CBAM: Carbon Border Adjustment Mechanism and Turkish Exporters

The European Union’s Carbon Border Adjustment Mechanism, known as CBAM, represents one of the most consequential trade and environmental policy developments affecting exporters to the European market. Formally entering its definitive phase in January 2026, CBAM requires importers of designated goods into the EU to purchase certificates corresponding to the embedded carbon emissions in those products. The mechanism is designed to prevent carbon leakage, whereby production shifts to jurisdictions with less stringent climate policies, and to create a level playing field between EU producers subject to the Emissions Trading System and their international competitors. For Turkish exporters in sectors including iron, steel, cement, aluminum, fertilizers, electricity, and hydrogen, CBAM introduces material reporting and financial obligations that demand immediate attention.

 

Impact on Turkey

During the transitional phase that commenced in October 2023, importers were required to submit quarterly reports disclosing the embedded emissions of covered goods, without financial liability. With the definitive regime now in effect, EU importers must surrender CBAM certificates reflecting the verified carbon content of imported products, with the certificate price linked to the prevailing EU ETS allowance price. Critically, a deduction is available where the exporting country imposes a carbon price on the goods in question, incentivizing the development of domestic carbon pricing mechanisms in exporting nations. Turkey’s progress toward establishing a national emissions trading system will therefore have direct implications for the cost competitiveness of Turkish exports under the CBAM framework.

 

Compliance Architecture

The compliance architecture of CBAM requires Turkish exporters to establish robust emission measurement and reporting systems at the installation level. Producers must be prepared to provide EU importers with verified data on direct and, in certain cases, indirect emissions associated with the production of covered goods. This necessitates investment in monitoring, reporting, and verification infrastructure, as well as the development of internal expertise in carbon accounting methodologies. The failure to provide adequate emission data may result in EU importers being required to apply default emission values, which are typically based on the worst-performing installations in the exporting country and thus impose a significant cost disadvantage.

 

Compliance Strategies

At Topluyıldız Legal Co., we provide tailored advisory services to Turkish exporters navigating the CBAM compliance landscape. Our approach encompasses regulatory analysis, supply chain mapping for carbon emission exposure, coordination with verification bodies, and strategic engagement with Turkish policymakers on the development of domestic carbon pricing instruments. We strongly recommend that affected exporters conduct a comprehensive CBAM readiness assessment and establish the organizational and technical foundations necessary to meet the ongoing reporting and certificate obligations under this regulation.

 

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This article was prepared by Topluyıldız Legal Co. for informational purposes and does not constitute legal advice.