Turkey approves plans to launch its carbon market

The country's parliament recently passed a climate law

Turkey has approved plans to launch a carbon market in order to achieve its goal of reducing greenhouse gas emissions to zero by 2053, according to Daily Sabah.

On July 2, the country’s parliament passed its first-ever climate law, which, among other things, provides for the creation of a national emissions trading system (ETS).

Under the new law, companies covered by the ETS will have to obtain greenhouse gas emission permits within three years of the regulation coming into force.

The law also introduces a pilot phase for the ETS prior to its full implementation, which will be overseen by the Carbon Market Council. In addition, the document specifies administrative penalties for failure to submit annual greenhouse gas emissions reports within the established deadline.

The Carbon Market Council will, among other things, approve the national plan, decide on the allocation of free allowances (the conditions for obtaining them are not specified), and determine the number of allowances to be offered for sale on the primary market. It will also be responsible for strategies and plans related to the emissions trading system and will determine the sectors, projects, and activities that will be subject to the international carbon market.

Permits will be sold at auction and traded on the secondary market, which is managed by Energy Exchange Istanbul (EXIST), Bloomberg notes. Certain key details remain unclear, such as the number of permits and price expectations, etc.

Earlier, the Ministry of Environment, Urbanization, and Climate Change stated that carbon trading would most affect the cement and metallurgy industries. This step was also seen as reducing the impact of the European cross-border carbon adjustment mechanism.

As a reminder, India is setting emission targets for the steel sector – the country’s relevant agency has published a draft of the relevant rules. This move is part of India’s commitment to the 2023 Carbon Credit Trading Scheme (CCTS), a mechanism introduced to create a domestic carbon market.