The European Green Deal Will Have Deep Influence On Trade

Turkish industry must follow the updates regarding the European Green Deal closely

The European Green Deal (EGD), the new sustainable growth strategy of the EU, is followed with great interest not only by the Member States but also by all third-party countries that have close trade and political relations with the EU. This is because the climate and environmental changes involve both risks and opportunities for many countries, including Turkey.

As DEİK, we are about to complete the works that will guide the industrialists through the project we carry out within the scope of the EGD that we follow closely. We aim to respond to the information needs of our industrialists by means of a Corpus composed of texts published by the Commission, a report that examines the EGD in detail, and a Checklist prepared for our industrialists.

One of the most remarkable developments in the recent period, the European Climate Law, agreed on by the European Commission and Council recently, will closely affect institutions operating through emission-intensive processes in Turkey, with a target of 55% reduction in net emissions by 2030 compared to levels of 1990 and a commitment to reach negative emissions after 2050, leading us to take steps to preserve our relations with the EU.

Within the scope of the EGD that has been on our agenda for about 1.5 years, there are different topics that are remarkable for the Turkish industry and need to be examined closely. One of these topics is the Circular Economy Action Plan. Within the scope of the Plan that focuses on sustainable resource use, determination of the problems experienced in the fight against climate change, solution proposals, duties, responsibilities, and sector-specific steps are defined. The sectors prioritized in the Action Plan are electronics, information and communication technologies, batteries and accumulators, packaging, plastics, textiles, building and construction, food, water, and other nutrients. Within the scope of the Action Plan, it is expected that the “Draft Legislation on Sustainable Product Policy” will be proposed, and the eco-design framework will be drawn in the future.

Drawing attention to the responsibility of manufacturers throughout the life cycle of products, the Plan will also bring solutions such as digital passports, labelling, and watermarks. It is important for the Turkish industry to take a proactive position by closely following the steps to be taken within the scope of the Circular Economy Action Plan, especially in the priority sectors in question.

Another important topic for the Turkish industry within the scope of the Green Deal is the Carbon Border Adjustment Mechanism (CBAM). Discussions still continue on the CBAM, expected to be shaped over the existing Emissions Trading System (ETS) in line with the WTO. Through this Mechanism, it is clear that manufacturers in countries performing production in EU standards can be exempted from this adjustment and companies that emit high greenhouse gas emissions in countries that do not have a similar system may be adversely affected by this adjustment. It is very important for the Turkish industry to follow the developments closely and take the necessary steps without delay in order to prevent potential external costs in trade with the EU.

Another topic that would be beneficial for the Turkish industry to follow closely within the scope of the Deal is the New Industrial Strategy. Mainly aimed at increasing Europe’s competitiveness and strategic autonomy, the main objectives of the strategy are to increase the global competitiveness of European industry, make Europe climate-neutral by 2050, and shape Europe’s digital future.

Each player in the industrial ecosystem is very important for this intended transformation. From a sectoral perspective, in addition to the information sector, the steel, chemical, and cement industries stand out within the scope of energy efficiency, and carbon-free economy. Among the items of the strategy that may be of particular importance for the Turkish industrialists are the need for clean energy and raw material supply, the establishment of the Single Market Enforcement Task Force consisting of member states and the European Commission, revision and, if necessary, regulation of EU competition rules, making the digital customs system at the border applicable, the establishment of a New Head Commercial Office, where compliance with the Paris Agreement is checked as a key element, and the expansion of international partnerships for access to raw materials.

Consequently, the European Green Deal, a comprehensive strategy that determines Europe’s new growth direction and touches all areas of production and trade, will have a great impact on trade as well as the updates it will bring to the EU’s ways of doing business. It is of great importance for the Turkish industry to follow these updates closely and to position itself in a timely manner so that it will not encounter difficulties in trade with the EU.

President of DEİK Nail Olpak