The “Greening” of the European Union and Turkiye: An Analysis of the European Green Deal and Turkish Green Action Plan

Introduction

The European Union adopted the Green Deal to overcome climate change and environmental degradation challenges and become the first climate-neutral continent by 2050. One of the highlights of this remarkable set of proposals is to lower net greenhouse gas emission by at least 55% by 2030 and eventually achieve zero net emissions by 2050. The European Union and the European Commission underline that the key steps and initiatives set out in the Green Deal “will transform the EU into a modern, resource-efficient and competitive economy.” Additionally, they envision that by implementing these initiatives, economic growth will not be repressed but contrarily be “decoupled from resource use.” Finally, thanks to its inclusive (and/or equitable) approach, this initiative will not lead to an increase in disruptive competition in the markets where it will be implemented. The legislation implementing the Green Deal is expanding its scope day by day with the introduction of secondary mechanisms and regulations.  Following this greening project in the European Union, Türkiye has also adopted an action plan meant to complement the EU initiative and support the transformation toward a greener future. It aims for full compliance with the regulations by limiting carbon emissions, constructing a green and circular economy, and implementing green financing and safe energy supply, ensuring sustainability in agriculture and transportation, and raising awareness of the European Green Deal.

This article is the first part of a series of articles that will provide a comprehensive overview of the European Green Deal and the Turkish Action Plan, outlining their projected roadmaps and end-goals. It also delves into the legal frameworks established in the European Union and Türkiye. In this series of articles, we will be analyzing the scope and impacts of these initiatives by shedding light on the future of relevant industries, hinting at the opportunities and potential challenges that a greener future may bring.

1. The European Green Deal: Objectives and Roadmap

As climate scientists have pointed out persistently and stated in the Paris Agreement in 2015, the only effective way to reduce the risks of devastating consequences of global warming is to achieve the 1.5°C climate threshold and contain global warming within 1.5°C above pre-industrial average temperatures. Although the European Union (“EU”) had ambitious goals prior to the European Green Deal (“EGD”), which was adopted in 2019 parallel to the international agenda on this topic, the roadmap and end goals were not as clearly defined. That said, with the introduction of the EGD, and the adoption of a secondary set of proposals and policies, such as the Fit for 55 package and Circular Economy Action Plan, the end goal is to become the first climate-neutral continent by 2050 with net zero or a balanced budget for emissions. In order to reach this ultimate goal, the EU aims to reduce emissions by 55%, compared to 1990 levels by 2030, as an intermediate goal.

In pursuit of these objectives, the EU prepared and endorsed a 30-year action plan centered on energy transition, boosting a circular economy, preserving biodiversity, and ending pollution. As of 2019, the EU and the European Commission provided macro-objectives and framework policies for subsequent actions. In order to meet the intermediate objectives, several action plans were made, notably regarding the financing of such a costly transition. As per the first analysis, it was estimated that €260 billion of new investment was required annually to reach the end goal. However, these estimations were severely impacted by the COVID-19 pandemic and the war in Ukraine. Consequently, the EU developed additional strategies and action plans in order to support the funding of a slowing down European economy and generate affordable, secure, and sustainable energy for Europe in response to energy crises, primarily stemming from the supply shock caused by the war in Ukraine. These initiatives also contain references to the EGD and targets to comply with the EGD’s end-goal and framework. Aside from ensuring the funding of the EGD, the EU has also introduced an action plan for the Circular Economy and Zero Pollution Action Plan, adopted the Farm to Fork Strategy and 2030 Biodiversity Strategy, proposed a new regulation to curb EU-driven deforestation and forest degradation, and revised EU legislation on Packaging and Packaging Wates and the Regulation on Ecodesign for Sustainable Products.

One of the most notable commitments of the EU is the Fit for 55 package of legislation, pursuant to the European Climate Law. The Fit for 55 package, designed and introduced as a growth and financing strategy in 2021, mainly includes items that will revitalize the green economy by developing innovative low-emission technologies, providing new employment suitable for green industries, targets to reduce emissions by 55% by 2030, and meet the intermediate goal. Fit for 55 contains three tools to achieve the green-goals of combating the irreversible devastating effects of climate change. These tools are: (i) the EU Emissions Trading System (which will be discussed in detail in the next issue of the ESG Quarterly), (ii) Carbon Border Adjustment Mechanism, and (iii) ReFuel EU, which proposes to increase the production and usage of sustainable aviation fuels. The package also includes a set of proposals for agriculture, forestry, renewable energy, transportation, maritime, and retail industries.

All these initiatives considered, the road to 2050 is still a long one and likely requires in-depth plans and binding requirements to grant implementation of the initiatives to reach the end-goal. Moreover, the studies demonstrate that the effects are worse on low-income households and countries, and thus the EGD and its supplementary legislation and policies are expected to include preventive measures and regulations in response to these concerns.

2. The Turkish Green Action Plan: Objectives and Initiatives

The Turkish Ministry of Trade has also engaged in monitoring and implementing policy instruments introduced by the EGD, as it is inevitable that the objectives set by the EU will have a direct economic impact on Türkiye due to its integration into the value chain of the EU through the customs union. Türkiye has also pledged to become net-zero in 2053 after signing the Paris Agreement. Following these developments, Türkiye established a study group to conduct research to ensure adaptation to the EGD, created an action plan by receiving contributions from many domestic institutions, and published the Turkish Green Action Plan (“Turkish Action Plan”) in the Official Gazette in 2021.

In line with the EU’s priorities and initiatives, the Turkish Action Plan includes 81 actions required to be implemented to achieve the EGD’s requirements under the following headings: (i) Carbon Border Adjustment Mechanism, (ii) Green Circular Economy, (iii) Green Financing, (iv) Clean, Economic and Safe Energy Supply, (v) Sustainable Agriculture, (vi) Sustainable and Smart Transportation, (vii) Combating Climate Change, (viii) Diplomacy, and (ix) Education and Awareness. The study group continues to work on their agenda under the Ministry of Trade to achieve the goals and actions enumerated under the Turkish Action Plan and is in close pursuit to comply with any developments in the EU. The study group also formed sub-study groups specialized in specific EGD requirements within certain industries, including steel, aluminum, cement, textile, retail, and construction. Moreover, although it is not directly included in the Turkish Action Plan, the establishment of new sub-study groups targeted to the training needs and social impacts of the green transition is in the study group’s agenda. With the draft law and regulations it has recently published, Türkiye has also signaled that an emissions trading system will be introduced to shield Turkish industry against the carbon pricing of Turkish exports through the carbon border adjustment mechanism. Moreover, with the Communiqué on Green Transformation Support Program Application Procedure and Principles, which was just published in the Official Gazette on July 26, 2024, Türkiye has revealed its intention for a greener future and determined the implementation procedures and principles of the program which will be carried out to attract investments that are compatible with a circular economy, protect natural resources, contribute to climate and sustainability goals, and aim for resource-efficient and low emission production. Türkiye is expected to implement additional legislation to meet this objective.