Decarbonization in Turkey Trends and Forecast
The future of the decarbonization market in Turkey looks promising with opportunities in the oil & gas, energy & utility, agriculture, government, automotive & transportation, aerospace & defense, and manufacturing markets. The global decarbonization market is expected to grow with a CAGR of 11.8% from 2025 to 2031. The decarbonization market in Turkey is also forecasted to witness strong growth over the forecast period. The major drivers for this market are the increasing investment in decarbonization technologies to reduce costs associated with carbon emissions, the growing awareness of the effects of climate change, and the stricter emissions standards across the world.
• Lucintel forecasts that, within the services category, the sustainable transportation service segment will remain the largest segment over the forecast period.
• Within the end use category, oil & gas will remain the largest segment.
Emerging Trends in the Decarbonization Market in Turkey
Turkey is undergoing a significant transformation in its energy landscape, driven by the imperative to decarbonize and transition to sustainable energy sources. This shift is influenced by technological advancements, economic considerations, and regulatory frameworks. The country commitment to reducing greenhouse gas emissions has led to the emergence of several key trends that are reshaping its decarbonization market. These trends encompass developments in renewable energy expansion, green hydrogen initiatives, electric vehicle adoption, carbon pricing mechanisms, and carbon capture technologies. Understanding these trends is crucial for stakeholders aiming to navigate and contribute to Turkey evolving energy sector.
• Expansion of Renewable Energy Capacity: Turkey has made significant strides in expanding its renewable energy capacity, particularly in solar and wind power. As of 2024, renewables represent 54% of Turkey total installed capacity, with initiatives like the Karapınar Solar Power Plant and offshore wind farms highlighting the country determination to be a global clean-energy leader. This expansion not only reduces reliance on fossil fuels but also attracts domestic and foreign investments, fostering a competitive and sustainable energy market.
• Advancement of Green Hydrogen Projects: Turkey is actively developing green hydrogen projects to diversify its energy portfolio and reduce carbon emissions. Notable initiatives include the Integrated Solar Hydrogen Production Project in Konya and the Wind Hydrogen Production Project in Aydın. These projects aim to leverage renewable energy sources for hydrogen production, positioning Turkey as a potential exporter of green hydrogen and contributing to its decarbonization goals.
• Growth in Electric Vehicle (EV) Adoption: The electric vehicle market in Turkey has experienced substantial growth, with over 105,000 EVs sold in 2024, marking a 45.9% increase from the previous year. Domestic manufacturers like TOGG and international players such as Tesla are leading this surge. The government support through incentives and infrastructure development is expected to further accelerate EV adoption, reducing transportation-related emissions and aligning with the country decarbonization efforts.
• Implementation of Carbon Pricing Mechanisms: Turkey is preparing to implement carbon pricing instruments, including the establishment of an Emissions Trading System (ETS). The Climate Change Mitigation Strategy and Action Plan (2024-2030) outlines the country roadmap for reducing greenhouse gas emissions, with the ETS playing a central role. Aligning with the European Union ETS and the Carbon Border Adjustment Mechanism, this initiative aims to incentivize emission reductions across various sectors.
• Development of Carbon Capture, Utilization, and Storage (CCUS) Technologies: Turkey is exploring the potential of carbon capture, utilization, and storage (CCUS) technologies to mitigate emissions from industrial processes. A report by the Resource, Environment and Climate Association highlights the country potential for CCUS and provides recommendations for its implementation. Adopting CCUS technologies can play a vital role in Turkey decarbonization strategy, particularly in hard-to-abate sectors.
The decarbonization market in Turkey is being reshaped by a combination of domestic initiatives and international collaborations. Emerging trends in renewable energy expansion, green hydrogen development, electric vehicle adoption, carbon pricing mechanisms, and carbon capture technologies are collectively driving the country towards a more sustainable energy future. These developments not only contribute to emission reductions but also present opportunities for economic growth, job creation, and enhanced energy security. Continued commitment and strategic planning are essential to sustain this momentum and achieve long-term decarbonization objectives.
Recent Developments in the Decarbonization Market in Turkey
Turkey is intensifying its efforts to decarbonize its economy, aligning with its target of achieving net-zero emissions by 2053. The government is implementing a series of policies and investments aimed at reducing greenhouse gas emissions across various sectors. These initiatives encompass advancements in renewable energy, energy efficiency, and infrastructure development. The following are five key developments that highlight Turkey commitment to a sustainable and low-carbon future.
• $1 Billion World Bank Partnership for Distributed Solar and Storage: In May 2024, Turkey signed a $1 billion agreement with the World Bank to accelerate the development of distributed solar energy and pilot battery storage systems. The program aims to increase solar capacity to 52.9 GW and battery storage to 7.5 GW by 2035. Implemented by Turkey Development and Investment Bank (TKYB) and Industrial Development Bank (TSKB), the initiative uses a results-based financing model to encourage private sector participation. This partnership is a significant step towards diversifying Turkey energy mix and reducing reliance on fossil fuels.
• Ambitious Renewable Energy Expansion Plan: Turkey has announced plans to quadruple its renewable energy capacity to 120 GW by 2035, requiring an investment of approximately $108 billion. The strategy includes streamlining permitting processes, reducing approval times from four years to two, and launching annual tenders for at least 2,000 MW of renewable energy projects. This expansion is aimed at enhancing energy security, reducing foreign energy dependence, and achieving net-zero emissions by 2053.
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• Significant Investment in Energy Efficiency: Turkey plans to invest over $20 billion in energy efficiency projects by 2030, targeting substantial savings across key sectors such as industry, buildings, and public lighting. The Second National Energy Efficiency Action Plan includes initiatives like retrofitting public buildings, promoting LED lighting, and developing a geographic information system-based map to guide heat pump investments. These measures are expected to reduce energy intensity and contribute to the country decarbonization goals.
• Largest Energy Storage Deal with Rolls-Royce: In January 2025, Polat Energy signed Turkey largest battery energy storage system supply agreement with Rolls-Royce. The 132 MWh capacity system will enhance storage capabilities at the Goktepe wind power plant in Yalova. This development is crucial for integrating renewable energy into the grid and ensuring stability and reliability in power supply.
• $30 Billion Incentive Package for High-Tech Energy Projects: In July 2024, President Tayyip Erdogan announced a $30 billion incentive package aimed at boosting high-tech areas, including $5 billion to enhance electric vehicle production and $4.5 billion to develop battery production capacity. The package also includes grants for solar cell facilities and investments in wind energy components. These incentives are designed to attract private sector investments and position Turkey as a regional hub for clean energy technologies.
These developments underscore Turkey commitment to decarbonization and transitioning to a sustainable energy future. Through strategic investments, policy reforms, and international partnerships, Turkey is enhancing its renewable energy capacity, improving energy efficiency, and fostering innovation in clean energy technologies. These efforts are pivotal in reducing greenhouse gas emissions, strengthening energy security, and achieving the country net-zero emissions target by 2053.
Strategic Growth Opportunities for Decarbonization Market in Turkey
Turkey is positioning itself as an emerging leader in decarbonization efforts in the Middle East, leveraging its growing renewable energy potential, strategic geographic location, and policy support. With the need to reduce its carbon footprint, the country is investing in clean energy technologies and sustainable practices across multiple sectors. This transition presents key growth opportunities in decarbonization, offering pathways to meet national and international climate commitments. Below are five key growth opportunities within Turkey’s decarbonization market.
• Expansion of Renewable Energy Generation: Turkey’s renewable energy sector, particularly wind and solar, is one of the fastest-growing in the region. The country has immense potential for both wind and solar energy, given its geographic position. The government has provided strong support through incentives, regulations, and energy auctions aimed at expanding capacity. By increasing renewable energy generation, Turkey can reduce its dependence on fossil fuels and move toward achieving its climate goals. Investment in renewable energy infrastructure offers long-term economic benefits, including job creation, energy security, and a reduction in emissions from the power sector.
• Energy Efficiency Improvements in Industry: The industrial sector in Turkey, which accounts for a significant portion of the country’s emissions, offers substantial opportunities for decarbonization. Energy efficiency improvements, such as upgrading machinery, optimizing production processes, and introducing cleaner technologies, can significantly reduce emissions in this sector. Turkey’s industrial modernization plan encourages the adoption of energy-efficient practices, offering financial incentives for businesses to invest in energy-saving technologies. These efforts can lead to reduced energy consumption, lower operational costs, and a cleaner industrial base, contributing to the country’s decarbonization goals.
• Electric Vehicle (EV) Adoption and Charging Infrastructure Development: The shift to electric vehicles (EVs) is a promising opportunity for decarbonizing Turkey’s transportation sector, which is one of the largest contributors to carbon emissions. The government is introducing policies to incentivize EV purchases, such as tax reductions and rebates. Additionally, the development of EV charging infrastructure is crucial to support widespread adoption. This sector presents growth potential for manufacturers, energy providers, and tech companies to expand their presence in the Turkish market. As EVs become more mainstream, Turkey will reduce emissions from its transportation sector and move towards a sustainable, electrified transport system.
• Green Hydrogen Production and Export: Turkey is well-positioned to take advantage of the global shift towards green hydrogen as a clean fuel alternative. The country has significant renewable energy resources that can be harnessed for the production of green hydrogen. With global demand for hydrogen increasing, Turkey could become a key player in the green hydrogen market, exporting this clean fuel to European and other international markets. Domestic usage of green hydrogen can decarbonize heavy industries, transportation, and power generation, while international exports can generate new economic opportunities for the country.
• Carbon Capture, Utilization, and Storage (CCUS) in Heavy Industry: Carbon capture, utilization, and storage (CCUS) technologies represent a key opportunity for decarbonizing Turkey’s heavy industries, such as cement, steel, and chemicals, which are hard to decarbonize through conventional means. Turkey is investing in CCUS projects to capture carbon dioxide emissions from industrial processes and either store them underground or convert them into usable products. This will significantly reduce emissions from some of the country’s largest industrial sectors, enabling Turkey to meet its climate goals while maintaining the growth and competitiveness of its industrial base.
The decarbonization market in Turkey is rapidly evolving, driven by key growth opportunities in renewable energy, energy efficiency, electric vehicles, green hydrogen, and carbon capture technologies. These opportunities offer significant potential to reduce emissions, diversify the energy mix, and contribute to sustainable economic growth. As Turkey embraces these decarbonization strategies, the country is positioning itself to become a leader in green energy and sustainability in the region. The impact of these opportunities will be felt across industries, contributing to long-term environmental and economic benefits for Turkey.
Decarbonization Market in Turkey Driver and Challenges
A combination of technological, economic, and regulatory factors shapes the decarbonization market in Turkey. As a country with a growing population and industrial base, Turkey faces increasing energy demands while striving to meet its climate goals. The government’s commitment to reducing carbon emissions, coupled with the adoption of renewable energy sources, presents a range of opportunities for decarbonization. However, the market faces challenges such as financial constraints, reliance on fossil fuels, and an underdeveloped infrastructure for clean energy. Overcoming these barriers is crucial for Turkey to transition to a more sustainable, low-carbon economy.
The factors responsible for driving the decarbonization market in Turkey include:
• Government Commitment to Climate Goals: Turkey has committed to reducing its greenhouse gas emissions and increasing the share of renewable energy in its electricity mix. The government’s ambitious plans include reaching net-zero emissions by 2053 and promoting the use of renewable energy sources such as wind, solar, and hydroelectric power. Policies like the Renewable Energy Resource Areas (YEKA) and incentives for clean energy technologies are driving the growth of the decarbonization market. These efforts aim to attract investment in green technologies and accelerate the transition to a low-carbon economy.
• Growth of Renewable Energy Sources: Turkey is rapidly expanding its renewable energy capacity, particularly in wind and solar power. The country has a favorable geographic location with abundant solar and wind resources, which provide significant potential for clean energy generation. The government’s focus on wind and solar power has led to increased investment in these sectors. As renewable energy prices continue to fall and technological advancements improve efficiency, Turkey is positioned to further reduce its reliance on fossil fuels and decarbonize its energy sector.
• Energy Efficiency Programs: Improving energy efficiency is a key aspect of Turkey’s decarbonization strategy. Government-led initiatives, such as energy efficiency audits and incentives for green building certifications, encourage businesses and individuals to adopt more efficient energy solutions. The country is also promoting the use of energy-efficient technologies in industries like manufacturing and transportation. These programs help reduce energy consumption, lower emissions, and provide economic benefits by reducing operational costs. Energy efficiency is a cost-effective means to accelerate decarbonization and enhance Turkey’s competitiveness in the global market.
• Private Sector Investment and Innovation: The private sector in Turkey is increasingly investing in green technologies, including renewable energy projects, electric mobility solutions, and sustainable agriculture practices. Turkish companies are also adopting circular economy models and incorporating environmental, social, and governance (ESG) factors into their operations. The growing demand for green bonds and sustainable investments is driving innovation and accelerating the development of low-carbon solutions. Private sector engagement is crucial for scaling up decarbonization technologies and achieving Turkey’s climate objectives.
• International Climate Commitments and Partnerships: Turkey is participating in international climate agreements, including the Paris Agreement, and is increasing its engagement in global climate initiatives. By aligning its policies with international climate targets, Turkey is attracting foreign investments and fostering partnerships with countries and organizations committed to reducing emissions. Collaborations in research, technology transfer, and joint projects provide Turkey with access to advanced decarbonization technologies and expertise, facilitating a faster transition to a green economy.
Challenges in the decarbonization market in Turkey are:
• Dependence on Fossil Fuels: Despite the growth in renewable energy, Turkey remains heavily reliant on fossil fuels, particularly natural gas and coal, for power generation. This dependence on coal-fired power plants and the associated carbon emissions presents a significant barrier to decarbonization. The country’s energy security concerns, coupled with the reliance on imported energy sources, further complicate efforts to reduce fossil fuel consumption. Transitioning away from fossil fuels will require substantial investments in clean energy infrastructure and the development of storage technologies to manage intermittent renewable sources.
• Financial Constraints and Investment Gaps: Financing decarbonization projects remains a significant challenge in Turkey. The country faces economic difficulties, including inflation, currency volatility, and a high level of public debt, which restrict the availability of funds for large-scale green infrastructure projects. Although there is growing interest from foreign investors, the lack of sufficient domestic financial resources and the perceived risks associated with renewable energy investments hinder the speed of the transition. Attracting sufficient private and public investment is essential to meet Turkey’s decarbonization goals.
• Underdeveloped Green Infrastructure: Turkey’s green infrastructure, including smart grids, energy storage systems, and electric vehicle charging networks, remains underdeveloped. These infrastructure gaps impede the effective integration of renewable energy sources into the national grid and limit the adoption of clean technologies across sectors. The country needs to invest in modernizing its energy infrastructure to accommodate the growth of renewable energy and enhance the overall efficiency of the energy system. Addressing these infrastructure challenges will be crucial for facilitating the transition to a low-carbon economy.
The decarbonization market in Turkey is driven by government policies, renewable energy growth, energy efficiency programs, private sector investment, and international climate commitments. However, challenges such as dependence on fossil fuels, financial constraints, and underdeveloped infrastructure present significant obstacles. Addressing these issues is essential for Turkey to accelerate its transition to a low-carbon economy and achieve its climate goals. By overcoming these barriers, Turkey can unlock new growth opportunities, attract investments, and position itself as a leader in the global green economy.
List of Decarbonization Market in Turkey Companies
Companies in the market compete on the basis of product quality offered. Major players in this market focus on expanding their manufacturing facilities, R&D investments, infrastructural development, and leverage integration opportunities across the value chain. Through these strategies, decarbonization companies cater to increasing demand, ensure competitive effectiveness, develop innovative products & technologies, reduce production costs, and expand their customer base. Some of the decarbonization companies profiled in this report include:
• Company 1
• Company 2
• Company 3
• Company 4
• Company 5
• Company 6
• Company 7
• Company 8
• Company 9
• Company 10
Decarbonization Market in Turkey by Segment
The study includes a forecast for the decarbonization market in Turkey by services, technology, deployment, and end use.
Decarbonization Market in Turkey by Services [Analysis by Value from 2019 to 2031]:
• Carbon Accounting & Reporting Services
• Sustainable Transportation Services
• Waste Reduction & Circular Economy Services
Decarbonization Market in Turkey by Technology [Analysis by Value from 2019 to 2031]:
• Renewable Energy Technologies
• Energy Efficiency Solutions
• Electric Vehicles
• Carbon Removal Technologies
• Carbon Capture and Storage
Decarbonization Market in Turkey by Deployment [Analysis by Value from 2019 to 2031]:
• On-premises
• Cloud
Decarbonization Market in Turkey by End Use [Analysis by Value from 2019 to 2031]:
• Oil & Gas
• Energy & Utility
• Agriculture
• Government
• Automotive & Transportation
• Aerospace & Defense
• Manufacturing
• Others
Features of the Decarbonization Market in Turkey
Market Size Estimates: Decarbonization in Turkey market size estimation in terms of value ($B).
Trend and Forecast Analysis: Market trends and forecasts by various segments.
Segmentation Analysis: Decarbonization in Turkey market size by services, technology, deployment, and end use in terms of value ($B).
Growth Opportunities: Analysis of growth opportunities in different services, technology, deployment, and end use for the decarbonization in Turkey.
Strategic Analysis: This includes M&A, new product development, and competitive landscape of the decarbonization in Turkey.
Analysis of competitive intensity of the industry based on Porter’s Five Forces model.
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FAQ
Q1. What are the major drivers influencing the growth of the decarbonization marketin Turkey?
Answer: The major drivers for this market are increasing investment in decarbonization technologies to reduce costs associated with carbon emissions, growing awareness of the effects of climate change, and stricter emissions standards across the world.
Q2. What are the major segments for decarbonization market in Turkey?
Answer: The future of the decarbonization market in Turkey looks promising with opportunities in the oil & gas, energy & utility, agriculture, government, automotive & transportation, aerospace & defense, and manufacturing markets.
Q3. Which decarbonization market segment in Turkey will be the largest in future?
Answer: Lucintel forecasts that sustainable transportation service segment will remain the largest segment over the forecast period.
Q4. Do we receive customization in this report?
Answer: Yes, Lucintel provides 10% customization without any additional cost.
This report answers following 10 key questions:
Q.1. What are some of the most promising, high-growth opportunities for the decarbonization market in Turkey by services (carbon accounting & reporting services, sustainable transportation services, and waste reduction & circular economy services), technology (renewable energy technologies, energy efficiency solutions, electric vehicles, carbon removal technologies, and carbon capture and storage), deployment (on-premises and cloud), and end use (oil & gas, energy & utility, agriculture, government, automotive & transportation, aerospace & defense, manufacturing, and others)?
Q.2. Which segments will grow at a faster pace and why?
Q.3. What are the key factors affecting market dynamics? What are the key challenges and business risks in this market?
Q.4. What are the business risks and competitive threats in this market?
Q.5. What are the emerging trends in this market and the reasons behind them?
Q.6. What are some of the changing demands of customers in the market?
Q.7. What are the new developments in the market? Which companies are leading these developments?
Q.8. Who are the major players in this market? What strategic initiatives are key players pursuing for business growth?
Q.9. What are some of the competing products in this market and how big of a threat do they pose for loss of market share by material or product substitution?
Q.10. What M&A activity has occurred in the last 5 years and what has its impact been on the industry?