Expanding Carbon Market Emerges Voluntarily in Kazakhstan

Expanding Carbon Market Emerges Voluntarily in Kazakhstan

Alim Sailybaev, a Kazakhstan native with a passion for innovation, is spearheading the development of the nation's voluntary carbon credit market, focusing on restoring the environmentally devastated Aral Sea region.

In conversations held at a planting site in Aralkum, a young desert northwest of the fishing village of Karateren, Sailybaev discussed his ambitious plans for the area. These plans encompass micro-nurseries for seedlings, an eco-corridor, a green e-currency, a crowdfunding platform, and more.

Sailybaev, 50, earned his stripes in the development sector, working for organizations like the United Nations Development Programme. His ideological center, however, revolves around innovation and creating transformative value for communities and businesses. In recent years, he has taken a green turn in his focus.

The Aral Sea region, once lush and teeming with life, has undergone massive environmental degradation over the past 60 years. The water that once fed the sea has largely been diverted, leaving behind a barren, salt-covered landscape. Sailybaev acknowledges this desolation but emphasizes that it presents an opportunity for carbon sequestration, particularly through the planting of saxaul shrubs.

Kazakhstan adopted a strategy in 2023 aiming to achieve carbon neutrality by 2060. While the strategy outlines measures for creating carbon sinks, it currently excludes the agricultural sector from its national plan for carbon units. The voluntary carbon market, which is only beginning to take shape, faces a regulatory void, resembling more a financial Wild West than a Holy Land of opportunity.

In response, Sailybaev founded Qazaq Carbon in February 2023. The platform aims to address environmental challenges, restore degraded land, conserve biodiversity, and improve community welfare. In May, Qazaq Carbon partnered with the Aral Oasis public association to implement a series of projects in the Aral Sea region.

Saxaul shrubs, known for their green hue and hardy root system that can hold up sand, have been planted in areas affected by the water scarcity. In 2005, the World Bank's eight-mile-long Kok-Aral dam brought water back to some areas, but the region remains an environmental disaster zone.

Qazaq Carbon collaborates with the Scottish entity, Plan Vivo, and the Swiss-based Open Forest Protocol to help smallholders generate carbon credits. However, their expertise largely applies to tropical and subtropical climates, making direct transferability to Kazakhstan, a predominantly dryland region, challenging.

The EU carbon trading market saw prices exceed $60 per metric ton (2,200 pounds) of CO2 equivalent in April. Kazakhstan's oil sector, composed mainly of state companies, hesitates to pay more than $5 for carbon credits. SPlan Vivo, Open Forest Protocol, and Aral Oasis public association to implement projects in the Aral Sea region, carbon prices must increase to drive market adoption. However, such changes often meet resistance due to concerns about higher electricity, petrol, and fuel bills.

Despite the challenges, Sailybaev remains undeterred. He envisions using carbon units as a financial tool to create a value chain for the development of local agroparks. This could enable Kazakh organic foodstuffs grown to European standards to reach large markets in China, replacing agricultural subsidies and making the venture financially viable.

Qazaq Carbon also help farmers design planting models with carbon targets in mind. Certification can be done through NGOs such as Plan Vivo, while an e-currency backed by carbon units may serve as a direct exchange medium for companies to buy products from agroparks in exchange for carbon offsets.

Scarce interest from large Kazakh clients, including banks and airlines, makes theoppurtunities for small farmers limited, with bundled deals preferred. The nascent voluntary carbon market remains obscure to US and EU traders, adding to the struggle for market presence.

Sailybaev acknowledges the hurdles but emphasizes a broader perspective. "The low-carbon economy is a cultural phenomenon. It is about new mindsets and new values," he contends. "In the Aral Sea region, a whole generation has grown up on handouts," he asserts, referring to social payments in the zone of environmental disaster.

Qazaq Carbon and Aral Oasis launched "100 Micro Nurseries" in May, a project aimed at empowering communities to plant seedlings for "green belts." The goal is to create an eco-corridor to the Barsakelmes biospherer eserve, a former Aral Sea island inhabited by free-roaming kulans and dzerens, by October 2025. The project has received funding from Freedom Holding Corp. and the GEF Small Grants Programme. A crowd-funding platform will be launched in January to explore additional funding options. High-resolution satellite maps will track the progress of green developments online, while three auls will compete in a unique face-off.

Sailybaev is strategizing for the long haul, "We are gearing up for the next 20 years," he concludes. "We are the descendants of nomads. Autonomy, tolerance, openness, mobility, and adaptability have accompanied us across the steppes." These values, in a modern guise, will drive Kazakhstan's green transition, he believes. "They are, in fact, neo-nomadic."

1. Alim Sailybaev, an entrepreneur with a passion for innovation, is spearheading the development of a voluntary carbon credit market in Kazakhstan, focusing on restoring the environmentally devastated Aral Sea region.
2. Sailybaev's ambitious plans for the Aral Sea region include micro-nurseries for seedlings, an eco-corridor, a green e-currency, a crowdfunding platform, and more.
3. Sailybaev's focus has taken a green turn in recent years, and he aims to address environmental challenges, restore degraded land, conserve biodiversity, and improve community welfare with Qazaq Carbon.
4. The EU carbon trading market has seen prices exceed $60 per metric ton (2,200 pounds) of CO2 equivalent, but Kazakhstan's oil sector hesitates to pay more than $5 for carbon credits.
5. To help smallholders generate carbon credits, Qazaq Carbon collaborates with organizations like Plan Vivo, Open Forest Protocol, and the Aral Oasis public association.
6. SPlan Vivo, Open Forest Protocol, and Aral Oasis public association's expertise largely applies to tropical and subtropical climates, making direct transferability to Kazakhstan's predominantly dryland region challenging.
7. Despite the challenges, Sailybaev envisions using carbon units as a financial tool to create a value chain for the development of local agroparks and achieve Kazakh organic foodstuffs' reach to large markets like China.

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