Kazakhstan
Kazakhstan
February 25, 2024

Kazakhstan's Path to Sustainable Fleet Management: Navigating Challenges and Seizing Opportunities

The Role of HEVs in Kazakhstan's Transition Towards Cleaner Transportation

Kazakhstan's Path to Sustainable Fleet Management: Navigating Challenges and Seizing Opportunities
Kazakhstan
February 25, 2024
Kazakhstan's Path to Sustainable Fleet Management: Navigating Challenges and Seizing Opportunities
The Role of HEVs in Kazakhstan's Transition Towards Cleaner Transportation
Summary

Kazakhstan stands at a pivotal moment in its approach to sustainable fleet management and vehicle electrification, navigating the complexities of a high-emission energy context. The country's focus on HEVs, supported by government initiatives and a growing awareness of environmental issues, represents a strategic step towards reducing transportation emissions. As Kazakhstan continues to develop its EV infrastructure and explore cleaner energy sources, the potential for a more comprehensive transition to electric vehicles becomes increasingly viable. This journey, while challenging, is an essential part of Kazakhstan's broader commitment to sustainability and environmental responsibility, offering valuable insights into the possibilities and pitfalls of electrification in a high-emission environment.

Country General Overview

Introduction

Kazakhstan, the ninth largest country in the world, stands as a significant player in Central Asia with its vast landscapes, abundant natural resources, and strategic geopolitical position. The country's corporate fleet management sector is evolving amidst this backdrop, driven by the need to navigate its extensive territories efficiently, enhance economic productivity, and address environmental concerns. Kazakhstan's approach to fleet management is thus characterized by a blend of innovation, strategic planning, and sustainability efforts, aiming to optimize operations in line with its unique geographic and economic context.

Geographic and Infrastructure

Kazakhstan's immense size, covering over 2.7 million square kilometers, presents unique challenges and opportunities for corporate fleet management. The country's terrain varies from vast flatlands to rugged mountains, influencing transportation logistics and infrastructure development. Kazakhstan has invested significantly in its road infrastructure to improve connectivity across its regions, boasting a total road length of approximately 97,000 kilometers. This network is crucial for the corporate sector, facilitating the movement of goods and personnel across long distances and diverse landscapes, from urban centers like Almaty and Nur-Sultan to remote areas.

Economic

The Kazakh economy, with a GDP of over $170 billion and a population nearing 19 million, is predominantly fueled by its rich natural resources, including oil, gas, and minerals. The economic landscape is further diversified through sectors such as agriculture, manufacturing, and services. With around 226 motor vehicles per 1000 people, Kazakhstan exhibits a moderate level of vehicle ownership, reflecting the importance of efficient fleet management systems. These systems are vital for minimizing operational costs, enhancing logistical capabilities, and supporting the country's economic development in both domestic and international markets.

Environmental Considerations

Environmental sustainability is an emerging focus in Kazakhstan, as evidenced by its Environmental Performance Index (EPI) 2022 rank of 93 out of 180 countries, with a score of 40.9. This ranking highlights the country's ongoing efforts and challenges in addressing environmental issues, including air pollution, water resource management, and land degradation. For corporate fleet management, the environmental agenda encourages the adoption of greener practices, such as utilizing fuel-efficient vehicles, optimizing routes to reduce emissions, and incorporating alternative energy sources. By prioritizing environmental considerations, Kazakh companies can contribute to national and global sustainability goals while improving their operational efficiency and corporate image.

Sustainable Fleet Management

Scopes Data - Electrification Recommendation Rank Icon

Electrification Recommendation Rank

Kazakhstan
's Category

Rank G : Difficult Environment for EVs

These countries are challenging environments for EV adoption due to economic difficulties and underdeveloped infrastructure. Here, transitioning to HEVs is the first choice for reducing CO2 emissions.

Same Category Countries

Argentina, Egypt, India, Kazakhstan, Philippines, Russia, Saudi Arabia, South Africa

Info:

The Electrification Recommendation is derived from two aspects: each country's EV Readiness assessment (based on factors such as Electric Vehicle market share, environmental consciousness, GDP, etc.), and the Electricity Emission Factor (EF). Even if a country has a low Electricity EF, enabling CO2e emissions reduction through transitioning to BEVs, the adoption of BEVs could be challenging if the country lacks adequate infrastructure or faces financial constraints.

Since every company operates in a unique environment, this recommendation might not apply in all cases. However, it can be useful for setting a general direction.

Scopes Data - CO2e From Electricity Icon

Electricity EF Category

Kazakhstan
's Electricity EF

0.797

CO2e kg/kWh

Ref:

The IFI Dataset of Default Grid Factors v.3.0 in 2021

Kazakhstan
's Category

Rank 4 : Very High Emission Countries (0.75 - 1.00 kg/kWh)

Info:

Countries with high Electricity EF have less benefit for electrification

  • Rank 1: 0.00 – 0.25 kg/kWh (About 0 – 38 CO2e g/km)
  • Rank 2: 0.25 – 0.50 kg/kWh (About 38 – 76 CO2e g/km)
  • Rank 3: 0.50 – 0.75 kg/kWh (About 76 – 113 CO2e g/km)
  • Rank 4: 0.75 – 1.00 kg/kWh (About 113 – 151 CO2e g/km)
  • Rank 5: More than1.00 kg/kWh (About more than 151 CO2e g/km)
Scopes Data - EV Readiness Icon

EV Readiness Category

Kazakhstan
's Category

Rank 6 : Very Challenging Environment for EV Adoption

Market Share information
Scopes Data - BEV Icon
2022 BEV

0.1

%

2023 BEV

0.1

%

Scopes Data - HEV Icon
2022 HEV

0

%

2023 HEV

0.1

%

Scopes Data - Non-ICE Icon
2022 Non-ICE

0.1

%

2023 Non-ICE

0.2

%

HEV: Only Full Hybrid Vehicles (Does not include
Mild Hybrid Vehicles)

Non-ICE: Total of BEV (Battery Electric Vehicles), PHEV (Plug-in Hybrid Electric Vehicles), HEV (Hybrid Electric Vehicles), and MHEV (Mild Hybrid Electric Vehicles)

2022 EPI Results
Rank

93

/180

Score

40.9

2022 EPI Results : Environmental Performance Index(EPI) provides a quantitative basis for comparing, analyzing, and understanding environmental performance for 180 countries.

Ref:Wolf, M. J., Emerson, J. W., Esty, D. C., de Sherbinin, A., Wendling, Z. A., et al. (2022). 2022 Environmental Performance Index. New Haven, CT: Yale Center for Environmental Law & Policy. epi.yale.edu

Introduction to Sustainable Fleet Management and Electrification Efforts

Kazakhstan is on the cusp of a significant transformation in its approach to fleet management, venturing into sustainable practices and electrification amid a challenging environmental landscape. With a very high electricity CO2e emission factor of 0.797 kg CO2e/kWh, the country's journey towards reducing the carbon footprint of its corporate fleets is both necessary and ambitious. Efforts to integrate Hybrid Electric Vehicles (HEVs) and explore Battery Electric Vehicles (BEVs) adoption reflect Kazakhstan's commitment to environmental sustainability. These initiatives, though in nascent stages, signify Kazakhstan's readiness to tackle its high emissions challenge, aiming for a balance between economic growth and ecological responsibility.

Current Vehicle Landscape: Preferences and Powertrain Segments

Kazakhstan's vehicle landscape is predominantly dominated by Internal Combustion Engine (ICE) vehicles, with popular models including the Hyundai Avante and Kia Sportage, reflecting a strong preference for reliability and traditional fuel sources. The market for HEVs and BEVs is in its infancy, evidenced by a minimal yet growing adoption rate. As of 2023, BEVs and HEVs together constitute a mere 0.1% of vehicle sales, illustrating the significant reliance on fossil fuels. Despite this, there's an emerging interest in more sustainable options, driven by environmental awareness and the global shift towards electrification. The country's vehicle mix is gradually diversifying, with the government and private sector beginning to explore the benefits of hybrid and electric powertrains in reducing emissions and dependence on oil.

Kazakhstan

Grid.js Table

HEV: Only Full Hybrid Vehicles (Does not include
Mild Hybrid Vehicles)

Non-ICE: Total of BEV (Battery Electric Vehicles), PHEV (Plug-in Hybrid Electric Vehicles), HEV (Hybrid Electric Vehicles), and MHEV (Mild Hybrid Electric Vehicles)

Electric Vehicle Market Overview and Trends

Kazakhstan's EV market is embryonic, with electric and hybrid vehicles making up a fraction of the national fleet. However, a 65.4% increase in EV registrations over the past year signifies a budding interest in cleaner transportation options. The total number of electric cars stands at 812, a small but significant step towards broader adoption. Almaty leads in EV registrations, indicating regional disparities in EV uptake. The government's plan to expand electric charging infrastructure by 2029 and incentives for duty-free electric car imports are promising steps towards fostering an EV-friendly environment. Despite these efforts, Kazakhstan's EV market faces hurdles, including underdeveloped infrastructure and low market acceptance, challenging the transition to a more sustainable vehicle landscape.

Energy Context: Electricity Emission Factors and Implications for Electrification

Kazakhstan's energy context, marked by a very high electricity CO2e emission factor of 0.797 kg CO2e/kWh, poses significant challenges to the electrification of transportation. The country's dependence on fossil fuels for electricity generation makes the transition to BEVs less impactful in terms of CO2e emission reductions compared to regions with cleaner energy sources. The potential environmental benefits of switching to electric vehicles are consequently limited, necessitating innovative approaches, such as the direct integration of renewable energy sources into vehicle charging infrastructure, to make electrification a viable component of Kazakhstan's sustainable fleet management strategy.

Challenges and Opportunities in EV Adoption

Kazakhstan faces a very challenging environment for EV adoption, characterized by a high electricity emission factor and a nascent EV market. Infrastructure development for EVs is in the initial stages, and the current energy mix heavily reliant on fossil fuels diminishes the immediate environmental benefits of transitioning to electric vehicles. However, opportunities exist in the form of government initiatives aimed at increasing the number of electric charging stations and incentivizing EV purchases through duty-free imports. These measures, coupled with the global trend towards vehicle electrification and increasing environmental consciousness, present Kazakhstan with a chance to redefine its transportation sector. Building a robust EV infrastructure and fostering public and private investment in cleaner energy sources are crucial steps towards overcoming the hurdles to EV adoption.

Additional Insights: Shaping the Future of Transportation

Kazakhstan's exploration of sustainable fleet management and vehicle electrification is an essential step towards addressing its environmental challenges. The country's strategic focus on HEVs as an interim solution, given the current energy context, reflects a pragmatic approach to reducing transportation emissions. As global trends shift towards cleaner, more sustainable transportation options, Kazakhstan's efforts to develop its EV infrastructure and adapt its energy mix can serve as a foundation for a more significant transition. This journey not only highlights the challenges of electrification in a high-emission environment but also underscores the potential for innovation and policy-driven change in shaping a sustainable future for transportation.

Country Case Study

The "Base Fleet" percentage is set according to the sales ratio of each powertrain in Kazakhstan for the year 2023. (For countries where sales ratios cannot be obtained, it is assumed all are ICE vehicles.) The "Recommended Fleet" is designed to be realistic (based on a rank determined by the Electricity Emission Factor Category and EV Readiness Category, deciding a practical range) and efficient in reducing CO2e emissions. It is not expected that the entire fleet will switch to this mix at once but rather after one or two renewal cycles over about 4 to 8 years, considering the usual fleet renewal period is around 4 years. This is viewed as a recommendation for the fleet composition in 4 to 8 years.

The calculation of CO2e emissions is based on a fleet of 100 vehicles traveling an average of 30,000 km per year. Therefore, if your company's fleet size in Kazakhstan is 1,000 vehicles, multiplying the results by 10 will give you an approximate value. For fuel, it is assumed all vehicles use petrol (2345.02 CO2e g/L), and for electricity, the average emission factor of Kazakhstan is used. For PHEVs, it is calculated assuming 50% electricity usage and 50% fuel usage.

Analysis of Fleet Transition from Current State to Sustainable Future

This refers to the average CO2e emissions per kilometer calculated based on the actual energy (Fuel and Electricity) used. It also takes into account the size of the vehicles used in Kazakhstan's fleet.

Scopes Data - ICE Icon

ICE

(CO2e g/km)

Scopes Data - HEV Icon

HEV

(CO2e g/km)

Scopes Data - PHEV Icon

PHEV

(CO2e g/km)

Scopes Data - BEV Icon

BEV

(CO2e g/km)

ICE

HEV

PHEV

BEV

In Kazakhstan, transitioning the corporate fleet towards sustainability presents unique challenges due to its very high electricity CO2e emission factor and a challenging environment for EV adoption. Initially, the fleet is entirely composed of ICE vehicles, a common scenario reflective of the country's current transportation infrastructure and energy matrix. The envisioned transition aims for a radical reduction of ICE vehicles to 12%, highlighting a significant shift towards HEVs, which are recommended to constitute 88% of the fleet.

This strategic pivot to HEVs as the primary component of the fleet underscores the practical approach towards reducing emissions while navigating the constraints of Kazakhstan's energy landscape. BEVs and PHEVs are notably absent from the recommended transition, emphasizing the current impracticality of their adoption due to the lack of necessary infrastructure and the country's high electricity CO2e emissions.

The focus on HEVs leverages their efficiency and lower emissions compared to traditional ICE vehicles without the dependency on the electrical grid, making them a more viable option for Kazakhstan. This transition strategy not only aims to reduce the environmental impact of corporate fleets but also aligns with the broader goals of enhancing energy efficiency and fostering a transition towards more sustainable transportation solutions. Despite the absence of BEVs and PHEVs in the immediate transition plan, the emphasis on HEVs represents a critical step towards mitigating transportation emissions and setting the foundation for future electrification as the energy sector evolves.

Analysis of CO2 Emission Reductions Through Fleet Transition

CO2e From Fuel  (Scope 1)

CO2e From Electricity (Scope 2)

Base Fleet Mix Case
Reasonable Recommended Fleet Mix Case

The proposed transition of Kazakhstan's corporate fleet towards a composition heavily favoring HEVs is anticipated to result in significant CO2 emission reductions. Originally, the fleet's total CO2e emissions, dominated by ICE vehicles, amounted to 438 tons. The transition strategy significantly alters this footprint by reducing ICE vehicle emissions to 53 tons and introducing HEVs as the dominant fleet type, expected to contribute 289 tons of CO2e emissions.

This shift towards HEVs, while not as radical in emission reductions as a potential shift towards BEVs would be under different energy circumstances, still represents a substantial decrease in emissions from the corporate fleet. The total CO2e emissions for the recommended fleet mix case are projected at 342 tons, demonstrating a notable improvement over the base scenario.

The strategic choice to focus on HEVs in Kazakhstan, given its very high electricity CO2e emission factor and the challenging environment for EV adoption, reflects a pragmatic approach to achieving emission reductions. This transition not only aligns with Kazakhstan's immediate capabilities and infrastructure but also sets a pathway for further reductions as the country potentially diversifies its energy sources and develops its EV infrastructure. As Kazakhstan progresses in its energy transition, the groundwork laid by the adoption of HEVs can facilitate a more seamless shift to BEVs and PHEVs, amplifying the benefits of this initial transition.

Comparative Analysis of CO2e Emissions Across Fleet Scenarios

CO2e From Fuel  (Scope 1)

CO2e From Electricity (Scope 2)

The comparative analysis of CO2e emissions across different fleet scenarios in Kazakhstan highlights the nuanced impact of transitioning towards more sustainable transportation options in a context of high electricity emissions. The base fleet mix, entirely composed of ICE vehicles, results in 438 tons of CO2e emissions. Transitioning to a fleet predominantly composed of HEVs reduces total emissions to 342 tons of CO2e, illustrating the efficacy of HEVs in mitigating emissions within Kazakhstan's specific energy and infrastructural context.

An all-ICE fleet scenario would perpetuate the 438 tons of CO2e emissions, underscoring the urgency of transitioning away from fossil fuel-dependent transportation. Conversely, an all-HEV fleet scenario further reduces emissions to 329 tons, highlighting the potential of hybrid technology to lower emissions even in environments where BEV adoption is currently impractical.

Scenarios exploring the adoption of PHEVs and BEVs, assuming direct access to renewable electricity, present a hypothetical yet insightful perspective on emission reductions. An all-PHEV fleet, with its reliance on both fuel and electricity, results in 415 tons of CO2e emissions due to the current high electricity CO2e emission factor. Meanwhile, an all-BEV fleet, under the country's average emission factor, would lead to 392 tons of CO2e emissions, indicating that without significant improvements in the energy mix, the transition to BEVs alone may not achieve the desired emission reductions.

This analysis underscores the importance of aligning fleet transition strategies with the national energy context. For Kazakhstan, the focus on HEVs emerges as the most viable interim solution, setting the stage for future electrification as the country progresses towards cleaner energy production. This strategic approach allows for immediate emission reductions while paving the way for more sustainable transportation options as the energy sector evolves.

https://scopesdata.com/sustainability-country-information/kazakhstan-2023

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