At least half of Turkey's 60 million mt/year capacity is being linked to renewable energy sources (RES) that will both reduce its carbon footprint and significantly cut its energy costs, according to an S&P Global Commodity Insights analysis.

Turkish steel mills have announced a large number of solar power plant projects since mid-2023. Although these plants were largely prompted by domestic energy prices quadrupling in 2022, they were also done with the EU's carbon border tax, CBAM, in mind.

Minor wind farms are also included in several steel mills' decarbonization strategies, including Borcelik and Kardemir, but solar power plants comprise the vast majority of the RES capacity that the Turkish steel industry will install this decade.

Energy costs in 2023 were up and down, but in October of that year, Turkey's Energy Market Regulatory Authority raised electricity prices for industrial use by 20%, and its state gas distributor Botas increased natural gas prices by the same percentage amid high inflation.

Largely as a result of that cost inflation, major Turkish steelmaker Tosyali said it aimed to meet 50% of its energy needs with RES and had already reached 235 MW of installed solar capacity.

Its carbon intensity had therefore declined by 30% to 600 kg of CO2 per ton of steel, with the further milestone being set at 400 kg/mt of steel, which Tosyali plans to achieve through ongoing investments in a total of 2.5 GW of renewable energy generation.

Steelmaking Yesilyurt Group said its 80 MWe solar power plant in Sanlıurfa met 27% of its facilities' electricity consumption. And most recently, in July 2025, steel bar producer IDC commissioned its 143 MWe solar power plant in Salihli.

In addition, Kroman Celik, which already has a 65 MW Horasan solar plant, is looking to expand it and build a 45 MW Horasan-2 solar farm in Hizirilyas.

Turkey's Ministry of Environment and Climate Change, which assesses such projects, has granted many approvals to date, most of which were obtained after mid-2024.

According to project owners, it takes four to twelve months for a solar project to receive environmental impact assessment approval in Turkey, but the majority have their permits agreed within six months. It then takes one to three years to build and commission the facility.

At least 14 solar plant projects have been approved so far, totaling 1,171 MWe. This will power 30.2 million mt/year of steelmaking operations, about half of Turkey's total installed crude steel capacity. Platts estimates that roughly 35% of this solar capacity is meant to reduce emissions at the BF-BOF plants, Isdemir and Erdemir, with a combined 8.5 million mt/year steelmaking capacity.

According to project designs, 1 MW of installed capacity can provide 1.7 million-2.7 million kWh, and so the combined output of the approved solar plants could amount to 2 billion - 3.150 billion kWh/year.

Also, a plethora of projects that have been submitted to the ministry and are awaiting approval would add to an even higher combined capacity of almost 1,500 MWe, and could potentially increase the share of steelmaking capacity partly powered by solar to just over 40 million mt/year.

Turkey now EU's top steel supplier

In 2024, Turkey became the top steel supplier by volume to the EU, with its exports comprising 12% of the EU's 37 million mt steel imports, up from a less than 5% share in 2014. Last year, the EU bought 4.39 million mt of steel from Turkey, tripling the tonnage compared to a decade ago. Turkey now stands a chance to enhance its market share in Europe by offering low-carbon steel products.

Turkish steel companies are building renewable power generation facilities both at EAF mills and at BF-BOF steelworks. They are building them because of the CBAM and to reduce their own energy costs. With these dual benefits, respective investments are expected to pay off, Sergey Nedelin, a senior analyst at Metals & Mining Intelligence, told Platts.

During the CBAM transition period [2023-2025], Scope 2 emissions were taken into account in the default values, and perhaps exporters expected emissions from electricity use to continue to be included, but in its definitive stage from 2026, with regards to steel, CBAM only takes into account direct, Scope 1, emissions so far, according to Nedelin.

However, even without accounting for Scope 2 emissions in the CBAM, Nedelin believes Turkish companies' transition to RES in the scrap–EAF production system will allow their steel to be labeled as near-zero carbon and fetch a premium in the European market.

Platts' assessments of European rebar and hot-rolled coil carbon-accounted premiums have held steady, at Eur30/mt and Eur60/mt, respectively, since May. The HRC carbon-accounted premium fell from Eur70-75/mt in February-March, while the rebar carbon-accounted premium has held at Eur35/mt previously for most of Q1 2025.

CO2 intensity cuts could reach two-thirds

The transition from fossil fuels (coal, coal-fired electricity) to RES power plants could result in carbon intensity reductions of 0.24 mt of CO2/mt for the BF-BOF route and 0.39 mt/mt for the scrap-EAF route, according to Metals & Mining Intelligence.

The Moscow-based consultancy estimates that BF-BOF steelworks in Turkey emit 1.9-2.5 mt of CO2e/mt of steel with Scope 1 and 2 combined and their per ton of steel energy consumption vary between 280 and 340 kWh, while scrap-fed EAF mills' emissions amount to 0.4-0.65 mt/mt with the energy requirements being 460-520 kWh/mt. And so replacing part of that energy intake with in-house generated fossil-free electricity could reduce carbon intensities of steel by 12% to just below 1.96 mt/mt for BF-BOF producers and by 66% to 0.2 mt/mt for EAF-based mills.

The average CO2 emissions per ton of rolled steel in Turkey is about one ton, so the country's steel is already low-carbon, and the local industry does not require as much decarbonization as elsewhere, Stanislav Zinchenko, the CEO of Kyiv-based metals and mining consultancy GMK Center, told Platts. He notes that the ongoing REPP projects primarily aim at reducing emissions from integrated BF-BOF steelworks Erdemir and Isdemir [owned by OYAK Mining Metallurgy Group] and Kardemir.

Kardemir, which operates both BF-BOF and EAF plants, notes on its website that its green energy installations, consisting predominantly of wind turbines, have a power of 23.7 MW and generate 61.13 GWh.

Unlike their EU counterparts, Turkish steel producers cannot rely on government subsidies to finance their energy transition, and so their decarbonization strategies do not imply a shift in their steelmaking route -- only energy efficiency improvements, including the launch of a new 2.8 million mt/year blast furnace at Isdemir, a new 800,000 mt/year coke oven battery at Erdemir, and the construction of REPPs and EAFs, but in addition to, not in lieu of, the existing BF-BOF facilities, according to Zinchenko.

Thus, OYAK is investing in 2,200 MWe of solar capacity, which it wants to have by the end of 2028, and in installing EAFs at its Isdemir and Erdemir steelworks.

Turkey's carbon market in the making

The launch of Turkey's Emission Trading System is also factored into the country's steel industry decarbonization. The ETS pilot phase, scheduled for 2026-2027, will cover sectors affected by the EU's CBAM, including the iron and steel, and energy industries. Companies emitting over 50,000 mt/year of CO2 will have to obtain emission permits.

The country's ambitions to grow renewable and nuclear energy generation should make the ETS viable. Turkey aims to have 51 GW of wind and solar energy capacity by 2030 and 120 GW by 2035: the latter target means a quadrupling from 2024's 32 GW. The share of these renewables in electricity generation in Turkey could therefore reach 49% in 2035. In 2024, it surpassed 18% (62 TWh), according to energy think tank Ember.

This was largely a result of the rapid solar capacity rollout during the last couple of years. In 2024, Turkey's installed solar capacity reached 19.8 GW and power generation from solar increased by 7.3 TWh or 39% year over year, according to Ember.