April | Sustainability Bulletin
1. Applications for the Efficiency Enhancement Project (EEP) Support Program will commence on April 15th.
The Ministry of Energy and Natural Resources (“the Ministry”) announced that under the 2024 Investment and Support Program, applications for projects with an estimated investment cost of 3 million Turkish Lira or more and a maximum payback period of five years will be accepted. The maximum budget allocated by the Ministry for these projects is 1.5 million Turkish Lira per project, and the Ministry requires that businesses interested in benefiting from the program meet specific conditions.
The program consists of projects related to two main themes: Industry and Building/Service Sectors.
In the industrial sector, supported projects include those achieving a minimum energy saving of 250 kilowatts per project for electrical energy and 750 kilowatts per project for thermal energy. This includes projects such as replacing electric motors with more efficient models, variable speed drive (VSD) applications, waste heat recovery projects, and automation projects aimed at reducing the energy consumption of existing equipment.
In the building and service sector, institutions like hospitals, shopping centres, and hotels with a current energy consumption of 500 TOE (tons of oil equivalent) and above will be supported, with the aim of providing assistance for projects that achieve 20% energy savings.
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2. The Republic of Turkey Ministry of Industry and Technology has developed sector-specific Low Carbon Roadmaps.
An introductory ceremony for the “Sector Reports” was held as part of the “Turkey Sectoral Low Carbon Roadmaps Project.”
During the promotion program for the Turkey Sectoral Low Carbon Roadmaps (“the Program”), the Minister of Industry and Technology emphasized the environmental and socioeconomic impacts of climate change while addressing key topics such as sustainable production, green transformation, carbon mechanisms, emission reduction, and support for research and development.
Within the scope of the Program, the Minister announced the creation of support mechanisms for industrialists and investors and conveyed the initiation of the “Turkey Organized Industrial Zones Project” to accelerate the transformation of Organized Industrial Zones (OIZ) into Green OIZs. This project will encompass green and technological infrastructure in OIZs, including advanced wastewater treatment facilities, water recycling, solar power plants, zero waste, and biogas facilities.
Additionally, it was reported that the “Sectoral Green Growth Technology Roadmaps,” prepared by TÜBITAK, identified technological needs and innovation-based solutions for critical sectors in the Turkish economy such as iron-steel, aluminium, cement, fertilizer, plastic, and chemical, setting targets for the years of 2026, 2030, and 2035.
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3. The European Union reached an agreement on the Corporate Sustainability Due Diligence Directive (CSDDD).
After extensive negotiations among the member countries of the European Union, an agreement was reached on March 15, 2024, regarding the Corporate Sustainability Due Diligence Directive (CSDDD). The approved directive underscores the EU’s commitment to promoting corporate responsibility and accountability, addressing the monitoring of sustainable business practices across the region.
Initially, the directive targeted companies with 500 employees and those with a turnover of 150 million Euros. However, following objections from Germany, Italy, and France, amendments were made to certain provisions of the directive. As a result, the employee threshold for affected companies was raised from 500 to 1,000, and the turnover threshold was increased from 150 million Euros to 450 million Euros. These amendments significantly reduced the number of companies covered by the law to one-third of the originally proposed number.
In light of these changes, the effectiveness of the Directive remains a topic of debate. Yet, it is observed that the Directive includes requirements such as the incorporation of the UN Principles on Business and Human Rights into EU law, legally mandating due diligence practices concerning environmental and human rights within corporate value chains.
The final approval process by the Members of the European Parliament is expected to be completed during the General Assembly session, planned for April.
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4. The European Union (“EU”) approved an agreement envisioning more sustainable packaging regulations.
The European Parliament and the Council of the European Union reached a provisional agreement aimed at reducing the use of packaging, promoting reuse, and recycling, and supporting the circular economy. The agreement mandates that all packaging used in the EU must be recyclable, minimize the presence of harmful substances, reduce unnecessary packaging use, and increase the procurement of recycled content, aiming to make all packaging more reliable and sustainable.
Under the agreement, packaging reduction targets are set (5% by 2030, 10% by 2035, and 15% by 2040), and EU countries are required to decrease the amount of plastic packaging waste specifically. Due to these requirements, certain single-use plastic packages will be banned starting from January 1, 2030. Moreover, the use of very lightweight plastic carrier bags will be prohibited unless necessary for hygiene reasons or provided as primary packaging for unpackaged food.
Additionally, the European Parliament has regulated the ban on the use of chemicals in food contact packaging, referred to as “forever chemicals” (such as per- and polyfluoroalkyl substances or PFAS), to prevent adverse health effects.
Other measures adopted include setting minimum recycled content targets for any plastic part of packaging, establishing minimum recycling targets based on the weight of packaging waste produced, and enhancing recyclability requirements, with a goal of separately collecting 90% of single-use plastic and metal beverage containers by 2029.
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5. EPİAŞ and EEX Agree on Development of Emissions Trading System
A Memorandum of Understanding was signed on February 28, 2024, between the European Energy Exchange (EEX) and Enerji Piyasaları İşletme A.Ş. (EPİAŞ) for the purpose of developing the Emission Trading System (ETS).
Through this Memorandum, both parties have committed to the development of an Emission Trading System in Turkey. Peter Reitz, CEO of EEX, stated that the agreement indicates their readiness to collaborate with EPİAŞ in establishing an effective ETS in Turkey, and emphasized their dedication to contributing to the development of carbon pricing tools globally.
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6. Egypt invests in green hydrogen and renewable energy.
In December 2023, the Egyptian Government approved a $3.1 billion project supporting the production of green hydrogen, which is generated through the electrolysis of water using electricity from renewable energy sources.
Following the approval of this project, which is expected to accelerate developments in the field, the Egyptian Ministry of Planning and Economic Development, the Egyptian Sovereign Wealth Fund, and foreign companies have recently signed seven different agreements related to green hydrogen and renewable energy. Under these agreements, investments planned in two phases over the next ten years will see an initial $12 billion investment followed by an additional $29 billion in the Suez Canal Economic Zone.
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7. The European Council and the European Parliament reached a provisional agreement on the prohibition on the European Union (“EU”) market of products produced as a result of forced labour.
The temporary agreement on banning products produced through forced labour in the EU market will establish a framework for investigations, new solutions in information technology, and cooperation between authorities and countries. Accordingly, products made through forced labour will not be allowed entry into the EU market, nor can they be marketed, imported, or exported.
In cases where there is suspicion of forced labour within a company’s supply chain, the competent authority of the respective EU member state will carry out investigations if the suspect company is an EU member. If the company is not a member state, the European Commission will have the investigative authority. The final authority conducting the investigation will decide on the banning, destruction, withdrawal, and in certain cases, detention of the produced goods. Companies failing to comply with these decisions will face monetary fines.
The European Commission will also be able to identify products or groups of products for which importers and exporters must provide additional details to EU customs, such as information about the producers and suppliers of these products.
Moreover, the agreement plans to establish a “Forced Labor Single Access Point” to assist in the implementation of the rules. This portal will include guidelines, information about prohibitions, databases on high-risk areas and sectors, public evidence, and a whistleblowing portal. Additionally, a “Network against Products of Forced Labor” will be created to enhance cooperation among authorities.
The law under the Agreement will enter into force following its formal approval by the Member States and the European Parliament, and its publication in the Official Journal of the EU.
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8. The European Bank for Reconstruction and Development (EBRD) will pay $543 million for financial support to earthquake-affected areas in Turkey.
The Ministry of Treasury and Finance and the European Bank for Reconstruction and Development (EBRD) signed a memorandum of understanding to provide $543 million in financing for infrastructure projects by local municipalities in the earthquake-affected areas of Turkey, covering water, drinking water, solid waste, sewage, and transportation sectors.
Previously, the EBRD announced a financing package of 1.5 billion euros for the reconstruction of the earthquake zone, supporting private sector projects, SMEs, and local banks in the region.
The new funding of $543 million is expected to cover the years 2024-2025.
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