Türkiye Carbon Credit and Offset System: Use of Carbon Credits in the Emissions Trading System and Turquoise Credit
- Goldstein Carbon
- 3 days ago
- 10 min read
Türkiye has entered a rapid and comprehensive transformation process in line with its low-carbon development goals. Following the publication of the draft Climate Law and Emissions Trading System (ETS) legislation, the first draft of the legislation regarding the Türkiye Carbon Credit and Offset System has now been presented for public consultation.
This regulation goes beyond being just a legal text and emerges as a tangible component of the low-carbon development vision. While the regulation strengthens Türkiye’s ambition to be an active player in international carbon markets, it also presents to the private sector and project developers the legal framework for registering internationally certified projects into the Turkish ETS for offsetting, and introduces the National Registry System and Turquoise Credit for the first time in a legal context.
The main objectives of the new regulation are to:
Establish an institutional infrastructure for the production and trade of carbon credits,
Systematically implement a national-scale carbon offset mechanism,
Ensure the international market validity of projects developed within Türkiye,
And most importantly, to encourage investments that will reduce or remove greenhouse gas emissions,
Introduce Turquoise Credit as the national credit unit.
Although the regulation outlines the general framework of applications, the detailed procedures and principles will be published later.
Contents:
Definitions
Offsetting: The use of carbon credits within the scope of the Türkiye Emissions Trading System to meet obligations or voluntary commitments.
Validation and Verification: The comprehensive assessment process conducted by the validating entity to determine that the practices, assumptions, limitations, and methods declared in program/project documents are reasonably included according to the Türkiye Carbon Offset System requirements, and the work carried out by the verifying entities to determine that the declaration containing historical data and information of the program/project is materially accurate and complies with the Türkiye Carbon Offset System requirements.
Validating and Verifying Entities: Organizations accredited by TÜRKAK and authorized to validate and verify programs/projects related to greenhouse gas reduction or removal in order to fulfill the provisions of this Regulation.
Voluntary Commitments: Targets declared on a voluntary basis by institutions, organizations, enterprises, or individuals to reduce or remove their carbon footprint.
Carbon Credit Programs: Programs/projects that produce carbon credits under internationally recognized principles, including the United Nations Framework Convention on Climate Change (UNFCCC) Clean Development Mechanism and systems regulated by Article 6 of the Paris Agreement, outside the Türkiye Carbon Offset System, which are designed, implemented, measured, and verified in accordance with the frameworks, criteria, and methodologies developed by states or independent organizations. (Example: Gold Standard, Verra, ICR, etc.)
Retirement: The process of rendering a carbon credit inactive so that it can no longer be traded or sold by transferring it to the retirement account of the registry system.
Issuance: The process of officially creating and recording carbon credits or emission allowances on behalf of a project after it successfully passes the verification process.
Letter of Authorization: A document issued by the Presidency, in accordance with the principle of avoiding double counting, committing that the amount of greenhouse gas emission reduction or removal specified in the document will not be used in the country’s Nationally Determined Contribution (NDC) targets.
What is Turquoise Credit?
Under TR KDS, carbon credits produced are called “Turquoise Credit”. Each Turquoise Credit represents one ton of carbon dioxide equivalent greenhouse gas emissions. For a program/project to produce “Turquoise Credit”:
Contribution to Sustainable Development Goals is Mandatory: Every project or program under TR KDS must contribute to at least three of the United Nations Sustainable Development Goals (SDGs). One of these goals must be “Take urgent action to combat climate change and its impacts.”
Prevention of Double Counting and Double Financing:
Projects must not have previously produced carbon credits or similar certificates under:
International carbon credit mechanisms defined in Article 6 of the Paris Agreement,
Any international carbon credit program,
YEK-G (Renewable Energy Guarantee of Origin) certificate or I-REC certificate,
Any other certification system related to the nature of energy.
Independent Verification and Validation Process: The validation and verification of a project must not be conducted by the same entity. This rule ensures independence and reliability in the process.
The Role of the Presidency, TSE, and TÜRKAK
The Türkiye Carbon Offset System (TR KDS) is not limited to crediting only emission reduction projects; it offers a holistic governance model from methodology to verification, accreditation to market retirement.
To ensure the system operates transparently, reliably, and sustainably, three main institutional actors are defined:
Presidency (Climate Change Presidency) (Strategic Guidance)
Turkish Standards Institution (TSE) (Operational Implementation)
Turkish Accreditation Agency (TÜRKAK) (Quality Assurance and Oversight)
Presidency
The Presidency is the main authority ensuring the reliability of TR KDS and compliance with the Regulation, reviewing program/project processes when deemed necessary, and overseeing the system’s strategic alignment. Its duties and powers can be summarized as follows:
The Authority Triggering Methodology Development Requests: The Presidency may officially request TSE to develop a methodology in line with Türkiye’s priority carbon reduction areas, and approve the creation, update, and adaptation of methodologies deemed appropriate by TSE.
High-Level Access to the Registry System: The Presidency has administrator access to the Türkiye Carbon Offset Registry System, where TR KDS projects are recorded and monitored. This enables central oversight for general policy alignment.
The amount of carbon credits produced and retired annually is published on the Presidency’s official website.
Turkish Standards Institution (TSE)
The Turkish Standards Institution (TSE) is authorized to establish and operate the technical and operational infrastructure of TR KDS. Its scope of duties is broad and forms the backbone of the system:
Methodology Development and Publication: Develops, publishes, and, when necessary, updates or revises carbon credit production methodologies specific to TR KDS.
Establishment and Operation of the Registry System: Creates the digital and procedural infrastructure of the Türkiye Carbon Offset Registry System, operating it efficiently and transparently.
Defines All Processes: From project application to validation and verification, to the retirement of Turquoise Credits, TSE defines all technical processes and requirements.
Thus, TSE is both the standard provider and the operations manager of TR KDS, ensuring the system’s technical integrity and functionality.
Turkish Accreditation Agency (TÜRKAK)
The Turkish Accreditation Agency (TÜRKAK) is authorized to accredit validating and verifying entities that will operate under TR KDS. Its duties include:
Managing the Accreditation Process: Evaluates whether validating and verifying entities meet system requirements and grants accreditation.
Public Disclosure: Announces to the public the entities that have been accredited or whose accreditation has been revoked, and formally notifies the Presidency and TSE.
Ensures Quality Assurance: Guarantees that TR KDS operates transparently, is traceable, and is open to impartial auditing.
Entities accredited by TÜRKAK assess the compliance of the purposes and implementation principles of projects or programs with TR KDS requirements, preparing a comprehensive validation report accordingly. They also analyze the material accuracy and systemic compliance of historical data and information of the project, submit a verification opinion, and issue a verification report.
Process Flow: TR KDS Operation from Project to Credit Retirement
1. Application Process: The program/project owner applies to TR KDS according to the application procedures and principles to be published by TSE. TSE evaluates the documents within 10 business days. Projects/programs that are positively evaluated pay the registration fee.
2. Validation: Projects are validated by an independent “validating entity,” then recorded in the registry system and assigned a project-specific account.
3. Monitoring and Verification: After the implementation period, the amount of emission reduction/removal is reported by an independent “verifying entity.”
4. Issuance of Turquoise Credit: Credits are issued for the verified amount for the period specified in the methodology. However, issuance is activated upon payment of the Turquoise Credit issuance fee.
5. Credit Transactions: Issued Turquoise Credits are managed through the Türkiye Carbon Offset Registry System (TR KDS) operated by TSE, through actions such as:
Transfer
Cancellation
Withdrawal
Retirement
Mandatory Market Use
Companies with obligations under TR ETS will be able to use a limited amount of Turquoise Credits produced under TR KDS to fulfill their allowance surrender obligations. However:
The usage rate will be determined by the Presidency and announced periodically (currently limited to 10%).
This ensures market stability, price balance according to supply, and prevents speculative movements.
This structure will allow Turquoise Credits to play a complementary role within ETS and create “carbon flexibility.”
However, carbon credits used for offsetting under ETS must be no more than 5 years old from their production date. This regulation:
Preserves the timeliness and environmental integrity of credits,
Limits the circulation of older credits with lower impact potential.
Also, Renewable Energy Guarantee of Origin Certificates (YEK-G) and other environmental labeling certificates providing information on the nature of energy cannot be used for offsetting within TR ETS.
Role of Turquoise Credits in Voluntary Commitments
Not only mandatory markets but also voluntary commitments have an important place in this system. When organizations wish to use Turquoise Credits within the scope of their voluntary commitments:
The amount of credits used is “retired” in the TR KDS registry system,
Thus, the risk of double usage is eliminated and the value of the credit is preserved.
This practice ensures transparency and reporting reliability, especially for companies, financial institutions, and exporters with net zero targets.
The regulation also assigns a clear task to public institutions: to develop mechanisms that will encourage the use of Turquoise Credits in voluntary commitments.
Türkiye’s Position in International Carbon Markets
The Türkiye Carbon Offset System (TR KDS) is not only a mechanism regulating the domestic carbon market; it also provides a framework for integrating projects developed in Türkiye into international carbon markets.
At the center of this integration is the “authorization mechanism” carried out by the Presidency and the Carbon Market Board.
How Does the Authorization Process Work?
The Presidency, in line with the decision of the Carbon Market Board, issues an authorization letter to validate credits from projects developed under TR KDS or other recognized carbon crediting programs in international markets.
Authorization may be full or partial and is generally conducted through a call for proposals. Calls are announced on the Presidency’s official website.
Authorized projects are recorded in the Türkiye International Carbon Registry System. This is a key step for transparency, traceability, and international validity.
Authorization letters are valid for a limited period. Credits outside this period cannot be used in international markets.
Authorized carbon credits are not included in Türkiye’s Nationally Determined Contribution (NDC). This prevents double counting and allows these credits to be issued without being included in Türkiye’s emission reduction targets, fully complying with Articles 6.2 and 6.4 of the Paris Agreement.
Authorization letters may also be issued under the Paris Agreement’s crediting mechanism.
The Presidency, by decision of the Carbon Market Board, may withdraw or change the scope of authorization letters.
Türkiye International Carbon Registry System
The Türkiye International Carbon Registry System is a central data system established and operated by the Presidency. Its main functions are:
Tracking projects registered in international carbon crediting programs within Türkiye,
Managing projects that have received authorization letters,
Tracking carbon credits imported from international markets,
Establishing a control mechanism that prevents double counting in Türkiye’s carbon accounting.
This system will play a key role in fulfilling Türkiye’s commitments under Article 6 of the Paris Agreement and ensuring the accuracy of national emission reduction accounts.
Under the new regulation:
Any international carbon credit production activity conducted in Türkiye outside TR KDS must now be recorded in the Türkiye International Carbon Registry System.
Projects already in international carbon programs must register within 90 days following the launch of the Türkiye International Carbon Registry System,
Projects not yet internationally registered must register within 90 days from their first registration date.
The regulation also clearly provides that protocols may be established between the Türkiye International Carbon Registry System and international carbon crediting programs. This allows:
Data synchronization between systems,
Prevention of registering projects abroad without Türkiye’s consent,
Establishment of a fully compatible but sovereignty-protective structure with global crediting mechanisms.
Transitional Regulation: Building a Bridge Towards Turquoise Credit
Until the infrastructure of TR KDS is completed and Turquoise Credits are officially issued, a temporary transition regime will be implemented in Türkiye’s carbon market. This transition period offers both market continuity and an adaptation opportunity for project owners and investors.
Under Provisional Article 1:
1. Temporary Use of International Carbon Credits
Carbon credits produced by international carbon crediting programs determined by the Carbon Market Board can temporarily be used under TR KDS for:
Offsetting transactions (TR KDS Draft Regulation Article 13),
Use within TR ETS (TR KDS Draft Regulation Article 14),
Voluntary commitments (TR KDS Draft Regulation Article 15).
This prevents potential market gaps and allows projects to progress and be credited.
Reminder: According to the Turkish Emissions Trading System Regulation, carbon credits will be allowed for use starting in 2028 (First Implementation Period).
2. Formalization Through Protocols
During this temporary period, the Presidency may sign official protocols with the carbon crediting programs to be used (e.g., Gold Standard, Verra, ICR). This ensures both implementation security and allows Türkiye to establish a parallel temporary control mechanism to its own system.
3. Only Projects Conducted in Türkiye Will Be Valid
Although credits selected from international carbon markets can be used temporarily, only:
Projects conducted within the Republic of Türkiye,
That have achieved an actual reduction/removal of greenhouse gas emissions,
can be included in the temporary scope.
Conclusion: What Will Happen to Your Project’s Carbon Credits?
Given that current carbon credits must be no more than 5 years old from their production date, and that ETS’s First Implementation Period will start in 2028, it can be interpreted that carbon credits produced from 2023 onwards can be used in national offset obligations.
However, integrating carbon credits from earlier years into the national offset system will not be possible. Therefore, such credits will need to be directed to foreign voluntary carbon markets. To carry out this process, it is anticipated that necessary authorization letters will need to be obtained from the competent authorities.
From 2028 onwards, new carbon credits will be usable within Türkiye’s national system both in the 10% offset obligation and in voluntary carbon markets. This will provide dual value for investors by enabling flexible use of credits.
In addition, if needed in the future, the transition of carbon credits produced by internationally accredited carbon credit programs into the national “Turquoise Credit” system may also come into question. This transition would be an important step in strengthening Türkiye’s international alignment and integration in the carbon market.
Most questions regarding the Turkish Emissions Trading System and TR KDS will be clarified in the upcoming detailed procedures and principles. The Methodology Development and Evaluation Procedures and Principles will be determined by the Presidency and the Turkish Standards Institution (TSE) to guide the market. While details of account and transaction types under the Türkiye Carbon Offset Registry System will be announced by TSE, procedures and principles for the authorization letters required for using credits in international carbon markets, including application processes, contributions, and fee mechanisms, will be shaped within the procedures and principles to be published by the Presidency. Finally, all technical procedures for validation and verification and the structural framework of verifying entities will be regulated through the procedures and principles to be issued by TSE.
Read the full ETS Draft Regulation here.
Goldstein Carbon continues to closely follow legislative developments in both national and international carbon markets and share them with you. We provide reliable consultancy services by anticipating opportunities and risks that will arise in the transition to the new period.
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