Towards a green H${}_2$ economy. Türkiye Country Report

Türkiye's Hydrogen Technologies Strategy and Roadmap highlights two main targets: 1. Reducing the cost of green hydrogen production to less than Dollar 2.4/kg by 2035 and less than Dollar 1.2/kg by 2053. 2. Increasing the electrolyser installed power capacity to 2 GW by 2030, 5 GW by 2035 and 70 GW by 2053. To reach these targets, the main focus lies on the technology development for hydrogen production, storage, distribution and utilization. However, the Roadmap lacks a detailed action plan with clear goals and how these will be achieved. In Türkiye, implemented policies and the targets announced by the government on climate action often conflict. A good example is the increasing number and capacity of coal power plants despite the announced net-zero target by 2053 by the President Erdoğan. Nevertheless, to establish a green hydrogen economy, there are several factors distinguishing Türkiye from other potential producers of the global market: 1. Natural, physical and human capital: Türkiye has very good renewable energy resources. In 2022, 60% of the domestic energy generation was from renewable sources. Pipelines, ports and electricity grid are all modern and well-equipped to support the unfolding hydrogen market. Its young population with high shares of STEM graduates offers great potential. However, water scarcity may pose one of the greatest challenges for green hydrogen production in Türkiye. 2. Research and innovation ecosystem: The research and innovation ecosystem of the country is a well-established one. One of the recent foci of Scientific and Technological Research Council of Türkiye (TÜBİTAK) is on green growth. The Green Growth Technology Roadmap of the Council includes a detailed technology development plan to support the green transformation of all the heavy-industries that are affected by Carbon Border Adjustment Mechanism (CBAM). These technologies also include hydrogen production and carbon capture and storage (CCS). Another important research topic for Türkiye is the boron mineral. Currently the research is particularly focused on its versatile use to chemically store hydrogen. However, high inflation rate makes it very challenging for firms to invest in R&D. 3. Local hydrogen demand: Turkish heavy-industry is the sector with the biggest demand for green hydrogen in the country. Due to CBAM that is going to be implemented by the European Union (EU) as of 2026, heavy-industry manufacturers need to decarbonize their production processes and green hydrogen, in most of the cases, is the only possible option to do so. However, high levelised cost of hydrogen (LCOH) compared to fossil fuels is the biggest challenge for industry given that no support mechanism is currently in place. - This country study recommends that immediate action in setting clear and coherent policies is required. Moreover, supportive regulatory framework should be implemented to ensure market development, safety and harmonised standardization. - Türkiye can also leverage its existing know-how in manufacturing of renewable energy technologies and use this to establish a strong electrolyser manufacturing sector. This can be supported by joint ventures with international manufacturers, accelerating the technology development and attracting foreign direct investment into the country. - One major area of collaboration with international cooperation is the joint infrastructure development. Existing joint declarations can be utilized to explore collaboration possibilities for regional and bilateral infrastructure projects like pipelines.