Turkey recently released its industrial and technology strategy which targets 27 areas, covering everything from giant industrial parks and hydrogen fuel cells to carbon capture and storage (CCS) and digital infrastructure.
The bold plans aim to see it triple its hi-tech exports to $30bn by 2030, and to nearly double its industrial exports to $400bn in five years.
But Turkey, like others, is having to reconcile its grand industrial vision with decarbonisation realities.
The country needs to cut emissions from transportation, buildings, and power generation by as much as 90%, and from agriculture by 50% to achieve Net Zero by 2053. It is well understood that these are challenging targets to hit.
All the same, Turkey’s east-meets-west location provides a wide range of international opportunities.
The Türkiye Wealth Fund (TWF) and the Development Fund for Iraq (DFI) recently signed a memorandum of understanding (MoU) in Baghdad, which included a commitment to grow renewable and green energy.
In March, Turkish construction firm Esta signed a $1.3bn fertiliser deal with Kazakhstan, which could produce up to 42,000 tonnes of ammonia annually.
EET Hydrogen, a division of fuels supplier Essar, also signed an engineering, procurement and construction deal with Enka, a global engineering and construction firm headquartered in Istanbul.
Phase one arising from the deal will see the construction of a hydrogen plant at the Stanlow oil refinery in Ellesmere Port in the UK. It will have a production capacity of 350MW and will capture around 600,000 tonnes of CO2 a year.
According to gasworld Intelligence, Turkey’s gas market grew 22.1% between 2023 and 2024 and it operates 77 production facilities, mainly clustered around Istanbul.
Bertrandt, which specialises in hydrogen technologies among others, recently opened a new site on the Asian (eastern) side of Istanbul.
Geopolitical dynamics are also coming into play. Given its high share of imported energy, particularly gas from Russia, hydrogen is key to increasing domestic energy production.
Bulgaria and Turkey are embarking on discussions to enhance natural gas transit capacity at their shared border – a strategic move aimed at increasing energy supplies to central Europe.
Turkey already has a relatively high share of renewable power generation, particularly hydro, and recent solar auctions have resulted in low prices, leading to more focus on the potential for green hydrogen production.
However, today the country still generates over half of its electricity from fossil fuel, including over 25% from coal and lignite, according to the Oxford Institute of Energy Studies.
Analyst group McKinsey identifies CCS as a “significant lever” for reducing emissions from industrial processes, and forecasts 3.6 Mt total green hydrogen demand by 2053.
But to be able to supply this demand at least $100bn of investment capital is needed.
“Integrating green hydrogen production facilities with current infrastructure could support stakeholder investment. Moreover, Turkey’s abundance of low-cost renewable energy sources and proximity to Europe could boost the green hydrogen trade,” it notes.
As the world’s seventh largest steel manufacturer, Turkey also has an opportunity to establish itself as a regional hub for green steel.
Decarbonisation efforts up to 2030 would primarily focus on retrofitting conventional technologies and using biofuels in industrial processes, McKinsey has said.
Under the modelled pathway, an 80% reduction in emissions in cement production could be achieved through electrification using biomass, carbon capture, alternative raw materials, and clinker substitution.
New regulations, such as the EU Emissions Trading System and Green Deal, have also come into play to encourage EU countries to cut net GHG emissions, and that could have a significant impact on Turkey’s export-driven economy.
Turkey has huge potential to develop its industrial profile but its success will depend on a complex mix of policy, investment, and geopolitical developments in the years ahead.
