Turkey Sets Up Carbon Market To Capture Revenue From EU Trade

Türkiye has established an emissions trading system to create a domestic carbon market and retain carbon-related revenue that might otherwise be collected by the European Union through CBAM. The regulation establishes rules for emissions monitoring, reporting and verification and domestic market governance. Because eligible carbon prices paid in the country of production can reduce an importer’s CBAM liability, Turkish producers may pay more of their carbon costs domestically, although the ETS will not automatically eliminate CBAM charges. The TR ETS will operate a pilot phase during 2026 and 2027, followed by its first implementation period from 2028 to 2035. Covered installations will require five-year emissions permits and be classified into three categories based on emissions. Revenue from allowance sales, permits, market stability operations, authorized international credits and certain fines will support the Climate Change Directorate. The system uses product benchmarks and emissions intensity, with free allocation planned for industries.
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