Turkey Approves National Emissions Trading System for 41% Reduction by 2030

Turkey’s cabinet has approved a plan to launch a national emissions trading system (ETS) focused on energy and heavy industry. This system is designed to support the country’s commitment to reduce greenhouse gas emissions by 41% from its business-as-usual path by 2030, a target reaffirmed in its updated Nationally Determined Contribution under the Paris pact. The ETS will cap annual emissions and allow companies to buy or sell allowances, with a new carbon market board under the Environment Ministry’s climate change department governing scrapping, permit allocations, pricing, and the use of auction revenues for climate-friendly investments. This move signifies a significant shift in Turkey’s energy and environmental policy.

The ETS will begin with a pilot program in 2025, featuring mandatory emissions reporting, monitoring, and verification by certified auditors. The full rollout, including legal enforcement and voluntary offset options, is planned for 2026. This timing aligns with the EU’s Carbon Border Adjustment Mechanism (CBAM), which is set to apply import rules in 2026. Turkey’s ETS can help shield its exporters from new carbon tariffs.

Turkey emits around 560 million tonnes of CO₂ annually, with a heavy dependence on coal and fossil fuels. Carbon pricing will increase costs for energy-intensive industries but also supports investment in renewables and cleaner infrastructure. This trend is echoed in Turkey’s “Long-Term Climate Strategy” for 2053. Adopting emissions trading could improve Turkey’s bid to join the EU, as aligning with EU ETS standards shows regulatory readiness for integration. However, unresolved coal subsidies and a lack of a coal phase-out timeline could complicate relations.

Turkey’s ETS opens the door for tokenized carbon credits on blockchain. Tokenization can bring traceability, real-time retirement, and programmable trading, aligning with an emerging global trend to embed compliance within on-chain infrastructure. Local startups may tap into voluntary markets, issuing Turkish carbon credits under recognized international standards. These could feed into ESG investment portfolios or global offset programs. Tokenizing credits could accelerate transparency, liquidity, and investor trust.

Turkey must now turn its approved framework into action. Lawmakers need to pass the proposed climate legislation and finalize the technical rules for the ETS. This includes decisions on auction methods, offset eligibility, and emissions reporting. Core infrastructure, such as carbon registries and third-party verification systems, must be in place before the 2026 rollout. Support from the EU and World Bank may help accelerate this transition.

With this, Turkey joins a growing club of nations turning to emissions trading as a climate tool. The EU, China, South Korea, New Zealand, and Canada already operate full-fledged ETS programs, while countries like India, Brazil, and Mexico are developing their models. As carbon markets continue to expand globally, Turkey’s entry adds momentum to this shift.