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Carbon Border Adjustment Mechanism (CBAM) and Turkey’s Climate Law

  • Writer: Goldstein Carbon
    Goldstein Carbon
  • May 23
  • 3 min read

The EU’s Carbon Border Adjustment Mechanism (CBAM), effective from 2026, marks a new era for exporting countries in carbon-intensive sectors. Turkey, as the EU’s sixth-largest trade partner, will be directly affected.


Turkey’s encounter with CBAM represents a multi-layered transformation driven not only by environmental concerns but also economic, trade, and geopolitical factors. From 2026, the EU will impose a carbon price on imports from carbon-intensive sectors (cement, steel, aluminum, fertilizer, electricity), aiming to prevent carbon leakage, enhance EU industry competitiveness, and promote global carbon pricing.



Countries most affected by EU’s CBAM and Turkey’s position

According to a joint report by EBRD and the Turkish Ministry of Environment, Urbanization, and Climate Change, the steel and cement sectors in Turkey will be most affected by CBAM. With a CBAM fee assumption of €75/tCO₂e, potential annual CBAM costs for Turkish industry could reach €138 million in 2027, increasing up to €2.5 billion annually by 2032 under a €150/tCO₂e scenario.

 

What Can Be Done to Prevent This Scenario?


Implementing a national carbon pricing system could significantly reduce these costs. For example, a national carbon price of €20/tCO₂e would reduce potential CBAM costs in 2027 to €56 million annually.



Cost distribution for Turkey’s cement and steel sectors under CBAM and national ETS effects

The graph illustrates the sectoral distribution of expected CBAM costs. Cement and steel sectors bear the highest cost burden under both €75/tCO₂e and €150/tCO₂e scenarios, totaling approximately €1.6 billion under the higher scenario.


However, implementing a national ETS (e.g., €50/tCO₂e) significantly lowers CBAM costs, demonstrating that local carbon pricing could effectively protect Turkey’s international competitiveness.



Policy options table for reducing Turkey’s CBAM costs

The above table comparatively presents the impacts of various carbon policy options on Turkey’s CBAM costs. The EU CBAM system aims to equalize carbon costs for imports and domestic production. The nature of Turkey’s carbon policies determines its vulnerability to this mechanism.


  1. An ETS directly linked with the EU ETS is the only option providing complete exemption from CBAM, eliminating the need for importers to buy CBAM certificates.

  2. An independent ETS (unlinked) allows partial CBAM relief corresponding to domestic carbon costs but not full exemption.

  3. Alternative policies (e.g., energy efficiency standards) contribute to emission reductions but do not directly decrease CBAM costs.

  4. Integrating Turkish and EU electricity markets, aligned with Turkey’s climate neutrality and renewable energy policies, could provide CBAM exemption on electricity imports.

  5. A supportive policy framework enhances carbon pricing effectiveness but does not directly reduce CBAM costs.


Is Turkey Ready for Carbon Pricing?


Turkey largely established its carbon pricing infrastructure under the World Bank-supported PMR program (2013–2020). Monitoring, Reporting, and Verification (MRV) systems and a draft ETS regulation are ready. Establishing a national ETS could reduce Turkey’s CBAM costs, support low-carbon production, and generate revenue for green development investments.


According to modelling results, domestic carbon pricing could generate additional public revenue of €1.5 billion by 2032, usable for industrial decarbonization. However, effective implementation requires supportive policies, the removal of fossil fuel subsidies, and strong stakeholder participation.


In conclusion, CBAM should be viewed not merely as a cost but as a strategic opportunity for Turkey’s transition to low-carbon industry.


What is the Climate Law? Is It Enacted?


Turkey’s first Climate Law draft, aligned with the 2053 Net-Zero Emission target, aims to legally frame climate action. The law covers emissions reduction, climate adaptation, renewable energy incentives, and eco-friendly production. It also proposes provincial Climate Change Coordination Councils and local action plans.


However, the draft law was withdrawn from parliamentary committee discussions, presenting an opportunity to reconsider the law more comprehensively.


Implementing CBAM adaptation measures and the Climate Law is essential not only to safeguard export markets but also to facilitate Turkey’s green transition and sustainable development goals.


References:

Chart 2 and Table 1 are taken from the report referenced above.

 

 

·       Beken, H. G., & Cebeci, A. (2024). Çatışmalı bir Süreç Olarak Sınırda Karbon Düzenleme Mekanizması Uygulaması. Paradigma: İktisadi Ve İdari Araştırmalar Dergisi, 13(2), 115-128.

 

·       İmer-ertunga, E., & Seyhun, Ö. K. (2022). SINIRDA KARBON DÜZENLEME MEKANİZMASI VE TÜRKIYE’NİN İHRACATINA OLASI ETKİLERİ. Ege Stratejik Araştırmalar Dergisi, 13(1), 1-13. https://doi.org/10.18354/esam.1119230

 

·       Saraçoğlu, F., & Kutlu, M. (2025). Sınırda Karbon Düzenleme Mekanizması ve Türkiye’ye Olası Etkileri. Ankara Hacı Bayram Veli Üniversitesi İktisadi Ve İdari Bilimler Fakültesi Dergisi, 27(1), 1-26. https://doi.org/10.26745/ahbvuibfd.1593438



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