Turkey ETS explained: pilot phase, who is covered and CBAM impact
The Turkish ETS pilot covers 2026 and 2027 emissions in five sectors. Who is in scope, when monitoring plans are due, what 100% free allocation means, and whether it can reduce CBAM costs.
The Turkey ETS rests on a regulation published in the Official Gazette on 27 August 2026 (No. 33353). It covers installations whose annual emissions, calculated from installed capacity, exceed 50,000 tonnes of CO₂e. The system starts with a pilot phase covering 2026 and 2027 emissions and limited to power generation, cement, iron and steel, aluminium and fertiliser. The first hard deadline for pilot installations is 27 January 2027, when their monitoring methodology plans are due.
If you buy CBAM goods from Turkey, or supply them, this matters for a simple reason: everyone wants to know whether Turkish carbon costs will reduce the CBAM bill. Much of what has been written so far predates the key decisions, so this guide reads the primary texts for producers and for the EU importers who depend on their data.
Which legal texts make up the Turkish ETS?
Press coverage tends to speak of one "ETS regulation". In practice the obligations sit across several documents:
| Text | Date | What it does |
|---|---|---|
| Climate Law No. 7552 | In force 9 July 2025 | Legal basis for the ETS and its penalties |
| Turkish ETS Regulation, Official Gazette 33353 | 27 August 2026 | Scope, emission permits, allowances, reporting, verification, fines |
| Carbon Market Board decisions, KPK/2026/1 | Decided 15 January 2026, announced 3 September 2026 | Pilot sectors and duration |
| Pilot Phase Procedures and Principles | 30 September 2026 | Sub-installations, benchmarks, activity level reports, verification |
| ETS Market Regulation (EPDK, the energy regulator), Official Gazette 33407 | 21 October 2026 | Market and transaction registry run by EPİAŞ, the Turkish energy exchange |
The new regulation replaced Turkey's 2014 greenhouse gas monitoring regulation. Plants already reporting under the old rules are not starting from zero.
Who is covered by the Turkey ETS?
There are three circles, and they are easy to confuse.
| Circle | Who | Obligation |
|---|---|---|
| Monitoring, reporting, verification | All activities listed in Annex 1 of the regulation (categories A, B and C) | Verified greenhouse gas emission report every year |
| Pilot phase (2026–2027) | Category B and C installations in power generation, cement, iron and steel, aluminium and fertiliser | Also a monitoring methodology plan, activity level reports and allowance surrender for 2027 emissions |
| First implementation period (2028–2035) | All Category B and C installations carrying out Annex 1 activities | Full ETS obligations |
Category A means up to 50,000 tonnes of CO₂e a year, Category B means 50,000 to 500,000 tonnes, and Category C means more than 500,000 tonnes. The test is not last year's actual emissions. It is emissions conservatively calculated from installed capacity, so a plant running well below capacity can land in a higher category than expected.
Listed pilot activities include iron and steel production and casting at 2.5 tonnes an hour or more, processing of ferrous metals with combustion units of 20 MW or more, primary aluminium and alumina, secondary aluminium at 20 MW or more, clinker in rotary kilns of 500 tonnes a day or more, and nitric acid and ammonia production.
Installations whose main activity falls outside the five sectors stay out of the pilot, so a manufacturer that simply generates its own power is not pulled in automatically. Annex 1 activities such as glass, ceramics, paper, lime, refining and bulk chemicals still report and verify every year, and those in Category B or C join the system from 2028.
What is the pilot phase timeline?
| Date | Milestone |
|---|---|
| 27 January 2027 | Deadline for the first monitoring methodology plan, extended by a decision of 13 October 2026 |
| 30 April 2027 | Verified 2026 emission report and activity level report |
| 30 June 2027 | 2023, 2024 and 2025 activity level reports for installations with an electricity sub-installation |
| 30 April 2028 | Verified 2027 report and activity level report |
| Last working day of November 2028 | Allowances surrendered for 2027 emissions |
| 9 July 2028 | End of the three-year window in the Climate Law for obtaining an emission permit; the Board can extend it by up to two years |
| 2028 emissions | First implementation period begins, with sub-periods 2028–2030 and 2031–2035 |
For 2026 emissions the duty is reporting only. No allowance surrender arises, apart from a voluntary complementary allowance price mechanism described below. Even so, verification has to finish before 30 April 2027, and benchmarks will be built from verified sub-installation data.
What is a sub-installation?
Turkish plants have generally reported installation totals. Under the ETS, free allocation is calculated per sub-installation: a technical unit, bounded by mass and energy balances, that attributes emissions to a product, measurable heat, fuel use or a production process.
The monitoring methodology plan describes these splits and how each data item is tracked. It adds to the existing monitoring plan rather than replacing it. Under the pilot procedures:
- Activities are split in priority order: product benchmark, heat benchmark, district heating, on-site heating, fuel benchmark, process.
- An installation can have at most one sub-installation of each listed type.
- Total emissions in the approved monitoring plan must be fully attributed, with no double counting.
- Total emissions in the activity level report must equal those in the verified emission report.
- If the authority finds gaps, the installation has 30 days to correct them.
The practical difficulty is data. Without meters, fuel and production records split by product, the sub-installation calculation cannot be done. Annex 1 of the procedures maps PRODCOM product codes to benchmarks, so production records must line up with those codes. Carbon steel and high-alloy steel from an electric arc furnace, for example, are separate sub-installations.
Does 100% free allocation mean zero cost?
No. For 2027 the free allocation rate is set at 100% under the benchmark method. That does not mean allowances equal to all your emissions. Allocation is broadly the benchmark multiplied by verified activity level. Outside power generation, the benchmark is the weighted average for that year.
A purely hypothetical example: with a benchmark of 1.00 tonne of CO₂e per tonne of product, output of 200,000 tonnes and verified emissions of 220,000 tonnes, a plant receives 200,000 allowances but must surrender 220,000. The remaining 20,000 have to be sourced from the market. A competitor below the average can sell its surplus.
Three details make planning harder:
- Benchmarks are not known in advance. Pilot values will be announced in the National Allocation Plan after verified reports are in.
- No banking or borrowing. Pilot allowances can be used only for pilot obligations.
- Carbon credits are not assured. Offsetting is available only if the Board decides so, and at the rate it sets.
The figure to watch is therefore emission intensity per tonne of product. We discuss the same indicator for steel in our guide to CBAM steel embedded emissions.
Will the Turkey ETS reduce CBAM costs?
Not automatically during the pilot. CBAM allows a deduction for a carbon price effectively paid in the country of origin. The Commission's CBAM Questions and Answers, updated 15 October 2026, name free allowances as a case where the benefit is taken into account. The draft implementing act published on 13 May 2026, as summarised by Turkey's Ministry of Trade, also requires evidence of payment certified by an independent accredited party.
Set that against the pilot design: no surrender for 2026 and a 100% free allocation rate for 2027. An EU importer preparing the declaration due by 30 September 2027 should not assume a deduction from the Turkish ETS on 2026 goods.
The one open door is the complementary allowance price. Provisional Article 2 of the market regulation lets participants request allowances equivalent to their verified 2026 emissions. Those allowances go straight to a retirement account and do not count towards surrender duties, so in effect the producer pays a carbon price voluntarily. The Turkish text does not mention CBAM. Whether such a payment would count in the EU depends on the final implementing act, which we could not find among the adopted acts on the Commission's legislation page on 7 November 2026. The Commission also plans default carbon prices by country. Importers and producers should see both before committing money.
For the wider picture, see our overview of what CBAM is and CBAM for importers buying from Turkey.
Same data, two calculations
| Turkey ETS | CBAM | |
|---|---|---|
| Unit of calculation | Installation and sub-installation | Installation, production process, embedded emissions per good |
| Addressee | Turkish Climate Change Directorate | EU authorised CBAM declarant |
| Verifier | Accredited by TÜRKAK, assigned through the central MEDAS system | Accredited verifier competent for CBAM |
| Annual date | 30 April | 30 September (first declaration 2027) |
| Record keeping | At least 10 years | At least 6 years |
Fuel, process and production records feed both calculations, but the boundaries differ. If the data kept for a CBAM report is also tagged by sub-installation, nobody has to collect it twice and the differences are easier to explain to two sets of verifiers.
What should producers do now?
- Confirm scope. Is the activity in Annex 1, is it a pilot sector, and what is the capacity-based category?
- Check the approved monitoring plan. The category follows from it.
- Map sub-installations. Match production records to the PRODCOM list and find missing meters.
- File the methodology plan before 27 January 2027 through the authority's electronic system.
- Close 2026 data early. Verification runs through MEDAS assignment and activity level reports add verifier days. Review calibration records too.
- Track intensity per sub-installation. It is the only way to estimate a shortfall before benchmarks are published.
- Keep the complementary price decision open. Wait for the final EU act and ask what your importers expect.
To see all of these points with their dates on one page, use our CBAM and Turkish ETS readiness checklist.
Missed deadlines are costly. Article 35 sets fines from TRY 627,450 to TRY 6,274,500 by installation size for failing to submit a verified report on time, doubled for installations inside the ETS. Amounts may be revalued, so confirm the current figures.
Where Carbonet fits
Carbonet is a corporate carbon footprint and CBAM software developed by LNA Soft in Izmir, Turkey. Official filings go through the Turkish authority's own monitoring, reporting and verification system, and Carbonet does not replace it. What it does is organise the data that makes ETS preparation hard. Fuel and energy records are held per site, with departmental permissions and their sources. The same data flows into an ISO 14064 GHG inventory and into CBAM embedded emissions calculations.
Supplying the EU from a Turkish plant, or buying from one? Let us look at where your data stands: request a demo, or write to info@carbonet.com.tr or WhatsApp +90 533 368 05 99.
Sources: Turkish Official Gazette 27.08.2026/33353 and 21.10.2026/33407; Climate Change Directorate announcements of 3 September, 1 October and 14 October 2026 and the Pilot Phase Procedures and Principles; European Commission CBAM Questions and Answers (15 October 2026); Turkish Ministry of Trade announcement of 18 May 2026. This article is general information, not legal advice.
Frequently asked questions
When does the Turkey ETS start?
The regulation took effect on 27 August 2026 and the pilot covers 2026 and 2027 emissions. 2026 is reporting only, apart from a voluntary complementary price mechanism. The first allowance surrender covers 2027 emissions and is due by the last working day of November 2028.
Which sectors are in the Turkish ETS pilot?
Power generation, cement, iron and steel, aluminium and fertiliser, for Category B and C installations. That means annual emissions above 50,000 tonnes of CO₂e, calculated from installed capacity. Installations whose main activity is outside these sectors stay out of the pilot.
What is the deadline for the monitoring methodology plan?
Turkey's Climate Change Directorate extended the deadline for first plans to 27 January 2027, as announced on 14 October 2026. The plan sets out sub-installations and how activity data will be tracked. It adds to the existing monitoring plan rather than replacing it.
Does Turkey have a carbon price that reduces CBAM?
Not automatically during the pilot. CBAM counts only a carbon price effectively paid, and the benefit of free allowances is taken into account. With no surrender for 2026 and a 100% free allocation rate for 2027, importers should not assume a deduction on 2026 goods.
What is the complementary allowance price?
It is a voluntary mechanism under the Turkish market regulation. Participants can request allowances equal to their verified 2026 emissions, and these go directly to retirement without counting towards surrender duties. Whether this payment qualifies for a CBAM deduction depends on the final EU implementing act.
What should EU importers ask Turkish suppliers?
Ask whether the plant is in the pilot, which category it holds, and whether CBAM data will be reconciled with its verified ETS report. Also ask about any complementary allowance payment and the evidence behind it. Treat any promised deduction with caution until the EU rules are final.