Strategic Preferences for Renewable Energy Adoption: Firm-Level Evidence From Turkish Steel Producers

Abstract This paper aims to study priorities and preferences of manufacturing firms in the process of adopting renewable energy (RE). For this purpose, we consider the case of Turkish steel producers and investigate various attributes that may be underlying their decisions to switch to RE just prior to the full entry into force of the EU’s Carbon Border Adjustment Mechanism (CBAM) on January 1, 2026. Using a discrete choice experiment (DCE), we identify significance of various attributes affecting firms’ preferences for transition to RE, including price stability, energy mix, and government support mechanisms. Results reveal a strong preference for long-term price guarantees and simple payment structures, with a one-month price guarantee offsetting approximately 20 percent of the price gap between conventional and renewable energy. The marginal willingness to pay (MWTP) for a simple payment structure exceeds the whole price differential, suggesting that non-pecuniary factors such as risk mitigation and sustainability also drive decision-making. These findings offer useful insights for designing incentives to boost the firms’ reliance on RE and for implementing CBAM-compatible policies in Türkiye and beyond.