Koç Holding: Independence and Competitiveness Formula in Energy Transition

Koç Holding Vice Chairman Ali Koç and CEO Levent Çakıroğlu made assessments on the energy transition at a press conference held within the scope of COP31. Ali Koç stated that the transition offers great opportunities for Turkey, emphasizing that new targets are no longer needed and that action must be taken. Expressing that climate goals and economic interests now converge at the same point, Koç said this is not a choice but an economic necessity. Explaining that the Russia-Ukraine War and the Strait of Hormuz crisis brought energy security to the forefront, Koç reported that Turkey's monthly energy cost increased by 49 percent after the Hormuz crisis. Summarizing the formula for energy transition as 'energy independence plus economic competitiveness,' Koç noted that Europe is participating in the race with regulations and carbon pricing, while the US is participating with all resources from shale gas to nuclear. He also cited the US withdrawal from the Paris Agreement in January 2025 as one of the important factors in the transition. Reminding that Turkey is two-thirds dependent on foreign sources for energy, Koç said that despite energy resources being nearby, Turkey is one of the most affected countries. He stated that with its engineering capacity and industry, Turkey has a high opportunity to position itself in the value chain of the transition. Ali Koç stated that the possibility of the EU excluding Turkey from the Made in EU scope would deeply affect the automotive sector. Noting that last year there were 28 billion euros in imports and 26 billion euros in exports in automotive, and that Turkey is Europe's second-largest market by volume and third-largest by value, Koç said such a decision would turn a 30-year win-win relationship into a lose-lose level. Drawing attention to the fact that nearly 45 percent of trade is conducted with Europe, he emphasized that compensation for exclusion would be difficult. Levent Çakıroğlu, on the other hand, announced that Koç Group invested 17.5 billion dollars in the last 5 years, and that 8.5 billion dollars have been invested in Tüpraş to date. He stated that the group's licenses within the scope of self-consumption are around 540 megawatts, and that more than 200 megawatts of this has been completed. He expressed that seven companies, including Arçelik's Turkey operations, Ford Otosan, TürkTraktör, Entek, Yapı Kredi, and Otokoç, provide all of the energy they use from renewable sources. He said that Entek's renewable capacity of 478 megawatts will increase to 827 megawatts by the end of next year, and the target is to raise it to 1.6 gigawatts in 2030 and 2.5 gigawatts in 2035. Ali Koç stated that China holds 92 percent of global solar panel production, 84 percent of battery storage capacity, 74 percent of wind turbine capacity, and 35 percent of heat pump capacity. Noting that 90 percent of the equipment used in wind energy in Turkey comes from China, Koç said that need fosters creativity and innovation. Koç added that financing in the country is currently very expensive and that he thinks cooperation can be made. Not investment advice.