IPM Lists Policy Recommendations to Accelerate Decarbonization of Türkiye's Steel Sector

The Istanbul Policy Center (IPC) has published its Policy and Actor Analysis report as part of its "Decarbonization of the Turkish Steel Sector" project. Based on interviews with steel producers, public institutions, and other actors in the production chain, the report examines the sector's fundamental challenges in transitioning to a high-value-added, low-carbon production model that prioritizes environmental and social impacts, while offering concrete solutions. According to the report, three key elements that will accelerate the transformation process are: i) a sectoral restructuring and modernization plan, ii) binding reduction targets and a multi-actor accountability framework, and iii) linking public support to greenhouse gas reduction targets.

The transformation of the steel sector, which accounts for approximately 10% of Turkey's greenhouse gas emissions, is critical to achieving the 2053 net-zero target. The IPM, which has been supporting the transformation of Turkey's steel sector since 2022, is discussing policy and institutional intervention proposals to accelerate the transformation process with its latest report , "Decarbonization of the Turkish Steel Sector: Policy and Actor Analysis ." The study also includes an assessment of the progress of crude steel producers and public administrations in selected areas.

Strong Motivation for Transformation Should Be Assessed

According to the study, the decarbonization process in Türkiye's industry is in the institutionalization phase. The developments driving this process are external factors such as European Union regulations and maintaining competitiveness in foreign trade, rather than a national climate and industrial policy. Despite this, interviews with industry employees and representatives suggest that decarbonization can be an opportunity for environmental and technological development, going beyond a mere compliance requirement. Project Coordinator Dursun Baş emphasized that this potential should not be ignored, saying, “There is a strong motivation for decarbonization in the steel sector. However, today we see that even the simplest environmental investments are being avoided. This, combined with a lack of oversight and regulation, increases the risk that the sector's 'green steel' or 'net zero' targets will remain mere rhetoric. A true transformation requires binding regulatory frameworks, effective oversight mechanisms, and strong public will. Türkiye's implementation of a national restructuring and modernization plan encompassing more than 40 crude steel plants should not be postponed any further.”

Baş emphasizes that transformation cannot be solely the responsibility of producers, emphasizing the need for a comprehensive and consistent roadmap to address structural problems. Baş cites the lack of a framework climate policy and reduction target for the sector, the absence of an integrated environmental permitting and information system, inadequate public-private partnership mechanisms and financing tools, fossil fuel dependency, the lack of a definition of low-carbon steel, inadequate environmental investments, and weak social relations as priority issues that must be addressed.

According to the Decarbonization of the Turkish Steel Sector: Policy and Actor Analysis, 10 policy recommendations that will accelerate the transformation in the steel sector are as follows:

1. A national restructuring and modernization plan should be prepared for the steel sector: The resource-intensive and low value-added production structure of the more than 40 crude steel production facilities across Turkey and the magnitude of the environmental and social costs created by this structure should be taken into account, and a comprehensive and prioritized national restructuring and modernization plan should be implemented urgently.
2. A multi-actor, supply chain-focused accountability structure should be developed for the steel sector's transformation: concrete targets should be established for reducing greenhouse gas emissions from the inputs that enable sectoral production. The two main structural obstacles to the steel sector's transition to low-carbon production using existing technologies are the fossil fuel dependence of electricity generation and supply problems with high-quality steel scrap. To address these challenges, reduction-focused industrial, energy, environmental, and input policies should be developed.
3. The public sector's climate policy architecture and institutional mandates should be reviewed: A binding climate policy architecture, tailored to sectoral needs, should be established to support the decarbonization of the steel sector. A governance system should be established that coordinates environmental, industrial, and energy policies.
4. An Industrial Decarbonization Policy and Roadmap should be developed, and the industrial sector's carbon budget should be defined . The steel sector's annual carbon budget and 2030-2050 targets should be clearly defined, and development plans in the industrial and energy sectors should be aligned with these targets. The TÜBİTAK Green Growth Technology Roadmap - Iron and Steel Sector document should be revised to address the needs of the sector.
5. An integrated environmental permitting and information system should be established for the management of polluting industrial emissions; the urgent implementation of best available techniques should be legally guaranteed: Institutional structures and regulations should be established to implement eco-design practices for products with an integrated permitting process that takes into account EU Industrial Emissions Directive standards.
6. A multi-stakeholder platform should be established to drive decarbonization in the industry; public support should be linked to reduction commitments: A multi-actor Industrial Decarbonization Platform should be established to support high-cost technological transformation investments in the steel sector, strengthen intersectoral coordination, and drive decarbonization in the industry in a planned manner.
7. A national definition, criteria, and standardization system for low-carbon steel should be established: To promote low-carbon production in the steel sector and ensure market reliability for these products, the concept of low-carbon steel should be clearly defined from a legal and technical perspective. Within this framework, demand for low-carbon steel should be increased through demand-side tools such as green public procurement, sector-specific supply chain policies, and labeling practices.
8. A reduction target for the greenhouse gas emission factor (kgCO2e/kWh) for electricity generation should be defined, and the energy transition should be aligned with industrial sector climate targets. To reduce Scope 2 greenhouse gas emissions in the decarbonization of the steel sector, greenhouse gas emission factor targets should be defined to reduce the carbon intensity of electricity generation. These targets should be integrated into a holistic energy transition roadmap aligned with the coal phase-out, electrification program, and energy supply security.
9. A comprehensive transformation program should be developed to strengthen employee health, environmental management, quality, traceability, and supply security in scrap management. A modernization program should be developed to strengthen employee health and environmental management in the scrap market, while a national scrap inventory, quality classification standard, and traceability system should be established to enhance scrap supply security.
10. Crude steel producers should be required to set greenhouse gas emission reduction targets, define a common calculation methodology, and establish a publicly accessible greenhouse gas emission information system. To make the decarbonization process of the crude steel sector in Turkey transparent, measurable, and comparable, producers should set science-based greenhouse gas reduction targets in line with international standards. Reporting on these targets using a common methodology and publicly sharing greenhouse gas emission data should be mandatory.