana's heating plants to natural gas, planning for a nuclear power plant (a public referendum is scheduled for autumn 2024), and developing various renewable energy projects. A major green hydrogen project has been launched involving a desalination plant, a 40-GW renewable energy station (wind, solar), and a 20-GW water electrolysis production facility. The Concept for the development of the hydrogen power industry until 2040 is being drafted.

Overall climate change effects are predominantly adverse across sectors like agriculture, water management, and forestry. For example, without significant changes in farming methods, the yield of spring wheat (a crucial crop for Kazakhstan) could decrease by 13-49% by 2050. An increase in the frequency and scale of forest and steppe fires is predicted.

In 2024, Kazakhstan experienced the largest floods in its history, affecting multiple regions across the country. The floods were primarily caused by rapid snowmelt and heavy rains, which led to the overflow of several major rivers, including the Ural, Tobol, and Ishim Rivers.

The Covid-19 pandemic has had a complex impact on climate action in Kazakhstan, like its effects in many other nations. Despite the economic challenges posed by the pandemic, the Kazakh government has maintained its focus on climate action (at least as declared) rather than diverting all resources to economic recovery. The most significant impact has been observed in changes in people’s behavior. The shift towards local tourism, new travel patterns, and acceptance of remote work are expected to have long-term effects on reducing carbon emissions. However, changes in consumption habits during lockdowns are likely to have only temporary effects on emissions and energy use.

Legal entities and individuals are required to obtain an environmental permit if their activities fall under Section 1 or 2 of Annex II to the Environmental Code (“Annex II”). Annex II lists the activities and quantitative criteria used to categorize a facility into Category I, II, or III. These categories represent facilities that have a significant, moderate, or insignificant negative impact on the environment, respectively. An environmental permit is necessary for the construction and/or operation of Category I or II facilities. Category III facilities can be built and operated based on a notification sent to the relevant permitting authority (“Declaration”).

There are two types of environmental permits:

• Integrated Environmental Permit; and
• Environmental Impact Permit.

Integrated Environmental Permit

Typically, an Integrated Environmental Permit is required for facilities that have a significant negative impact on the environment (Category I) to ensure integrated pollution prevention using the best available techniques. Operators of Category II facilities may also apply for an Integrated Environmental Permit if there are approved Best Available Techniques Conclusions applicable to their facility.

Environmental Impact Permit

An Environmental Impact Permit is required for facilities that have a moderate negative impact on the environment (Category II). Category I facilities that existed when the Environmental Code became effective (1 July 2021) may also obtain an Environmental Impact Permit instead of an Integrated Environmental Permit.

The conditions of an Environmental Impact Permit are less extensive compared to an Integrated Environmental Permit.

To obtain a permit, an applicant must submit supporting documents such as project documentation for the construction and/or operation of facilities, draft emission limits, a draft waste management program, a draft program of industrial environmental control, and other documents to the permitting authority.

Integrated Environmental Permits: The authority checks the application for completeness within 5 business days. If complete, the application undergoes a state environmental expert review within 25 business days. Within the same period the application and supporting documents are also sent to other concerned state bodies for their feedback. If deficiencies are found, applicants have 10 business days to address them. Final permit decisions are made within 5 business days after receiving all feedback or resolving disputes.

The Integrated Environmental Permit is issued by the CERC or its relevant territorial department. There is no charge for the issuance of this permit.

Environmental Impact Permit: The authorities check the documents for completeness within 5 business days. The authorities communicate any deficiencies within 25 business days for Category I or 15 business days for Category II. Applicants are required to address these within 10 business days for Category I or 5 business days for Category II. The issuance of the permit can take up to 45 business days.

An Environmental Impact Permit is issued by the local executive authority (for Category II) or by the CERC (for Category I), based on an application with attached supporting documents. There is no charge for the issuance of this permit.

The duration of an integrated environmental permit is indefinite. However, if a new assessment of the best available techniques determines that the facility does not meet the required standards, the operator is obligated to apply for a permit revision within one year from the approval of the assessment. If the permit is not revised within this period, it will automatically expire.

Environmental impact permits for Category I or II facilities are issued for a maximum of ten years.

An environmental permit or a Declaration is tied to the facility, so if the operator of the facility changes, the environmental permit or the Declaration remains in effect and becomes binding for the new operator.

The new operator must apply to the permitting authority to reissue the permit in their name within 10 business days. The reissuance of an environmental permit is based on an application for reissuance, and a copy of the title document confirming the change of the facility's operator must be attached to the application.

The environmental permit is reissued within 5 business days.

If there is a change in the name or the organizational and legal form of the facility's operator, permit reissuance is also required.

In Kazakhstan, holders of environmental permits have ongoing obligations to ensure compliance with all applicable environmental regulations and standards, including:

1. Compliance with Permit Conditions: Holders must strictly adhere to all conditions and requirements stipulated in the environmental permit, including emission/discharge limits, waste placement limits, waste management practices, and environmental protection measures.
2. Environmental Management Plans: They are obligated to develop and implement environmental management plans and programs aimed at minimizing environmental impacts, enhancing resource efficiency, and mitigating risks to human health and the environment.
3. Monitoring and Reporting: Holders must conduct regular monitoring of environmental parameters, emissions, and impacts associated with their activities. They are required to submit timely and accurate reports to the regulatory authorities as specified in the permit.
4. Emergency Preparedness (for specific facilities): They must develop and implement emergency response plans to address and mitigate any environmental emergencies, incidents, or accidents that may occur during their operations.
5. Public Information: Holders are obligated to provide information to the public and stakeholders regarding their environmental performance, potential impacts, and measures taken to mitigate environmental risks.
6. Renewal and Compliance Reviews: They are responsible for renewing their environmental permits as required and undergoing periodic compliance audits or inspections by regulatory authorities to ensure ongoing adherence to environmental laws and regulations.

These obligations ensure that environmental permit holders in Kazakhstan operate responsibly, mitigate environmental risks, and contribute to sustainable development while complying with national environmental laws and regulations.

The Code on Administrative Violations (hereafter referred to as the "Administrative Code"), outlines a general administrative liability for failure to comply with the conditions of an environmental permit. This liability typically manifests as a fine of up to 300 Monthly Calculation Indexes (MCIs), with one MCI being equivalent to KZT 3,692 (approximately USD 7.9).

In certain circumstances, such as repeated violations or non-compliance that results in environmental damage, the fine can be increased and may also result in the suspension of the environmental permit.

There are also specific sanctions, potentially more severe than the general administrative liability, that are applied to specific violations. These include exceeding emission limits, unauthorized waste dumping, and failure to remediate damage, among others.

Furthermore, certain egregious violations can lead to criminal liability for the individuals responsible for the crime, as well as civil liability, which may include remediation of environmental damage, reimbursement for property damage or personal harm, and prohibition of operation of the facility.

Waste is defined as any substances, materials, or objects produced during manufacturing, work execution, service provision, or consumption that:

1. are explicitly recognized as waste by their owner;
2. must be sent for disposal or recovery due to legal requirements; or
3. the owner intends to recover or dispose.

However, there are certain exceptions such as pollutant emissions, wastewater, and specific categories like in-situ contaminated soil or solid minerals used for construction.

Waste management involves a series of operations from its generation to final disposal. These operations include accumulation, collection, transportation, recovery, and disposal. Operators involved in sorting, processing, or disposal are required to have mandatory waste management programs.

The Environmental Code sets a waste hierarchy principle aimed at environmental protection and sustainable development. This hierarchy follows the “Refuse/Reduce – Reuse – Recycle – Recover (Repurpose) – Remove” sequence. The priority is as follows:

1. waste prevention/reduction;
2. preparation for reuse
3. recycling
4. other recovery (including waste-to-energy); and
5. final disposal (in the form of destruction or landfilling).

Decisions are guided by technical capabilities, economic feasibility, and environmental impact assessments.

The Environmental Code also establishes specific regulations and guidelines for managing waste in the mining industry, municipal waste, radioactive waste, and specific types of waste.

Distinct aspects of waste management are covered in the Subsoil Code, which pertains to waste during subsoil use operations (waste rock, tailings etc), and in the Water Code, which concerns the protection of water bodies from clogging. Such aspects can also be found in other sector-specific laws.

Operators of Category I and/or II facilities, as well as any individuals engaged in sorting, processing, disposal, recovery, and/or waste disposal operations, are obligated to formulate a waste management program. Consequently, they are required to comply with the general legislation, the stipulations of the permits (if applicable), and the waste management program.

There are stringent reporting requirements pertaining to waste. Certain waste management activities necessitate a license from the CERC.

The regulatory regime governing hazardous waste management includes several key features:

Licensing: To engage in activities for the processing, neutralization, utilization, and (or) disposal of hazardous wastes, a person must obtain a special license from the MENR.

Passports: For each type of hazardous waste, the operator must have a special passport with detailed information about the location, origin of waste, hazardous properties and chemical composition, methods of management, necessary precautions, requirements for transportation, prevention and elimination of emergencies.

Mixing of Hazardous Waste: Only entities with the appropriate environmental permits are allowed to mix hazardous wastes.

Burial of Hazardous Waste: Hazardous waste burial is permitted only in specially equipped sites with environmental permits. The location of the landfill intended for the burial of hazardous wastes must meet strict requirements. Additional more stringent requirements are also applied to the management of such landfills.

Separate provisions are dedicated to the regulation of special hazardous wastes, such as radioactive wastes, chlorine-containing wastes, tailings etc.

Business entities that generate waste bear the responsibility for managing such waste appropriately from the moment of its generation until it is transferred to an entity licensed to perform waste recovery or disposal operations.

The regulation of Extended Producer Responsibility (EPR) is addressed in a separate chapter of the Environmental Code. The EPR regime applies to individuals and legal entities that manufacture certain types of goods within the territory of the Republic of Kazakhstan or import such goods into the country. The list of these goods is approved by the Ministry of Environment and Natural Resources (MENR).

The EPR regime requires producers (importers) to either use their own waste management system (excluding motor vehicles and self-propelled agricultural machinery) or pay a "utilization fee" to a specially designated EPR operator, which operates under state control.

For the purposes of mandatory environmental insurance, the concept of “environmentally hazardous activities” is used. The list of such activities is approved by the MENR, and it is prohibited to conduct such activities without a mandatory environmental insurance contract concluded by the operator. Mandatory environmental insurance is carried out in accordance with the Law On Mandatory Environmental Insurance.

Environmental legislation does not specifically define a category of “hazardous substances”. Instead, the term “pollutants” is used, and the regulatory regime covers emissions of such substances into the atmosphere, water, or land as described in previous sections. The Environmental Code contains specific requirements for activities related to the use of ozone-depleting substances, persistent organic pollutants, modern biotechnology products (GMO), radioactive substances, and others.

Prevention and elimination of natural and man-made emergencies and their consequences, ensuring fire and industrial safety are regulated by a special Law on Civil Protection and are under the jurisdiction of the Ministry of Emergency Situations.

Safety of chemical products to protect human life and health, environmental protection, and consumer interests falls under the regulatory regime of the Law on the Safety of Chemical Products. Chemical products are classified depending on the types of hazards (fire, explosion, corrosion, toxicity).

Biological safety issues are additionally regulated by the Law on Biological Safety of the Republic of Kazakhstan.

The rights and obligations of operators of hazardous sites will depend on the type of hazard they pose. In addition to environmental requirements, provisions of legislation on industrial safety and civil protection, radioactive safety, chemical safety, biological safety, and other sectoral legislation (for example, in terms of epidemiological, phytosanitary, veterinary requirements, electrical safety, nuclear industry, etc.) may be applicable.

Eg, in relation to hazardous waste disposal facilities:

• Operators are required to maintain a chronological record of the quantity, type, origin, destinations, collection frequency, transportation method, and disposal method of hazardous waste. This information must be provided to the CERC.
• Records of hazardous waste must be retained for at least five years, except for transportation records which must be kept for a minimum of twelve months.
• Annually, by 1 March of the following year, operators must submit an electronic report on the inventory of hazardous waste as of 1 January. This report is mandatory for entities carrying out operations for the recovery or disposal of hazardous waste, hazardous waste generators, business entities engaged in the collection, transportation and (or) neutralization of hazardous waste.
• Upon request by the CERC or the previous waste owner, operators must provide documentary evidence confirming the completion of hazardous waste management operations.
• Primary statistical data on waste management activities are compiled by the subordinate organization of the MENR based on information from the state waste register. This data is submitted to the authorized statistical agency of Kazakhstan as per the national legislation on official statistics.

Environmental legislation does not specifically define a category of “environmental accidents”. Instead, special reporting requirements are in place in cases of exceeding emission limits, other violation of environmental requirements, accidents, and causing environmental damage.

Operators of Category I and II facilities are required to carry out Industrial Environmental Control (IEC). The operator of the facility is obliged to report to MENR/CERC within three working days about the facts of violation of environmental legislation identified during the implementation of IEC.

Emission monitoring in the environment at Category I facilities should include the use of an automated emission monitoring system (AEMS). AEMS should continuously track emission indicators at the main stationary emission sources and ensure regular data transmission to the CERC information system.

In the event of an emergency situation at Category I and II facilities, the facility operator is obliged to report this to CERC immediately, but in any case, within no more than two hours.

In case of environmental damage, the responsible party shall notify CERC within two hours.

Depending on the type of incident, specific notification requirements may be applied (for example, in the case of the death of a red book animal, emergency oil spills, unplanned opening of a water horizon during mining operations, etc.), including within the framework of other sectoral legislation.

In Kazakhstan, the investigation of environmental accidents is primarily regulated under the Business Code, with specific provisions also contained in the Environmental Code. The investigation of environmental accidents can take various forms, including:

1. Preventive Control: This is a preventive measure carried out in relation to a specific operator or facility. It can be conducted remotely, or by visiting the facility.
2. Unscheduled Inspection: This is conducted in a limited number of cases, including based on complaints received from individuals or legal entities or when instructed by the prosecutor’s office.
3. Investigation: This is conducted when the person responsible for an environmental accident is unknown.

The CERC is the key enforcement body that monitors and supervises environmental compliance. During preventive control or unscheduled inspection state environmental inspectors have the right to:

• Access the site and premises
• Interrogate experts and specialists
• Request documents relevant to the case
• Request laboratory test results and other materials
• Use audio and video recordings
• Make measurements
• Take samples
• Other procedural actions

The legislation does not specifically regulate the process of investigation and powers of the regulatory authorities during investigations (ie, when the assumed infringer is unknown). However, in practice, the CERC officers would visit the public place where the environmental incident occurred to collect evidence (instrumental measurements, laboratory samples, photo and video materials, witnesses’ interviews, etc) without the right to access private property.

The Administrative Code establishes administrative liability for a wide range of offenses related to the regulatory regime governing hazardous activities and substances. For instance:

1. Violating safety requirements in the handling of explosive, pyrotechnic, radioactive, bacteriological, chemical, and other hazardous substances can result in a fine of up to 100 MCI.
2. Non-compliance with rules for handling nuclear materials, radioactive substances, special non-nuclear materials, and dual-use products can lead to a fine of up to 200 MCI.
3. Violating the prohibition on burying certain types of waste incurs a fine equal to 100% of the economic benefit gained from the violation.
4. Storing waste outside designated areas or without an environmental permit can result in a fine of up to 200% of the economic benefit gained.
5. Non-compliance with environmental requirements for waste management (accumulation, collection, transportation, recovery, disposal, and neutralization) can lead to a fine of up to 500 MCI. A repeated violation within a year (or three years for large businesses) can result in a fine of up to 1,000 MCI and suspension of the license for hazardous waste processing, neutralization, disposal, or destruction.

Criminal liabilities are specified for more severe offenses that have caused death, serious health harm, or extensive environmental damage. Examples of such offenses include those involving radioactive materials, radioactive waste, industrial disasters.

The regulatory framework governing contaminated land in Kazakhstan is comprehensive and ensures accountability and proper remediation. Here are its key features:

Correction Principle:

Land contamination is likely to be categorized as environmental damage and must be fully remediated. Financial compensation for environmental damage is not permitted, except for state-incurred remediation costs. To hold entities or individuals accountable, it is necessary to identify the responsible party, establish a causal link between the damage and their actions, and clearly define and measure the damage.

Polluter Pays Principle:

Entities or individuals causing environmental damage are required to fully remediate the affected environment at their own expense. Approved remediation plans must adhere to specific methodologies and standards to ensure effective cleanup.

Administrative or criminal liability does not absolve the responsible party from civil liability for remediation.

Heritage Contamination:

This refers to accumulated environmental damage to lands resulting from past activities where remediation obligations were either not fulfilled or not fully met. Local executive bodies organize the identification and assessment of historical contamination objects, as well as their subsequent remediation.

The accounting of historical contamination objects is carried out by including them in the state register. In special cases, the Ministry of Environment and Natural Resources (MENR) may organize the remediation of historical contamination. The financing of works for the remediation of historical contamination is carried out at the expense of budgetary funds.

The “polluter pays” principle assigns liability to polluters, obligating them to undertake remediation. The determination of liability is based on the following criteria:

1. Conditions for Liability:
   
   • The ability to identify the specific individual(s) or entity/entities whose actions or activities resulted in environmental damage.
   • The ability to establish a causal link between the environmental damage and the actions or activities of the identified individual(s) or entity/entities.
   • The environmental damage must be clearly defined and quantifiable.
2. Successor Liability:
   
   • If the responsible entity ceases to exist, the liability is transferred to their legal successor(s).
   • In cases of privatization, the state ensures compliance with environmental requirements. The previous operators are held responsible for any damage that occurred prior to privatization unless the new operator agrees to assume this liability.
3. Responsibility of Landowners:
   
   • If the polluter or its successor(s) cannot be found or ceased to exist, the responsibility falls on the person who was the landowner at the time of contamination.
   • If no such landowner can be found, the responsibility falls on the current landowner, provided it can be proven in court that they were aware of the contamination at the time of land acquisition.
   • If no responsible parties can be identified within three years of discovering the damage, the state assumes responsibility for remediation.

In cases where multiple parties have contributed to contamination, determining liability necessitates the establishment of clear links between each party’s actions or omissions and the observed contamination. This process requires a detailed assessment and the gathering of evidence to demonstrate how specific activities directly contributed to the environmental damage. Any disputes can ultimately be resolved in court.

According to the Civil Code, individuals can initiate legal proceedings in instances of harm to their health or property damage, regardless of the type of incident that caused it. However, in the case of general environmental damage, individuals are prohibited from taking legal action against polluters, as it is the state's function to protect the environment.

The authorized environmental protection authority has the right to initiate legal proceedings to address environmental harm resulting from pollution or activities that breach environmental regulations. Claiming monetary compensation for environmental damage is prohibited, except for reimbursement of costs incurred by the state for restoration or remediation measures.

Such environmental disputes can be resolved in civil courts.

In Kazakhstan, environmental information is publicly accessible and unrestricted. The key public registers and information sources include:

1. Pollutant Release and Transfer Register (PRTR): This is a publicly available electronic database that details pollutant emissions and levels of environmental pollution. It shall be accessible on official government websites to ensure public participation and transparency in environmental decision-making.
2. National Environmental Report: This is an annual report that provides detailed information on environmental quality, anthropogenic impacts, regional conditions, legislative changes, and the impacts of climate change. It is published on official websites and is compiled by environmental authorities with contributions from central and local government bodies.
3. State Environmental Information Fund: This is a centralized system for collecting, storing, and disseminating various forms of environmental information, including regulatory, statistical, and scientific data. It is freely accessible to the public.

Operators of categories I and II facilities must maintain internal records and submit periodic reports on the results of their IEC activities electronically to the authorized environmental body’s information system by the first day of the second month following the reporting quarter.

There are separate reporting requirements on waste management, greenhouse gas emissions and within the PRTR.

Companies in Kazakhstan are only subject to the public environmental audits (refer to Section 6.4 for more details). It should be noted that Kazakhstan has eliminated the requirement for mandatory private environmental audits, which were in effect prior to the implementation of the current Environmental Code.

There are no explicit requirements for disclosing environmental issues. The Environmental Code provides broad freedom for any interested party to obtain environmental information from any individual or entity in possession of such information.

In Kazakhstan, environmental taxes are characterized as “Payments for Negative Environmental Impact” (referred to as “Fee”). This Fee is applicable to air emissions and water discharges of pollutants, open storage of sulfur, and waste disposal. It is based on pertinent environmental permits and Declarations. The Fee is payable by operators of facilities that fall under categories I, II, and III as per the Environmental Code.

The Fee is imposed based on the actual environmental impact during the reporting period. The fee rates are set in the Tax Code as a multiple of the Monthly Calculation Index (MCI) established by the law on the republican budget and effective on the first day of the tax period.

While there are no specific climate taxes in Kazakhstan, economic incentives are implemented through the auctioning of missing carbon quotas and carbon units trading on the secondary market. Greenhouse gas emissions within the benchmark volumes (calculated by the MENR as specific volumes of quota greenhouse gas emissions per unit of production) are exempt from charges.

Facilities classified under Category IV are exempt from environmental taxes, even if they operate commercial vehicles that have an environmental impact.

Additionally, operators can secure full exemption from the Fee for a specific facility by obtaining an integrated environmental permit that necessitates the adoption of the Best Available Techniques.

The Tax Code also provides for reduced coefficients to the Fee for natural monopoly entities when providing utility services; energy-producing organizations when generating electricity; and operators of landfills and those involved in the disposal of municipal waste.

Parties seeking to mitigate their environmental and climate tax liabilities can consider several strategies:

1. Integrated Environmental Permits: Implement Best Available Techniques (BAT) to reduce emissions and enhance environmental performance. Enterprises that adopt BAT are exempt from fees associated with negative environmental impacts. However, non-compliance could lead to substantial fee increases.
2. Green Technologies and Practices: Invest in energy-efficient technologies, renewable energy sources, waste reduction, recycling, and sustainable practices to decrease pollutants and carbon emissions. Such investments may qualify for tax incentives or credits designed to encourage environmental responsibility. The framework for Renewable Energy investments in Kazakhstan is becoming increasingly favorable each year.
3. Invest in Environmental Compliance: Ensure full compliance with environmental regulations and standards to avoid penalties and liabilities associated with non-compliance. Develop and maintain Environmental Management Systems to manage environmental responsibilities systematically. Consider hiring highly qualified professionals and outsourcing environmental engineers, consultants, and auditors.
4. Carbon Offsetting and Credits: Participate in carbon offset programs or purchase carbon credits to compensate for emissions that cannot be immediately eliminated.
5. Engage in Green Financing: Utilize green financing opportunities to fund projects aimed at reducing environmental impact. This can include grants, green bonds, and other financial instruments, including those available within the Astana International Financial Centre (AIFC).
6. Policy Advocacy: Engage with policymakers to advocate for favorable environmental policies and incentives that support sustainable practices and reduce tax liabilities.
7. Research and Development (R&D): Invest in R&D for new technologies and processes that reduce environmental impact.

The environmental legislation provides for the obligatory and voluntary environmental insurance, with a purpose is to ensure the civil liability of a pollutant for compensation of environmental damage caused by an accident.

The requirement for obligatory environmental insurance applies to the types of activities, the list of which was approved by the MENR, which includes:

• use of land and subsoil;
• use of water resources;
• implementation of oil operations;
• metallurgical production;
• use of nuclear and thermal energy;
• impact on atmospheric air, climate, and the ozone layer, etc.

The amount of the insured sum must be at least:

1. a 5,000 MCI with an individual entrepreneur;
2. a 65,000 MCI with a legal entity.

Voluntary environmental insurance is carried out by pollutants by virtue of their will.

Moreover, operators of category I facilities must provide financial security of claims for obligations related to the liquidation of the consequences of the implementation of activities. Financial security can be provided, including in the form of insurance, three years after the commissioning of a category I facility.

The amount of financial security in the form of insurance is determined by the MENR.

Green financing pertains to investments channeled towards the execution of “green projects”. These investments are typically drawn through instruments such as green bonds, green loans, and other financial mechanisms. At present, a selection of green bonds, including ESG bonds, are listed on the Astana International Exchange and the Kazakhstan Stock Exchange.

To classify a project as 'green', the MENR convenes a commission to make a determination. The commission's decision to recognize a project as 'green' must be justified within the framework of the Rules for the Recognition of Technologies as Green Technologies.

The Environmental Code incorporates a taxonomy of green projects and provides legislative definitions for green financing and specific instruments. The government of Kazakhstan endorses the classification (taxonomy) of green projects, as well as the rules for recognizing technologies as green technologies.

Environmental disputes can be settled through administrative, civil, and criminal courts. However, it is rare to see environmental issues leading to criminal charges.

Generally, the judicial system of Kazakhstan is structured into three levels:

• Supreme Court (highest court, cassation instance);
• local regional courts and courts with equivalent regional court status (appellate instance); and
• local city and district courts (courts of first instance, with some exceptions).

Civil Disputes

The culture and practice of individuals resorting to civil courts for environmental incidents are not very developed in Kazakhstan. In fact, only the regulatory body (CERC) actively brings lawsuits against business entities. Also, certain NGOs initiate civil proceedings, for the most part, due to the violation of the requirements of the Aarhus Convention (by both enterprises and government bodies).

Within the realm of environmental law, civil disputes may include such issues as remediation of environmental damage, compensation for death or personal injuries, property damage, failure to provide environmental information, violation of the EIA or public hearing requirements, suspension of hazardous activities and others.

Administrative Disputes

Administrative disputes predominantly involve the regulatory body (CERC) levying fines on business entities, which could also encompass warnings, revocation of environmental permits, or suspension of activities. Both individuals and legal entities can be subjected to administrative liability.

Private entities also have the right to lodge a claim against public authorities for their wrongful actions or inaction, such as refusal to issue an environmental permit.

Criminal Liability

The Criminal Code outlines several criminal offenses that involve breaches of environmental regulations and are associated with severe consequences such as death, personal injuries, widespread disease, environmental disasters, mass wildlife fatalities, and other forms of environmental damage. Criminal liability may result in the imposition of a fine, community service, imprisonment, restraint, or the deprivation of the right to hold certain positions or engage in certain activities. In Kazakhstan, only individuals can be held criminally liable.

Statutes of limitation apply as follows:

• civil liability (remediation of environmental damage) – 30 years;
• civil liability (death, personal injury, property damage) – three years;
• administrative liability – one year for individuals, three years for legal entities; and
• criminal liability – depends on the gravity of offence.

In civil, administrative and criminal cases, the main defence would be proving that:

• the act or failure to act was not unlawful;
• there is no harm; or
• there is no cause‒effect relation between the act (or omission) and the harm.

In civil cases, the main defence would be:

• proving that the liability must be shared with third parties;
• proving that the environmental incident or damage was due to an unlawful act (or omission) by a public authority; and
• proving the contributory guilt or negligence in cases of death, personal injury, property damage.

In terms of administrative and criminal liability, the following applies:

• a person cannot be subject to administrative or criminal liability if they prove that the offence was committed in the circumstances of extreme necessity; and
• a person can be released from administrative liability if they prove that the offence was “insignificant”.

In Kazakhstan, as a rule, all disputes shall undergo a mandatory pre-trial process, except for criminal violations.

Specifically, in civil disputes, one party is obligated to present claims to the other party, which should include the basis for the claims and any damages incurred. The recipient of these claims has the right to either accept or reject them. In the absence of a mutual agreement, the parties are entitled to bring their case before the court. Alternatively, the dispute can be resolved through mediation or arbitration, depending on the terms of their legal agreement.

The process is similar for administrative violations. However, in this scenario, one of the parties is invariably a state body that enforces claims on the violator of environmental legislation, in accordance with the Administrative Code. In instances where the claims are disputed, the resolution of the dispute is typically handled by the court.

A significant example is the case of Kazakhstan against NCOC, a consortium comprising seven of the world's prominent and experienced energy companies: KazMunayGas, Eni, Shell, ExxonMobil, TotalEnergies, CNPC, and Inpex.

In early 2023, the Atyrau Regional Department of Ecology identified ten instances of environmental law violations at the Kashagan field, with excessive sulfur storage being a notable issue. As a result, the Kazakhstani government levied a substantial fine of 2.3 trillion tenge (equivalent to $5.1 billion at the time) on the NCOC consortium. NCOC disputed these charges and initiated legal proceedings in the Astana court. While some of their claims were recognized, the Ministry of Ecology continued to press for further action, filing a cassation complaint. In the end, the Astana Court of Appeals confirmed the validity of the environmental audit and upheld NCOC's obligation to pay the imposed fine.

Kazakhstan has made notable strides in addressing environmental and climate change issues despite not being a leader in global influence. In 2021, the country implemented a new Environmental Code that significantly altered its approach to ecology and climate change. Key developments include the establishment of the Council on the Transition to a Green Economy, which facilitates crucial discussions and decision-making processes.

Kazakhstan has developed and approved 16 BAT reference documents, which will be mandatory for the top 50 first-category industrial enterprises starting 1 January 2025. For other first-category existing facilities, BAT implementation will be compulsory from 2031, but must be adopted by 1 January 2025, if modernization occurs before then.

Active decarbonization measures have been initiated, including the development of a roadmap and a national strategy. A working group has been established to create sector-specific plans for achieving carbon reduction targets.

Reforms are expected to address plastic and packaging waste with stricter regulations and enhanced recycling programs.

The government has launched plans to plant 2 billion trees before 2025, aiming to combat deforestation and improve air quality.

Environmental legislation despite its recent detailed revision can still contain many hidden pitfalls. These are associated both with the fact that bylaws were not adequately and qualitatively revised by the MENR as part of the 2021 environmental reform, and due to the lack of qualified personnel, especially in its territorial divisions (due to high staff turnover and lack of a well-established system of professional development).

The key factor in minimizing risks in the field of environmental and climate compliance is detailed planning and consulting with professionals in the field of environmental protection and local lawyers. It is important to have access to practical experience and the expertise of specialists who have a deeper understanding of the history of environmental policy formation in the country and all the latest trends.

Kazakhstan is currently undergoing a significant transformation of both economic and social relations, and the system of state governance. In this regard, frequent and extensive rewriting of legislation can be expected. It is necessary to actively participate and initiate environmental and climate change discussions and working groups, cooperate with MENR and environmental associations to improve legislation and the practice of its application. Private sector’s active advisory assistance to state bodies will benefit both the state and business, as transparent, understandable, and stable conditions for doing business in the country will be formed, the level of qualification of civil servants will increase, and public trust will be enhanced.