Environmental protection

Management approach: key aspects and initiatives

The World Bank’s Zero Routine Flaring by 2030 initiative

UN 17 Sustainable Development Goals initiative

Climate program CDP

Global Methane Initiative

Caspian Environmental Protection Initiative

The International Association of Oil & Gas Producers

The health, safety and environment management system is designed to Kazakhstan’s statutory requirements, ISO 14001 and ISO 45001 international industry standards, global best practices, and recommendations of the IOGP. It covers ten areas and relies on four pillars: leadership, goal achievement, risk management, and continuous improvement.

Since 2006, KMG operates an integrated quality, environmental, and occupational health and safety management system compliant with ISO 9001, ISO 14001, and ISO 45001. KMG’s subsidiaries and associates with significant energy consumption are certified to ISO 50001. The effectiveness of the HSE management system is verified by independent auditors on a regular basis.

To improve its Health, Safety and Environment Management System, KMG has it certified to ISO 45001.

Recognising the nature and scale of its footprint, the Company is committed to prioritising the sustainable use of natural resources, ensuring safe working conditions, safeguarding employee health across all business lines, protecting the well‑being of local communities in its regions of operation, and upholding environmental stewardship.

We have made significant progress in enhancing the environmental safety of our operations thanks to effective corporate standards and continuous improvements in management. We aim to achieve a zero footprint, which means no negative impact on the environment whatsoever.

KMG Group’s goals in HSE management are directly related to its Development Strategy. Our Development Strategy until 2031 covers strategic initiatives to promote greater environmental responsibility. KMG Group’s environmental priorities include effective management of air emissions, water resources and waste, flaring reduction, and land reclamation.

The Company remains dedicated to being an environmentally responsible business by further enhancing its environmental protection management system, maintaining open dialogue with all stakeholders, and fulfilling its commitments as outlined in its Environmental Policy.

Taza Qazaqstan environmental campaign

Clean Kazakhstan (Taza Qazaqstan) is a large‑scale nationwide environmental campaign initiated by the President of the Republic of Kazakhstan in 2024. KMG Group actively participates in this initiative. In March 2025, the Action Plan for the implementation of the Taza Qazaqstan environmental campaign at KMG for 2025 was approved.

The key areas of the plan include:

• implementing environmental initiatives;
• developing an environmental culture among employees;
• promoting environmental campaigns;
• creating an eco‑community;
• stepping up greening efforts.

A central aspect of our action plan is the initiative to clean up populated areas. To that end, a schedule of clean‑up days for KMG Group was approved.

In 2025, a total of 282 clean‑up days were held with the participation of 9,287 people, and over 5.9 thous. bags of waste were collected.

Greening projects

KMG actively engages in large‑scale tree planting initiatives, contributing to the country’s reforestation efforts.

In accordance with KMG Group’s 2025 greening plan, 109 thous. trees were planned for planting, with approximately 113.7 thous. actually planted.

In addition, 150 thous. Scots pine seedlings were planted in the Kostanay Region in October of the reporting year with KMG’s financial support. The technical opening of a KMG park in Astana also took place, with 1,320 trees planted.

In 2025, KMG Group planted a total of approximately 264 thous. trees.

Use of reverse vending machines

KMG’s Corporate Centre also launched an initiative to collect plastic bottles and aluminium cans using a reverse vending machine (RVM). A competition was announced encouraging the active use of the RVM. The goal of the competition is to raise awareness about reverse vending machines that accept bottles and cans for recycling. In addition to incentivising waste separation, this initiative seeks to foster environmental responsibility among employees. In 2023–2025, the following was collected:

• 15.1 thous. aluminium cans;
• 61.7 thous. plastic bottles.
• Total: 76.8 thous. containers.

Information about the reverse vending machine in the building was circulated regularly throughout the year. The most active users were awarded prizes.

Green Office

The Company adheres to the Green Office principles, which focus on resource efficiency and environmental sustainability. To date, KMG’s Corporate Centre has installed eco‑bins for waste separation, set up a cabinet for storing fluorescent lamps in the warehouse, implemented electronic document management, and established designated bicycle parking and electric vehicle charging stations.

Regular internal mailings keep employees informed on environmental and sustainable development matters, while information materials and posters promoting the key principles of the Green Office concept are displayed throughout the building to foster a culture of environmental awareness.

Environmental legislation

KMG actively participates in task forces under the authorised bodies responsible for environmental protection and water resources, and contributes to proposals for amendments to laws of Kazakhstan. The Company is also engaged in monitoring and participating in negotiations with the Ministry of Ecology, Geology, and Natural Resources concerning:

1. a draft international treaty on combating plastic pollution, including marine pollution;
2. a methodology for calculating financial security to determine the amount of financial assurance for fulfilling obligations to remediate the consequences of operating Category I facilities, and for developing a repurposing and/or alternative operation plan;
3. tightening of sanctions for environmental violations under the Code of Administrative Offences of Kazakhstan, and other matters;
4. amendments to the environmental legislation of Kazakhstan.

Comprehensive environmental approvals

A comprehensive environmental approval is a document designed to ensure the comprehensive prevention of environmental pollution through the application of best available technologies, while minimising and controlling the negative anthropogenic impact on the environment. Throughout 2025, KMG Group actively supported the development of design documentation for comprehensive environmental approvals at its refineries. PetroKazakhstan Oil Products obtained its approval in April 2025, with the process ongoing for the remaining refineries and Kazakhoil Aktobe.

Automated monitoring system

Between 2022 and 2025, automated monitoring systems were deployed in phases across subsidiaries and associates at Mangistaumunaigaz, Kazakhoil Aktobe, Atyrau Refinery, Pavlodar Refinery, Shymkent Refinery, and KPI – covering 15 pollutant emission sources in total. All subsidiaries and associates now transmit data online to the National Environmental Data Bank in real time, with the exception of KPI, where commissioning is currently underway.

Priority environmental projects

Eliminating legacy pollution

Elimination of historical pollution, as well as sources of negative environmental impact (idle wells, wastewater reservoirs, landfills and other production facilities).

Reducing atmospheric emissions

Reduction in emissions through improved technology solutions, e.g. replacing fuel oil with fuel/natural gas as a process furnace fuel; using next‑generation additives; tree planting and land improvement at production facilities; upgrading equipment; replacing burners; streamlining equipment operating modes to reduce runtime; treating exhaust gases from harmful compounds; expanding gas processing capacity; installing gas processing units; engaging in ongoing monitoring to detect and promptly repair leaks; equipping storage tanks with floating roofs to minimise the generation of volatile fractions by eliminating the free space above the product common in conventional tanks.

Automated environmental monitoring information system

The automated environmental monitoring information system is designed to create a shared information space in environmental protection and covers the following critical tasks: automated generation of environmental reports to government agencies; maintaining the database of authorisation regulations and calculating environmental emission fees; day‑to‑day environmental monitoring based on environmental controls at production sites.

Air protection

Air protection is a priority for KMG, given that pollution directly impacts both human health and the environment. Under its Environmental Policy, the Company is consistently reducing pollutant emissions through equipment upgrades, modern technological solutions, automated monitoring systems, and measures to cut gas flaring.

Key work streams include the technical modernisation of facilities, optimisation of equipment operating modes, transition to cleaner fuel types, and the development of industrial environmental monitoring systems. Energy efficiency projects and reductions in process losses further contribute to lowering the Company’s atmospheric impact.

Emission monitoring is carried out continuously across both stationary and mobile sources. In line with Kazakhstan’s environmental laws and international best practices, automated emission monitoring systems have been deployed at a number of facilities, ensuring transparency and timely environmental control. For more details on activities and performance indicators, see KMG’s Sustainability Report.

Air pollutant emissions

Monitoring and automated control system

To strengthen the transparency and efficiency of environmental control, KMG is rolling out automated emission monitoring systems at key production facilities. These systems track emission parameters in real time and relay data directly to state supervisory authorities.

The integration of digital solutions into environmental monitoring is central to KMG’s broader approach to ambient air protection and reducing its environmental footprint.

Efficient use of raw gas

The reduction of gas flaring is a priority task for KMG Group. According to the approved Environmental Policy, the Company strives to achieve zero routine gas flaring by paying increasing attention to the responsible use of gas. Hence, over the last nine years, routine flaring has decreased by 86% (2017: 315.8 mln m³). Utilisation of raw gas in 2025 was 98.8%. Flaring was brought down thanks to the launch of a gas processing unit at Embamunaigas, which provides highly efficient treatment of hydrogen sulphide. In addition, a modern gas processing facility with a capacity of 226 mln m³ of commercial gas per year was commissioned at Kazakhoil Aktobe’s Kozhasai field.

In 2025, raw gas utilisation rate was 98.8%, with flaring at 1.7 tonnes per 1,000 tonnes of produced hydrocarbons (1.45 tonnes in 2024 and 1.4 tonnes in 2023), an increase year‑on‑year and 83% lower than the IOGP industry average (10.0).

KMG supports the World Bank’s Zero Routine Flaring by 2030 initiative. Raw gas flaring reports under the Initiative are submitted on an annual basis to the World Bank’s representative office in Kazakhstan.

Initiatives to reduce atmospheric emissions

Several subsidiaries and associates are implementing measures to cut pollutant emissions. At Atyrau Refinery, these include the phased installation of internal floating roofs across the tank farm (60 roofs), reducing evaporative hydrocarbon losses and cutting VOCs by up to 80–90%; modernisation of burner equipment at EDD‑ADU‑2 units, with 36 burners replaced in 2024; the introduction of additional heat‑exchange circuits at EDD‑AVDU‑3, lowering fuel consumption by up to 30%; and, under the Tazalyq project, the dismantling of a sectional oil‑water separator and closure of open reservoirs at mechanical treatment plants, reducing fugitive emissions and eliminating odour sources.

The automated monitoring system (AMS) is installed at Kazakhoil Aktobe, Mangistaumunaigaz, Atyrau Refinery, Pavlodar Refinery, and PetroKazakhstan Oil Products; data on emission indicators are transmitted in real time; KPI is finalising pre‑commissioning and construction and installation works. Environmental control devices monitor emissions of soot, nitrogen oxides, and carbon monoxide in flue gases from furnaces and boilers. The AMS not only helps monitor emission indicators but also, if necessary, adjust the operating mode of equipment to improve process performance.

Waste management

KMG’s production operations generate production and consumption waste. KMG Group develops and implements a set of measures to improve the waste management system, keeps records of waste generated and accumulated, including contractors’ waste, and ensures the safe accumulation of waste until it is recovered or disposed of. In 2025, KMG’s expenses for the recovery of historical oil waste totalled KZT 9.7 bln.

In selecting waste recovery methods, KMG prioritises advanced technologies that minimise environmental impact and prevent secondary pollution.

KMG Group disposed of a total of around 339 thous. tonnes of historical waste, with their sites remediated.

In 2024, we approved the Corporate Waste Management Standard for KMG Group. The standard specifies step‑by‑step actions of officers in charge at subsidiaries and associates when carrying out waste management activities to ensure compliance with the requirements of Kazakhstan’s environmental laws. In 2025, the standard was implemented as a guiding document for waste management at production facilities of subsidiaries and associates.

Asset retirement obligations

Oil and gas assets

Under the terms of certain contracts, in accordance with legislation and regulatory legal acts, KMG has legal obligations to dismantle and liquidate fixed assets and restore land plots at each of the fields. In particular, KMG’s obligations include the gradual closure of all non‑productive wells and actions to permanently terminate operations, such as dismantling pipelines, buildings and reclamation of the contract area, as well as decommissioning and obligations to prevent environmental pollution at the production site.

The Company calculates asset retirement obligations separately for each contract. The amount of the liability is the present value of the estimated costs that are expected to be required to settle the liability, adjusted for the expected inflation rate and discounted using average long‑term risk‑free interest rates on government debt of transition economies, adjusted for risks inherent in the Kazakhstan market.

As of 31 December 2025, the carrying amount of the Company’s provision for liabilities to liquidate oil and gas assets was KZT 142.3 bln (31 December 2024: KZT 142.0 bln) (for details, see Note 4 in the consolidated financial statements).

Oil and gas trunklines

In accordance with the Law of the Republic of Kazakhstan On Trunk Pipeline, which entered into force on 4 July 2012, KazTransOil has a legal obligation to liquidate the trunkline after the end of operation and implement subsequent measures to restore the environment, including land reclamation. The provision for the obligation to abandon pipelines and land reclamation is estimated based on the cost of dismantling and reclamation works calculated by KMG. As of 31 December 2025, the carrying amount of KMG’s provision for the obligation to abandon pipelines and reclaim land of the Company amounted to KZT 24.1 bln (as of 31 December 2024: KZT 37.4 bln) (for details, see Note 4 in the consolidated financial statements).

Environmental remediation

KMG also creates provisions for obligations related to environmental clean‑up and rehabilitation, based on its estimates and judgements. Environmental costs are either capitalised or expensed based on their future economic benefits.

The Company’s environmental remediation reserve represents management’s best estimates based on an independent assessment of the expected costs required for KMG to comply with the existing Kazakh and European regulatory frameworks. As of 31 December 2025, the carrying amount of the provision for obligations related to asset disposal and land reclamation was KZT 33.6 bln (as of 31 December 2024: KZT 41.8 bln) (for details, see Note 4 in the consolidated financial statements).

Water protection

Water is an integral part of all KMG production processes. KMG adheres to the principles of the UN Global Compact and integrates the Sustainable Development Goals (SDGs) into its operations. The Company adheres to all 17 SDGs, including Goal 6, Clean Water and Sanitation. In its activities, the Company strives to reduce water consumption, increase water use efficiency, drive up water reuse and recycling, improve the quality of effluents, and minimise the impact on natural water bodies.

As KMG is a vertically integrated company engaged in the production, transportation, and processing of hydrocarbons, all our processes consume a lot of water. The Company takes water from surface and underground sources, municipal water supply systems, and the Caspian Sea. Wastewater from KMG’s operations mainly goes to specialised receivers: storage ponds, and evaporation and filtration fields. Those facilities are technical structures designed for natural treatment of wastewater and preventing environmental pollution. Operations that do not have their own storage facilities transfer wastewater to dedicated companies for treatment and disposal. The quality standards for discharged water established by environmental laws are met through the use of mechanical and biological methods of effluent treatment. However, no wastewater is discharged into surface natural water bodies.

One of the Company’s most important objectives is to increase the reuse of treated effluents by returning them to the process, using them for irrigation of green areas, and dust suppression on construction sites and roads.

KMG uses the WRIWorld Resources Institute. Aqueduct water stress metrics to evaluate and monitor production assets in water stressed areas within the Caspian Sea, and the Syr Darya and Ural river basins.

Kenderly seawater desalination plant

In 2025, KMG completed construction of the Kenderly seawater desalination plant, situated approximately 100 km from the city of Zhanaozen. Implemented on the instructions of the President of Kazakhstan, it is one of the Company’s largest social infrastructure projects in the Mangistau Region. With a design capacity of up to 50 thous. m³ of drinking water per day, the plant will provide a reliable water supply for Zhanaozen and the surrounding settlements.

The project was delivered by Ak Su KMG, a subsidiary of Ozenmunaigas. Construction was completed in May 2025, and commissioning began in July with the launch of the full production cycle. The facility uses a modern multistage treatment and desalination system that brings water quality up to drinking water standards.

The plant’s strategic significance for the region is considerable: it reduces the load on the Astrakhan–Mangyshlak main water line, enhances the reliability of water supply, and supports the social and economic development of the Mangistau Region.

In its initial stage, the facility will operate in a water deficit compensatory mode, supplementing existing supply sources for the city of Zhanaozen.

The project represents the Company’s largest social initiative in the region, having created 91 permanent jobs, with up to 650 people employed during the construction phase.