What’s going on here?
Turkey has emerged as Europe’s leader in coal-generated electricity for 2024, producing 88 TWh from January to September and overtaking powerhouse nations like Germany and Poland.
What does this mean?
Turkey’s increased dependency on coal is largely fueled by its expanding electricity needs, which jumped 5% this year—far surpassing the more modest growth observed across Europe. This surge in demand has solidified coal’s position, now accounting for 35% of the nation’s electricity production. Meanwhile, the environmental cost is significant: the country’s coal-powered plants emitted 88.4 million tons of CO2, setting a new record and diverging from the downward emission trends in other European nations. Adding to this dynamic, Turkey imported 16.7 million metric tons of coal in the first three quarters of 2024, with Russia supplying a dominant 70% share. This reliance on coal, coupled with Turkey’s blossoming export-driven manufacturing sector, highlights the country’s pressing energy demands and the current lag in developing greener alternatives.
Why should I care?
For markets: The cost of industry.
The rise in coal consumption mirrors Turkey’s growth in electricity demand, largely driven by a bustling manufacturing economy focused on exports. With winter approaching and cleaner energy infrastructure upgrades lagging, Turkey’s reliance on coal is projected to tighten the country’s energy market. This situation presents both risks and opportunities for investors: a continuing dependency on imported resources could impact trade balances and market stability, while potential shifts toward cleaner energy may require substantial investment in the future.
The bigger picture: Balancing demand and sustainability.
Turkey’s current path underscores a critical global challenge: meeting booming energy demands without compromising environmental commitments. As Turkey increasingly turns to coal, the pressure mounts on its policymakers to reconcile economic growth with sustainable practices. This scenario offers a lens through which to view broader trends affecting global energy markets, as nations grapple with the twin challenges of industrial demand and climate change policy.
