Green Growth: Turkiye’s Strategy for a Circular Economy and EU Market Alignment

Turkiye's transition to a Circular Economy, guided by the World Bank and TÜBİTAK, aims to align with EU sustainability standards, enhancing resource efficiency and trade competitiveness. This shift offers economic and environmental benefits, requiring targeted policies, innovation, and workforce upskilling.

The World Bank, in collaboration with Turkiye’s Scientific and Technological Research Council (TuBİTAK), presents a comprehensive analysis of Turkiye’s transition to a Circular Economy (CE). This transformative shift seeks to address critical issues like resource depletion and environmental degradation while unlocking economic opportunities. Globally, material consumption has tripled over the past five decades and is expected to rise by 60% by 2060. Turkiye mirrors this trend, with domestic material extraction surging from 558 million tons in 2000 to over 2 billion tons in 2021. Although municipal waste recycling rates improved to 35% by 2023, thanks to the “Zero-Waste Initiative,” much work remains to meet the ambitious target of 60% by 2035. As the European Union (EU) Turkiye’s largest trading partner tightens sustainability standards through the Green Deal, aligning with circular principles becomes critical for maintaining competitiveness.

Circular Economy: From Necessity to Opportunity

Transitioning to a CE is not just an environmental obligation but a strategic economic opportunity. This model aims to replace the wasteful "linear economy" with a regenerative system where resources, materials, and products are reused and recycled. For Turkiye, this transformation holds significant promise, especially in sectors like textiles, chemicals, and automotive, which are central to its global trade portfolio. With 41% of its exports directed to the EU, adapting to CE principles will ensure continued market access while enhancing the value of Turkish goods. However, challenges loom large. While 20% of Turkish firms have adopted resource-efficient practices, critical sectors such as machinery and fabricated metals lag far behind. Advancing these industries will require innovative policies and targeted incentives.

The CE transition also brings environmental benefits. Policies encouraging resource efficiency and recycling could reduce material use by 14% by 2030, complementing Turkiye’s climate commitments under the Paris Agreement. Combined with Nationally Determined Contributions (NDCs), CE measures could cut CO2 emissions from fossil fuels by an additional 7%, helping Turkiye achieve its net-zero target by 2053. These achievements will depend on successfully navigating the complexities of non-metallic minerals, which account for 85–90% of Turkiye’s material consumption and present significant recycling challenges.

Strengthening Industrial Linkages for a Thriving Circular Economy

Turkiye’s economic integration with the EU amplifies the importance of CE adoption. As EU regulations increasingly favor sustainable practices, Turkiye faces both challenges and opportunities. Non-compliance risks losing market share, while alignment could position the country as a leader in green innovation. Sectors such as textiles have already shown promise, with 40% of firms implementing circular practices like waste reduction and recycling. However, fabricated metal products and machinery sectors require significant improvements to match the progress seen in regional competitors such as Hungary and Poland.

Building stronger industrial linkages will be pivotal for Turkiye’s CE journey. Sectors like iron, steel, plastics, cement, fertilizers, and chemicals form the foundation of this transition, but their connections with upstream and downstream industries remain weak. Addressing these gaps through targeted investments and policies can improve resource flows and foster innovation. For example, regulations promoting modular construction materials in the cement industry or incentivizing recycled plastics could stimulate circular practices. Similarly, fostering sustainable agriculture by promoting phosphorus recycling from wastewater, solid waste, and manure would support the fertilizer sector while reducing environmental harm.

Economic Impacts: Balancing Costs with Long-Term Benefits

The economic costs of Turkiye’s CE transition are modest and manageable. By 2030, the implementation of CE policies may reduce GDP by 1.6%. However, this short-term cost is offset by long-term benefits, including enhanced resource efficiency, reduced pollution, and improved export resilience. Addressing workforce disparities will be critical. Currently, low-skilled workers are disproportionately affected by CE policies, which favor industries requiring advanced skills like engineering and research. Reskilling programs will be essential to ensure an inclusive transition, preparing workers for green jobs that align with CE principles.

Turkiye’s industrial sector has an opportunity to lead innovation in CE-related fields. For example, the textiles sector has pioneered sustainable practices such as polyester recycling and waterless dyeing. With continued government support, such as through subsidies, public-private partnerships, and R&D incentives, Turkiye can maintain its momentum in green innovation. Aligning these efforts with global frameworks like the European Green Deal will further bolster its position in international markets.

Paving the Way: A Strategic Plan for Turkiye’s Circular Future

Moving forward, Turkiye’s success in CE hinges on the implementation of its forthcoming CE Strategy and Action Plan. This plan, aligned with the EU’s CE Action Plan, must integrate short-, medium-, and long-term goals. In the short term, accelerating the adoption of resource-efficient technologies and improving coordination with EU partners will be critical. The medium-term focus should be on fostering R&D investments, supporting green business models, and raising public awareness about the importance of circular practices. Over the long term, establishing robust monitoring, reporting, and verification (MRV) systems will enhance policy credibility and secure private sector investments.

By adopting clear and actionable policies, Turkiye can not only meet EU regulatory standards but also create domestic markets for circular products. For instance, modular design in construction materials and mandatory recycled content in plastics could stimulate local demand. Similarly, incentivizing phosphorus recovery in fertilizers could establish Turkiye as a leader in sustainable agriculture.

Turkiye’s CE transition represents a bold step toward redefining its economic and environmental trajectory. By embracing circular principles, the country can enhance its resilience against global shocks, ensure sustainability, and strengthen its competitive position in international markets. If managed strategically, Turkiye has the potential to set a global example of how to integrate CE principles into national development strategies, leading the way in sustainable innovation and inclusive growth.