Ankara looks to coal production for energy trade deficit

Upping local coal production would help Turkey lessen its energy import-driven trade deficit, Turkish Economy Minister Zafer Çağlayan said in a written statement on Thursday.

Ankara looks to coal production for energy trade deficit

World Bulletin/News Desk

Upping local coal production would help Turkey lessen its energy import-driven trade deficit, Turkish Economy Minister Zafer Çağlayan said in a written statement on Thursday.

The minister also promised to help boost investment in the country's coal reserves by providing tax breaks for coal firms under a new incentive package that aims to spur countrywide investment, according to the statement. “This applies especially to investments in bituminous coal, especially high-calorie deposits,” he said.

Turkey's energy import bill is expected to be between $55 billion and $60 billion in 2013, Energy Minister Taner Yıldız estimated during a press conference earlier this month. Turkey imports nearly 97 percent of its fossil fuels from abroad and key supplier Iran, which provided 40 percent of Turkish oil last year, faces sanctions that could one day limit Turkey's ability to receive its much needed oil and gas.

Çağlayan said that a move toward coal would limit that dependence. “This step is paving the way to investments in high-calorie coal production and making our natural resources available to the economy quickly,” he said in the statement.

The agreement would allow investors in coal to access a series of deep tax cuts that are allocated under a new regional incentive system that aims to bring development to the country's most impoverished regions. That system ranks the development levels of the country's 81 provinces on a scale of one to six, with developed “level one” regions earning few tax breaks while the poorest regions ranked “level six” receive the heftiest tax cuts. Regardless of the region, coal producers investing in new facilities would receive benefits similar to industries zoned under the heavily subsidized “level five” designation under the plan.

Earlier this month, Ankara approved a $2.4 billion deal between Turkish Hattat Holding and China's Harbin Electric International to build a 2,640-megawatt (MW) coal plant in the Black Sea province of Sinop. The news was largely overshadowed by news in the same week that Japan's Mitsubishi Heavy Industries, Ltd. and Itochu Corporation, with France's GDF Suez, had agreed to build a $22 billion nuclear power plant -- slated to be Turkey's second -- in Sinop province.

Turkey eventually plans to build three nuclear plants with the aim of decreasing its reliance on imported fuels. It is also counting on creating close ties with the provincial authorities in northern Iraq, where the state-run Turkish Petroleum Corporation (TPAO) has bought shares in several oil and gas fields. TPAO is also drilling in the Black Sea in hopes of finding domestic natural gas reserves. Turkish environmentalists meanwhile have criticized Ankara's energy strategy by arguing that nuclear, coal and fossil fuels could be replaced by a determined strategy to develop an extensive national wind and solar infrastructure.

Güncelleme Tarihi: 31 Mayıs 2013, 09:09
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