Turkey's Business World Must Prepare for the Green Deal

Turkey's Business World Should Prepare for the Green Deal Turkey's ratification of the Paris Climate Agreement and participation in the 'Green Deal' process with the European Union (EU) have accelerated "green transition" steps within Turkey's business world. However, while large holding companies are already implementing green policies and announcing their zero-carbon emission timelines, small and medium-sized enterprises, which make up 95 percent of the economy, remain uninformed and in need of assistance regarding which steps to take. EGİAD Ege Genç İş İnsanları Derneği, which is working to prepare the young business world for this process, has been playing a guiding role for its members through various roadmaps for some time. Within this scope, the business organization, working together with Ege Bölgesi Sanayi Odası, presented to EGİAD members the 'Green Industry Guide Through the European Union Green Deal Window' study, which was prepared by EBSO to guide manufacturers. At an online meeting attended by EBSO Environment Committee Chairman Erdoğan Çiçekçi, Ege University Bioengineering Department Faculty Member and EBSO Environment Working Group Member Prof. Dr. Nuri Azbar, the EU Green Deal was reviewed and sector-specific points requiring attention and steps to be taken for alignment were evaluated. The European Union has begun establishing a new international trade system closely affecting our country and the production sector. In line with this, the EU, which is preparing to implement the "European Union Green Deal," has set a target to reduce greenhouse gas emissions within a specific program by 2050. In this context, with the EU providing a trade volume of USD 140 billion, a detailed evaluation meeting was held to serve as a guide to EGİAD Ege Genç İş İnsanları Derneği members under the framework of the "Green Industry Guide Through the European Union Green Deal Window" to ensure our trade with the EU does not suffer. The meeting addressed many uncertainties, including questions such as: What does Carbon Border Adjustment contain? How could it affect Turkey? What should our manufacturers pay attention to? What needs to be done in the production process? and other topics and solution proposals. The meeting, moderated by EGİAD General Secretary Prof. Dr. Fatih Dalkılıç, opened with remarks by Board Chairman Alp Avni Yelkenbiçer. Pointing out at the Zoom meeting that a large portion of Turkey's exports are to European Union countries and that European Union Green Deal regulations are of great importance, Yelkenbiçer said, "We believe it will be very beneficial to inform our EGİAD members about the European Green Deal process and to prepare an easily adaptable roadmap through the presentation of Prof. Dr. Nuri Azbar, a member of the EBSO Environment Working Group. Although the European Union Green Deal carbon border applications seem to create new obstacles for our industry, it is possible to turn this new trade system to the advantage of Turkish manufacturers and evaluate it as an opportunity through rapid adaptation and alignment strategies." Noting that while the European Union Green Deal carbon border applications seem to create certain obstacles for our manufacturers, they also allow for reshuffling of the cards, Yelkenbiçer said, "It is possible to turn these regulations to our advantage and evaluate them with today's agility understanding and correct strategies. In this direction, particularly our industry sectors with high energy intensity and high carbon intensity must rapidly review their production processes through the lens of the EU Green Deal and take necessary measures. By acting in this way, with the perspective that every threat contains an opportunity, the Green Deal can enable Turkey to support low-carbon production and thus gain an advantageous position compared to high-carbon countries, increasing its market share in exports to EU countries."

Aiming for Carbon Neutrality by 2050

Recalling that according to the climate law approved by the European Parliament on 24 June 2021 and called the "Green Deal," EU countries aim to reduce carbon emissions by 55 percent by 2030 and achieve carbon neutrality by 2050, Yelkenbiçer said, "Countries that approve the law will face an additional tax between EUR 30 and 50 per ton if they do not regulate the carbon emissions of products and services they sell to the European market according to established standards. The application in the EU, Turkey's largest export market with more than 50 percent share, will also significantly affect Turkey's exports. According to calculations, if Turkey's export world does not implement investments to ensure compliance with the Green Deal, an annual tax burden of USD 4 billion could emerge in exports." he warned.

Green Deal Working Group

Expressing the desire to be part of the "Green Deal Working Group" established regarding the Green Deal Action Plan, Yelkenbiçer said, "The circular issued by the Ministry of Commerce regarding the 'Green Deal Action Plan' was published in the Official Gazette in July, and a 'Green Deal Working Group' was created with participants from 9 ministries to monitor the implementation of the action plan and provide necessary coordination. It was emphasized that specialized working groups could be established to assist the Working Group, and universities, civil society organizations, professional associations, and relevant private sector representatives could be included in all work and meetings, if deemed necessary, in addition to relevant institutions and organizations. As EGİAD, we are ready and willing to be part of this group based on our work and preparations." EBSO Environment Committee Chairman Erdoğan Çiçekçi, recalling that they have brought greenhouse gas effects to the agenda as EBSO since 2012, emphasized that it is understood once more how justified and appropriate their work is with the subject affecting commercial life. Stating that the greenhouse effect can be prevented through afforestation numbers, Çiçekçi emphasized that everyone has responsibility at this point. Ege University Bioengineering Department Faculty Member and EBSO Environment Working Group Member Prof. Dr. Nuri Azbar, emphasizing that a clear vision has been established on how to achieve the goal of carbon neutrality by 2050, said, "While greenhouse gas emissions were reduced by 23 percent between 1990 and 2018, the economy grew by 61 percent. However, current policies will reduce greenhouse gas emissions by only 60 percent by 2050. The EU is making plans to responsibly increase its 2030 greenhouse gas emission reduction target to at least 50 percent, if possible 55 percent, compared to 1990 levels. While the world is making plans to send vehicles to Mars, it has become unable to solve a gas problem on Earth. Urgent measures and studies need to be carried out on this matter." he said. Stating that the transition period for Carbon Border Adjustment will be between 2023 and 2025, Azbar noted that it will initially be applied to the iron and steel, cement, fertilizer, aluminum, and electricity sectors, saying, "It will come into effect in 2026 after the transition period. It will be evaluated whether the system will affect new sectors. Certificates will need to be obtained through the ETS. Turkey's carbon bill resulting from its exports to the EU will be for EUR 30 and 50 per ton of carbon."