Why a weak Turkish ETS fails both the climate and Turkish exporters

The report argues that the proposed Turkish ETS is fundamentally weak due to its reliance on an intensity-based cap, broad unconditional free allocation, and the use of offsets. These design choices are expected to prevent the system from generating a meaningful carbon price signal, thereby failing to drive emissions reductions aligned with the Paris Agreement and leaving Turkish exporters exposed to significant CBAM fees. The authors recommend transitioning to an absolute declining cap, phasing out offsets, and shifting toward auctioning to retain climate revenues domestically.

• The proposed Turkish ETS uses an intensity-based cap rather than an absolute cap, which the report argues fails to ensure emissions decline over time and lacks a progressive tightening pathway.
• The draft regulation provides unconditional free allocation across all covered sectors, including the power sector, which contradicts the polluter-pays principle and risks rewarding the most polluting installations.
• The Turkish ETS allows facilities to meet up to 10% of their compliance obligations using domestic 'Turquoise Credits', which the report claims weakens the carbon price signal and raises environmental integrity concerns due to weak additionality and permanence rules.
• The system's governance is described as highly centralised and opaque, with key decisions made by the Carbon Market Board and the Presidency and no formal role for civil society or independent experts.
• The report estimates that without a domestic carbon pricing scheme, Turkish exporters could face annual CBAM fees of €1.655 billion, representing nearly 10% of the value of all traded goods.
• Analysis suggests the Turkish ETS is unlikely to align with the Paris Agreement 1.5°C pathway; emissions from covered sectors are projected to reach 197 MtCO₂e by 2035 under maximum policy effort, compared to a compatible level of 123 MtCO₂e.

APA

Marullaz, J., Tamellini, L., & Hernandez, M. V. (2026). Why a weak Turkish ETS fails both the climate and Turkish exporters. Carbon Market Watch. https://carbonmarketwatch.org/wp-content/uploads/2026/05/Turkish-ETS_final-version.pdf

Chicago

Marullaz, Jeanne, Lidia Tamellini, and Meili Vanegas Hernandez. Why a weak Turkish ETS fails both the climate and Turkish exporters. Carbon Market Watch, 2026. https://carbonmarketwatch.org/wp-content/uploads/2026/05/Turkish-ETS_final-version.pdf.

Wikipedia

{{cite report |last1=Marullaz |first1=Jeanne |last2=Tamellini |first2=Lidia |last3=Hernandez |first3=Meili Vanegas |title=Why a weak Turkish ETS fails both the climate and Turkish exporters |publisher=Carbon Market Watch |date=May 2026 |url=https://carbonmarketwatch.org/wp-content/uploads/2026/05/Turkish-ETS_final-version.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{marullaz2026why, author = {Marullaz, Jeanne and Tamellini, Lidia and Hernandez, Meili Vanegas}, title = {{Why a weak Turkish ETS fails both the climate and Turkish exporters}}, institution = {Carbon Market Watch}, year = {2026}, month = may, url = {https://carbonmarketwatch.org/wp-content/uploads/2026/05/Turkish-ETS_final-version.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }