Türkiye - Holland Circular Hotspot

Circular Economy Opportunities in Türkiye

Türkiye has experienced substantial economic growth over the past years coupled with environmental challenges. As one of the countries most vulnerable to the impacts of climate change, the national government and local businesses have set goals and standards to implement a circular economy and become climate-neutral by 2053. The Netherlands Embassy is actively exploring collaboration opportunities with local partners to facilitate this transition.

Interested in investing in circular business opportunities in Türkiye? Below you will find an overview of the country’s policy landscape, circular economy strategies, and three selected priority sectors: Textile, Construction, and Food & Agriculture.

Economic Indicators

Surface area: 785.350 square kilometers (2021) [∼18,9 times larger than the NL]
Total Population: 84,98 million (2022) [∼4,8 times the population of the NL]
GDP (nominal+ranking): 907 billion USD, #19 (2022)
Purchasing Power: 10.618 USD per capita (2022)
Import from the NL: 6,26 billion USD (2021)
Export to the NL: 6,72 billion USD (2021)
Economic growth: 5,9% (2023)
Corruption Perception Index: 64, #109 (2022)
Unemployment rate: 10,03% (2022)
Currency and exchange rate euro: 1€ = 33,15 Turkish lira (TRY) (2024)
Time difference with NL: +2 hours in winter, +1 in summer
Ease of doing business: 33 (2022)

Circular Economy Indicators

Global Innovation Index: 37/132 (2022)
Recycling rate of municipal solid waste: 19% (2022)
Wastewater recovery ratio: 4,2% (2022)
Municipal population with wastewater treatment plants: 89% (2022)
Renewable Energy Production: 54% (2022)
Average circularity of inputs in the textile sector: 16% (2022)
Average circularity of outputs in the textile sector: 23% (2022)
Average circularity of inputs in the plastic sector: 7% (2022)
Average circularity of outputs in the plastic sector: 13% (2022)

Policy Landscape

Türkiye has recently become more engaged in addressing climate change as a driver of sustained long-term growth. Following the announcement of the Green Deal Action Plan in July 2021 and the ratification of the Paris Agreement in October 2021, the government has set the goal of reducing greenhouse gas emissions by 41% by 2030 and reaching a net zero target by 2053.

Aligning with the European Union’s framework, Türkiye has adopted pivotal regulations on waste and circularity. These include directives for Waste Electrical and Electronic Equipment (WEEE), End-of-Life Vehicles (ELV), Batteries, construction materials, eco-labels for textiles, and food transportation. Complemented by educational initiatives, innovative practices, and the ambitious Zero-Waste Project (2017) targeting a 35% municipal waste recycling rate by 2023, these efforts optimise resource utilisation and have led to the improvement of cyclical material flows in the country.

Demonstrating further commitment to implementing circularity principles, Türkiye launched the ongoing EU-funded Technical Assistance for Assessment of Türkiye’s Potential on Transition to Circular Economy (DEEP Project) in 2022. This 36-month project aims to propel Türkiye’s transition towards a circular economy by bolstering national corporate and technical capabilities in line with the EU Circular Economy Model, and ultimately contributing to the development and publication of a comprehensive National Circular Economy Action and Roadmap. The plan includes six strategic goals, 24 key objectives, and 58 measures to be implemented from 2024 to 2028. Additionally, Türkiye plans 35 legislative changes and measures addressing infrastructure, technology and innovation, institutional structure and cooperation, financing, and economy.

Textiles (Raw Manufacturing)

Türkiye, a global textile manufacturing leader, achieved $9.8 billion in textile exports in 2020, contributing 3% to the nation’s GDP and representing 10.1% of total exports. Globally, the country ranks seventh in clothing exports and is the fourth largest supplier to the Netherlands. However, its resource-intensive processes account for 15% of Türkiye’s total industrial water consumption. Recognising this environmental impact, the textile industry has begun embracing cleaner and more sustainable innovations to enhance its climate resilience.

Key strengths of the sector make the circular textile transformation easier in the country. Its proximity to major European markets within 3,000 kilometers, amplified by recent trends of near-shoring during the pandemic, positions it as a prime location for a sustainable European supply chain. The sector’s diverse and flexible manufacturing further strengthens this positioning. Strong domestic capabilities across the entire value chain, from fiber to garment, coupled with vertical integration within regional clusters, create an ideal ecosystem for circular practices. Existing expertise in EU fashion, adaptable production systems ready to shift towards on-demand models, and established infrastructure for fiber recycling round out a portfolio conducive to circularity.

This shift encompasses various initiatives across the entire value chain, from design and sourcing to production and end-of-life management. Over 267 Turkish companies have partnered with the Better Cotton Initiative (BCI), recognising the importance of ethical and sustainable practices throughout the supply chain. Moreover, Turkish textile manufacturers are crucial partners for the Denim Deal, a collaboration between Dutch denim industry leaders to increase the use of recycled textiles in jeans. Finally, Türkiye also emerges as a rare producer of carbon fiber, a material that supports circular performance with its extended lifespan and energy-saving potential.

Last year, a Dutch trade mission brought 17 circular textile innovators to Türkiye in 2023, responding to a comprehensive market study ‘Defining Circularity of Textile Industry in Turkey’. Collaborative efforts between Dutch and Turkish companies present significant opportunities for synergy in recycling and sorting services, circular production capacity building, digital technology utilisation, circular design capability building, and renewable energy use. To further enhance collaboration, multiple trade missions are planned for 2024 by the Dutch Consulate and the Netherlands Enterprise Agency (RVO), signalling a commitment to advancing circular solutions in the Turkish textile sector.

Construction (Built Environment)

The construction sector in Türkiye is a major driver of the country’s economy. However, the sector also stands out as one of the highest greenhouse gas emitters and energy- and resource-intensive. Buildings alone account for 31% of the country’s final energy consumption and 30% of carbon emissions, creating a demand for innovative and circular solutions, particularly in the context of rapid urbanization and seismic risks. With 92% of the country’s land lying on a seismic belt and housing 95% of the population – resulting from an urbanization rate that increased from approximately 53% in 1990 to 93% in 2022 – reconstruction strategies become essential, especially following the earthquake disaster that hit the southern part of the country in February 2023.

In response to these challenges, various initiatives and certifications have emerged over the past decade aimed at fostering a greener built environment, with a focus on energy efficiency and climate resilience. National and private efforts, such as ‘Urban Renewal’ and ‘Türkiye’s Seismic Resilience and Energy Efficiency in Public Buildings Project’ (2021-27), aim to reconstruct risky buildings and enhance public infrastructure for better earthquake protection and energy performance. Additionally, certifications like the ‘Green Certificate for Buildings and Settlements’ and the ‘B.E.S.T. Certificate’ for residential and commercial buildings incentivize greener practices, setting a local green building benchmark for new projects.

This evolving landscape and the urgent need for reconstruction presents significant business opportunities, particularly for Dutch companies specializing in circular design, recycling technology capabilities, and bio-based materials. The demand for energy-saving construction methods and technologies is especially strong, aligning perfectly with Türkiye’s 2053 emission reduction targets. Initiatives like the Zero Carbon Building Accelerator (ZCBA) (2021-23), led by the World Resources Institute (WRI) and the UN Environment Programme (UNEP) and supported by the Global Environment Facility (GEF), further amplify this demand. ZCBA aims to reduce emissions throughout the entire lifecycle of buildings by promoting energy efficiency, transitioning to renewable energy sources, and endorsing environmentally friendly building materials and construction methods. The initiative also outlines strategies to enhance the climate resilience of the building sector, as detailed in the Building Sector Decarbonization Roadmap.

There is a clear opportunity linking the momentum for energy efficiency with circularity. Responding to these developments, workshops in January 2024 focused on ‘Developing Circular Reconstruction Strategies for Türkiye’, part of the Embassy Science Fellowship (ESF) program. Additionally, the Embassy of the Kingdom of the Netherlands in Ankara is working on the ‘Critical Infrastructure and Modular Building Report Türkiye’ project to showcase Dutch solutions in circular construction and modular building, contributing to the reconstruction of earth-quake affected regions in Türkiye.

Food and Agriculture (Food Waste)

Türkiye, the 7th largest global food producer, boasts a diverse agricultural sector pivotal to its economy. Despite near self-sufficiency in most agricultural sub-sectors, the country grapples with significant food losses and waste, amounting to approximately $38 billion annually. The Ministry of Food, Agriculture, and Livestock (MFAL) has responded with measures to mitigate post-harvest losses and waste across the food value chain, including upgrading storage facilities, enhancing processing and packaging systems, and implementing awareness campaigns.

Key initiatives include the Bread Waste Prevention Campaign (2013), the Zero Waste Project (2017), and the Save Your Food/Gidani Koru’s Action Plan (2020), a collaborative effort by the Turkish Ministry of Agriculture and Forestry and the FAO. The latter, spanning logistics, composting, food service, retail, and consumer engagement, resulted in an estimated $80 million in household savings and a 22% increase in food waste recycling.

In 2021, FAO initiated a collaborative campaign involving public and private entities, including Metro Turkey, a subsidiary of METRO AG. This initiative assessed restaurant operations, menu composition, and waste management. Simultaneously, the Turkish Ministry of Agriculture and Forestry introduced the Food Banking project, a strategy against food waste involving the appropriate storage and distribution of leftover or over-produced food to those in need.

Beyond the existing efforts, promising opportunities lie in alternative protein production methods, horticulture and aquaculture, and biomass application in bioproducts and materials. Collaborating with Dutch companies offers avenues for the adoption of sustainable protein sources, advancing greenhouse technologies and sustainable aquaculture practices, and scaling biowaste-to-energy solutions beyond addressing food waste alone. The potential for Dutch investment in these areas aligns with the ongoing efforts in Türkiye to create a circular and sustainable food and agricultural sector.

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