The Turkish Climate Law No 7552 

Following its approval by the Turkish Grand National Assembly last week, Türkiye’s first Climate Law (the “Law”), entered into force upon its publication in the Official Gazette dated 9 July 2025 and numbered 32951, marking a pivotal moment in the Türkiye’s transition toward a low-carbon economy. This legislation establishes the long-awaited legal framework for Türkiye’s climate governance, translating its international commitments—including the Paris Agreement, its Nationally Determined Contributions (“NDCs”), and the 2053 Net Zero Emissions Target—into binding domestic action aimed at reducing greenhouse gas emissions and enhancing climate resilience.

CONCEPTS INTRODUCED BY THE LAW

At the core of the new legislation is the establishment of a national Emissions Trading System (“ETS”), a cap-and-trade mechanism that will price greenhouse gas emissions in key industrial sectors. Facilities subject to ETS will be required to monitor, report, and verify their emissions in accordance with standards to be issued by the Climate Change Presidency, operating under the Ministry of Environment, Urbanisation and Climate Change. According to ETS mechanism, facilities emitting above their allocated quotas would be obliged to purchase additional allowances or pay administrative penalties, while those emitting below their thresholds may generate surplus credits tradable in the national carbon market.

This market-based system is designed not only to reduce environmental harm, but also to enhance the competitiveness of Turkish exporters as a strategic response to the Carbon Border Adjustment Mechanism (“CBAM”), which imposes carbon tariffs on certain goods imported into the European Union. Currently, CBAM applies to a limited set of products—namely cement, steel, aluminium, fertilizers, electricity, and hydrogen—majority of which are of significant importance to Türkiye’s trade with the EU. Notably, Türkiye supplies nearly 30% of the EU’s imported cement and 9% of its imported iron and steel, placing the country among the most exposed trade partners—alongside China, Russia, the United Kingdom, and Norway.

Under CBAM, if no equivalent carbon price is paid in the exporting country, EU importers must purchase CBAM certificates equivalent to the EU’s carbon cost. The Law seeks to mitigate this risk by allowing Turkish exporters to internalize the carbon cost through a domestic ETS. In doing so, companies subject to ETS will be able to deduct the amount already paid in Türkiye from their CBAM liabilities in the EU. This effectively prevents double carbon taxation, retains the economic value of carbon pricing within the Turkish economy, and strengthens the competitiveness of Turkish exporters in the EU market.

In connection with the ETS, the Law also establishes a framework for the generation and trading of carbon credits, including through voluntary offsetting projects. Companies implementing activities that verifiably reduce or remove greenhouse gas emissions—such as afforestation, renewable energy deployment, or industrial efficiency upgrades—may be eligible to register these projects in a national offset registry.

The resulting credits may then be used to fulfil compliance obligations under the ETS or be traded within voluntary carbon markets, subject to forthcoming secondary legislation.

GREEN FINANCE AND INVESTMENT FACILITATION

The Law establishes a legal foundation for the development of a comprehensive Turkish Green Taxonomy, the expansion of climate-related financial instruments, and the alignment of capital markets with sustainability objectives. This framework is intended to accelerate private and public sector investments in green technologies and low-carbon production models by enhancing access to climate finance. In line with this, the Law empowers public institutions to use their revenues, within the scope of their governing legislation, to support climate-related investments through various tools. These include incentivizing green investments, reducing the perceived risk and cost of climate finance, developing climate insurance mechanisms, issuing green and sustainable finance instruments, and offering guarantees, grants, or subsidized financing.

CLIMATE GOVERNANCE RESPONSIBILITIES

Beyond its financial provisions, the Law introduces a wide range of institutional obligations focused on both climate change mitigation and adaptation. Public authorities are tasked with implementing sector-specific greenhouse gas reduction strategies aligned with Türkiye’s NDCs and net zero emissions target. This includes the preparation and execution of medium and long-term climate action plans in coordination with relevant ministries. These efforts are further supported by mandates to promote circular economy principles, expand the use of renewable energy, improve energy efficiency, deploy low-carbon technologies, and preserve or expand natural carbon sinks.

Complementing these mitigation responsibilities, the Law also establishes a framework for climate change adaptation. Institutions are required to assess climate risks, reduce anticipated damages, and enhance resilience across vulnerable sectors such as agriculture, water management, and biodiversity. Planning and decision-making processes must integrate climate risk and impact assessments, with a strong emphasis on nature-based solutions—including reforestation, erosion prevention, and the development of carbon sinks beyond traditional forest areas. In this way, climate adaptation is intended to be embedded as a cross-cutting legal obligation across all sectors and levels of public administration.

SANCTIONS AND ADMINISTRATIVE FINES

The Law establishes an enforcement framework to ensure compliance with obligations related to emissions trading, monitoring, and reporting. Entities that fail to comply—such as by exceeding their allowances without surrendering credits, failing to submit verified emissions reports, or breaching registry and trading rules—may be subject to administrative fines of up to TRY 50 million per violation. In cases of repeated or serious non-compliance, authorities may also suspend registry access or revoke trading rights.

The enforcement of obligations under the Law is overseen by the Climate Change Presidency, which holds competence to conduct inspections and impose administrative fines. In this context, subject persons are required to provide all relevant information and documentation requested during inspections, including data on materials used, fuel consumption, emissions reports, and monitoring systems. Failure to cooperate or provide access to requested data may result in additional enforcement measures.

TRANSITIONAL PROVISIONS

A pilot phase will precede the full implementation of the ETS, during which procedures and timelines will be set by the Carbon Market Board—yet to be established as the central decision-making body responsible for coordinating the involvement of various public institutions in ETS design and implementation—in consultation with relevant public institutions and civil society.

During this period, administrative fines for non-compliance with ETS obligations may be reduced by up to 80%. Entities falling within the scope of the ETS will be required to obtain greenhouse gas emission permits within three years following the Law’s entry into force. During this transitional period, entities are deemed to have greenhouse gas emission permits for the purpose of continuing their activities under the ETS, on a one-time basis. If deemed necessary, Climate Change Presidency is entitled to extend the period specified in this paragraph for up to two years from the expiration dates, pursuant to the decision of the Carbon Market Board.

Although the Law lays down the general legal framework for Türkiye’s climate governance, the detailed rules and technical requirements will be developed through secondary legislation.