Is Your Company Covered by Turkey’s ETS? TR ETS Scope, Thresholds and Categories
For companies operating industrial facilities in Turkey, the first TR ETS question is not how to buy carbon allowances. It is whether the facility is covered at all. This guide explains the scope test, Category A, B and C thresholds, Annex 1 activity analysis and the situations where a simple emissions threshold is not enough.
Short answer: is your facility in TR ETS?
A Turkish facility is generally within the Turkey Emissions Trading System (TR ETS) where two core conditions are met:
1. The facility carries out an activity listed in Annex 1 of the TR ETS Regulation; and
2. The facility falls within Category B or Category C.
Category B generally means estimated annual emissions of more than 50,000 tonnes CO₂ equivalent and up to 500,000 tonnes. Category C generally means more than 500,000 tonnes CO₂ equivalent.
However, this is only the starting point. The Regulation contains exclusions, special rules and monitoring obligations that mean a company should not rely on the emissions threshold alone.
TR ETS coverage decision tree
A practical applicability review can be broken into four stages.
Identify the facility and operator
Determine the relevant fixed technical installation, the legal or operational entity responsible for it and whether multiple activities are carried out at the same site.
Test the activities against Annex 1
TR ETS does not apply to companies merely because they emit greenhouse gases. The facility must first be assessed against the activities listed in Annex 1 of the Regulation.
Determine the emissions category
Once Annex 1 relevance is established, determine whether the facility is Category A, B or C using the emissions classification rules.
Check exclusions and special rules
Certain facilities, activities or circumstances may receive specific treatment. Monitoring and reporting obligations can also continue even where a facility is outside the trading component of TR ETS.
TR ETS applicability is an installation-level question, not simply a company-turnover or company-size question.
Category A, B and C thresholds under TR ETS
| Category | Estimated annual emissions | General position |
|---|---|---|
| Category A | 50,000 tonnes CO₂e or less | Generally outside the emissions trading scope itself, but this does not automatically eliminate monitoring, reporting or other regulatory requirements. |
| Category B | More than 50,000 tonnes and up to 500,000 tonnes CO₂e | Generally within TR ETS where an Annex 1 activity is carried out, subject to exclusions and special provisions. |
| Category C | More than 500,000 tonnes CO₂e | Generally within TR ETS where an Annex 1 activity is carried out, subject to exclusions and special provisions. |
The emissions classification is based on the Regulation’s methodology rather than simply copying a sustainability report or a corporate greenhouse gas inventory.
For this reason, companies should document the basis on which the installation has been classified.
Why Annex 1 matters more than company size
One of the easiest mistakes is to treat TR ETS as if it applied to every large company in Turkey.
It does not.
The scope begins with the activities listed in Annex 1 of the TR ETS Regulation.
This means two companies with similar turnover, headcount or total corporate emissions may have different TR ETS outcomes depending on the activities carried out at their Turkish installations.
Turnover alone does not determine TR ETS coverage.
The number of employees is not the central scope test.
Being part of a multinational group does not by itself place a Turkish facility within TR ETS.
The activity conducted at the installation is a central part of the legal scope test.
The A/B/C classification determines how the installation is treated within the framework.
Exclusions and specific rules may alter the result even after the activity and threshold tests.
What if your facility is below 50,000 tonnes CO₂e?
A facility at or below the 50,000-tonne threshold is generally classified as Category A.
That does not necessarily mean the company can ignore the Regulation.
The TR ETS framework distinguishes between participation in the emissions trading system and broader obligations relating to the monitoring, reporting and verification of emissions.
“Our emissions are below 50,000 tonnes, therefore TR ETS has nothing to do with us.”
A proper review should establish which obligations continue to apply to the relevant Annex 1 activity and facility.
What if one facility carries out several activities?
This is another area where a high-level threshold test can produce the wrong conclusion.
Under the Regulation, where an installation performs an activity listed in Annex 1, other Annex 1 activities carried out by that installation may also fall within the monitoring and reporting framework regardless of individual capacity thresholds.
For groups with complex manufacturing sites, the scope review should therefore be performed at facility level and should map all relevant activities carried out within the installation boundary.
A site with multiple production processes should not assess each process in isolation without first establishing the regulatory installation boundary.
Are there exclusions from TR ETS?
Yes. The Regulation includes activities and facilities that are outside all or part of the framework.
For example, the Regulation contains specific treatment for certain research and development activities, facilities using biomass exclusively and military elements.
It also contains specific rules for certain schools, universities, hospitals and defence-industry facilities in relation to the trading-system scope.
The important point is that an exclusion from the trading system does not always mean an exclusion from every monitoring, reporting or verification obligation.
1. within the monitoring and reporting framework;
2. within TR ETS trading obligations; and
3. subject to any specific exclusion or transitional treatment.
Why TR ETS scope matters to the CFO
Applicability determines whether emissions remain principally a sustainability reporting issue or begin to create a direct regulatory and financial exposure.
Where a facility is within TR ETS, management may need to consider:
Verified emissions may ultimately need to be matched with surrendered allowances.
Eligible installations may seek free allowances through the applicable allocation process.
Allowance deficits can result in future market purchases and cash requirements.
Carbon-cost scenarios may need to enter annual budgets and forecasts.
Emissions and activity data must be controlled, traceable and capable of reconciliation.
Incorrect classification or missed reporting obligations can create administrative and operational exposure.
This is why the scope assessment should involve the finance team rather than remaining entirely within the environmental or sustainability function.
Three simplified TR ETS applicability scenarios
Scenario 1 — Annex 1 activity + Category B
A Turkish installation conducts an activity covered by Annex 1 and is classified above 50,000 tonnes but below 500,000 tonnes CO₂e.
Preliminary result: the installation would generally fall within Category B and therefore within TR ETS, subject to any relevant exclusion or special rule.
Scenario 2 — Annex 1 activity + Category A
The installation conducts an Annex 1 activity but is classified at or below 50,000 tonnes CO₂e.
Preliminary result: the installation is generally outside the trading-system scope as a Category A installation, but the company should still determine which monitoring, reporting and verification requirements apply.
Scenario 3 — High emissions but no Annex 1 activity
A company has significant corporate greenhouse gas emissions but the relevant Turkish installation does not conduct an Annex 1 activity.
Preliminary result: high emissions alone do not automatically establish TR ETS coverage. Annex 1 activity analysis remains fundamental.
These examples are deliberately simplified. Actual scope requires assessment of the facility, activities, technical boundaries, applicable thresholds and special provisions.
What should a TR ETS applicability assessment review?
For finance and compliance teams, a useful scope review should go beyond a one-line legal conclusion.
| Review area | What should be established? |
|---|---|
| Legal operator | Which entity is responsible for operating the relevant installation? |
| Facility boundary | Which technical units and directly related activities form part of the installation? |
| Annex 1 mapping | Which listed activities are conducted at the facility? |
| Category analysis | Is the installation Category A, B or C? |
| Special rules | Does an exclusion, transitional provision or specific treatment apply? |
| MRV obligations | What monitoring, reporting and verification obligations apply? |
| Permit position | Is a greenhouse gas emissions permit required and what is the applicable timeline? |
| Financial exposure | Could the installation face allowance requirements, carbon-cost exposure or additional internal-control needs? |
If your facility is covered, what happens next?
Determining that a facility is within TR ETS is only the first stage.
The next workstreams typically include:
Permit and regulatory readiness
Confirm the facility’s greenhouse gas emissions permit position and relevant transitional deadlines.
Monitoring methodology
Ensure that the facility’s emissions monitoring methodology and underlying data sources are properly established.
MRV controls
Build a process for monitoring, reporting and independent verification.
Allowance exposure
Estimate available allowances, potential free allocation and future purchase requirements.
Finance integration
Connect emissions data to ERP, budgeting, treasury, accounting and management reporting processes.
For a full overview of the TR ETS framework, read our Turkey Emissions Trading System (TR ETS): 2026 CFO Guide .
Not sure whether your Turkish facility falls within TR ETS?
SystemsCPA can provide a structured first-stage assessment covering your facility’s TR ETS scope, emissions category, key compliance obligations and potential financial exposure.
The review is designed for CFOs, finance directors, controllers and international groups that need a clear answer before committing resources to a full carbon-compliance programme.
Request a TR ETS Assessment → Read the Full CFO GuideSystemsCPA provides financial, accounting and compliance advisory support. Technical emissions verification must be performed through the applicable authorised verification framework.
Frequently asked questions
What companies are covered by Turkey’s ETS?
TR ETS generally covers Category B and Category C facilities conducting activities listed in Annex 1 of the TR ETS Regulation, subject to exclusions and special rules.
What is the TR ETS threshold?
Category B generally begins above 50,000 tonnes CO₂ equivalent in estimated annual emissions and extends up to 500,000 tonnes. Category C applies above 500,000 tonnes.
Are facilities below 50,000 tonnes outside TR ETS?
Facilities at or below 50,000 tonnes are generally Category A and outside the trading-system scope itself. However, monitoring, reporting and verification obligations may still apply depending on the relevant activity and regulatory provisions.
Does every large Turkish company fall within TR ETS?
No. Turnover, employee count or corporate size alone does not determine coverage. Annex 1 activity and installation classification are central to the scope analysis.
Can a company with high emissions still be outside TR ETS?
Potentially, yes. High corporate emissions alone do not establish TR ETS coverage if the relevant facility does not conduct a covered Annex 1 activity.
Does being outside TR ETS mean there are no emissions reporting obligations?
Not necessarily. The Regulation distinguishes between trading-system scope and broader monitoring, reporting and verification requirements.
Who should perform the TR ETS applicability assessment?
The assessment is typically cross-functional. Technical emissions and installation issues require appropriate environmental expertise, while legal scope, finance processes, allowance exposure and internal controls require coordination with compliance and finance professionals.
Why should the CFO be involved in the scope assessment?
Because being within TR ETS can create allowance requirements, budgeting and cash-flow exposure, new internal-control requirements and potentially material compliance risks.
Primary regulatory basis
This guide is based principally on the Turkey Emissions Trading System Regulation published in the Official Gazette dated 27 August 2026, No. 33353.
TR ETS implementation is developing through the pilot period and additional implementation rules, allocation parameters and market procedures may be issued. Facility-specific analysis should therefore be based on the rules applicable to the relevant period.