07.06.2022 Eskişehir
Speaking at the Eskişehir Chamber of Industry’s Industry Congress, the Union of Chambers and Commodity Exchanges of Turkey (TOBB) President M. Rifat Hisarcıklıoğlu said, “We need to be aware of the new world that is coming into being on our doorstep.” Hisarcıklıoğlu underlined that the main issue shaping the future is the digital and green transformation process, stressing that this situation contains risks and opportunities for all companies.
TOBB President made
evaluations about the new process of economy and trade at the Eskişehir Chamber
of Industry’s Industry Congress hosted by Eskişehir Chamber of Industry
President Celalettin Kesikbaş. Hisarcıklıoğlu stated that if they use this
process correctly, they can pass ahead of other countries that are competitors
especially in the EU market, “But if the necessary transformations are not
provided, we may lose the advantages of the Customs Union between us and the
EU. Research shows that Turkey will be the third country most adversely
affected after China and Russia in the implementation of carbon at the border,
which will be fully implemented in 2026. Especially in the aluminum, cement and
iron and steel sectors, it is expected that this effect will be seen more.”
- Carbon footprint
calculation
Hisarcıklıoğlu said
that last month, the think tank TEPAV conducted a survey of companies and said:
“Unfortunately, the results are not very positive. Currently, only 1 in 4
companies can calculate their carbon footprint. Most companies do not have a
decarbonization policy. If hydrocarbon-intensive companies are widespread,
there are no plans to replace existing energy sources. The vast majority of
firms appear to have very limited knowledge of the Green Deal and Carbon
Regulation at the Border. And it is determined that they do not have
comprehensive knowledge of the Emission Trading System (ETS) and even doubt the
feasibility of ETS in Turkey. Therefore, both our companies and the relevant ministries
need to take these issues into consideration more and think about how we can be
involved in this transformation process.
For this reason, we
will soon launch a portal where the Turkish business world can calculate its
carbon footprint.
The Russian-Ukrainian
war has also brought both the issue of energy security and food security to the
forefront.
It showed not only
Europe's dependence on Russia for energy, but also the dependence of the world
food system on Russia and Ukraine.
30 percent of global
wheat production and 60 percent of sunflower oil production originate from
Ukraine and Russia.
Due to the war, almost
half of Ukraine's agricultural land could not be cultivated this year.
The 25 million tons of
grain harvested remained there due to the Russian blockade in Ukrainian ports
and was left to rot. The Global Food Price Index increased by 30 percent in
April 2022 compared to last year.
In fact, while the
Russian-Ukrainian war brings the issue of energy security to the forefront, it
also accelerates the energy transition. This puts the European Green Deal, and
therefore its importance for Turkey, on an even more solid footing. The
“Re-Power-EU” plan, which aims to reduce the EU's dependence on energy raw
materials from Russia, aims to diversify fossil fuel source countries for
Europe in the short term and energy efficiency and renewable energy in the
medium to long term.
For example, according
to the plan, the EU plans to meet half of its energy needs from renewable
energy by 2030.
It is considered that
the obligation to install rooftop solar panels in commercial and public
buildings until 2025 and in new houses until 2029 will be introduced. In
addition, the Mediterranean Green Hydrogen Platform will be established and
hydrogen imports will be met from here. This will bring the opportunity to make
new investments and partnerships for our country's industry.
These decisions, which
were taken to reduce dependence on Russia in energy, are also supported by the
private sector.
Several global firms,
including Microsoft and Unilever, argue that the Green Deal must be
strengthened to reduce dependence on Russia. In short, we need to be aware of
the new world that is being born on our doorstep.”
- We are proud of
Eskişehir's industrial achievements
Hisarcıklıoğlu
mentioned that the agenda of the country and the world remained intense, but
mostly focused on the short term, “First the pandemic, then supply and supply
problems and now the Russia-Ukraine war are occupying the agenda. But as
industrialists, we need to distinguish between the superfluous and the
important. Eskişehir Industrial Congress also offers us an important
opportunity to get out of the near-sighted perspective and focus on the future.
This was already the case for Eskişehir, the city of industry and technology in
Western Anatolia. With its 3 OIZs and 13 companies among Turkey's top 500
industrial enterprises, we are proud of Eskişehir's industrial successes. Here,
849 different industrial products can be produced. In terms of production capacity,
Eskişehir ranks first in Turkey in 54 products and among the top 3 provinces in
176 products. And in Eskişehir, now is the time to talk about the future of the
industry.”
Explaining that the
concept of “off-shoring” was discussed from the 1980s to the 2010s, the TOBB
President reported that supply chains spread from developed countries to
developing countries. Hisarcıklıoğlu said “China has gained the most from this”
and said: “We have also benefited a lot from this trend in the medium-tech
manufacturing industry such as automotive and white goods. We have transformed
and developed both our industry and our exports. Then, from the 2010s, came the
concept of “re-shoring”. As the weight of labor power waned, and technology and
human capital came to the fore, supply chains began to return to their
homeland.”
- Warning for EU and
Customs Union not covering digital economy
“Also with the
pandemic, the efficiency of long supply chains has decreased. And finally, with
the Russian-Ukrainian war, it became clear that it was no longer possible for
supply chains to spread freely all over the world, as they had been in the past
40 years. Thus, a new concept appeared in America: Friend-shoring. In other
words, supply chains are now wanted to be in trusted countries.
First the U.S. and now
the European countries say that our goal is no longer just free trade, but safe
trade. They will implement these policies through bilateral and multilateral
trade agreements.
On issues such as the
digital economy, data sharing, carbon pricing and climate change, they will
improve their supply chains with countries that have the same approach. So if
you want to stay in your supply chains, you have to follow the new rules. In
fact, instead of passively following these rules, we need to take part in this
table where the rules will be shaped. For example, our Customs Union with the
EU unfortunately does not cover the digital economy. The European Union and the
United States are working on a transatlantic data-sharing framework and will
agree soon. Therefore, in the beginning age of “friend-shoring”, we need to be
at the table where the rules will be determined. Otherwise, we can experience
the same problem as the free trade agreements that we ignored when we entered
the same customs union, and we can be left alone.”
- There are both
threats and opportunities
Stating that the
products to be imported into the EU markets with the Carbon Regulation at the
border will be subject to an additional tax based on carbon footprint,
Hisarcıklıoğlu said that then, along with sustainable product standards, carbon
footprint, water footprint and waste management conditions will be examined.
TOBB President Hisarcıklıoğlu said, “The details will be shaped until the end
of 2022 and accordingly, a number of products will be completely prohibited
from entering the EU markets. So the Customs Union will no longer work.
In the first stage,
sustainable product standards will be introduced for sectors such as furniture,
bedding, tires, detergents, paints, mineral oils, iron and steel and aluminum,
especially for textiles, where our country has the highest foreign trade
surplus. So the opportunities and the threats are there, and it's clear what to
do.”
- The opportunity that
comes with TOGG
Stating that the Green
Deal process is a deep new opportunity area that will allow Turkey to imagine a
common future together with European partners, Hisarcıklıoğlu said, “It is a
sign that we need to stop dealing with the superfluous, focus on the important.
It is a real framework of economic programs in the areas we need most, from
industry to foreign policy. When we start to take steps in this direction, it
will be seen that new and very wide, green financing opportunities will be
opened before us in terms of access to external financing, which we feel the
most lacking.”
Hisarcıklıoğlu stated
that they seized a similar opportunity in Turkey's automobile project and said:
“This project is more than just producing a car. It is the best industrial
policy move implemented in Turkey in recent years. As you know, Automotive is
one of the most important industrial sectors of Turkey. We produce both cars
and their parts. We are also Europe's largest supplier in this field. On the
other hand, being a passive element of the supply chain is also risky. Because
rival countries can get in front of us and grab our place. We have already
experienced a few of these in the past years.
So we had to be the
leader of the supply chain and have our own producers. It was at this moment
that a window of opportunity opened for entering the automotive sector,
parceled out by old brands: electric and autonomous vehicles. Using this window
of opportunity, the market capitalization of Tesla for 20 years has surpassed
the sum of all the other automotive companies you know.
While the device we
call the car was transforming, both the opportunity to enter the market for
Turkey and the necessity of taking precautions in order not to leave our
automotive supplier industry out of this transformation emerged. In order to
evaluate this window of opportunity, we launched the TOGG initiative. For the
first time, we brought together 5 diverse and large groups. For the first time,
we are producing a car whose intellectual property rights belong entirely to
our country.
For the first time, we
are working with start-up companies in different fields and establishing our
own supplier ecosystem. For the first time, we are reversing the brain drain in
this area. By employing qualified employees and engineers, we also prevent them
from going abroad. In summary, we are capturing technological and mental
transformation with TOGG. We are completing the story that started in Eskişehir
60 years ago but remains unfinished. We are building more than a factory. We
are building a smart, environmentally friendly production center and technology
base. We contribute to the green and digital transformation process of our
country and the mobility ecosystem. At the same time, we are creating a new
supply chain and production system within our country. The first vehicle from
our production facility in Bursa Gemlik leaves on October 29. Next year, we
start to see TOGG on the roads.”
Following the meeting,
awards were presented to industrialists who completed 30-40 and 50 years.