Turkey has a population of 72.9 million and generated a gross domestic product of $440.5 billion in 2006. There are great opportunities for Canadian environmental technology products in this rapidly developing market. With the start in 2005 of the European Union (EU) accession process, Turkey has adopted an environmental law (2006) to initiate the harmonization of its environmental regulations with EU standards. Complete implementation of these regulations will take more than 10-15 years and this process is creating a market for environmental infrastructure and related technologies that is expected to be worth $96 billion in 2024. Adoption of EU environmental regulations and norms is driving demand for goods, services and technologies in this sector and there is increased environmental awareness among all decision-makers.

Value of imports and exports: The Turkish environmental market is dominated by EU, US and Japanese firms, which provide funding arrangements and are gaining an important role in the market. The value of Turkey’s imports of environmental goods and services from the EU was around US$ 913 million in 2006. In the same year the Turkish exports to EU have totalled to US$ 204.0 million. In 2006, Turkish imports from non-EU countries were about US$ 650 million, while its exports were US$ 300 million.

Other market plans within this sector as a priority: Turkey’s rapid industrialization during the last few decades, annual high growth rate between 2003 and 2006, and rapid urbanization have created complex environmental problems and have increased awareness of environmental issues. Problems are particularly acute in public services such as water supply, sewerage and energy distribution. With the growing threat of pollution, government agencies and municipalities have launched several environmental projects.  Turkey’s EU accession process has given added impetus to addressing environmental issues.

Foreign financing, through the World Bank (WB), the European Investment Bank (EIB), and individual country export credit institutions and commercial lenders, support most of the large projects. As Turkish enforcement of environmental legislation increases, Turkey has started to offer a wealth of opportunities for foreign firms with expertise in major environmental projects and foreign suppliers of environmental technology. As Turkey is still developing its capacity for implementing these investments, there is a need for technical support for capacity build-up as well as financial assistance.

Main buyers/investors: Key players in the Turkish environmental sector are State organizations, NGOs, universities, municipalities and private companies, all of whom must comply with environmental rules and regulations. Main buyers of equipment and services in the Turkish environmental market are municipalities and industrial organizations.

Municipalities are responsible for the construction and management of solid waste and wastewater treatment services. The public tendering system often requires that a locally established company take part in the consortium tendering. Build and Operate and Build Operate & Transfer systems (BO/BOT) enhance the participation of foreign firms combined with the funding systems.

The private sectors, especially mining and manufacturing firms, have faster and simpler procurement systems. Turkish industries are also potential buyers of industrial waste treatment and recycling technologies and equipment, as well as air pollution prevention products and services. The Ministry of Environment and Forestry is the body that makes and implements Turkey’s macro-environmental plan at the national level. The Ministry may buy services or equipment in the scope of national projects.

Main Local Industry: There are over 150 companies in the Turkish environmental market. Local firms are mostly involved incontracting; local engineering companies have limited capabilities to undertake comprehensive environmental projects due to their lack of experience and therefore often seek a foreign partner to undertake larger projects. Local firms provide only civil works and basic technological provisions for many projects in industrial waste water treatment systems, flue gas desulphurization systems in power and composting plants, incinerators and remediation technologies, but generally lack project financing. For these requirements, and for hard engineering equipment, local suppliers must import the required technology and equipment and services, and must often team up with a foreign partner for the required financing of BO/BOT projects in the public sector.

Main foreign companies: Turkish companies generally establish joint ventures and partnerships with experienced companies from EU countries. Commercial delegations led by the environmental ministers of EU countries often visit Turkey in order to create bilateral market dynamics in this sector. The Turkish environmental market is dominated mainly by foreign firms, which provide environmental technology, services and equipment to Turkey. Japanese firms provide very competitive funding arrangements and are gaining an increasingly important role in the market. 

Market and Sector Challenges (Strengths and Weaknesses)

Policy and access issues: As a result of Turkey’s Customs Union with the EU and the country’s EU accession process, Turkey is on track to applying EU common commercial policy measures in all sectors. Reforms in Turkey’s business and investment environment improved prospects for foreign firms and have reduced bureaucratic processes and procedures. Improvement is still needed in the areas of transparency and predictability in public sector projects.

The Turkish market requires long-term commitment and cooperation with local partners and a network of contacts both in the public and private sector. Periodic visits and participation of Canadian firms in local trade fairs are significantly important for successful market entry. Canadian companies should have a local representative or liaison office to enter the market. As business develops, companies can open up subsidiaries. Canadian companies can rely on local experience and knowledge to assist in doing business and in marketing Canadian products and services in this developing market, as well as in understanding the regulatory and business framework.

Although not a major impediment to conducting business in Turkey, the lack of a Double Taxation Agreement (DTA) between Canada and Turkey is an issue to be resolved in order to reduce tax expenses to Canadian companies incorporated in Turkey. Most distributors have a dealer network throughout the country or in particular areas where the product is most used. In the case of several industrial sectors, a dealer/repair network may be required. Commission representatives/agents periodically visit their customers and their foreign principals to maintain strong personal contact.

Changes to policies with implications to trade and investment: The environment is one of the thirty-five chapters that Turkey has been negotiating with the EU and the new Environmental Law was enacted at the end of April 2006, providing for much stronger fines and penalties to prevent individuals and industries from polluting. As an incentive to reduce and prevent industrial pollution, the government plans to offer industrial plants a reduction in their electricity bills if they set up their own waste treatment facilities.

All new investment projects now have to conform to the EU environmental protocols in order to receive permission for operations. Turkey’s overall level of compliance with EU environmental acquis remains low, particularly in the fields of air quality, nature protection, and water quality, and enforcement still needs to be strengthened. Compliance with EU standards has been more successful in the areas of waste management and noise. Compliance with EU environmental norms and standards comes with a heavy price tag. The following environmental directives are expected to be completed by 2011, and will require Turkey to import relevant technologies and equipment.

Expected sector growth: Fulfillment of environmental requirements in Turkey in the scope of the EU accession process requires large scale and complex infrastructure investments in technology and development. Wastewater treatment and air pollution abatement technologies are the main sectors of opportunity for Canadian companies. According to WB studies, Turkey market volume estimation for waste and wastewater disposal technologies is $1.4 billion annually. Harmonization with the EU acquis will require investment of an estimated $96 billion over the next twenty years. The total investment value may increase to $123 billion when investments required by the "chemicals directive" are added to the total picture. Furthermore, the budget for modernizing the current drinking water supply systems as per EU standards is estimated to reach approximately $20 billion.

Following updating of already existing environmental legislation, the environmental needs and demands of the manufacturing, waste and mining sectors will increase as enforcement becomes stricter. In the coming years, important business opportunities for Canadian companies are expected to arise.

Projects will require environmental assessment as well as supply of environmental equipment and technologies. Until today, BO/BOT models have been implemented mostly for construction of thermal power plants, airports, municipal water supply systems and harbours.

Municipalities are responsible for several environmental services such as air pollution control, solid waste management and wastewater treatment. Some governmental agencies and non-governmental organizations also coordinate environmental activities such as recovery and recycling of wastes, water and wastewater treatment services and equipment procurement by municipalities. The private sector is also the end-user of environmental products such as wastewater treatment plants and emission mitigation equipment. Foreign companies have undertaken projects in various areas such as water, wastewater and solid waste management to the value of approximately $ 817 million in 15 municipalities.

Financing: The major mechanism for financing government projects is through EU financing instruments. Infrastructure projects defined under the Environmental Heavy Cost Investment Programme are currently at the stage of feasibility studies, to be financed through the IPA (Investment Promotion Agency) funding. Recent twinning projects have been conducted in air quality, chemicals and solid waste management fields.

Various other projects financed through EU funds in the environmental sector include upgrading occupational health and safety, establishment of environmental standards in the textiles sector, and capacity building in the environment sector including environmental education, heavy cost investments, and waste management projects. So far, financial support from the European Investment Bank (EIB) for infrastructure development in Turkey has mainly been for environmental projects and construction activities following the 1999 earthquake. EIB also encourages small and medium-sized enterprises (SMEs) towards new investments by global loans via local commercial banks in Turkey.

In Turkey, many organizations provide funding for environmental projects, including international and regional organizations (i.e. European Commission Delegation to Turkey, UN, UNDP, UNEP), international finance institutions (World Bank), international NGOs, and other international environmental institutions. On some occasions, the NGOs and local governments are given support through donations from the funds of certain ministries. In Turkey, private sector and private banks also provide support in the field of the environment as a significant source of funding for environmental NGOs.

Specific Opportunities and Leads: The main areas offering business opportunities for Canadian companies are: industrial and municipal wastewater treatment; desulphurization systems for power plants and process industries; solid waste treatment and disposal; industrial and domestic water treatment/purification; waste incineration plants; environmental impact assessment and monitoring; recycling; water resource management consulting/engineering services; environmental health infrastructure and sanitary installation technologies; pipes and equipment; water insulation products; channel cleaning systems and products (for sewerage networks); alternative and renewable energy systems; hazardous waste collection systems; emissions control.

Canadian position in Turkey: Turkey’s Customs Union with the EU, geographic proximity to Europe and the EU accession process, and the availability of funding from EU to help Turkey comply with EU standards make market conditions more favourable for import of goods and services from European countries. EU companies often open offices in Turkey or assign agents to monitor developments and to report on local tender announcements, which may put Canadian firms at a disadvantage.

Canadian companies may seek possibilities of partnering with EU companies for the projects in the Turkish environment sector. They may also be able to counter the competition from EU through provision of attractive funding mechanisms and by effective marketing that highlights Canadian expertise as well as niche capabilities. The difference in the exchange rate between the Canadian dollar and the Euro may also be another advantage for Canadian firms.

Canadian competitive advantages: Canada’s emphasis on environmental preservation encourages research and development for innovative environmental technologies. This has resulted in an environmental industry that is globally competitive, with the emergence of many innovative solutions, including: Water and wastewater treatment technologies; Clean energy; Solid waste management; Engineering and consulting services; Emission monitoring and air pollution control; Remediation; Natural resource management; Geographic Information Systems. The ability of Canadian environmental companies to offer integrated environmental solutions is a core strength, making them the preferred partners in projects worldwide. The ability to work with governmental or private funding agencies to offer financing packages will further enhance Canada’s share in international market opportunities in this sector.

See the full report for details on specific sub-sectors and opportunities.

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Extracts from Environmental Goods and Services Market Sector Profile - Turkey, November 2007, Canadian Trade Commissioner Service

Canadian Government Contacts


Canadian Embassy in Ankara

Cinnah Caddesi 58, Cankaya

06690 Ankara, Turkey

Tel: (90-312) 409-2700

Fax: (90-312) 409-2715 

Contact: Akin Kosetorunu, Trade Commissioner

E-mail: akin.kosetorunu@international.gc.ca

Internet: http://www.infoexport.gc.ca/tr