New Turkish Climate Law – What Does It Mean for CBAM and Business?

The EU's Carbon Border Adjustment Mechanism (CBAM) will begin charging fees in 2026. It's based on a simple premise: an importer into the EU will pay exactly what an EU producer would pay for the hidden carbon dioxide emissions of goods. If the exporting country has its own emissions trading system (ETS), this fee can be reduced by the actual cost of emissions incurred. CBAM addresses concerns about "carbon leakage"—a situation where industrial production shifts to countries without emission restrictions.

Turkey is one of the main suppliers of CBAM goods (steel, aluminum, cement, fertilizers) to the EU. It is estimated that in 2022, the value of exports of these goods to the EU amounted to approximately €19 billion, which represented almost 8% of total Turkish exports. It is no wonder that the authorities in Ankara have prepared national solutions: on July 9, 2025, it was published in the Official Journal Climate Act No. 7552This is the first comprehensive climate law in Turkey. What are its most important elements and what do they mean for business?

Key tasks and functions of the new act

1. Establishment of a national emissions trading system (ETS).
The law establishes a framework for the Turkish ETS—a market for greenhouse gas emission allowances. The system is to operate on the basis of emission intensity limits rather than rigid absolute caps. The law provides for free allocation of allowances to entities in the initial phase, based on historical data or benchmarks. The pilot phase of the ETS will begin in 2026, and administrative penalties will be reduced by 80% during the transitional period. Companies covered by the ETS must obtain an emissions permit within three years of the law's entry into force.

2. Possibility of creating a border carbon price correction mechanism (SKDM – Sınırda Karbon Düzenleme Mekanizması).
Article 2 of the Act defines SKDM as "a mechanism for managing greenhouse gas emissions in goods imported into the municipal customs territory." The most important is Article 8, paragraph 1, point ç, which states that:A border carbon price adjustment mechanism (SKDM) may be established to account for hidden emissions in goods imported into the Turkish customs territory.The reporting, scope, content, procedures, and rules of the SKDM will be determined by the Ministry of Trade in coordination with the relevant ministries." This is clearly inspired by the EU's CBAM.

3. Establishment of financial bodies and tools.
The Act establishes Coal Market Council (Karbon Piyasası Kurulu) and designates the market operator – Enerji Piyasaları İşletme A.Ş. (EPİAŞ). The Council will, among other things, approve the national allocation plan, determine the distribution of free allowances, and decide on the size of the auction. The law also introduces Turkish green taxonomy and a system of green financial instruments (bonds, guarantees, insurance) to support investments in low-emission technologies.

4. Carbon credits and offsets system.
Similar to the EU, voluntary emission reduction projects are also available. A national carbon credit system will register projects, and the resulting credits can be used to meet some of the ETS obligations.

What does the Act mean for business?

Exporters to the EU and CBAM

For Turkish exporters, the link between the domestic ETS and the CBAM is crucial. The CBAM mechanism allows only the actual domestic carbon price paid to be deducted from the CBAM fee. Since Turkish law provides for full free allowances At least in the initial phases, the domestic carbon cost will be low. This means that exporters of iron, steel, aluminum, or cement will have nothing to "deduct," and as a result, importers in the EU will pay the full CBAM rate. In the longer term (when allowance auctions are introduced in Turkey or the intensity system is tightened), the carbon price paid in Turkey will be able to reduce the CBAM fee.

Producers and importers in Turkey

The law establishes a framework for reducing industrial emissions. Companies in energy-intensive sectors (energy, metals, cement, fertilizers) will be required to monitor and report emissions according to the standards specified in the regulations. Failure to surrender allowances will result in the purchase of additional allowances and payment of a penalty. Companies importing into Turkey must consider the possibility of being charged fees under the SKDM once it is implemented, especially if their products originate from countries without carbon pricing systems.

Finance and investments

The introduction of a national green taxonomy and a green finance system will facilitate raising capital for emission-reduction projects. Businesses can benefit from tax breaks, guarantees, and subsidies for investments in energy efficiency, renewable energy sources, and the development of hydrogen technologies. A new system of carbon credits and offsets will create an additional market for emission reduction projects, for example, in forestry and waste management.

Impact on business strategies

1. Supply Chain Assessment: Companies exporting to the EU should map the emissions of their products and assess how much CBAM they will have to pay. The law requires emissions monitoring and reporting – this is a good opportunity to create robust data management systems.

2. Preparation for reporting: The ETS will require detailed emissions reports and verification by independent entities. It's worth investing in emissions measurement and accounting systems now to ensure your data complies with future regulations.

3. Cost and opportunity analysis: Initially, free allowances will minimize the cost impact of the ETS, but over the next few years, allowance auctions and a potential SKDM could raise import and emission prices. Companies should factor these costs into their financial forecasts and consider investments in emission reductions.

4. Collaboration with partners: Since CBAM applies to products at every stage of the supply chain, it's worth collaborating with suppliers to reduce emissions. Importers to Turkey, in turn, should monitor the development of SKDM regulations.

Summary

Turkish Climate Law No. 7552 is a significant milestone in the country's climate policy. It establishes the framework for the national ETS, enables the introduction of a carbon border adjustment mechanism, and promotes green finance. For now, the system relies on free allocation, which limits its direct impact on exports to the EU – importers in the EU will still pay the full CBAM fee. However, as the Turkish ETS develops and the SKDM is eventually implemented, strategic emissions management and business preparedness for the new requirements are becoming increasingly important. Companies in energy-intensive sectors, as well as their trading partners in the EU, should adapt to the upcoming changes now.

Source:

Turkish Climate Law (BİRİNCİ KISIM, Genel Hükümler, BİRİNCİ BÖLÜM Başlangıç Hükümleri)

https://icapcarbonaction.com