The Turkish Emissions Trading System Takes Effect!
- 2 hours ago
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Berk Cin
Partner
Ahsen Ebru Karadayı
Associate
Ebru Uzan
Trainee
The Türkiye Emissions Trading System Regulation (the “Regulation”), which has entered into force on August 27, 2026, introduces provisions governing the operation of the Emissions Trading System (the “ETS”) monitoring and reporting of greenhouse gas emission data of certain companies. The key points are assessed in detail below.
Which Activities and Facilities Subject to the Regulation?
The Regulation introduces monitoring, reporting and verification obligations for greenhouse gas emissions generated by the activities listed in Annex-1 to the Regulation. The activities set out in Annex-1 are activities with high greenhouse gas emissions such as energy production, petroleum refining, iron and steel, cement and clinker, aluminium, chemicals and paper production.
Category B and category C Facilities carrying out the activities listed in Annex I to the Regulation have been included covered by the ETS. Although Category A Facilities are not subject to the ETS, they remain within the scope of the Regulation and are subject to its monitoring, reporting and verification obligations for greenhouse gas emissions.
Facility categories are classified according to annual emission amounts as follows:
Category A Facilities: Facilities with annual emissions equal to or less than 50,000 tonnes of CO₂ equivalent,
Category B Facilities: Facilities with annual emissions exceeding 50,000 tonnes of CO₂ equivalent but are equal to or less than 500,000 tonnes of CO₂ equivalent,
Category C Facilities: Facilities with annual emissions exceeding 500,000 tonnes of CO₂ equivalent.
Exemptions from the Scope of the ETS:
Facilities belonging to schools, universities, hospitals and defence industry entities that carry out the activities listed in Annex I to the Regulation have been excluded from the scope of the ETS, limited to the activities they conduct; however, they remain under the obligation to monitor, report and verify their greenhouse gas emissions.
Activities relating to the transmission and storage of natural gas and crude oil have been temporarily excluded from the scope of the ETS until the end of the first implementation period, with the exception of monitoring, reporting and verification processes.
Exclusions From the Scope of the Regulation:
Facilities or parts of facilities in which research and development activities are carried out, or in which new products or processes are developed or tested,
Facilities and parts of facilities using exclusively biomass; and
Military elements.
Greenhouse Gas Emissions Permit Requirement and the Permit Procedure
Facilities falling within the scope of the ETS must obtain a greenhouse gas emissions permit from the Directorate of Climate Change (the “Directorate”) no later than July 9, 2028, to continue their operations. This period may be extended by 2 years by the Directorate in line with a decision of the Carbon Market Board.
Where an operator conducts activities at more than one facility, it is mandatory to obtain a separate greenhouse gas emissions permit for each facility.
The permit application process will be conducted electronically and will be assessed by the Directorate within a maximum of 60 days.
The greenhouse gas emissions permit will be valid for 5 years, and an application for renewal must be filed at least 6 months prior to the expiry of the permit period.
Obligation to Monitor, Report and Verify Emissions
Facilities will be required to submit their greenhouse gas emissions monitoring plan to the Presidency for approval at least 6 months before the date on which greenhouse gas emissions monitoring begins.
Facilities will be required to report to the Directorate, by April 30 each year, their greenhouse gas emissions and activity levels monitored during the previous year.
Prior to their submission to the Directorate, emission reports must be verified by an independent verification body authorised and accredited under the Regulation.
Pilot Period
The scope and duration of the pilot implementation period, together with the procedures and principles governing its application, will be determined by the Carbon Market Board.
Operators falling within the scope of the pilot implementation are required to submit their initial Monitoring Methodology Plans to the Directorate electronically by October 27, 2026.
Operators that have not submitted a Monitoring Methodology Plan during the pilot implementation period will submit their Initial Monitoring Methodology Plans to the Directorate by the end of the calendar year preceding the year in which the first implementation period is to commence.
Allowance Mechanism
The total amount of greenhouse gas emissions that operators may emit will be limited to the ETS cap set out in the National Allowance Plan.
Allowances may be allocated free of charge or offered for sale by auction in the primary market.
Operators may, where necessary, purchase allowances from the secondary market.
The issuance, transfer, surrender, cancellation and redemption of allowances will be carried out through the Transaction Recording System to be operated by EPİAŞ.
Since the benchmark value determined on the basis of the production level and emission intensity of sub-facilities will be taken into account in calculating the amount of free allowances, maintaining accurate and verifiable production, energy, fuel and emission data will be significant for operators not only in terms of their reporting obligations, but also in terms of the amount of free allowances they may receive.
Carbon Markets and Carbon Credits
Primary Market: The market in which allowances are offered for sale by auction in accordance with the auction calendar determined by the Directorate.
Secondary Markets: The markets in which allowances are traded through continuous trading, and in which participants may submit both bid and ask orders.
By way of offsetting, carbon credits obtained from projects carried out within the borders of Türkiye may also be used towards ETS allowance surrender obligations, provided that they do not exceed the ratio determined by the Carbon Market Board.
Conclusion
Although the Regulation has established the legal and operational infrastructure of the ETS, the Draft Regulation on the Operation of the Emissions Trading System Market, published by the Energy Market Regulatory Authority, is also expected to enter into force in the coming days to procure the actual operation of the market.
The ETS compliance process should be approached not merely as an environmental and sustainability issue, but as a strategic process having direct implications for operational costs, investment decisions, energy strategies, data management and commercial contracts.
Operators under the Regulation are recommended to first clarify their obligations concerning monitoring, reporting and verification processes, and assess their technical and legal infrastructure for the collection of emission and activity data.
