Turkey and the EU: Dialogue to Ensure Energy Security

Energy and decarbonization: a space for cooperation and dialogue between the European Union and Turkey

On 24 February, Russia’s internationally condemned act of aggression against Ukraine created a situation of precariousness across the globe and especially in the European Union. Since March’s Versailles Declaration, whereby member states agreed to phase out EU dependence on Russian fossil fuels, member states are working in close coordination to tackle rising prices and ensure energy supplies for the upcoming winter. In fact, Executive Vice President Timmermans emphasized the diversification of energy, saving, and the acceleration of renewable energy as key measures to reduce EU’s dependency on Russian fossil fuels. Though reachable, such goals would be unrealistic without acknowledging the EU’s current need for gas and thus stressing the importance of an energy cooperation between the EU and Turkey in ensuring energy security. EU member states are willing to compromise interests to make room for short-term modifications of the Customs Union to regulate the EU’s relationship with Turkey through the lens of the Green Deal and the objectives of the recently proposed REPowerEU. 

Considering recent initiatives to reduce EU dependence on Russian gas, energy diversification should mainly focus on the member states of the EU’s Neighborhood Policies, a community strategy through which closer relations between the EU and its neighbors are sought. Despite stalled proceedings, Turkey is an essential agent due to its status as a Candidate State for the EU, and its position as a crucial energy transit hub of LNG, coal, and energy connections with the Caucasus and the Middle East. 

In the past decade bilateral relations between the EU and Turkey have endured stalling political tensions due to discrepancies arising from the situation of the rule of law and human rights. Economic interdependence based on the Green Deal may open comprehensive dialogue for other matters of common interest. According to Article 3 TEU, the EU should always ensure that founding values on its bilateral and multilateral relations are respected. Therefore, cooperation on the Green Deal could result in a partial reopening of negotiations between Turkey and the EU. 

Long-term costs and benefits of the said cooperation through its economic, environmental, and political impacts are of specific importance regarding diversification. Considering the EGD announcement in December 2019, the Green Deal has its focus on the decarbonization processes through circular economy regulations and carbon boarder adjustment mechanism (CBAM). The EU's CBAM has led to certain fears towards Turkey’s cooperation in projects such as REPowerEU, as it could significantly impact on the Turkish economy. As Turkey’s Turkey's main exporter partner is the EU, an increase in taxes could negatively affect the flow of goods, especially electricity and cement. Studies estimate that Turkey may suffer a bill of €1.8 billion and an expected GDP decline of up to 3.6. Despite such fears, a variety of benefits arise for both partners, as "By providing further efficiency gains in electricity generation and diffusion, Turkey can achieve a higher path to national income and carbon load reduction, with higher net incomes for households and businesses."

In addition, Turkey imports 93% of its fossil fuels and wants to become more energetically self-sufficient. As a result, trying to invest in hydroelectric dams, solar panels, and wind farms. Currently those represent approximately 44% of Turkey’s electricity production. Despite that, Turkey is still importing LNG, is cooperating with Russia for the infrastructure of the Turkmen pipeline (to export and import Russian gas) and build its first nuclear reactor. The EU should be interested in supporting Turkish energy goals around self-sufficiency while at the same time benefiting from some of its fossil fuel transits. The eastern Mediterranean is a complicated scenario for Turkish-EU relations. By one way Turkey sees the East Mediterranean Gas Forum as a form of exclusion. At the same time, Turkish territorial and EEZ disputes with Greece and Cyprus and the 2020 demarcation of Libia are origin of many tensions. Especially, Turkish vessels’ exploration over its claimed EEZ precisely to become more energetically independent is one of the main problems. A more positive agenda, as the one expressed by the Council during Germany’s presidency in the second half of 2020, needs to involve an investment in Turkish green energy. This also goes in line with January 2021 Council conclusions on the external dimension of the European Green Deal on ideas such as energy diplomacy to boost security of the EU and its partners. Moreover, this were to include other projects related to sustainable blue economy in the Mediterranean and Black Sea. Needless to say, less Turkish dependence on hydrocarbons is a synonym for less Russian influence. Furthermore, it is important to mention that EU Member States could gain short-term benefits from the Baku Caspian Sea gas fields, which would help improve gas diversification through the Balkans.

Turkey's involvement in the EU's plan to reduce its gas consumption by 15% will allow the Union to regulate energy savings on a wider scale while creating room for solidarity between EU and Turkey. The joint voluntary reduction of gas consumption by member states and Turkey, supplemented with a coordinated demand for reduction by the Commission through its “Union Alert”, will significantly reduce the risk of curtailment of industries that are crucial for both the EU and Turkish supply chains.

Since the Commission’s proposal to increase the target to 45% by 2030, energy cooperation between the EU and Turkey seems of utmost importance for acceleration of renewable energy. The Commission even adopted a recommendation to speed up permit-granting procedures for renewable projects and facilitate power purchase agreements. Similarly, Turkey signed the Paris Agreement and pledged to reach net-zero emissions by 2053.  Turkey has vast potential for alternative energy sources, which are needed to meet EU's increased energy demand. Nonetheless, Turkey lacks a clear framework on how to achieve its climate goals. Thus, the EU can potentially support Turkey by providing a framework similar to REPowerEU. New interconnections will foster electricity trade and ensure energy security for both parties.

To conclude, decarbonization of the EU’s and Turkey’s economy is a crucial factor for the future of Turkey-EU relations. Not only is it needed to tackle climate change and energy security for both parties, but it also provides the change for a partial reopening of negotiations between Turkey and the EU. Energy diversification, saving, and the acceleration of renewable energy objectives towards a greener economy would provide both parties more self-sufficiency and allow them to become more independent of neighboring international agents.

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