Greenhouse gas emissions control is now a top priority for fighting climate change. Countries around the world, especially those in the European Union, are adopting carbon pricing strategies. These strategies help countries meet their climate goals by putting a price on carbon emissions. Recently, Türkiye has taken significant steps in this direction with its Climate Law No. 7552.
This law is a game-changer for Türkiye, setting up a framework for a new carbon pricing system. The Turkish Emissions Trading System (TR-ETS) Draft Regulation is currently open for feedback until August 2025, laying out detailed rules on how the system will work.
Let’s break down what this means:
The Draft outlines how emissions will be monitored, reported, and verified. It details how emission permits are issued and how the national ETS will operate. The law aims to include high-carbon activities while excluding public services like schools and hospitals.
Under the new system, facilities emitting over 50,000 tons of CO₂ equivalents annually will need to apply for emissions permits. A straightforward electronic application process ensures that companies can quickly get the permits they need. Notably, these permits will be valid for five years, and renewals must be applied for six months in advance.
The regulations specifically focus on different facility categories. Category B includes businesses with emissions between 50,000 and 500,000 tons per year, while Category C covers those exceeding 500,000 tons. Facilities will be required to follow strict guidelines to ensure compliance.
Moreover, emission allowances will be allocated based on an annual cap determined by the Climate Change Presidency. This cap ensures that the total emissions are capped to meet Türkiye’s climate goals. The drafting process includes a benchmarking method to determine how many allowances each facility will receive based on their activity type and emissions history.
In the spirit of transparency and accountability, all emissions data must be verified by independent bodies to ensure there is no cheating in the reporting. This is vital for building trust in the system and ensuring that emissions reductions are real.
The market will have both Primary and Secondary Markets. In the Primary Market, emission allowances will be auctioned, while the Secondary Market allows businesses to buy and sell their allowances. To maintain market stability, a Market Stability Mechanism will be in place to manage price fluctuations. This ensures a fair trading environment for all participants.
Flexibility is another key feature of this system. Companies can ‘bank’ unused allowances for future years or ‘borrow’ from future allowances to meet current obligations. These options make it easier for companies to manage their emissions and adapt to changing market conditions.
Looking ahead, the TR-ETS will start with a pilot phase from 2026 to 2027. During this time, businesses will receive 100% free allocation to help them adjust to the new system. By 2028, the full implementation will begin, aiming to strengthen Türkiye’s climate strategies.
While this regulation marks a significant step toward controlling emissions in Türkiye, experts warn that its limited scope may require future adjustments to fully meet climate goals. Continued engagement from stakeholders and transparent updates could further enhance the system and achieve a more sustainable future.
For further reading, you can explore the Turkish Climate Change Presidency’s official publications here.
This overview serves as your guide to Türkiye’s emerging carbon market. As we face climate challenges, staying informed and adaptable is crucial for all stakeholders involved.
