Medium-Term Program (MTP) for the 2024–2026 Period and Green Transformation, September 6, 2023

The Medium-Term Program (MTP) is an important policy document that initiates the government's budgetary process. The MTP for the 2024–2026 period, which includes the main macroeconomic targets, policies, and regulations for priority reform areas, was announced on September 6, 2023. The MTP tackles “Green Transformation”; 

• Under the “Main Objectives” heading,
• Under the “Macroeconomic Targets and Policies” heading,
• As part of “Policies and Measures” under the “Green Transformation” heading. A summary of the details can be found in the note attached. 

Examination of the regulations regarding the priority reform areas stipulated in the MTP, processes related to green and digital transformation, and the schedule produces the following key points:

• From the perspective of growth and trade; “Preparation of a national critical raw materials strategy regarding digital and green transformation as part of domestic production and product-based technological transformation in the industry, aimed at reducing import dependency and ensuring supply security (Q2 2024)” 
• From the perspective of green and digital transformation;

1. For compliance with the Climate Change Legislation, the EU Emissions Trading System (EU ETS), and Carbon Border Adjustment Mechanism (CBAM); “Organizing planning and implementation tools for combating climate change, reducing greenhouse gas emissions, and adapting to climate change in order to achieve and maintain green transformation and the 2053 net zero emissions target (Q1 2024, continuous),” 
2. As part of green taxonomy and sustainable financing; “Establishing a National Green Taxonomy system, which is compatible with the international classification system and Türkiye’s needs, increasing the organizational capacity on sustainable finance, developing the green financing ecosystem, establishing the legislative infrastructure for the analysis of banks’ climate-related financial risks and measuring their contributions to environmental targets, developing innovative and sustainable financing tools within the framework of environmental, social, governance (ESG) criteria, and meeting the financing needs of investments (Q1 2025, continuous),” 
3. For domestic energy resources; “Making legislative arrangements for heat supply in order to evaluate Turkey's heat potential and utilize waste heat (Q2 2024).” 

The green transformation regulations included in the MTP have significant implications for the machinery industry. Aiming to contribute to the development and transformation of the country’s economy and machinery industry, enjoy a sustainable value chain, and enhance competitiveness with the efforts carried out under the “Mundus Plus” brand, the Machinery Exporters’ Association closely follows all developments regarding “Green Transformation,” fully aware of its responsibilities. 

ATTACHMENT:

MTP 2024–2026 and Green Transformation: 
The “Green Transformation” regulations stipulated in the MTP, which includes the main macroeconomic targets, policies, and regulations for priority reform areas for the 2024–2026 period, are summarized below under three headings. 

• Green transformation is tackled under the “Main Objectives” heading in line with the following approaches: 

1. “Improving the technology composition of exports,”
2. “Strengthening Turkey’s international competitiveness with sustainable, low-emission, advanced-technology-based production techniques by adopting integrated and environmentally friendly policies, especially in the energy, industry, transportation, and agriculture industries,” and 
3. “Strengthening public finance sustainability.” 

• Green transformation is tackled under the “Macroeconomic Targets and Policies” heading from the perspective of growth, employment, balance of payments, financial stability, and public finance in accordance with the relevant “Policies and Measures.” Accordingly,

1. Supporting competitive cluster initiatives with sustainability potential in a manner that is more effective and encourages stakeholder participation,

• ​Expanding the use of green technologies as well as digital technologies such as artificial intelligence, autonomous systems, cloud computing, and big data analytics. 

2. Employment perspective refers to:

• Establishing occupational standards and qualifications in the fields of green and digital transformation, updating these occupational standards, closing the green and digital competence gap, 
• Effective implementation of active workforce programs in ensuring workforce adaptation to the jobs required by green and digital transformation and creating new employment opportunities, 
• Ensuring the full, equal, safe, and effective participation of women in a labor market that is changing with digital and green transformation, 
• Conducting a needs analysis for those employed in regions and occupational groups that could potentially be impacted by the green transformation in order to realize a just transition.

3. The balance of payments perspective refers to:

• Preparation of a national critical raw materials strategy to reduce import dependency and ensure supply security as part of the digital and green transformation, 
• Expanding the use of renewable energy in existing and newly established free zones and organized industrial zones, increasing the contributions to the green and circular economy, and implementing regulations that will attract foreign investments to high technology in the region, 
• Prioritizing green and digital transformation in Eximbank’s financial support to high-tech and value-added exports, and 
• Diversifying and activating the tools used in export financing against the additional costs that the carbon pricing mechanism will impose on various industries. 
• Financial stability and public finance perspective refers to: 
• Increasing awareness of environmental, social, and governance (ESG) criteria, developing new products and services in the field of green financing, 
• Updating the public procurement legislation in line with international norms and standards, based on a procurement approach that supports digitalization, innovation, and sustainability, and implementing a sectoral public procurement regulation.

The MTP includes comprehensive information under the “Green Transformation” heading and details the “Policies and Measures” to be followed. Accordingly,

1. A basic legislation that addresses climate change–related practices in a holistic manner will be prepared, 
2. The legal infrastructure of the National Emissions Trading System (ETS) will be developed in a structure compatible with the EU's Carbon Border Adjustment Mechanism (CBAM), and preparations will be made for financial obligations during the transition period,
3. Activities will be carried out in line with the Net-Zero 2053 carbon emissions target to establish a long-term low-emission development strategy,
4. Sectoral road maps on resource, process, and energy efficiency, digitalization, and similar issues will be prepared for companies as part of the European Green Deal, and awareness-raising activities will be carried out,
5. The Green Deal Action Plan will be updated in order to increase competitiveness in export markets, especially the EU, and to improve Turkey's position in supply chains,
6. An infrastructure will be created in line with the goals of combating climate change in order to monitor and price greenhouse gas emissions,
7. Technologies such as energy storage, hydrogen and carbon capture, utilization, and storage operations that support energy transformation, and R&D and innovation activities for the development of micro-grid management and digitalization will be supported as part of the Carbon Border Adjustment Mechanism (CBAM) and the 2053 net zero emissions target, 
8. An impact assessment will be made regarding compliance with the legislation, which is being prepared within the framework of the EU’s circular economy policies; a National Circular Economy Action Plan will be prepared; resource efficiency, materials recovery, and waste management will be prioritized in accordance with sustainable production and consumption; industrial symbiosis practices will be encouraged, 
9. The legislation on eco-design and sustainable products in the manufacturing industry will be followed, new legislation will be prepared to calculate and monitor carbon footprint and other environmental indicators for the promotion of the circular economy model and the European Green Deal, and the required digital infrastructure will be supported, 
10. Zero waste practices will be expanded,
11. Standards for recycled secondary materials will be determined, an incentive and guidance system will be developed, and legislative arrangements will be made,
12. The renewed product system will be expanded as part of the sustainable consumption model in order to protect the health, safety, and economic interests of the consumer,
13. The effects of the transition to a green and circular economy on labor markets will be analyzed, and the competency of the workforce will be improved for new occupational groups in accordance with the just transition principle,
14. Green public procurement strategies will be developed, and purchasing criteria that support green transformation will be determined,
15. Environmentally friendly multi-modal transport terminals will be established,
16. Incentives will be provided for green port practices; use of machines and equipment harmful to the environment will be reduced,
17. A charging station network will be developed in order to promote the use of electric vehicles, and domestic electric vehicles in particular,
18. The use of technologies and materials with low noise levels and greenhouse gas emissions will be promoted in road construction projects,
19. Projects will be realized for the sustainability of transportation in order to facilitate the transition to low-carbon systems in urban transportation,
20. Projects will continue to be developed with the Renewable Energy Resource Area (YEKA) model, requiring the use of domestic products,
21. Legislative arrangements for heat supply will be made in order to evaluate Turkey's heat potential and utilize waste heat,
22. New Energy Efficiency Strategy Document and the 2nd National Energy Efficiency Action Plan will be implemented,
23. Energy efficiency initiatives will continue in public buildings and services, and the necessary technical and administrative infrastructure will be developed for more widespread use of energy performance contracts,
24. The Nearly Zero-Energy Buildings (NZEB) approach, which aims to achieve high energy performance and use a certain rate of renewable energy in public, commercial, and residential buildings, will be expanded,
25. Forest assets will be protected and expanded as part of sustainable forest management, new sinks will be established, and industrial plantation activities will continue on suitable lands,
26. More effective use of soil and water resources will be ensured by promoting climate change-resistant agricultural practices and new technologies,
27. Financing opportunities for green transformation will be increased, existing support mechanisms will be reviewed, the green finance ecosystem will be developed by bolstering organizational capacity for sustainable finance, 
28. Legislative activities will be carried out to create a National Green Taxonomy that is compatible with international counterparts, especially the EU taxonomy, and considers Turkey's needs,
29. Regulations will be established to accelerate the banking industry's transition to sustainable banking practices and manage the financial risks arising from climate change,
30. Companies' sustainability reporting principles will be updated in line with international standards with the development of new regulations and practices based on sustainability in capital markets; a third-party assurance and verification system will be established for environmental, social, and governance reporting, and integration of data into the system will be ensured,
31. Participation in international financial markets will be accelerated in accordance with environmental, social, and governance criteria, and the financing needs for investments will be met by developing innovative and sustainable financing tools for green transformation.