Türkiye Emissions Trading System Regulation: first steps for industry

01Legal basis and purpose

The regulation is based on Climate Law no. 7552, which entered into force on 9 July 2025, and replaces the Regulation on Monitoring Greenhouse Gas Emissions applied since 2014. Türkiye’s existing monitoring, reporting and verification (MRV) system thus becomes an emissions trading system that puts a price on emissions. The system is run by the Climate Change Directorate, and market decisions are taken by the Carbon Market Board.

02Which installations are covered?

Annex 1 of the regulation lists activities above certain capacity thresholds: fuel combustion, oil refining, iron and steel and other metals, clinker, glass, ceramics, paper and board, and certain chemicals. Installations carrying out an Annex 1 activity are placed in three categories by annual emissions:

1. Category A (50,000 tCO₂e a year or less): outside the TR ETS, but monitoring, reporting and verification obligations continue.
2. Category B (50,000 – 500,000 tCO₂e): in the TR ETS.
3. Category C (above 500,000 tCO₂e): in the TR ETS.

Research, development and testing installations, installations using only biomass, and schools, universities, hospitals and defence-industry installations are kept outside the system, although their MRV obligations continue. Natural gas and crude oil transmission and storage are outside the TR ETS until the end of the first implementation period.

03Key obligations and timeline

• Pilot phase: the scope and rules of the pilot are set by the Carbon Market Board. Operators in the pilot had to submit their first Monitoring Methodology Plans electronically within two months of the regulation’s entry into force, that is by 27 October 2026. Operators that missed this date are advised to contact the Climate Change Directorate without delay, as the Directorate has the power to extend the deadline.
• Greenhouse gas emission permit: operators in the TR ETS must hold an emission permit, valid for five years. During a three-year transition period from the Law’s entry into force, operators are treated as permitted; the Board can extend this by up to two years.
• Monitoring plan: Annex 1 operators must submit their monitoring plans to the Directorate for approval at least six months before monitoring begins.
• Annual report: emissions and activity levels for the previous calendar year are reported by 30 April each year. Reports must be verified by an accredited verifier assigned through MEDAS.
• Surrender of allowances: TR ETS operators surrender allowances equal to their verified emissions through the Transaction Registry System.

04Allocation, market and penalties

Free allocation will be calculated per sub-installation using a benchmarking method; operators seeking free allocation will apply after the National Allocation Plan is published. Allowances may also be auctioned on the primary market and traded on the secondary market. Carbon credits from projects in Türkiye can be used, within set limits, towards the surrender obligation.

The penalties are significant: late submission of the verified emissions report carries an administrative fine of between TRY 627,450 and TRY 6,274,500 depending on category, doubled for TR ETS operators. Operating without a permit is fined between TRY 1,254,900 and TRY 12,549,000.

05Link with CBAM

The EU Carbon Border Adjustment Mechanism allows a carbon price actually paid in the country of origin to be deducted from the CBAM obligation. The TR ETS therefore matters in two ways, especially for exporters of iron and steel, aluminium, cement and fertilisers: a carbon price paid in Türkiye can lower the EU importer’s cost, but only if verified emissions data and proof of payment are kept in line with CBAM rules.

06What should you do now?

1. Establish your category: review your Annex 1 activities and your verified emissions for recent years.
2. Check the pilot scope: if you are on the pilot list and have not yet submitted your Monitoring Methodology Plan, contact the Directorate now.
3. Update your monitoring plan: revise measurement methods, uncertainty and data flows to match the new regulation.
4. Engage a verifier early: plan verification around the 30 April deadline.
5. Model your carbon cost: reflect free allocation, likely allowance prices and the CBAM effect in budgets and investment decisions.