According to Turkey’s newly-announced Pre-Accession Economic Reform Program for 2026-2028, the pilot phase of the national Emissions Trading System (TR ETS) will begin in the 2026-27 period, with the first official application period of the ETS scheduled to begin in 2028. The system is defined as a core reform measure under the Turkish government’s sustainability and resilience plans, directly linked to Turkey’s 2053 Net Zero Emissions target and the objective of preserving international competitiveness.
The program underlines that achieving the 2053 target requires greenhouse gas emissions to be reduced in an effective and cost-efficient manner. It noted that the absence of a market-based carbon pricing mechanism in emissions-intensive sectors would limit the identification of low-cost abatement opportunities and complicate industry’s gradual and predictable adaptation to the green transition.
TR ETS to follow staged roadmap
The program states that the regulatory and legal framework for the TR ETS has already been established and that implementation will follow a staged roadmap. This roadmap includes the publication of ETS-related secondary legislation, the launch of a pilot phase, the development of the ETS Market Management System (ETSPYS), and the transition to the first full compliance period.
ETS seen as key tool to mitigate CBAM cost exposure
The program provides quantitative estimates on the cost and competitiveness impacts of the EU’s Carbon Border Adjustment Mechanism (CBAM) on the Turkish economy, drawing on a study conducted in cooperation with the European Bank for Reconstruction and Development.
The study models carbon price scenarios of €75/tCO₂e and €150/tCO₂e. Under a scenario in which Turkey does not implement a national ETS and the EU applies a CBAM price of €75/tCO₂e, the annual cost to Turkish industry in 2027 is estimated at €138 million. Under a €150/tCO₂e scenario, CBAM-related costs could reach approximately €2.6 billion annually by 2032.
National ETS expected to significantly lower CBAM-related costs
The same analysis shows that the introduction of a Turkish ETS would materially reduce these cost burdens. The estimated €138 million CBAM cost for 2027 could decline to around €56 million once the national ETS is operational. Similarly, the projected €2.6 billion cost for 2032 could fall to approximately €1.1 billion.
The study emphasizes that a domestic ETS would allow a significant share of CBAM-related costs to be internalized within Turkey, with revenues potentially recycled into national low-carbon development and industrial transformation frameworks.
ETS integrated with green finance architecture
The TR ETS is presented alongside the Turkey Green Taxonomy, which aims to classify sustainable economic activities and improve access to finance for environmentally and socially responsible investments. In parallel, the Green Transformation Certification System for Industry has been introduced to help clean-producing facilities benefit from financial facilitation mechanisms.
Finally, the program identifies potential implementation risks, notably the possibility that obligated entities may face compliance challenges during the early phases of the ETS. To mitigate these risks, the Turkish government plans to ensure close coordination with stakeholders and to accompany implementation with guidance, institutional capacity building and technical support measures.
