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Climate change

Turkey's Climate Law: A New Era for Sustainability and Foreign Investment

Strategic Insights

— 1 min read

Turkey's Climate Law marks a significant milestone in the country's transition to a low-carbon economy. Introduced on July 9, 2025, the law sets ambitious targets for net-zero emissions and green growth, embedding transformative regulations that impact local and foreign businesses operating in Turkey. Key features include the establishment of an Emission Trading System (ETS), a Border Carbon Adjustment Mechanism (BCAM), promotion of carbon credit markets, and strategic financial incentives for green investments. The law also introduces mandatory reporting and transparency measures, with severe penalties for non-compliance.

Key Takeaways:

  • The Climate Law establishes a national Emission Trading System (ETS) to regulate greenhouse gas emissions from companies, with allowances distributed through free or auction-based mechanisms.
  • Businesses failing to comply with ETS limits face substantial financial penalties, calculated based on ETS market rates, affecting sectors such as energy, manufacturing, and transportation.
  • The law introduces a Border Carbon Adjustment Mechanism (BCAM), assessing the carbon footprint of imported goods and potentially imposing tariffs or fees, impacting import-dependent businesses and international trade partners.
  • Companies can meet ETS obligations through carbon offsets, investments in renewable energy, carbon sequestration, and energy efficiency improvements.
  • The law promotes green financial products, such as sustainable bonds and green loans, while incentivizing insurance instruments and investment guarantees for environmentally sustainable projects.
  • Mandatory reporting and transparency measures require companies to disclose their carbon footprints and verified emission reports, enhancing public access and corporate accountability.
  • Non-compliance with ETS requirements or reporting obligations attracts significant financial penalties, ranging from TRY 500,000 to TRY 50 million, with escalating penalties for repeated violations.

Statistics:

  • The Emission Trading System (ETS) will cover companies engaging in activities generating direct greenhouse gas emissions.
  • The law sets a goal of reducing Turkey's greenhouse gas emissions through the ETS.
  • The Climate Law aims to achieve net-zero emissions by [date not specified in the source material].
  • The Border Carbon Adjustment Mechanism (BCAM) targets imported goods, assessing their carbon footprint and potentially imposing additional tariffs or fees.
  • Penalties for non-compliance with ETS requirements or reporting obligations range from TRY 500,000 to TRY 50 million.

Sources:

  • Turkey's Climate Law No. 7552
  • CCS Law - [no specific article or resource listed]
  • Mondaq Ltd [reported in 2025]

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