Impacts of the amendments to the environmental impact assessment regime on Turkish infrastructure projects

Turkey published a new Environmental Impact Assessment Regulation in the Official Gazette dated 29 July 2022 (the New Regulation), repealing the previous Environmental Impact Assessment Regulation which was in effect for the last eight years (the Old Regulation). The New Regulation includes certain important amendments and responds to current topics, such as sustainability and ESG concerns.

The New Regulation became effective as of 29 July 2022. However, for the existing project for which the Environmental Impact Assessment (EIA) application/project presentation files were submitted to the relevant authorities before the above-mentioned effectiveness date, only the favorable provisions of the New Regulation will be applied. Otherwise these projects will continue to be subject to the regime under the Old Regulation.

What's new?

• Content of the EIA application and project presentation forms is enriched, especially with sustainability and ESG assessments: So-called "sustainability plans" comprising of zero waste plans, traffic management plans, greenhouse gas reduction plans, environmental and social management plans, etc., are now also required to be included in both forms. From now on, the EIA application form should also include an assessment of the effect of the project on climate change as well as the effects of climate change on the project, going beyond the assessment of "greenhouse gas emissions" in the form attached to the Old Regulation.
• Definition of stakeholders ("public") has been narrowed: In the New Regulation, the term the "stakeholders" (which are to be consulted during the EIA process) no longer covers legal persons and associations, organizations and groups of these legal persons. As a result, NGOs closely monitoring environmental issues seem to be left out of the EIA processes. The stakeholders under the New Regulation only consist of Turkish citizens and foreigners resident in Turkey.
• Stakeholder consulting processes have been updated with the new notion of "stakeholder participation plan": The updated EIA application form attached to the New Regulation contains a "stakeholder participation plan" in which the project owners explain how they will communicate with the real and legal persons who may be affected by or may affect or be related to the project and how these persons will be informed at all stages of the project.   
• "Cumulative impact assessment" concept has been introduced: The EIA application and project presentation forms will now include parts analyzing the environmental impacts and risks of the project on the area where it is planned to be implemented as well as any other areas or resources which are to be affected by the project. According to the cumulative impact assessment method, other activities which may be directly related to the project must be analyzed as well. Therefore, the cumulative environmental impact assessments for complex or hybrid structures became a part of the EIA process.
• Capacity increases in "legally exempt projects" and "out of scope projects" became subject to EIA: Under the New Regulation, "legally exempt projects" are defined as the projects which started production and/or operation before 7 February 1993 and the projects which were included in the public investment program before 23 June 1997 and which have started production or operation as of 29 May 2013. The New Regulation also defines what is "out of scope" differently than the Old Regulation. Accordingly, projects which are not specified in the New Regulation due to their features, processes, type, production method, etc. or the projects which do not exceed the thresholds in Schedule 1 (the list of projects subject to EIA) or Schedule 2 (the list of projects of which environmental impact is subject to prior audit and assessment) of the New Regulation are defined as "out of scope". Further, the New Regulation makes the capacity increase and exemption plans of both "legally exempt projects" and "out of scope projects" subject to EIA and expands the applicability of the New Regulation.
• Change of project owner and project transfer processes are clarified: Deadlines for submitting documents relating to changes in the project owners or transfers of the projects and the necessary documents that need to be submitted in these cases have been clarified in the New Regulation.
• Shorter validity period for EIA positive decisions but inclusion of "court decisions" in the "force majeure" definition: The EIA positive decisions will expire in five years, instead of seven years as foreseen under the Old Regulation, unless the relevant investment is not commenced as a result of a force majeure event. Administrative court decisions directly impeding the commencement of the investment (such as issue of stay order or cancellation) are now included in the "force majeure" definition.

What's the impact on infrastructure projects?

The New Regulation has revised the scope of projects subject to EIA (Schedule 1) and projects of which environmental impact is subject to prior audit and assessment (Schedule 2).

The updates in the Schedule 1 are particularly significant in terms of the renewable energy projects, the environmental effect of which are still a topic of discussion. The New Regulation requires EIA for all renewable energy projects (except for solar energy), regardless of their generation capacity, whereas in the Old Regulation, only the projects having generation capacities above certain thresholds were subject to EIA:

• Geothermal: All geothermal energy power plants are now subject to EIA, whereas in the Old Regulation, only extraction and usage of geothermal resources with a thermal capacity of 20 MWe and above were subjected to the EIA.

The New Regulation also regulates all search and extracting activities of geothermal resources among the projects whose environmental impact is subject to prior audit and assessment. On the other hand, the Old Regulation's Schedule 2 only listed the extraction and usage of geothermal resources with a thermal capacity of 5 MWe.

• Hydro: All hydroelectric power plants are now subject to EIA, whereas in the Old Regulation, only those with an installed capacity of 10 MWm and above were subject to EIA. In addition, the hydroelectric power plants to be installed on existing dams and water pipelines are now among the projects whose environmental impact is subject to prior audit and assessment. On the other hand, Schedule 2 of the Old Regulation only listed the hydroelectric power plants with an installed capacity of 1 to 10 MWm.
• Wind: All wind power plant projects are now subject to EIA, whereas in the Old Regulation, only those having 20 turbine or more or an installed capacity of 50 MWm and above were subject to EIA. In the Old Regulation, wind power plants having five turbines or more or an installed capacity between 10 MWm and 50 MWm were among the projects whose environmental impact was subject to prior audit and assessment.
• Solar: Solar power plants with a project area of 20 hectare and above or an installed capacity of 10 MWm and above are now subject to EIA, whereas in the Old Regulation, the installed capacity limit was 10 MWe. Similarly, the installed capacity limit for solar power plant projects in Schedule 2 is amended from 1 MWe to 1 MWm.

In accordance with the efforts to fight against climate change, carbon capture and geological storage projects having a capacity of 1.5 million tons a year are added to list of projects subject to EIA. Similarly, carrying CO2 with pipeline for the purposes of carbon capture and storage are now among the projects whose environmental impact is subject to prior audit and assessment.

In addition to the above, the below-listed infrastructure projects are also now subject to EIA:

• construction of railways and airports without taking the railway/runway lengths into account;
• all kinds of harbors, piers and docks with commercial purposes; and
• hotels, holiday camps and tourism complexes with more than 250 rooms, instead of 500 as stipulated under the Old Regulation.

Our comments

Inclusion of sustainability and ESG topics into the EIA processes will incentivize public authorities to specialize in and obtain knowledge about these issues. The practical application of the New Regulation calls for close watch, especially to understand how the detailed criteria included in the EIA application and project presentation forms will be fulfilled

The New Regulation takes significant steps in taking the concerns on the potential negative effects of renewable energy as well as other large-scale social infrastructure projects into account. Nevertheless, the debate around the changes made to the stakeholder participation process should be followed up, as it is not clear whether these changes will increase or decrease the public's reaction towards environmentally sensitive projects.