When examining the growth of Türkiye’s HVACR market, Mert Kalafatoglu says, one must start looking from 2008, when the Ministry of Energy issued new legislation stating that all buildings over 2,000 square metres must incorporate a central heating and cooling system. Kalafatoglu, who serves as the Senior Sales Director of Climate Solutions at Danfoss Türkiye, Middle East and Africa, says that 2008 marked a new beginning for the HVACR market in Türkiye and that the legislation made high-tech HVAC control equipment an essential part of newly built projects.

From 2008 to 2018, Kalafatoglu says, Danfoss has witnessed massive urbanisation in Türkiye, resulting in an upward trend for the HVAC control group product portfolio in commercial and residential buildings. Moreover, he adds, the pandemic and the period of high inflation also positively impacted more central and digital solutions, resulting in the reduction of the total cost of ownership of an HVAC system. In addition, he says, Türkiye has started to subsidise some parts of the energy renovation projects in public offices and industry, following the signing of the Paris Agreement in 2021 to reduce CO2 emissions to 50% by 2030 and reach zero emissions by 2050. “We also expect that in 2024, a subsidisation initiative will kick in for private commercial buildings,” he says.

Joining the conversation, Mehmet Şanal, Chairman, Turkish HVAC-R Exporters’ Association, says that rapid urbanisation in Türkiye; rising disposable incomes; and government incentives, subsidies and regulations promoting the use of green HVACR systems, encourage companies and consumers to invest in eco-friendly options amid growing concerns about environmental stability and rising demand for energy-efficient and low-emission technologies. These, he says, have collectively contributed to the growth of the HVACR industry in Türkiye.

He says the expansion of the sector also brings economic benefits through job creation, increased manufacturing and service opportunities, and improved indoor comfort. Furthermore, he says, the focus on green HVACR systems aligns with Türkiye’s commitment to environmental protection and to achieve a sustainable future by reducing energy consumption and emissions.

Moreover, he says, the investments in green HVACR systems, smart HVACR systems and new technologies in Türkiye’s HVACR sector contribute to achieving environmental sustainability goals, enhancing energy efficiency, and driving economic growth. These investments, he says, also align with global trends towards sustainability, positioning Türkiye as a more energy-efficient and environmentally responsible nation while creating economic opportunities for businesses and individuals alike.

In addition to this, he says, introducing energy-efficiency standards for HVACR equipment, supporting research and development of new energy-efficient HVACR technologies and providing financial incentives for the purchase of energy-efficient HVACR equipment have strengthened Türkiye’s position as a global leader in the green HVACR market. Moreover, he adds that the strong manufacturing base in the country, skilled workforce and strong commitment to environmental sustainability position Türkiye as a global hub for the production and export of green HVACR products and services.

Şanal, providing an overview of the sustainability initiatives in Türkiye, says that the country has installed 5.7 GW of renewable energy capacity in 2019 and has set a target of reducing its greenhouse gas emissions by 21% by 2030. Further, he says, the government of Türkiye is investing USD 60 billion in energy efficiency measures over the next decade.

Exports profile

Weighing in, Kalafatoglu says the size of the HVACR market in Türkiye, which is approximately USD 6 billion, makes green solutions a crucial part of the CO2 reduction targets. With the Paris Agreement implementation, he says, the expectation is to see the main value drivers in all applications in the HVAC market shifting towards smarter and greener solutions. “Following the global green transition agenda, Türkiye is capable of growing both the local and export markets,” he says.

In the first quarter of 2023, Kalafatoglu says, the air conditioning market in the country had increased its exports compared to the same period in 2022 – 7.9% in the heating systems sector, 3.9% in the cooling systems sector, 11.3% in the air conditioning systems sector and 16.6% in the ventilation systems sector. The highest export market of Türkiye, he says, is Germany with USD 190.8 million, followed by Italy with USD 127 million, Russia with USD 125 million and the United Kingdom with USD 116 million.

The major export markets for Turkish HVACR products, Şanal says, are France, Germany, Italy, Poland, Qatar, Russia, Romania, Saudi Arabia, Spain, United Arab Emirates and the United Kingdom. Turkish businesses, he says, are expanding their market presence internationally by offering high-quality products, competitive processes, strong distribution networks, financial incentives, marketing assistance and trade delegations from the government. He further says that the rapid economic growth and urbanisation in the GCC region are also driving demand for Turkish HVACR products. Additionally, Şanal says, Turkish businesses now focus on developing strong brand identity and marketing their products internationally, attending fair trades to showcase products and networking with potential buyers.

Taking the discussion to the key trends in the use of new technologies in the HVACR sector in Türkiye, Kalafatoglu says the adoption of new technologies in the HVACR industry in the country is very high. The market showcases increasing demand for digital as well as energy- efficient solutions, he says. For instance, he says, Danfoss has been observing a massive demand for its smart solutions for commercial and residential buildings, such as its digital actuator, electronic thermostatic radiator valves, and thermostats and controllers for floor-heating applications.

For his part, Şanal says smart HVACR systems, energy efficiency, green solutions, renewable energy integration, Indoor Air Quality (IAQ) enhancement, advanced refrigerants, hybrid systems, ductless mini-split systems, Building Information Modelling integration, electrification and heat pumps are the key factors that contribute to the rise of innovative technological solutions in the Turkish HVACR sector. Moreover, he adds that the sector, committed to contributing to global sustainability initiatives, is keen on adopting technologies that enhance energy efficiency, reduce environmental impact and improve user experience.

HVACR-related regulations

The government of Türkiye, Şanal says, has enacted several regulations in recent years aimed at promoting energy efficiency, environmental protection, consumer safety and the growth of the HVACR sector in the country. Some of the regulations, he says, are the Energy Efficiency Law, which sets minimum energy efficiency standards for a variety of products, including HVACR equipment; the Environment Law, which regulates emissions from HVACR equipment; the Consumer Protection Law, which sets standards for the safety and performance of HVACR equipment; and the Tax Incentives Law, which provides tax breaks for the purchase of energy-efficient HVACR equipment. In addition to the aforementioned regulations, Şanal says, the government provides grants and loans to purchase energy-efficient HVACR equipment, tax breaks for installing energy-efficient HVACR systems, and subsidies for the research and development of energy-efficient HVACR technologies. These financial incentives, he adds, have helped make energy-efficient HVACR systems more affordable for businesses and consumers and have contributed to Türkiye’s position in the global HVACR market.

Furthermore, Şanal offers some specific examples of how the government’s regulations and financial incentives have contributed to the HVACR sector. In 2017, he says, the government of Türkiye introduced a new energy efficiency labelling scheme for HVACR equipment, mandating manufacturers to label their products with an energy efficiency rating, from A+++ to D. “The higher the rating, the more energy efficient the product is,” he says. In addition, he says, the government also provides tax breaks for businesses that purchase energy-efficient HVACR equipment, and these tax breaks can be worth up to 50% of the purchase price of the equipment.