Turkey’s cabinet approved a plan this week to launch a national emissions trading system (ETS) focused on energy and heavy industry. The system supports the country’s commitment to cut greenhouse gases 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. A new carbon market board, under the Environment Ministry’s climate change department. This will govern scrapping, permit allocations, pricing, and use auction revenues for climate-friendly investments. The move marks a striking shift in Turkey’s energy and environmental policy.

Pilot Launch in 2025, Plans Finalized for 2026

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

Carbon Pricing Meets Trade and Policy Pressures

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

Tokenization Meets Compliance

Turkey’s ETS opens the door for tokenized carbon credits on blockchain. Tokenization can bring traceability, real-time retirement, and programmable trading. It aligns 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. Meanwhile, tokenizing credits could accelerate transparency, liquidity, and investor trust.

Next Steps and Global Echoes

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. That 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.

As Turkey moves forward, the question becomes: could your country follow suit? And if so, when might it reach its net-zero emissions goal?

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