🏗 Decarbonization in the Turkish Steel Sector: Policy and Actor Analysis

In line with the 2053 Net Zero target, the transformation of emission-intensive sectors holds a significant place on Türkiye’s climate policy agenda. At the forefront of these sectors stands the steel industry.

In this context, the “Decarbonization of the Turkish Steel Sector Project” conducted by Istanbul Politikalar Merkezi (IPM) provides a comprehensive analysis that examines the current state of the sector, policy gaps, and potential areas of intervention to accelerate the transition.

Project Objective

Launched in mid-2022, the project was built on a four-stage research and consultation process that brought together representatives from industry, government, academia, and civil society.

The goal was to identify the structural barriers to the sector’s transition to low-carbon production and to define the policy and institutional tools needed to accelerate this process.

Key Policy Findings

The report clearly outlines the structural shortcomings that limit decarbonization in the Turkish steel sector:

• Lack of a national policy architecture: Binding mechanisms to guide greenhouse gas reductions in the industry and energy sectors have not yet been established.

• Absence of binding targets: The lack of defined sectoral emission reduction targets for 2030 creates uncertainty in long-term investment decisions.

• Lack of demand-side instruments: The absence of tools such as green public procurement, low-carbon steel definitions, and technical standards keeps the transition at the producer level only.

• Misalignment with energy policies: High emission intensity in electricity generation makes it more difficult to achieve decarbonization goals in the sector.

• Structural problems in the scrap market: Dependence on imports, lack of traceability, and informality limit the potential of low-emission scrap-based steel production.

Policy Recommendations

The study proposes 10 key policy measures to accelerate the transformation. These go beyond technological change and also address governance, institutional structure, demand-side measures, and data transparency:

1. A national transformation plan should be developed: A national restructuring plan is needed to modernize production structures and reduce environmental costs in the steel industry.

2. A multi-actor responsibility framework should be established: Decarbonization should be defined as a shared responsibility of not only producers but also energy, raw material, logistics, and downstream sectors.

3. The climate policy architecture should be strengthened: Institutional roles must be clarified, and an emissions trading system and monitoring mechanisms should be established.

4. A decarbonization roadmap for industry should be developed: A carbon budget, target years, and emission peak points should be defined to guide the sector’s transition.

5. An integrated environmental permitting and information system should be established: An EU-aligned permitting and information infrastructure should be created to manage pollutant emissions.

6. An Industrial Decarbonization Platform should be established: A multi-stakeholder structure ensuring coordination between public, private, and civil society actors should be launched.

7. Low-carbon steel definition and standards should be introduced: Demand for low-carbon products should be stimulated through green public procurement and technical standards.

8. Emission intensity in electricity generation should be reduced: Energy transformation targets should be aligned with industrial decarbonization goals, and the share of renewable energy should be increased.

9. Scrap management should be strengthened: A comprehensive scrap policy should reduce informality, improve quality standards, and ensure supply security.

10. Emission targets should be made mandatory: Emission reduction targets should be defined for producers, and a common reporting infrastructure should be established.

Transition Is Not Possible Alone

One of the report’s key findings is that decarbonization in the steel sector cannot be achieved by primary steel producers alone. The process requires the simultaneous contribution of:

⚡ Energy and raw material suppliers

🏭 Downstream industries (e.g., construction, automotive, white goods)

🏛 Public institutions (climate, environment, industry, energy)

👷 Local communities and workers

The report also highlights the strong motivation of sector employees toward transformation. Supporting this internal motivation is seen as a critical lever to accelerate the transition.

Conclusion

The Decarbonization of the Turkish Steel Sector Project clearly shows how decisive policies and coordination among actors will be in enabling the steel industry’s shift to low-carbon production.

Without an inclusive policy framework, demand-side instruments, and a multi-actor governance model, this transformation cannot progress rapidly. However, if these steps are taken, the sector can secure a strong position both in the domestic market and in international competition.

From Policy Goals to Action: Aligning with Digital Transformation

A significant part of the 10 policy recommendations focuses on areas that require digital infrastructure, such as data management, emission reporting, supply chain transparency, and energy transition.These areas represent not only a compliance requirement but also an opportunity for competitive advantage for steel producers.

At this point, integrated sustainability platforms such as Optimimax enable companies to:

📊 Calculate product-level carbon footprints (PCF),

🌐 Meet Digital Product Passport (DPP) requirements,

⚡ Optimize energy use and production processes,

🧾 Manage reporting for policy compliance — all in one place.

This allows companies to comply with the Carbon Border Adjustment Mechanism (CBAM) and other regulations, while strengthening their market access through sustainable production.

Accelerate the Transition with Optimimax

In the transformation journey of the Turkish steel sector, digital solutions are not just reporting tools — they are strategic competitive assets.

Optimimax monitors production data at the process level and ensures alignment with policy requirements, integrating emission management, DPP, and energy optimization into a single solution.

This enables companies not only to meet regulatory obligations but also to gain cost advantages and export competitiveness.

👉 Request a demo tailored to sectoral requirements: www.optimimax.com

📝 Source: Istanbul Politikalar Merkezi – “Türkiye Çelik Sektörünün Karbonsuzlaşması: Politika ve Aktör Analizi” (August 2025)

🔗 For more information and to access all project publications: https://ipc.sabanciuniv.edu/tr/turkiye-celik-sektorunun-karbonsuzlasmasi-projesi

📩 For further details, contact: Dursun Baş (dursun.bas@sabanciuniv.edu)