On the other hand, Türkiye’s decision to launch the ETS is significantly influenced by its trade relations with the European Union (EU). As of 2026, the EU is set to impose additional costs on products imported from outside the EU based on their emissions through the Carbon Border Adjustment Mechanism (CBAM). This regulation aims to protect the competitive environment for producers who already pay for emissions under the EU’s existing ETS, while also expanding efforts to fight against climate change.
According to CBAM rules, if a carbon price has already been paid in the exporting country, that amount can be deducted from the CBAM costs payable to the EU. Therefore, implementing an effective ETS in Türkiye helps keep these carbon costs within Türkiye’s borders and channel them towards the green transition of domestic industry. This also helps Türkiye’s export sectors remain competitive in international markets.
With the implementation of the Turkish ETS, facilities with annual emissions of more than 50,000 tons of CO2 equivalent are covered by the ETS, thus incorporating approximately half of national emissions into the system. The start of the pilot implementation period and the rules governing its implementation will be determined by the Carbon Market Board. Each facility within the scope must first obtain a greenhouse gas emission permit valid for five years to continue operations and join the ETS registry system. Then, by the end of April each year, they are also required to prepare reports verified by independent organizations containing the previous year’s emission data and submit them to the Climate Change Directorate.
Following the submission of reports, within a 60-days period, a National Allocation Plan will be prepared under the coordination of the Climate Change Directorate and submitted for approval to the Carbon Market Board. The Plan determines the total amount of allowances to be released to the market in the relevant year – the ETS cap. The Board will also have the authority to determine the floor and ceiling prices for allowances, which provide permits for 1 tonne of CO2 equivalent emissions.
For the allocation of free allowances, benchmarking studies are carried out at the sub-sector level, and benchmark values that define product-based reference emission intensities are set. Facilities with emission intensities below these benchmarks – those using more efficient and cleaner production technologies or with a higher share of clean energy – receive allowances above their actual emissions and can generate income by selling the surplus. The Carbon Market Board plays a key role in determining the details of free allowance rates and the benchmarking approach.
Facilities with high emission intensity relative to the benchmark value receive fewer free allowances than their actual emissions. Facilities must cover these gaps by the end of November each year by purchasing allowances either from the primary market, where allowances are sold by EPİAŞ through auctions, or from other installations through the secondary market. Revenues from the ETS—both from primary and secondary markets, as well as penalties—will be used to support the climate action and green transition. This system encourages continuous improvement in emission intensities by increasing competition among businesses.
