Economic, Trade, and Industry Implications of the Circular Economy Transition in Türkiye

Industry Investment Rating - The report does not explicitly provide an investment rating for the industry, but it highlights the importance of transitioning to a circular economy (CE) in Türkiye, which presents both challenges and opportunities for industries [18][19][20] Core Report Insights - The transition to a circular economy in Türkiye is driven by both environmental sustainability goals and the need to align with the EU's tightening environmental policies, particularly under the EU-Türkiye Customs Union [19][20] - Türkiye's material demand is expected to increase despite improvements in material intensity, with non-metallic minerals dominating the material mix [35][36] - Circular economy policies can support Türkiye's climate mitigation objectives, potentially reducing CO2 emissions by over 7% in 2030 on top of the Nationally Determined Contribution (NDC) scenario [38][39] - A combination of demand-side and supply-side policies is necessary to achieve circular economy targets, with demand-side measures more effective in reducing non-metallic mineral use and supply-side measures better suited for increasing metal ore recycling [43][44] Macroeconomic Impacts of the CE Transition in Türkiye - Türkiye's economy is projected to see an absolute increase in the use of all material inputs, driven by GDP and population growth, with material intensity declining for all commodities except metal ores [36] - The economic dividend of supporting the CE transition can be reaped by addressing Türkiye's existing skills gap, particularly in high-skilled labor [49] - The costs of implementing CE policies are relatively moderate, with real GDP decreasing by about 1.6% in the combined scenario, but this does not account for co-benefits such as reduced air pollution and improved ecosystem services [47] Positioning Turkish Industry in Circular Global Value Chains - Nearly one-fifth of Turkish firms have adopted resource-efficient production technologies, with higher adoption rates in the garments and textiles sectors compared to fabricated metal products and machinery sectors [55] - Two possible CE futures for Türkiye are outlined: a 'light' transition focusing on material efficiency and recycling, and an 'ambitious' transition involving comprehensive product redesign and higher value-added goods [62] - Factors enabling CE readiness include effective traceability, digital monitoring systems, access to recycled inputs, and technological upgrades [66][67] Prioritizing Industries for Building a Competitive Circular Economy in Türkiye - Strong connections between industries are essential for a successful circular economy, with weak links currently observed between high-potential circular industries and their supporting sectors [80][82] - The analysis identifies six priority value chains for Türkiye's CE transition: iron and steel, aluminum, cement, plastics, fertilizers, and chemicals, with 80 core industries and 75 supporting industries identified [84] - Policies for a competitive CE transition include boosting competition in key industries, strengthening primary and manufacturing industries, and fostering collaboration within the tertiary sector [91][93] Next Steps for Türkiye's CE Transition - Türkiye should focus on enhancing the competitiveness of core industries, fostering the growth of upstream and downstream industries, and promoting investments in key industries that support circularity [96][99][100] - Pilot regulations within vital sectors with strong interrelations are recommended, along with broadening the use of network analysis to bolster monitoring, reporting, and verification (MRV) objectives [106]