Photo by Ilyas Dautov on Unsplash
Europe today is rethinking its economic security and long-term resilience. Questions of energy autonomy, supply chain diversification, and connectivity have risen to the top of the agenda, accelerated by geopolitical fragmentation and the global green transition. At the same time, Central Asia has emerged as a region of growing relevance to these debates. Kazakhstan, by far the region’s largest economy, sits at the intersection of these concerns. It accounts for more than half of Central Asia’s GDP and is the anchor for almost 82 percent of the region’s trade with the European Union, writes Gabidulla Ospankulov.
Engagement between Europe and Kazakhstan has deepened in recent years through concrete projects and investment. The 2022 EU–Kazakhstan memorandum on renewable hydrogen, critical raw materials, and batteries marked a turning point, followed in 2023 by a roadmap with clear timelines and obligations. These commitments are now tied to lithium and nickel projects in East Kazakhstan and Karaganda and to pilot processing initiatives. They also align with the EU’s Global Gateway strategy, under which Brussels is funding infrastructure and clean energy along the Eurasian corridor. At the April 2024 EU–Central Asia summit in Samarkand, European Commission President Ursula von der Leyen announced €12 billion in Global Gateway financing for transport, raw materials, renewable energy, and digitalisation projects across the region.
Major energy ventures highlight the scope of this cooperation. Hyrasia One in Mangystau, led by Germany’s Svevind, is set to become one of the world’s largest hydrogen projects, with 40 GW of wind and solar and output of two million tons of green hydrogen annually. Hydrogen clusters in Mangystau could also support ammonia and methanol exports through the Caspian. France’s TotalEnergies has committed to a 25-year, 1 GW wind farm in Zhambyl with integrated storage, while Italy’s Plenitude (Eni) already operates 100 MW of wind capacity in Aktobe. The European Bank for Reconstruction and Development is backing decarbonization at the urban level, financing 190 new trolleybuses in Almaty and broader programs in Almaty and Astana to modernize heat plants, improve lighting efficiency, and expand electric bus fleets.
Critical raw materials form another pillar of the partnership. Kazakhstan produces 21 of the 34 critical raw materials listed by the European Union. The country possesses substantial reserves of copper, lithium, nickel, cobalt, and rare earth elements, which are indispensable for Europe’s energy transition and technological industries. For instance, Kazakhstan accounts for 21% of global titanium supplies to the aerospace industry, including for Airbus.
The EU-Kazakhstan roadmap has created space for joint ventures that move beyond resource extraction toward processing and refining. The Cove Capital project, for example, is developing deep processing of rare earths as part of a full value chain, from mining to the production of high-tech components. The direction of travel is clear: Kazakhstan is positioning itself not only as a source of raw materials but as part of Europe’s industrial ecosystem.
Connectivity and transport are another core area of engagement. Europe increasingly sees Kazakhstan as central to the Trans-Caspian International Transport Route, or Middle Corridor, which links China to Europe across the Caspian, the South Caucasus, and the Black Sea. In 2024, the EU, Kazakhstan, Azerbaijan, and Georgia agreed on the route’s main building blocks, from port modernization and new ferries to the digitalization of logistics. Kazakhstan has allocated funds to expand the ports of Aktau and Kuryk and extend the Beineu–Aktau rail line, while European firms such as Alstom and Stadler are producing locomotives and passenger cars in Astana. To date, memoranda worth around €1.47 billion have been signed to support transport connectivity. President Kassym-Jomart Tokayev has underlined the importance of these efforts, noting that five international railway corridors now cross Kazakhstan, backed by $35 billion of investment over the past decade. Future plans include 5,000 kilometres of new track and the repair of 11,000 kilometres, with priority projects such as the Mointy–Kyzylzhar line, upgrades from Kyzylzhar to Aktau, and the Dostyk–Moyynty route to China. He also stressed that digitalization and artificial intelligence will be increasingly applied to the rail sector, making transport and logistics a driver of future growth.
Underlying these sectoral initiatives is Kazakhstan’s gradual alignment with Western corporate and legal standards. ESG frameworks, due diligence practices, and governance models familiar to European and American investors are being adopted. This reduces transaction costs and lowers the barriers for European capital to operate in Kazakhstan with greater predictability. European investment already exceeds $200 billion since 2005, with $12.5 billion added in 2023 alone. Importantly, these reforms are not only opening Kazakhstan to Europe but also making it a jurisdiction compatible with U.S. corporate standards. In practice, this means European-led investments are creating an English-speaking business environment and compliance systems that American companies can also readily navigate.
Of course, challenges remain. Hydrogen production in western Kazakhstan will require large volumes of water, which are in short supply, while transport gains depend on harmonizing tariffs and regulations with neighbours. Human capital is another priority: many engineers have trained in Europe, but embedding these skills at home is essential for long-term sustainability. Recognizing these constraints is important to keep expectations realistic.
Even so, the direction of Kazakhstan–Europe cooperation is clear. What is emerging is less a political showcase than a set of continental-scale engineering projects. In places like Aktau, Zhambyl, Aktobe, Almaty, and Astana, European technologies are taking shape as power plants, wind farms, factories, and logistics hubs. For Europe, the benefit is greater energy security and reduced dependence on external suppliers. For Kazakhstan, it is integration into the economy of the future, where exports include processed goods, advanced skills, and participation in high-value supply chains.
For both sides, it is about rethinking Eurasia’s economic balance. As Europe looks eastward for resilience and diversification, Kazakhstan offers a pragmatic partner that is already embedded in European value chains. As Central Asia opens further to global investment, Europe has the chance to anchor its role in the region through cooperation that is mutually beneficial and strategically relevant.
As Europe works to secure its energy transition, diversify supply chains, and develop alternative trade routes, deeper engagement with Central Asia offers clear opportunities. Kazakhstan has already attracted substantial European investment, with cooperation extending from hydrogen to logistics. In this context, the country is positioned not only as a bridge between East and West but increasingly as part of Europe’s wider economic landscape.
 |
The Author, Gabidulla Ospankulov, is the Chairman of the Investment Committee of the Ministry of Foreign Affairs of Kazakhstan
|
