Global trade is turning green; industries unable to reduce their carbon footprint risk being left out of the competition. For Turkey, green transformation is no longer just an environmental necessity but an economic one. While green production becomes the key to accessing export markets, carbon-neutral targets are becoming a new competitive criterion for companies. Those who seize this transformation in time will secure not only their environmental but also their commercial future.
Cansu ÖZDEMİR
The industrial sector has long been considered the main engine of economic growth and development. However, today, the sustainability of this growth has become as critical as growth itself. It is no longer just about producing, but also how it is produced. Especially the fight against the climate crisis has gone beyond environmental responsibilities, becoming an economic and strategic priority. Reducing the carbon footprint is a vital necessity for both ecosystem protection and ensuring commercial sustainability.
In this context, the Carbon Border Adjustment Mechanism (CBAM), which the European Union will implement in 2026, marks a turning point for Turkish industrialists. The application of a border carbon tax will directly affect the competitiveness of carbon-intensive production sectors. This situation concerns not only large exporting companies but also small and medium-sized enterprises (SMEs) that are part of these companies’ supply chains, providing raw materials and intermediate goods.
Low-carbon production, which has become a prerequisite for integrating into global value chains, necessitates investing in technology, increasing energy efficiency, and adopting green transformation strategies. Therefore, for industrialists, this transformation is not just an environmental sensitivity; it also plays a decisive role across a wide range, from access to finance to protecting market share. In short, for Turkish industry, transitioning to a low-carbon production model is no longer a choice but an unavoidable strategic necessity.
HOW AWARE ARE INDUSTRIALISTS?
The importance of carbon-neutral production is increasingly understood among industrialists; however, this level of awareness varies significantly between sectors and company sizes. While large exporting firms have started making long-term plans for this transformation, a lack of information and cost concerns are quite common, especially among SMEs. SMEs, which constitute a large part of industrial production in Turkey, still view sustainability investments as a cost factor. However, this perspective needs to change rapidly because low-carbon production is no longer just an environmental choice; it is a prerequisite for staying in the market and continuing to export.
COMPLIANCE WITH THE GREEN DEAL IS VITALLY IMPORTANT
The Green Deal, announced by the European Union in 2019, consists of a radical transformation plan covering all sectors such as industry, agriculture, transport, and energy, not limited to the environment. Under this strategy, aiming to make the EU a “climate-neutral continent” by 2050, strict environmental standards are being introduced for carbon-intensive sectors, while significant investments are directed towards areas like energy efficiency and the circular economy. The Carbon Border Adjustment Mechanism (CBAM), one of the most notable applications, foresees a tax on imports of high-carbon products. The system, which began its reporting process in 2023, will turn into a tax from 2026.
Turkey is directly affected by this transformation as 40 percent of its exports go to the EU. Companies engaged in carbon-intensive production face the risk of losing competitiveness in the European market. Although Turkey published its Green Deal Action Plan in 2021, progress in implementation is slow; shortcomings persist in terms of legislation, financing, and technical support.
However, green transformation is not just a risk; it offers opportunities for integration into global supply chains and export sustainability for companies transitioning to carbon-neutral production. Europe has set out; Turkey needs to act quickly to not miss this process.
DIGITALIZATION AND DECARBONIZATION MUST ADVANCE HAND IN HAND
The digitalization of industry and decarbonization processes emerge as two fundamental transformation areas that support each other. Digitalizing production processes enables more efficient use of energy and resources, thereby reducing carbon emissions. Therefore, Industry 4.0 applications and data analytics solutions not only increase production efficiency but also support environmental sustainability. Although the digitalization journey of Turkish industry is not yet progressing at the desired pace, investments in this area also need to be increased to achieve carbon-neutral targets.
CARBON FOOTPRINT MANAGEMENT: THE NEW CONDITION FOR COMPETITION
Green production is no longer an option but a necessity. Companies are judged not only by what they produce but also by how they produce it. Companies that calculate their carbon footprint, report this data transparently, and set concrete emission reduction targets are positioned more strongly in all developed markets, especially in Europe. In sectors like automotive and textiles, European buyers are now closing their doors to suppliers without carbon data. An industrial structure capable of managing its carbon footprint becomes the key to commercial sustainability and competitiveness, beyond just environmental responsibility.
TIME IS RUNNING OUT FOR GREEN TRANSFORMATION
Although Turkey has taken important steps with its 2053 net zero emission target and Green Deal Action Plan, there are still serious deficiencies in implementation. Legal regulations that mandate monitoring and reporting carbon emissions have not become widespread across all sectors; access to finance for technological infrastructure and green investments creates significant difficulties, especially for SMEs. Furthermore, there is an ongoing lack of information and a need for guidance on carbon-neutral production throughout the industry. The need for comprehensive and widespread support mechanisms is increasing during this process. On the other hand, the reporting period of the Carbon Border Adjustment Mechanism (CBAM), launched by the European Union in 2023, and the carbon tax to be implemented from 2026, place direct pressure on Turkish exporters. This system, covering sectors such as iron and steel, cement, and aluminum, will determine the fate of competition in the EU market, which accounts for approximately 40 percent of Turkey's total exports. Although large exporters have turned towards transformation, SMEs still require significant preparation and support to adapt to this new reality. Therefore, it is critically important for Turkey to strengthen its legislation, diversify its funding sources, and raise awareness among industrialists to accelerate the green transformation. Otherwise, Turkish industry will not only fail to fulfill its environmental responsibilities but will also face the risk of largely losing its competitiveness in global markets.
THE FUTURE BELONGS TO THOSE WHO CHOOSE CARBON-FREE PRODUCTION
Turkey's success in the green transformation process is only possible by advancing on three strategic pillars: Green finance, digitalization, and education. Low-interest loans, special incentives for carbon reduction projects, and sustainability-focused consulting services should be widely disseminated. At the same time, production processes should be made traceable with digital technologies; carbon emissions must be transparent and measurable. Implementing these steps swiftly and decisively is a requirement not only for environmental goals but also for economic sustainability. Because regulations like the EU's CBAM are no longer just a warning but are in the direct implementation phase. Companies that do not internalize carbon management, cannot reduce their emissions, and fail to transition to green production will face the risk of being eliminated from export markets. However, if Turkey can seize this transformation in time, it will not only remain in the EU market but also gain a stronger position in global value chains and increase its competitiveness. The future will belong to those who see carbon-neutral production not as a luxury but as a necessity. If the transition to green industry is planned today; Turkey can become one of the countries that set the economic and environmental standards of the future.
WHERE DO TURKEY AND EUROPE STAND IN CARBON-FREE INDUSTRY?
The European Union (EU) is among the regions taking the most comprehensive and determined steps to reduce the carbon footprint of all economic activities, especially the industrial sector. The European Green Deal, announced by the EU in 2019, aims for the continent to become “climate-neutral” by 2050. In line with this goal, strict carbon emission rules are being introduced for energy-intensive sectors, border carbon tax implementations are being launched, and significant incentives are offered to companies for green transformation.
The Carbon Border Adjustment Mechanism (CBAM), which will fully enter into force in 2026, foresees the application of a border carbon tax on carbon-intensive products such as cement, iron-steel, aluminum, fertilizers, and hydrogen coming from outside Europe. Many European countries have already shaped their industrial policies according to this new order. In countries like Germany, the Netherlands, and France, industrial companies have announced long-term carbon-neutral strategies and have rapidly transitioned to renewable energy and circular economy practices in their production processes.
TURKEY STARTED LATE BUT IS AWARE…
IS IT POSSIBLE TO CLOSE THE GAP WITH EUROPE?
The transition to carbon-free industry in Turkey started later compared to Europe and is progressing with limited resources. The ratification of the Paris Agreement in 2021 was an important step, and a “net zero emission” target was set for 2053. However, a comprehensive roadmap on how to achieve this target has not yet been presented.
The capacity to measure, report, and reduce carbon emissions is quite limited in SMEs, which constitute a large part of the industry. In terms of energy efficiency and renewable energy investments, financing, lack of information, and regulatory barriers stand out. Nevertheless, large companies working with Europe have reluctantly started to take steps towards green transformation. In sectors such as automotive, white goods, and textiles, some companies have begun to report their carbon footprint and invest in renewable energy. However, these efforts are not yet widespread throughout the industry.
On the other hand, Europe is at a much more advanced stage in the transition to carbon-free industry. A significant gap has emerged in terms of institutional infrastructure, financing tools, and technology adoption. Turkey, however, is trying to join this process later, driven by both global climate pressures and the motivation not to lose competitiveness in the EU market. To close this gap, clearer policies, specific incentives for SMEs, and widespread green investments are needed. Otherwise, Turkey faces the risk of falling behind not only environmentally but also economically.
TRANSITION TO GREEN INDUSTRY: WHERE IS TURKEY IN THE TRANSFORMATION?
Global industry has entered a new era with regulations limiting carbon emissions. The Carbon Border Adjustment Mechanism (CBAM), launched by the European Union, is being implemented with the goal of economically penalizing carbon-intensive production. In this new order, companies that do not reduce their carbon footprint face not only environmental but also economic risks. Turkey is still standing on the sidelines in this global transformation. Practices for measuring, managing, and reducing the carbon footprint are quite limited across the industry. However, time is running out; companies that do not transition to green production risk being uncompetitive in exports due to high carbon costs.
This content has been translated using artificial intelligence technology.