Green Hydrogen: The Last Drop of the Caspian Sea?

Hyrasia One, with its futuristic name and ambitious scale, is a green hydrogen megaproject being developed in Kazakhstan’s western Mangistau region. Instead of a boon for the country’s energy transition, however, the venture has the familiar traits of extractivism and “green colonialism.”

Green hydrogen is a carbon-free fuel that could, in theory, dramatically reduce emissions and pollution. The German Svevind Group is in charge of Hyrasia One, which entails the construction of thousands of wind turbines and solar panels bookmarked for export, near the Caspian Sea shore.

The biggest promise of green hydrogen is to replace fossil coal and gas in heavy industry and long-haul transport. However, machinery and equipment need significant upgrades to be able to use hydrogen as a fuel – requiring further investments and retrofitting to build hydrogen infrastructure. High flammability, low density, storage and transportation barriers increase capital and operating costs of hydrogen. The costs can be minimized per unit with a large enough enterprise through the economies of scale, explaining the planned capacity of 2 million tons at Hyrasia One.

There are successful operating hydrogen plants, usually on a smaller scale and used at the site to avoid the conversion to ammonia, storage and transportation costs. Invenergy's Sauk Valley Hydrogen plant in the USA produces up to 40 tons of green hydrogen per year to cool turbines at its adjacent 980-megawatt Nelson Energy Center gas power plant. 

"An opportunity window to nudge the economic policy away from extractive rentier capitalism has arisen.”

Similar to Hyrasia One, Envision Energy’s plant in China is export-oriented and is the largest green hydrogen and ammonia plant in the world today, with an annual capacity of 320,000 tons of ammonia. The plant is to start exports in Q4 in 2025 and plans to ramp up capacity by 1.5 million tons in three years. Yet, the project has similar concerns as an export-oriented facility with high capital costs and a nascent volatile market. 

The “green colonialism” scheme takes resources away from less economically and institutionally developed countries to purportedly champion energy transition and decarbonization in another, more economically powerful country. The associated non-financial costs–such as displacement, pollution, and biodiversity loss, something that economists call negative externalities–are however borne by the origin country.

Hyrasia One will consist of more than 5,000 150-meter wind turbines on undisclosed swathes of land and solar panels distributed over approximately 150 square kilometers across five clusters in the Mangistau region.

In line with foreign investor practice, the project areas are named after the “five good deeds” listed by the 19th century poet Abai: will (talap), labor (enbek), contemplation (teren oi), contentment (kanagat), and empathy (rakym).

At capacity, the project will generate 40 GW of electricity, almost twice the total national installed capacity of 25.3 GW. This output will fuel its electrolyzer plants, which draw Caspian Sea water and split it into 2 million tons of hydrogen per year. This is then converted into 11 million tons of ammonia, which makes it easier to move towards destination markets in Southeast or East Asia, or Europe. 

The oil terminal at the port in Aktau. Photo: portaktau.kz

The shoreline in Aktau. Photo by Almas Kaisar.

Oil, Climate Change, and the Shrinking Sea

The Hyrasia One project may require up to 60 million m³/year of water, equivalent to 0.00008% of the total Caspian Sea volume or 100% of the annual water use of Mangistau and Atyrau regions in 2020. The project’s impact on the water volume of the Caspian Sea may be negligible than the effects of the climate crisis and the river inflow decrease, however remains controversial in a region with increasing water scarcity and water stress, dominated by extractive industries and their environmental and social consequences.

Will the green hydrogen production drain the Caspian Sea? No. In this respect, the oil and gas industry is beyond competition. But, green hydrogen production will have a negative effect on water quality and therefore affect the local ecosystem. Hyrasia One’s success relies on electrolysis, which requires purified water. This means that the project is likely to set up desalination plants, with the impurities discharged back to the Caspian Sea.

The environmental and social costs of the massive Hyrasia One wind and solar farms can be substantial as well, from habitat loss, to biodiversity loss, to the loss of land used by the locals – most acutely felt by the immediate coastal communities.

While less harmful than the costs associated with fossil fuels production, solar and wind farms of such an industrial magnitude solely for the inefficient production and export of hydrogen in the region riddled with water scarcity and electricity deficit seems unwise at best.

To make up for its water deficit, the government uses desalination plants to make Caspian Sea water potable. To welcome a new, ambitious project producing purified water and carbon-free electricity not for the immediate needs of the population, but for export in an emerging and volatile market seems misguided.

The promised economic growth will likely benefit the private companies involved in the project and the central government, rather than the local communities along the Caspian Sea, who will face the social and environmental costs of the project. 

Fort Shevchenko. Photo by Almas Kaisar.

The project is a stark reminder of the tunnel vision of economic growth based on extraction and export, laden with promises of prosperity for all, while the immediate communities bear the brunt of the so-called economic growth and depletion.

There is no need for more human activity in the Caspian region, be it industrial projects, conferences, or repetitive monitoring and research. Instead, we need to scale back, or rather, slash the problematic anthropogenic footprint.

Reduced fossil fuel production, or even its complete phaseout, would help prevent the dire projections for the Caspian Sea stemming from global warming and would reduce the ever-increasing scarcity of the Volga River.

This is a global issue, larger than Kazakhstan’s sole remit, in an ever increasingly hostile global political environment for climate mitigation.

And yet, Kazakhstan has the power and agency over a number of local factors shaping the fate of the Caspian Sea and the people.

There is hardly a dearth of scholarship on the disastrous effects of fossil fuel production on the ecosystems of the Caspian Sea. Yet, the Kashagan oil field–notoriously one of the most technologically problematic, ecologically harmful, and economically dubious offshore oil projects–has been developed in a protected nature reserve area that is projected to dry up by the end of the century and eventually lead to the extinction of the Caspian seal and sturgeon.

The only way to remediate the damages appears to have taken the form of environmental fines, which are then beaten back by the Big Oil legal teams.

As Kazakhstan is renegotiating contract terms with Big Oil regarding fossil fuel production and new projects such as Hyrasia One are in the early stages of development, an opportunity window to nudge the economic policy away from extractive rentier capitalism has arisen.

Malyi Taldykol. Photo by Beiimbet Moldagali.

Outside of Big Oil projects, the people of Kazakhstan are also witnessing the erasure of a much smaller Malyi Taldykol lake system in Astana to make room for apartment complexes and a shopping mall atop. With far less vested interests involved and a more limited jurisdiction, the Malyi Taldykol case does not inspire hope for the Caspian Sea.

Yet, there is still time to prevent the worst-case scenario. We need to reconsider the Hyrasia One green hydrogen project and bar any future projects that would exhaust the Caspian Sea, including new oil and gas projects. Kazakhstan’s government needs to collaborate with other riparian countries, namely Russia, Azerbaijan, Turkmenistan, and Iran, to reexamine priorities in oil and gas production.

Ideally, a stricter accountability system would alter the producers’ conduct and prevent any oil spills and other types of pollution, including cleanup of the existing contamination. The revitalization of the mighty Volga River should be a top priority on the agenda for regional cooperation. Solutions are available, but the time is running out – we need to act now.

Zhanaiym Kozybay is a researcher at Global Energy Monitor. The views expressed in this piece are solely her own and do not express the views or opinions of her employer.

Sign up for our English-language newsletter.