Turkey’s Emissions Trading System Is Now Operationally Defined.
On 27 August 2026, Turkey published the regulation that sets out the operating framework for the Turkish Emissions Trading System (TR ETS), including covered facilities, emissions permits, monitoring, verification, free allowances, carbon-market infrastructure and administrative penalties.
Short answer: businesses operating high-emission facilities in Turkey should now treat TR ETS readiness as a finance, compliance and operational-control project—not merely an environmental reporting exercise. Covered Category B and C facilities will need an emissions permit, verified emissions reporting, allowance management and timely surrender of allowances.
What changed on 27 August 2026?
The Ministry of Environment, Urbanization and Climate Change published the Türkiye Emissions Trading System Regulation in the Official Gazette on 27 August 2026. The Regulation implements the framework created by Turkey’s Climate Law No. 7552 and replaces the previous 2014 regulation governing the monitoring of greenhouse gas emissions.
The new framework goes materially beyond emissions measurement. It creates the mechanics of a cap-and-trade system: covered installations may receive free allowances, purchase allowances in the primary or secondary market, transfer them through the registry and ultimately surrender allowances corresponding to verified emissions.
Which businesses are covered by the TR ETS?
The Regulation states that the ETS covers facilities carrying out activities listed in Annex 1 that fall into Category B or Category C.
| Facility category | Conservatively calculated annual emissions | TR ETS status |
|---|---|---|
| Category A | 50,000 tCO₂e or less | Not included in the ETS solely by category, although monitoring/reporting rules may still apply to Annex 1 activities. |
| Category B | More than 50,000 and up to 500,000 tCO₂e | Included in the TR ETS. |
| Category C | More than 500,000 tCO₂e | Included in the TR ETS. |
The Regulation excludes research and development facilities or facility sections used for developing or testing new products or processes, facilities exclusively using biomass, and military elements from the Regulation’s overall scope.
It also provides a specific ETS exclusion for facilities belonging to schools, universities, hospitals and defense-industry organizations, limited to the relevant activities. Importantly, their obligations to monitor, report and verify emissions arising from Annex 1 activities continue.
Greenhouse gas emissions permit
A business within the TR ETS must obtain a greenhouse gas emissions permit from the Climate Change Presidency before carrying out activities that cause greenhouse gas emissions under the ETS framework.
Relevant operational changes, facility changes, category changes and changes in the permit holder must generally be notified within 30 days.
Transitional permit rule
The transitional provision states that businesses that will fall within the ETS must obtain their greenhouse gas emissions permits within three years from the entry into force of Climate Law No. 7552. During that three-year period, they are deemed, once only, to hold the permit necessary to continue their ETS activities. The Carbon Market Board may authorize an extension of up to two additional years where considered necessary.
Monitoring, reporting and verification
Annex 1 businesses must prepare an emissions monitoring plan and monitor greenhouse gas emissions under the approved plan and the principles set by the Regulation and subsequent implementing rules.
Each year, businesses must report the previous calendar year’s monitored greenhouse gas emissions and activity levels to the Presidency by 30 April. The Presidency may extend that deadline by up to one month where necessary.
Before submission, the greenhouse gas emissions report must be verified. Verification is carried out by accredited verification bodies assigned through the central MEDAS system, subject to the stated exceptions for entities under public procurement legislation.
How allowances work under the TR ETS
One allowance represents the right to emit one tonne of carbon dioxide equivalent (tCO₂e). Allowances are issued electronically and recorded in the Transaction Registry System operated by the market operator, EPİAŞ.
Free allocation
Free allowances are based on a sub-installation benchmarking methodology. The amount is calculated using the relevant benchmark, free-allocation ratio, sectoral activity coefficient and facility activity level. The Carbon Market Board has authority over the allocation framework and applicable ratios.
Primary and secondary markets
Allowances may be sold through a primary auction market. After free distribution or primary-market sale, market participants may trade allowances on continuously operated secondary markets.
Banking, borrowing and offsets
The Regulation allows for flexibility mechanisms such as banking allowances for later years and using allowances from later years for current surrender obligations, subject to implementing rules. Carbon credits generated from projects within Turkey may also be used against part of an ETS facility’s surrender obligation, up to a ratio determined by the Carbon Market Board.
When must allowances be surrendered?
A covered business must surrender allowances equal to the verified emissions of each facility by the last business day of November in the relevant compliance year through the Transaction Registry System.
Failure to surrender the required amount does not eliminate the obligation. Unsurrendered allowances are carried forward into the compensation year and added to the subsequent surrender requirement, in addition to statutory sanctions.
Administrative penalties can be material
The Regulation sets substantial administrative fines for failures such as late verified emissions reporting and operating without a valid greenhouse gas emissions permit. The amount varies according to facility category and emission level.
| Example violation | Facility range | 2026 amount stated in Regulation |
|---|---|---|
| Verified emissions report not submitted on time | Category A | TRY 627,450 |
| Verified emissions report not submitted on time | Category B: >50,000–250,000 tCO₂e | TRY 1,254,900 |
| Verified emissions report not submitted on time | Category B: >250,000–500,000 tCO₂e | TRY 2,509,800 |
| Verified emissions report not submitted on time | Category C: >500,000–2,000,000 tCO₂e | TRY 4,392,150 |
| Verified emissions report not submitted on time | Category C: >2,000,000 tCO₂e | TRY 6,274,500 |
Pilot period and immediate transition items
TR ETS starts with a pilot implementation period. The scope, duration and detailed implementation rules of the pilot will be determined by the Carbon Market Board after consultation with relevant institutions, organizations and civil-society bodies.
Businesses included in the pilot must submit their first Monitoring Methodology Plans electronically within two months of the Regulation’s entry into force, unless the Presidency extends that period. The Regulation permits an extension of up to six months.
What should companies do now?
For companies with industrial operations in Turkey, the first practical step is a facility-by-facility applicability assessment. A sound internal project should bring together environmental, production, legal, finance and internal-control functions.
| Workstream | Immediate question |
|---|---|
| Scope | Does each Turkish facility carry out an Annex 1 activity, and what is its Category A/B/C classification? |
| Permit | Is the facility within the ETS, and what is the permit timetable under the transitional rules? |
| Data | Are emissions and activity-level data complete, traceable and controlled? |
| Verification | Is the reporting calendar aligned with independent verification and the 30 April deadline? |
| Allowances | What is the expected free allocation, forecast emissions position and potential allowance deficit or surplus? |
| Governance | Who owns the registry account, trading authority, approval matrix and compliance sign-off? |
| Records | Can the company retain supporting records for at least 10 years and reproduce its calculations during an inspection? |
Frequently asked questions
Is every Turkish company subject to the TR ETS?
No. ETS coverage is facility- and activity-based. The Regulation targets Annex 1 facilities falling into Category B or Category C. Other Annex 1 businesses may still have monitoring, reporting and verification obligations even when they are outside the ETS itself.
What is the Category B threshold?
Category B covers facilities with conservatively calculated annual emissions above 50,000 tCO₂e and up to 500,000 tCO₂e, excluding biomass CO₂ and including transferred CO₂ as specified in the Regulation.
What is the Category C threshold?
Category C covers facilities with conservatively calculated annual emissions above 500,000 tCO₂e.
When is the annual emissions report due?
By 30 April for the emissions and activity levels of the previous 1 January–31 December period. The Presidency may extend the deadline by up to one month.
Does the emissions report need independent verification?
Yes. The emissions report must be verified before it is submitted to the Presidency. Verification is performed by accredited verification bodies under the Regulation.
How long is an emissions permit valid?
Five years. Renewal must be initiated at least six months before expiry, and the renewed permit must be obtained before the existing five-year period ends.
Can companies receive free allowances?
Yes, where the relevant activity is eligible. Free allocation is based on sub-installation benchmarks, activity levels and parameters determined under the national allocation framework.
Can Turkish carbon credits be used for compliance?
The Regulation permits carbon credits from projects located in Turkey to be used for part of an ETS facility’s surrender obligation, subject to the maximum ratio and detailed rules to be determined by the competent authorities.
Need a TR ETS readiness review?
SystemsCPA can support management teams with a structured finance-and-compliance review of their Turkish operations, including entity and facility scoping, reporting calendars, internal-control mapping and coordination of the financial implications of carbon compliance.
Discuss your Turkish compliance position →Primary legal source: Türkiye Emisyon Ticaret Sistemi Yönetmeliği, Official Gazette dated 27 August 2026, No. 33353. This article is a general information note and does not constitute legal, environmental-engineering or investment advice. Annex 1 activity classification and subsequent implementing decisions should be reviewed for each facility separately.