Navigating the 2026 Carbon Frontier: Preparing Turkish Industry for Simplified CBAM Compliance

Introduction

Following the European Union’s (“EU”) launch of the Green Deal in 2019, the transition into a green economy has been framed not only as an environmental imperative but also as a new growth strategy. The Green Deal seeks to combine the reduction of emissions with the preservation of economic competitiveness. To translate these objectives into practice, the EU has relied on and expanded market-based instruments such as the Emissions Trading System (“ETS”) and the Carbon Border Adjustment Mechanism (“CBAM”), that work together to encourage the reduction of emissions and address the risk of carbon leakage through carbon pricing. To ensure a smooth transition as the initial phase ends on January 1, 2026, the EU recently adopted Regulation (EU) 2025/2083, which introduces significant simplifications and strengthening measures to the CBAM framework.

Türkiye’s Preparations for 2026

Türkiye’s response to this transformation has taken shape along two principal pillars. The first is the enactment of Climate Law No. 7552 (“Climate Law”), which establishes the overall legal framework for national climate policy and sets out Türkiye’s commitments, institutional structure and policy instruments in line with international developments. The second pillar is the Draft Regulation on the ETS (“Draft ETS Regulation”) which is prepared pursuant to the authority and principles introduced by the Climate Law. Taken together, these two instruments illustrate a step-by-step regulatory approach, where a general legislative framework is followed by secondary rules that put carbon pricing into practice through a market-based system.

The Climate Law provides the main regulatory structure for Türkiye’s 2053 net zero emissions target. For the private sector, particularly in greenhouse gas–intensive sectors, carbon footprint measurement and emissions management will become mandatory compliance requirements under the forthcoming national ETS.

According to the Draft ETS Regulation, the Turkish ETS will be rolled out in stages, with a Pilot Phase (2026–2027), primarily covering sectors most exposed to CBAM – such as cement, iron and steel, aluminium, and fertilizers. Notably, Türkiye’s model utilizes an emissions-intensity-based cap, focusing on lowering emissions per unit of output while permitting overall production growth.

Beyond regulatory compliance, the emergence of parallel carbon pricing systems in the EU and Türkiye is likely to influence contractual risk allocation, pricing mechanisms, and supply-chain governance. As carbon costs become increasingly quantifiable, climate exposure is expected to play a more prominent role in commercial negotiations, long-term procurement strategies, and cross-border investment decisions.

Critical Innovations and Simplifications for the 2026 Definitive Phase

As Turkish industry prepares for the 2026 deadline, several “innovations” introduced by the EU’s latest regulation provide essential administrative and financial relief:

– The ‘De Minimis’ Exemption: A significant new derogation exempts importers from CBAM obligations if the cumulative net mass of imported goods in a calendar year does not exceed 50 tonnes. This applies to iron, steel, aluminium, fertilisers, and cement, though it specifically excludes electricity and hydrogen.

– Extended Reporting and Surrender Deadlines: Authorized CBAM declarants now have until September 30 of the year following importation to submit their annual declaration and surrender certificates. This provides additional time to collect data and ensure verified emissions reporting.

– Flexibility for 2026 Applications: To avoid trade disruptions, importers who submit their authorization applications by March 31, 2026, may provisionally continue importing even if they exceed the 50-tonne threshold while their application is pending.

– Alignment of System Boundaries: To simplify application for third-country operators, the embedded emissions for certain finishing processes in aluminum and steel (not covered by the EU ETS) are now excluded from calculation boundaries. Furthermore, if input materials (precursors) have already been subject to the EU ETS or a fully linked system, their emissions are not accounted for in the final complex good.

– Scope Refinements: Non-calcined kaolinic clays have been officially excluded from the list of cement goods subject to CBAM.

– Penalty Mitigation: Competent authorities are now granted the power to reduce penalties in cases of minor or unintentional errors, such as when the 50-tonne threshold is exceeded by no more than 10% or when errors result from incorrect information provided by third-party operators or verifiers.

Next Steps For Türkiye

The integration of these EU-level simplifications with Türkiye’s domestic ETS architecture is vital for maintaining trade integration. The success of Türkiye’s transition will depend on introducing gradually stricter limits, ensuring predictable reductions in free allowances, and utilizing system revenues to support green transition efforts. For Turkish exporters, preparations for 2026 now involve not only compliance with national laws but also the use of new EU administrative measures to maintain competitiveness in the European market.