Market report
WASTE MANAGEMENT IN TURKEY
OFFICIAL PROGRAM
P
WASTE MANAGEMENT AND WASTE WATER MANAGEMENT IN TURKEY The goal of this study is to analyze and assess the current situation in the waste management and waste water management market in Turkey and make an outlook with regard to future developments in these markets. Today, in Turkey, still about the half of the total population of 73.7 Mio is not served with waste disposal / recovery and waste water treatment services. Moreover, only about a quarter of the industrial waste water is discharged to receiving bodies after treatment. Turkey’s objective of an EU integration and thus shaping all of its waste management regulations and policies towards harmonisation with EU’s standards, the various strategic plans of ministries, Turkey’s economic growth forecasts, the raising awareness in the industry for an integrated waste management approach, the waste-to-energy concept, various expected population growth scenarios and many other lucrative factors, will lead to a substantial growth of both the municipal and industrial waste management and waste water treatment industry in future. Hence, based on these analyses and positive market trends, potential investment and cooperation opportunities for Swiss SMEs within these industries will be highlighted. Moreover, a comprehensive SWOT analysis and concrete recommendations for business and marketing strategies will be provided, illustrating how Swiss SMEs could enter into these lucrative industries. Thereby, the main business potentials of Swiss companies in the increasing Turkish waste management and waste water treatment industry - which, at the same time incorporate their comparative business advantages , - are their project management competence as well as the supply and technology transfer of their High-Cleantech products, processes and services. Consequently, in order to optimally make use of these lucrative Swiss-Turkish business and cooperation potentials in the waste management and waste water treatment industry, the participation in events as well as the launch of joint initiatives are essential issues. Language: English Number of pages: 106 Author: Commercial Office Turkey, Green Consult and Finance, Erkan Kalayci, Ph.D. FRM DISCLAIMER The information in this report were gathered and researched from sources believed to be reliable and are written in good faith. S-GE and its network partners cannot be held reliable for data, which might not be complete, accurate or up-to-date, nor for data which are from internet pages/sources on which S-GE or its network partners do not have any influence. The information in this report does not have a legal or judicial character, unless specified noted.
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Contents
4.2. Regulatory framework and legislative requirements __ 49
1. EXECUTIVE SUMMARY _______________________4 2. TURKEY AND ITS KEY ECONOMIC INDICATORS__7 Growth within a decade _________________________ 7 Real sector __________________________________ 9 Financial Sector _____________________________ 10
3. SECTOR ANALYSIS – WASTE MANAGEMENT ___13 3.1. Key sectors ______________________________ 13 3.2. Policy and regulation within the waste management industry _____________________________ 13 3.2.1. Legal Regulation ________________________ 13 3.3. Current situation and future outlook for the waste management market ____________________ 17 3.3.1. Waste Management in Turkey ________________17 3.3.2. Outlook for potential changes within the waste management industry ________________________ 33 3.3.3. Key issues within the waste management market __ 36 3.4. Competition analysis _______________________ 37 3.4.1. Key drivers for competitive advantage in the Turkish market 37 3.4.2. Market fragmentation and key players _________ 37 3.5. potential investment and cooperation opportunities within the industry _____________________ 41 3.5.1. In the Public Sector ______________________ 41 3.5.2. In the Private Sector _____________________ 45
4. THE REGULATORY DRIVERS FOR WASTE & RENEWABLE ENERGY FROM WASTE _____47 4.1. Main regulatory stakeholders __________________ 47
4.3. Product standards & end of waste criteria _________ 61
5. THE TURKISH WASTE MANAGEMENT INDUSTRY 71 5.1. Current size and future investments _____________ 71 5.2. Key players and market structure _______________ 74 5.3. Market pricing and future trends _______________ 87
6. TURKISH MARKET OPPORTUNITIES __________ 89 6.1. Trends and future developments _______________ 89 6.2. Market developments and market niches _________ 89 6.3. Project structures & key issues _________________ 90 6.4. Available grants and investment opportunities ______ 92 6.5. SWOT analysis for Swiss firms in turkey __________ 95 6.6. Event marketing opportunities ________________ 97
7. MARKET ENTRY STRATEGIES ______________ 105 8. CONCLUSION _____________________________ 106 9. SUMMARY AND KEY TAKEAWAYS ___________ 107
1. Executive Summary Today, in Turkey, still about the half of the total population of 73.7 Mio does not have access to any waste disposal / recovery and waste water treatment services, thereby being exposed to threats to their health and environment. Moreover, 44% of the municipal solid waste is still dumped into open dumping sites of municipalities, therefore implying the release of the very potent greenhouse gas methane into the atmosphere and incorporating explosion risk of sites. On average, only about 24% of the industrial waste water discharged is treated. Due to Turkey’s expected economic and population growth, the absolute amount of municipal and industrial solid waste as well as municipal and industrial waste water discharged are even expected to further increase substantially in the future. Turkey’s goal of a sustainable development, giving increasing awareness and importance to environmental issues, which is additionally enhanced by Turkey’s objective of an EU accession, have resulted in giving main priority to the development of the waste management and waste water treatment industry, which constitute more than half of Turkey’s total environmental expenditures today. Since the start of the EU accession in 2005, Turkey has been defining and adapting all its regulations with regard to waste management and waste water treatment corresponding to the existing EU Directives and in line with the “EU Integrated Environmental Approximation Strategy for Turkey (2007-2023)”. In addition, several regulatory stakeholders, in particular the Ministry of Environment and Urbanization (MoEU) with its “Strategic Plan 2013-2017” being in accordance with Turkey’s EU path, have defined concrete strategies, targets and action plans for bringing the Turkish waste management and waste water treatment industry to EU standards. According to MoEU’s “Strategic Plan 2013-2017”, 61 controlled landfill sites, 550 waste bringing centers and 63 dual waste collection systems will be established until 2017. In addition, 460 waste water treatment projects will be approved, 50% of which will be paid by the state as investment incentive of the energy bills. All these projects will very likely be publicly tendered under the responsibility of Municipalities and Metropolitan municipalities and based on public-private partnership (PPP) structures. Municipalities and Metropolitan municipalities are in public charge by law and have the sole responsibility for the implementation of waste management and waste water treatment services for domestic type of waste and waste water from households, industries or commercial enterprises. However, the current implementation of waste management and waste water treatment services by municipalities and Metropolitan municipalities is far away from its optimal status. While collection and transportation of waste is done to a large extent, the great majority of solid waste in the country is still not being disposed in accordance with the laws and regulations. For that reason, municipalities and Metropolitan municipalities increasingly waive their responsibility for the entire process of municipal solid waste management (i.e., collection, transportation, separation, recycling, composting, disposal) and tend to reduce their waste management activities to only the collection and transportation of waste and transfer the responsibility for the other waste activities to the private sector by entering into PPPs in form of BOT contracts. Private companies increasingly see the lucrative business potential of integrating municipal solid waste management activities with the production of energy from waste. Today, various investment and cooperation opportunities exist in Turkey’s waste management and waste water treatment sector. While, as in the case of integrated solid waste and waste-to-energy facilities, also for the establishment of waste water treatment facilities also BOT contracts are common, for their operation and their operation and maintenance, mainly outsourcing or PFI contracts are applied. Concession contracts between public institutions and private companies are primarily implemented through investments in waste-to-energy plants for the rental of land and receipt of electricity generation licenses from the Turkish Energy Market Regulatory Authority. In addition to project investments of relatively larger sizes, JV / partnerships, increasingly financed by a combination of the entrepreneurs’ own equity and cleantech focused international loans, such as TurSEFF, MidSEFF or CTF, are increasingly found in initiatives for investments in waste-to-energy facilities of relative smaller sizes, where new technologies such as gasification / pyrolysis technologies are targeted to be applied.
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