İKMİB Releases Sustainability Action Plan Report

İKMİB Chair Pelister: "The Time for Change and Transformation in Chemical Exports Has Come for Sustainability"

İstanbul Kimyevi Maddeler ve Mamulleri İhracatçıları Birliği (İKMİB), the export leader of Turkey's chemical sector, has published a new report that will serve as a guide for the sector's transformation and change in light of the green economy and circular economy concepts that will directly affect the future of global trade. The "Chemical Sector Sustainability Action Plan Report" prepared by İKMİB provides the codes for a new era in chemical exports, while examining the risks and opportunities awaiting the sector particularly within the framework of the EU Green Deal and the United Nations Sustainable Development Goals, as well as the green steps that Turkish chemical exports must take to maintain its share in global trade. The presentation meeting of the "Chemical Sector Sustainability Action Plan Report," which was shared with sector representatives and exporters, was held under the chairmanship of Adil Pelister, Chair of the Board of Directors of İstanbul Kimyevi Maddeler ve Mamulleri İhracatçıları Birliği (İKMİB), with the participation of Mustafa Gültepe, Chair of Türkiye İhracatçılar Meclisi (TİM), İKMİB Board of Directors members, and media representatives.

Gültepe: "Compliance with the Green Deal is of vital importance to maintain and increase our market share especially in the EU market"

Mustafa Gültepe, Chair of Türkiye İhracatçılar Meclisi (TİM), emphasized that production and exports are the driving force of the country's economy, stating, "We have reached USD 233 billion in exports in 11 months. We will announce the 2023 results on 2 January with the participation of our President. We hope to close this year with exports exceeding USD 255 billion. In service exports, we anticipate approaching the USD 100 billion threshold. We will complete the 100th anniversary of our Republic with two records both in goods and service exports. The European Union is our largest export market. We conduct 42 percent of our total exports to EU countries. With the United Kingdom, the ratio rises above 45 percent. There is no alternative for us to this large market. The EU Green Deal focused on the target of carbon neutral by 2050. To maintain and increase our market power, we need to adapt our exports to Green Deal criteria. It is important that our chemical sector has a roadmap. Because chemical-based products are used as intermediate goods by many sectors. In other words, chemicals are in the position of natural supplier to all sectors. The chemical sector also ranks among our largest exporting sectors. It finished 2022 as the leader with USD 33.5 billion. This year, despite many global challenges, it approached USD 28 billion in 11 months. Compliance with the Green Deal is of vital importance to maintain and increase our market share especially in the EU market. Because the Green Deal compliance process is accelerating. Green transformation is a difficult and costly process. Especially since SMEs will not be able to afford the transformation with their own resources, financing is crucial. Our work with İGE A.Ş. continues on financing the transformation. Additionally, KOSGEB has launched an important support program under the scope of the "Turkey Green Industry Project." I believe that incentive programs will continue to increase in the coming period. With this confidence, I wish good outcomes for our Chemical Sector's Sustainability Action Plan," he said.

Pelister: "We must adapt to sustainability for more chemical exports"

Adil Pelister, Chair of İKMİB's Board of Directors, stated that they have prepared a sustainability roadmap not only for the chemical sector but also for all locomotive industry areas that chemicals touch, saying, "The concepts of 'Green Economy' and 'Circular Economy,' which have entered our lives recently, bring along a critical adaptation process that will directly affect the future of our chemical exports. When we consider the EU market, which covers more than 40 percent of our exports, the 'Carbon Border Adjustment Mechanism,' 'Fit for 55,' and the 'EU Emissions Trading System' (ETS) that will come into effect with the Green Deal will impact all our sectors as well as chemicals significantly. As İKMİB, with the Chemical Sector Sustainability Action Plan Report we have prepared, we have determined the direction of chemical's transformation and change in this area. Because the chemical sector is in a strategic position that touches all other sectors and provides input to them. Change in the chemical sector will affect all other sectors as well. In this respect, we are aware that the time for change and transformation for the sustainability of chemical exports has come," he said.

Pelister: "For Building Sustainability in Chemicals, We Have Identified 8 Priority Objectives and 4 Core Pillars"

Pointing out that they have prepared a guide for all change processes that the chemical sector must be prepared for in green transformation and circular economy, from greenhouse gas emissions to energy and water management, from product design to recycling, Pelister stated, "With the action plan report we have prepared, we have charted a route that our chemical sector and exporting companies will follow step by step. As the chemical sector, while contributing to all 17 objectives within the UN Sustainable Development Goals, we have identified 8 priority objectives with 5 being primary and 3 being secondary that will most impact our sector. To build a sustainable chemical sector on 4 core pillars, we have listed step by step the tasks we must undertake along with a broad vision perspective. Under the headings of Low-Carbon Economy, Resource Efficiency, Investment Need, and Caring for People and Planet, all 16 of our subsectors need to launch their sustainability mobilization. Therefore, we want our chemical sector to not miss the sustainability train and to be among the game changers of the new era that green transformation and circular economy will bring," he said.

Pelister: "An ETS must be established urgently in our country and a carbon pricing regulation must be introduced"

Expressing his belief that the chemical sector, one of Turkey's two largest exporting sectors and which has exported over USD 130 billion in the last five years, will preserve its global trade muscles through reforms on the sustainability axis, Pelister stated, "One of the most closely concerning regulations for us in the coming period will be the 'Carbon Border Adjustment Mechanism' prepared under the EU Green Deal. With the CBAM entering into practice as of 1 October 2023, limited to reporting obligations, there is a transition period until 31 December 2025 where our exporters will not face financial obligations. However, as of 1 January 2026, we will be subject to an additional burden through carbon pricing. While emission reporting is mandatory, importing countries of our products will incur additional carbon costs. By 2034, costs will increase in stages. For this reason, it is very important that an emissions trading system (ETS) be established urgently in our country and carbon pricing regulation be introduced. Otherwise, all exporters in Turkey and especially our chemical sector will face the risk of falling into a disadvantaged position in exports and losing competitiveness. Of course, in this process, the countries that move fastest towards transformation in the chemical sector will have a significant advantage in the global chemical products market. Innovative countries will gain additional market share by meeting market demands for cleaner and lower carbon emission products. For this reason, as İKMİB, we have taken responsibility to be a driving force of the process to maintain the strong muscles of Turkish chemical exports in global trade. I hope that our chemical sector, which sets records with leverage effect on Turkey's exports, will take steps in green transformation, circular economy, and sustainability areas that will be a role model for all sectors," he stated.