Türkiye is not necessarily a new market for Norwegian suppliers and importers. Many Norwegian companies have established themselves in the country and some might consider that the Turkish maritime industry is indebted to Norway for how we have contributed to the sector’s development over the last 20 years!
However, the country’s economy is still growing and the green shift offers new market opportunities for Norwegian technology that can be significant and ensure a cost-effective springboard towards 3rd countries. Are our neighbouring countries Denmark and Sweden more “on the ball”? There are some indications of this, but we will start a process to strengthen Norwegian competitiveness!
1.0 Summary
To give our members an improved insight into and knowledge of new market opportunities in Türkiye as a result of the green shift, we can present a summary of the country’s green goals and some information about the strategic backdrop.
Türkiye takes the challenges related to climate change very seriously and has introduced a number of measures that are important to be up to date. After ratifying the Paris Agreement in October 2021, Türkiye published its National Targets (INDCs) that together should lead to a 41% reduction in greenhouse gas emissions measured against normal levels (BAU) until 2030 (up from 21% at the design of the plan). Türkiye has also set a goal of reaching net-zero emissions by 2053.
The targets are set out in a national climate change strategy (2010-2023) and a national action plan against climate change (2011-2023). The action plan contains 32 different short-, medium- and long-term goals and 81 specific actions to strengthen Türkiye’s transition to a more sustainable and greener economy in line with its goal of making Europe the first climate-neutral continent by 2050. Below you will find the list of the most important elements in the respective categories of Türkiye’s Green Deal Action Plan and where Norwegian technology can play a role (target/opportunities for Norwegian exports):
| Evaluate how a national carbon pricing mechanism should be implemented. | CCS technology can become profitable |
| Efforts to implement and develop green industrial zones. | Development and rehabilitation of commercial areas near the coast and harbours |
| Develop the green finance ecosystem, increase access to bilateral and international funds | It will be easier to finance investments through green bonds from parent companies. Taxonomy requirements will be easier to meet (aquaculture will be benefitted) |
| The “Türkiye Hydrogen Technologies Strategy and Roadmap” and a Green Tariff program aim to support clean and secure energy supplies. | Hydrogen and ammonia as fuels are made more profitable |
| It made a number of changes to Türkiye’s energy market law and current regulations to allow existing licensees of wind and solar power plants to establish batteries at their facilities. | The market for grid batteries will grow |
| Improved management of water resources and waste with the goal of reuse rate of treated wastewater consumption to reach 5% in 2023. | Efficient water purification technology will be required |
| Türkiye will focus on the development of organic agricultural production | Modern fertilisers, soil treatment, weed treatment, tunnels and new methods such as aquaponics may come to play a role |
| Strategy development and planning for the development of EV and charging infrastructure activities will be carried out. | A large number of car chargers will be in demand |
| National legislation on a certification programme for green ports, reducing harmful emissions from the maritime sector and supporting green shipping. | The market for ammonia and hydrogen handling equipment will grow |
What do we do next?
We are in the process of establishing a working group together with Sabanci University in Istanbul and the Turkish Shipbuilders’ Association to look at Norwegian technology to develop green corridors and value chains.
2.0 Background
Türkiye is a country strategically located between East and West both religiously, politically and geographically, and because of this, the country has always found itself in a position where one has had to find a balance between neighbours with different interests. Many countries would not have survived such a situation, but Türkiye has in recent times used the situation to build up its weight economically, politically and religiously in a remarkable way.
The result is that Türkiye is something as unique as a Muslim democratic NATO country that has sought EU membership. The country is considered too powerful to ignore and whatever the outcome of the war in Ukraine, its importance in the region will only increase. It is important to understand that the country is conscious of its particular geopolitical role and has a strategy and plan that has been developed consistently for over 20 years to this end.
The price of such a political balancing act is that important processes are sometimes delayed. The EU largely halted the process of a further approach to membership and the United States imposed sanctions on arms deliveries. Türkiye has not given up either EU membership or being able to buy strategically important weapons, but as an alternative it has focused more heavily on bilateral relations with key EU countries, developed its own weapons systems, above all in the category of drones and remotely operated vehicles in air and at sea, and is using momentum in case after case to strengthen its position. There are signs that could indicate that the pendulum is now swinging back to a more Western approach.
The green shift in Europe is precisely one such issue that is not coloured by religion or system, and where Türkiye can show decisiveness and leadership. Therefore, the opportunity presented by the Paris Agreement and the EU’s “Fit For ’55” plan has been taken to set ambitious targets in support of this process.
A big question, however, is how the country will develop economically. Türkiye relies on increased trade and foreign investment to continue its growth, but its economic policies have been difficult to understand and given rise to speculation in the Lira currency. Since the 2023 elections, steps have been taken that may indicate that the country’s leadership will create more confidence in its own currency and economic sustainability. Exporters report that foreign exchange revenues outweigh local inflation and statistics show that growth continues and unemployment falls.
Trade situation with Norway and the other Nordic countries
A free trade agreement with Türkiye was dated 25.6.2018 and replaced the existing free trade agreement between EFTA and Türkiye from 10 December 1991. The provisions of the free trade agreements are intended to ensure effective protection for Norwegian copyright holders of intellectual property, patents, trademarks, designs and the like. Türkiye has modern legislation in this area and is a party to the European Patent Convention (EPC).
Our neighbouring countries Sweden and Denmark naturally rely on the adopted trade agreements between the EU and Türkiye, namely “The EU-Türkiye Customs Union”, signed in 1995, which covers trade in industrial goods and thus the bulk of trade flows. In addition to the customs union, in 1998 the Council for Rapprochement between the EU and Türkiye adopted a free trade agreement for agricultural products. In 1996, Türkiye signed a separate free trade agreement on coal, iron and steel products with the European Coal and Steel Community (ECSC).
In addition, our Nordic neighbours Sweden and Denmark have signed bilateral JETCO agreements that are suitable for facilitating appraisals related to trade at ministerial level.
The main purpose of a possible JETCO agreement between Norway and Türkiye will be to strengthen trade and economic relations between the countries. A JETCO agreement often precedes a free trade agreement, but even after it is in place (as in the case of Norway and Türkiye) it can help facilitate discussions between ministerial authorities on issues of further market liberalisation and market access, and facilitate regular meetings. Typically, a council of key firms will play a key role in feeding the views of the business community into this process, with a view to improving the situation for the players and reducing trade barriers. This is something that has become much more important in today’s rapidly developing free market economies.
Norwegian/Turkish trade
Trade between Norway and Türkiye has developed sharply over the past 20 years, from a net export deficit of NOK 0.5 billion in the early 2000s to an export surplus of more than NOK 2 billion in both 2021 and 2022. However, this ranks far behind our neighbouring countries Sweden and Denmark. Traditionally, fruit and vegetables have been important import products from Türkiye, but cheap textiles today account for the largest share of imports to Norway – largely due to modern flexible production and proximity to the market.
On the export side, we find fish, paper, metals, defence equipment, machinery and plastic among the larger product groups. The fact that more than 170 Norwegian companies, according to Innovation Norway, are in the Turkish market also leads to a steadily increasing demand for logistics services. From the Turkish side, one cannot ignore that a large part of the maritime exports go to Norway through deliveries of fishing boats, Hurtigruten ships and ferries. This makes Norway one of the most important maritime trading partners and is interested in keeping it at current levels.
Some of our members such as: Jotun (production, sales and research) and Ekornes (private sales and projects) are already well established in Türkiye and have experience that is important to share and benefit rom. Statkraft is also well established with two hydropower plants in operation and market operations.
What do we do next?
We are in the process of planning a delegation trip to Samsun in Türkiye in September to strengthen Norwegian exports in the field of aquaculture. Additionally the Chamber plans visits to partners within energy and green transition to discuss development of green corridors and value chains.
