The Urgency Of Establishing A ‘Clean Power Common Market’ In Central Asia – Analysis


By Yi Wang

The excessive reliance of Central Asian countries on coal and coal-fired energy has increased the risk of environmental degradation in the region, posing a serious challenge to local sustainable development and sparking new international concerns.

Coal resources in Central Asia are mainly concentrated in Kazakhstan. In 2022, Kazakhstan’s coal production reached a cumulative 113.9 million tons. Following the outbreak of the Russia-Ukraine war, the EU, the U.S., Japan, and other countries implemented a ban on coal exports from Russia, providing Kazakhstan with an opportunity to increase coal exports. The Kazakh Ministry of Industry and Infrastructure Development stated that coal production would be increased between 2023 and 2029, with coal exports accounting for about 28% of the total production.

Meanwhile, coal production in Uzbekistan has grown significantly as well. Data shows that coal production in Uzbekistan increased by 19.1% in the first 11 months of 2023, reaching a total of 5.73 million tons, compared to a 3.8% increase during the same period in 2022. Overall, the figure has steadily increased, averaging 3.8 million tons annually from 1985 to 2022. In recent years, the Uzbek government has emphasized the conservation of natural gas consumption, leading to a significant shift to coal for heating purposes domestically, resulting in increasingly severe air pollution problems in the capital Tashkent.

Coal production in another Central Asian country Kyrgyzstan has also been increasing year by year. Statistics show that its coal production reached 3.1 million tons and 3.8 million tons in 2021 and 2022, respectively, significantly higher than the 600,000 tons in 2010 and 2.4 million tons in 2018. Some of Kyrgyz coal is exported to neighboring countries, Europe, and China, providing the country with important sources of economic income. In 2022, due to increased domestic coal demand, the Kyrgyz government implemented coal purchase restrictions starting from November 1 to prevent price manipulation, limiting each household in the capital Bishkek to 2 tons of coal. However, the city suffers from severe smog, especially in winter when coal-fired power plants work overtime to keep the city warm, resulting in poor air quality.

The landlocked country Mongolia’s coal production has seen a significant increase, with total production reaching 81.192 million tonsin 2023, a 118.2% increase from the previous year. The capital, Ulaanbaatar, is among the cities with the most polluted air in the world during winter. The United Nations Children’s Fund (UNICEF) pointed out that coal combustion is the primary source of pollution. Air pollution in the ger districts of Mongolia has reached dangerous levels: data from 2011 shows that fine particulate matter (or PM2.5), which increases the risk of children’s respiratory infections, is 6-7 times higher than the standards allowed by the World Health Organization (WHO); by December, this measurement peak reached 25 times the allowed value. From 2011 to 2015, the Mongolian government spent over USD 37 million, combined with USD 47 million in international donations, on air pollution control. In January 2017, thousands of Mongolians took to the streets of Ulaanbaatar, calling on the government to take action against air pollution.

The latest annual report Boom and Bust Coal 2024 by Global Energy Monitor (GEM) points out that in the past decade, the proportion of coal-fired power generation in Central Asia has doubled. In 2023, Kazakhstan, Kyrgyzstan, Uzbekistan, and Tajikistan planned to add a total of 8.1 gigawatts of new coal-fired power plant capacity, more than twice the capacity in 2013.

As the European Union continues to raise environmental standards and requirements, Central Asian countries must seek new coal export markets, hence the demand in the Asian region has become its target. Data provided by the environmental think tank Ember shows that in 2023, Asia accounted for 82% of global coal-fired power generation, compared to 75% in 2019. Among the major coal-importing countries, coal-fired power generation in China, India, the Philippines, Turkey, and Vietnam has increased, while Japan and South Korea have seen varying degrees of decline. Although governments in various countries have committed to increasing the deployment of renewable energy, in the short term, coal consumption and carbon emissions in Asia are expected to further increase.

Coal-fired power generation in major coal-importing countries (January 2019 – October 2023)

The supply of key minerals often involves national capacity decisions, which impact both carbon emissions and economic stability. Large investments flowing into mineral-rich regions can bring economic benefits, create job opportunities, and stimulate population movement for countries. Yet, this also leads to a singular industrial structure and overall imbalance in regional energy structures. Consequently, economic disparities between regions widen, social conflicts escalate, and long-term stability in regional development is compromised.

Therefore, both coal-producing and importing countries should make cautious decisions, accurately assessing the environmental burdens brought by the development of Central Asian coal industry and its impact on regional sustainable development. It is crucial for Central Asian countries to diversify their energy structure in the future, requiring the establishment of a “clean electricity common market”. Continuous cooperation on Central Asian coal and other mineral resources should be committed, so as to contributing to the region’s green energy transformation.

Firstly, closer cooperation between Central Asian countries and major coal-consuming countries should promote energy transformation in Central Asia, reducing reliance on fossil fuels such as coal and expanding the green industry chain. The key lies in increasing capital and technological investment in clean energy, facilitating smoother exchange of green talents and technologies, and producing high-value-added energy products.

For example, Kyrgyzstan has strengthened cooperation with Japan to enhance the modernization level of its coal industry. According to Trend, the Kyrgyzstan Ministry of Energy, Kyrgyzstan-Kagoshima Association, and Japan’s SENTO GROUP have signed a comprehensive three-way memorandum of cooperation in the coal industry, specifically involving coal exploration, mineral extraction, construction of coal processing plant, and logistics center. Additionally, Japan is also interested in promoting cooperation in hydropower in Kyrgyzstan.

Secondly, Central Asia and Northeast Asia are collaborating to promote the construction of an energy common market. China, South Korea, and Japan lead the region’s electricity demand growth, which can help Mongolia and other countries leverage their advantages in the “upstream industry” to build a connected power grid in Northeast Asia, capable of providing clean electricity to more neighboring countries. This accelerates the decarbonization process on a larger scale and promotes the common transition to net-zero emissions in the Asian region.

Mongolia is currently formulating its national strategies and action plans to increase the deployment of renewable energy, focusing on solar, wind, geothermal, and hydro power, so as to implement cleaner energy solutions. The Gobi Desert in Mongolia serves as an ideal platform for field trials and operations of the Asian Super Grid project, an electrical power transmission network connecting Mongolia, Northeast Asia, parts of Southeast Asia, India, and Russia. Through Gobi investments and the Asian Super Grid plan, Mongolia is also attracting private sector investment to participate in the operation of transmission systems.

The 2024 United Nations Climate Change Conference (COP29) will kick off in November in Azerbaijan. As it stands, the pathway towards clean electricity in Central Asia, along with the expansion of green energy trading, requires resource-sharing between the public and private sectors, as well as collaborative innovation in policies and measures, so as to establish a market system that benefits all stakeholders.

  • Yi Wang is a researcher at ANBOUND


Anbound Consulting (Anbound) is an independent Think Tank with the headquarter based in Beijing. Established in 1993, Anbound specializes in public policy research, and enjoys a professional reputation in the areas of strategic forecasting, policy solutions and risk analysis. Anbound's research findings are widely recognized and create a deep interest within public media, academics and experts who are also providing consulting service to the State Council of China.

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