Implementation of Türkiye’s Emissions Trading System (ETS) has started as the pilot phase gets underway. In late August 2026, Türkiye published its ETS By-Law, establishing the legal framework for implementation and the system’s operational details. This was followed on September 30 by the release of Procedures and Principles Regarding the Pilot Application Period of the Turkish Emissions Trading System, which regulate the scope, duration, and implementation of the TR ETS pilot phase.
Two key decision points are: how benchmark values and free allocations are determined for industries to receive allocated allowances, and how covered installations monitor and report the activity-level and attributable-emissions data needed for these calculations. These questions were addressed at the Sectoral Studies and Reporting Workshop, convened days after the ETS regulations were made public.
Organized by Türkiye’s Directorate of Climate Change and supported by the Partnership for Market Implementation (PMI), the workshop brought together more than 400 representatives of government agencies, industries, and climate-focused organizations to examine aluminum, cement, electricity generation, fertilizer, and iron and steel installations as covered in the ETS pilot phase. Each industry participating in the ETS pilot phase was featured in individual sessions to highlight their production processes, fuel mixes, and emission profiles.
Discussions also centered on developing a reliable data reporting system for the benchmarks. Alan David Lee, Senior Energy Specialist at the World Bank Group, said that “benchmark design requires balancing environmental ambition, competitiveness, technical feasibility, and fairness across installations. The methodology must reflect reliable data and Türkiye’s industrial circumstances.” Officials from the Directorate explained how the country’s framework for monitoring, reporting, and verification (MRV) underpins the TR ETS, and how the additional sub-installation and activity-level reporting required for benchmark-based free allocation will operate alongside it.
Mehrali Ecer, the Directorate’s Deputy Head, emphasized the long-term strategic importance of the ETS as an economic instrument that would maintain Türkiye’s industrial competitiveness while supporting Turkish industry in responding to the EU CBAM. “The Emissions Trading System is an important policy tool for achieving Türkiye’s 2053 net-zero emissions target,” said Ecer.
The pilot phase for Türkiye ETS, started in 2026, will run through 2027, ahead of the first implementation period, expected for 2028 to 2035 covering all sectors in MRV. A key objective of the pilot phase is to ensure emissions reporting systems are fully operational. Covered companies – which, during the pilot phase, account for 84% of total GHG emissions in the MRV system – must submit their Monitoring Methodology Plans. Initial plans are due by January 2027.
PMI has supported the government’s preparation of this phased approach. This includes preparing economic analysis, developing a domestic crediting system that could supply offsets to the ETS, and implementing an Article 6 strategy to enable Türkiye’s participation in international carbon markets under the Paris Agreement. PMI’s support for Türkiye will continue until 2030.
Just days after the Sectoral Studies workshop, the decisions of the Carbon Market Board were published. These decisions provide that, during the pilot phase of the Türkiye ETS, the free allocation rate for each sector will be set at 100% based on the benchmarking methodology. Taken together, these developments demonstrate continued progress in the implementation of Türkiye’s ETS as the pilot phase begins.
