Turkey has unveiled its long-anticipated draft regulation for a national emissions trading system (ETS), laying the groundwork for a phased rollout of the scheme for high-emitting sectors that includes offset use up to 10% and sector-specific implementation.
An aerial view capturing the contrast between Istanbul’s vibrant urban skyline and the tranquil greenery of Belgrad Forest. AI generated picture.
Published by the Ministry of Environment, Urbanisation and Climate Change, the draft regulation is now open for public consultation until 4 August. It outlines operational rules for the Turkish ETS, including emission permit requirements, allowance allocation procedures, and penalties for non-compliance.
The new framework stems from environmental legislation passed earlier this month, which identifies the ETS as a key instrument in reducing Turkey’s greenhouse gas emissions. According to the ministry, the regulation will ‘define the procedures and principles governing the operation of the Turkish ETS.’
The system will initially apply to Category B and C facilities—those emitting more than 50,000 tonnes of CO₂ equivalent annually. Educational, healthcare, and defence institutions are excluded.
Starting with a pilot phase covering emissions from 2026 and 2027, impacted sectors include electricity generation, cement, aluminium, steel, ammonia, and nitric acid. During this period, allowances will be distributed free of charge. A full implementation phase will follow, covering 2028 to 2035, with mechanisms for both primary and secondary carbon markets.
Companies are required to secure a five-year greenhouse gas emissions permit and provide verified annual reports on their emissions and activities. Additionally, they must store emissions data for at least a decade and manage all related processes through official digital platforms. The proposed regulation also introduces fines of up to around $2.5 million (TRY10 million) for major emitters who fail to comply.
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Market stability measures such as a reserve mechanism and the introduction of allowance banking and borrowing will be implemented after the pilot period. Notably, companies will be allowed to meet up to 10% of their compliance obligations using Turkish carbon credits once the pilot concludes. Mehmet Kemal Demirkol of GTE Carbon said the offset provision is ‘a welcome step for Turkish developers.’
Others voiced concern that the lack of mandatory compliance in the pilot years could delay very necessary environmental action. One source argued, ‘It would be much better if there will be a partial compliance in the second year of pilot… facilities will not be taking real action until 2028.’
Another noted the absence of a strategy for coal, warning, ‘Incorporating coal into the ETS framework is not optional; it is essential for credibility, effectiveness, and long-term decarbonisation.’
Additional concerns were raised about the ambiguity of offset eligibility, credit standards, pricing mechanisms, and the exclusion of carbon removal activities such as afforestation from the draft.
Ramazan Aslan of Life Climate advised businesses to take the pilot seriously: ‘It is beneficial… to evaluate the ETS pilot period as a mechanism that will come into force with all its elements… and to prepare accordingly from now on.’
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