New Roadmap Proposal: Annual Revenues of Up to €1.5 Billion to Decarbonize Turkey’s Steel Industry
Turkey could generate between €500 million and €1.5 billion annually to finance the transformation of its steel industry through the implementation of a national Emissions Trading System (ETS) and a Carbon Border Adjustment Mechanism (CBAM). If directed toward industrial investments, these funds could cover a significant share of the costs associated with the transition to low-carbon production.
According to Steel World Review, the research institute Agora Industry, in collaboration with the Istanbul Policy Center (IPC) and the Sustainable Economics and Finance Association (SEFiA), has examined financing solutions and the technical requirements for the steel industry’s transition to low-carbon production in a report entitled “Turkey’s Steel Industry Roadmap to Net Zero by 2053.” The report was presented in Istanbul on November 3, 2026.
According to the study’s estimates, implementing the accelerated decarbonization scenario would require annual investments of approximately €1.5 billion over the next 20 years. In contrast, the introduction of a national Emissions Trading System (ETS) and a Carbon Border Adjustment Mechanism (CBAM) could generate annual revenues ranging from €500 million to €1.5 billion, depending on the level of carbon prices. This estimate is for 2030 and assumes that 60% of emission allowances are allocated free of charge.
One of the main pillars of this proposal is to direct revenues generated from carbon pricing into a dedicated fund for green steel development. Accordingly, instead of having the carbon costs associated with Turkish steel exports transferred predominantly abroad through payments related to the European Union’s border mechanism, Turkey could collect these revenues domestically and use them to modernize its industry. Achieving this objective depends on the design of a national carbon pricing system and aligning its carbon price with that of the European Union’s system.
The report also outlines three different pathways for the future of Turkey’s steel industry: continuation of current production trends, a gradual transition, and accelerated decarbonization. According to the study’s findings, under the accelerated scenario, greenhouse gas emissions from the steel industry would decrease by 92% by 2050 compared with 2025 levels. This pathway could also create up to 29,000 new jobs.
In terms of technology and raw materials, the development of hydrogen-based direct reduced iron (DRI) production, the use of low-emission hot-briquetted iron (HBI), increased collection and recycling of domestic scrap, and the expansion of renewable energy capacity have been identified as key pillars of this transformation. The study also emphasizes the need to maintain primary iron production capacity within Turkey and reduce dependence on foreign sources.
The significance of this plan for Turkey stems from the position of the steel industry in the country’s economy and foreign trade. The steel industry accounts for approximately 40% of Turkey’s industrial emissions, and reducing its emissions is essential for the country to achieve its net-zero emissions target by 2053.
Overall, this roadmap demonstrates that carbon pricing, in addition to its role in discouraging pollutant emissions, can become a financing instrument for modernizing the steel industry, particularly for a country like Turkey, whose steel exports are heavily dependent on the European Union market.
