Türkiye’s first climate law adopted

The Climate Law establishes a legal and institutional framework for mitigating and adapting to climate change, supporting Türkiye’s greenhouse gas emission targets and its commitments under the Paris Agreement. It provides a binding domestic basis for reducing emissions and advancing the country’s transition towards a net zero emissions economy.

Objectives and scope 

The climate law aims both to reduce the effects of climate change and enhance Türkiye’s competitiveness in a global economy increasingly focused on low-carbon practices. It is driven by the dual objectives of achieving “green growth” and reaching “net zero emissions”. Green growth refers to fostering economic development while ensuring the sustainable use of natural resources, minimising environmental degradation, and promoting social inclusion. The net zero emissions target, meanwhile, commits Türkiye to balancing the amount of greenhouse gases emitted with those removed from the atmosphere, in line with global efforts to limit temperature rise and mitigate the impacts of climate change.

The Climate Law covers a broad range of issues, including:

• Principles to be adopted against climate change
• Duties and competencies of institutions responsible for implementing and monitoring greenhouse gas reduction policies
• Details regarding the implementation of the emissions trading system (“ETS”).

The scope extends to public institutions, private legal entities, and individuals, requiring compliance with the measures introduced. This inclusive approach reflects the principle of shared but differentiated responsibilities, ensuring all actors contribute to a just and sustainable transition.

Key mechanisms and institutional structure

The Climate Law introduces several mechanisms and establishes a detailed institutional architecture to ensure effective implementation of Türkiye’s climate objectives.

Emissions Trading System (“ETS”)

A central pillar of the new legislation is the establishment of a national ETS. The ETS is designed to operate as a market-based mechanism to limit overall greenhouse gas emissions in specified sectors. This is accomplished by establishing a cap on total emissions and emissions allowances are distributed accordingly. The ETS market will be operated by Enerji Piyasaları İşletme Anonim Şirketi (“EPİAŞ”), which is also responsible for reporting the market-disruptive actions to the Climate Change Presidency (“Presidency”) and Energy Market Regulatory Authority.

Planning and Implementation Tools

The planning and implementation tools envisaged by the Climate Law will play a major role in achieving Türkiye’s targets for combating climate change, including the target to reduce greenhouse gas emissions by 41% by 2030. Accordingly:

1. The Presidency will prepare and develop climate change and action plans, as well as sectoral vulnerability and risk analyses
2. The development and use of climate finance, insurance products as well as green and sustainable capital market tools and bank financing will be prioritised
3. Türkiye’s Green Taxonomy, which refers to classification systems that contribute to mobilizing climate finance by establishing principles and criteria for economic activities that support the fight against climate change will be prepared and developed
4. The development and widespread use of clean technologies will be promoted.

Financial instruments and Carbon Border Adjustment Mechanism (“CBAM”): The Climate Law introduces the CBAM, which will serve as a framework for managing the greenhouse gas emissions associated with goods imported into the customs territory. The procedures and principles regarding CBAM will be determined by the Ministry of Trade in coordination with the relevant administrations.

Obligations and compliance

Facilities covered by forthcoming secondary legislation and engaging in activities that directly generate greenhouse gas emissions will be required to obtain a greenhouse gas emission permit from the Presidency. These facilities will also be required to surrender annual allowances corresponding to their verified annual emissions. Furthermore, the use of carbon credits is permitted to meet allowance obligations.

These requirements are intended to ensure that emissions are effectively monitored and controlled, while also providing flexibility through the trading of allowances and the use of carbon credits.

Violation of the Climate Law is subject to substantial administrative fines. For example, failure to meet reporting and notification obligations related to the ETS may result in fines of up to 10,000,000 Turkish Lira.

Transition period

A pilot phase will precede full ETS implementation. During this period, administrative fines will be imposed at a substantially reduced rate—specifically, 80% lower than the standard penalties. Notably, the Climate Law does not specify a definitive end date for the pilot phase; rather, the duration, scope, and detailed implementation procedures will be determined by the Carbon Market Board (“Board”).

As part of the transitional arrangements, all facilities subject to the ETS are required to obtain emissions permits within three years from the date the Climate Law enters into force. The Board may extend this deadline, taking into account practical considerations and the readiness of different sectors.

Conclusion

The Climate Law represents a transformative step in Türkiye’s environmental and economic policy, aiming for net zero emissions and sustainable development.

It should also be noted that the introduction of the ETS and CBAM is motivated by both environmental goals and the need to align with the European Union’s (“EU”) carbon pricing mechanisms, thereby maintaining export competitiveness of the Turkish industries in EU trade.

Despite its significance, the Climate Law has faced some criticism. Environmental groups and legal experts have pointed out that the law lacks ambitious, science-based medium-term emission reduction targets. Additionally, it is argued that the Climate Law falls short in ensuring meaningful civil society participation and omits the establishment of an independent expert advisory body, raising concerns about transparency and effective oversight.

Finally, the Climate Law primarily establishes a framework, leaving many critical details—such as allowance allocation methods under the ETS and the functioning of the carbon market—to be defined by forthcoming secondary legislation. The Law’s effectiveness will depend on the timely issuance of comprehensive regulations, robust institutional coordination, and the development of technical and administrative capacity.