Within the scope of the “Decarbonization of the Turkish Steel Industry” project coordinated by the Istanbul Policy Center, industry representatives, public institutions, researchers, and participants from steel-consuming industries came together at the “Information Session on the Turkey Steel Industry Network Working Program.” During the meeting, topics such as the European Union’s Carbon Border Adjustment Mechanism (CBAM), low-emission steel definitions, green steel standards, financing challenges, and the sector’s transformation process were discussed.
Speaking at the opening of the meeting, Project Coordinator Dursun Baş from the Istanbul Policy Center stated that the “Decarbonization of the Turkish Steel Industry” project, which started in June 2022 and will complete its fourth year as of June 2026, initially focused on crude steel producers in Turkey. Baş explained that the project involved not only crude steel producers, but also public institutions, industry associations, financial organizations, and steel-consuming sectors through collaborative efforts. He emphasized that the decarbonization of the sector is not solely the responsibility of crude steel producers and stated that this transformation must be addressed together with the energy, natural gas, logistics, financing, public policy, and steel-consuming sectors. Noting that the Turkish steel industry’s emissions burden does not stem only from integrated mills, Baş said that electric arc furnace-based plants also generate significant indirect emissions due to their high electricity consumption. He additionally pointed out that emissions arising from natural gas usage, transportation, and logistics are also significant.
Verified emissions data and financing pressures mark new phase
Speaking during the meeting, Muammer Bilgiç, executive board member of Bilecik Demir A.Ş., stated that the benchmark and default emission values announced by the EU under CBAM mark the beginning of a new era for the sector. Bilgiç noted that in the past, companies were evaluated based on indicators they defined themselves, whereas verified emission data will now serve as the basis. He stressed that companies are now considered green only to the extent of their verified values. Bilgiç also remarked that electric arc furnace-based facilities may not be as advantageous as previously believed, noting that under CBAM, arc furnace-based facilities and basic oxygen furnace-based facilities are evaluated within their own respective categories. Emphasizing that sustainability efforts in the steel sector should no longer remain solely the responsibility of environmental departments, Bilgiç said that procurement, production, finance, and management processes must all be integrated into the transformation process.
Hasan Akbulut from the Turkish Steel Producers’ Association stated that the world is entering a new era in trade, with globalization increasingly giving way to trade nationalism. Akbulut noted that pressure on the sector has intensified during the EU’s emissions trading system revision process, saying, “This transformation is being carried out in the EU with substantial state support. Without resolving the financing issue, it will not be easy to move this process forward.” Akbulut stated that the Turkish steel industry continues to invest in energy efficiency, material efficiency, and renewable energy, but companies are forced to prioritize due to high investment costs. He also noted that the EU is developing new mechanisms to protect its own steel industry, while emphasizing that Türkiye should not lose access to the EU market despite these developments.
Barış Bora, environmental manager at İçdaş, stated that uncertainties surrounding CBAM practices are making trade more difficult. Bora explained that the CBAM-related costs arising from sales to the EU in 2026 will only become clear in 2027, creating significant risks for producers and importers. He also stated that the methodologies published by the EU contain uncertainties regarding verification processes, adding that differences may emerge between the verification systems used in Türkiye and the EU’s practices. Furthermore, Bora said that imported raw materials and the use of Russia-origin billet create additional complications in CBAM calculations. Referring to the the EU’s sanctions against Russia, Bora noted that uncertainties have emerged in the calculation methodologies and that under the current system, producers may in some cases effectively appear as though they are using Russian steel.
Bahar Güçlü, deputy permanent representative at permanent delegation of Turkey to the EU, stated that the world is entering a new era of trade wars centered on technology and the green transition. Noting that the EU aims not only to increase its own production but also to support low-emission manufacturing, she said, “While the EU protects its own industry, it is also placing green transition pressure on its producers.” Güçlü stated that efforts to expand the scope of CBAM in the EU are ongoing and that including sectors such as automotive and white goods in the system is also being discussed. She added that the EU is trying to encourage the use of green steel through public procurement, funding mechanisms, and new regulations, and emphasized that Türkiye should also establish mechanisms to increase demand for green products in its domestic market.
EU green steel criteria could favor high-emission producers
In the second part of the meeting, Daniel Pietikäinen, steel policy manager at Belgium-based non-governmental organization Bellona Europa, delivered a presentation on the EU’s low-emission steel classifications and eco-design regulations. Pietikäinen stated that the classification system developed by the EU covers products such as hot rolled coil, wire rod, galvanized steel, stainless steel, and electrical steel. He said the Industrial Accelerator Act is intended to create “lead markets” for low-carbon steel and other products, while the Ecodesign for Sustainable Products Regulation (ESPR) will establish the definition of low-carbon steel for intermediate products. According to Pietikäinen, the Construction Products Regulation (CPR) will later define low-carbon steel specifically for construction products, particularly long products.
Pietikäinen noted that the EU’s low-carbon steel classifications are based on emissions values per ton and that steel used in public procurement will be categorized into specific classes. The draft system applies a sliding-scale classification based on scrap content, with Class A and Class B corresponding to categories eligible for green public procurement. He described the methodology as relatively lenient. According to Daniel, the methodology incorporates Scope 1, Scope 2, and Scope 3 emissions data, using ETS data for EU-based facilities, CBAM default values for non-EU plants, and modeled life-cycle emissions for production outside the EU.
He argued that the methodology relies on global production data rather than data limited to the EU market, while also applying inflated CBAM default values in a way that shifts more plants and products into the greener classification categories. In his view, this approach allows many blast furnace-basic oxygen furnace (BF-BOF) and electric arc furnace (EAF) products produced in the EU to qualify for the highest green classes, making the labeling framework overly permissive.
Daniel specifically noted that for wire rod products, Class A covers emissions ranging from zero to 0.87 mt of CO2 per mt, while Class B ranges from 0.87 mt to 2.43 mt of CO2 per mt. For hot rolled coil, he said the proposed thresholds are similarly high, meaning nearly all EAF-based products and a significant portion of EU BF-BOF products would qualify under green public procurement criteria. Stating that the EU aims for 25 percent of the steel used in public procurement to consist of low-emission steel by 2030, Pietikäinen said that the current drafts contain relatively advantageous thresholds, particularly for high-emission producers in Europe. He also noted that the classification methodology prepared by the European Commission using global production data and CBAM default values has sparked debate. According to Pietikäinen, the current system may allow many high-emission facilities in Europe to fall into the “green” category, which could send misleading signals to the global steel industry.