Introduction
The opportunity in Turkey lies in investing in solar energy products.
The report provides a preliminary analysis of how environmental policies affect global trade. While analyzing the trade of ‘environmental products’ that aim to minimize environmental damage in the world and in Turkey, it reveals striking findings specific to Turkey:
- Turkey’s export value of environmental products rose from $7.4 billion in 2010 to $16.3 billion in 2020, while imports increased from $12 billion to $16.3 billion.
- Exports of environmental products increased from 6.1% of total exports in 2010 to 9.1% in 2020.
- Imports of environmental products, on the other hand, rose from 12% of Turkey’s total imports in 2016 to 9.1% in 2020.
Turkey’s exports of environmental products are primarily dominated by internal combustion engines and components in the automotive sector. However, with EU countries aiming to end the sale of new petrol and diesel-powered vehicles by 2035 and the expectation that electrification will increase in all sectors, Turkey will lose ground in its most important export market in the coming period. Focusing Turkey’s investment portfolio towards the production of renewable energy equipment and components that support electrification, particularly solar energy products, appears to be an area of opportunity for Turkey.
Bengisu Özenç, Director of SEFiA, underlines that Turkey is also dependent on foreign sources for its energy transition:
Especially when we look at the 2016-2020 period, we see that Turkey’s new solar energy capacity increase is in parallel with the increase in imports of solar energy products. Turkey needs to rapidly transform its investments in internal combustion engines and components in the automotive sector, which has a large share in Turkey’s exports and is losing momentum globally, in line with current trends and to support electrification. It would also be appropriate to invest in the production of solar energy products, both to create added value in the economy and to prevent the increasing imports of solar energy products. Investing in this area, whose global trade is expanding, will also eliminate the risk of Turkey losing its share in environmental product exports.
Turkey’s main export products that stand out in environmental products are ‘other motor vehicles carrying persons’, ‘parts for diesel engines’ and ‘parts for gasoline engines’.
Global findings on trade in environmental products are as follows:
- The global trade volume of environmental products is USD 1.5 trillion, which corresponds to approximately 9% of total global trade.
- The top three product groups with the highest share of environmental products on a global scale are “renewable energy facilities”, “wastewater management and drinking water treatment” and “clean or resource-efficient technologies”.
- China, Germany and the United States of America (USA) accounted for around 40% of exports and 30% of imports of environmental products in the 2010-2020 period.