What Turkish Exporters Need to Know About CBAM's Transitional Period

What Is the CBAM Transitional Period?

The European Union's Carbon Border Adjustment Mechanism (CBAM) entered its transitional period on October 1, 2023. Established by Regulation (EU) 2023/956 published in the Official Journal of the European Union, CBAM aims to put a price on the embedded carbon emissions of certain products imported into the EU (European Parliament and Council, 2023).

The transitional period runs until December 31, 2025. During this phase, importers face no financial obligations, but they must submit quarterly reports on the embedded emissions of their imports.

Products in Scope

CBAM covers products from sectors with the highest risk of carbon leakage:

• Cement (CN Code: 2523)
• Iron and Steel (CN Codes: 72 and 73)
• Aluminium (CN Code: 76)
• Fertilisers (CN Codes: 2808, 2814, 3102-3105)
• Electricity
• Hydrogen

According to Commission Implementing Regulation (EU) 2023/1773, importers must report the embedded emissions of these products during the transitional period (European Commission, 2023).

Reporting Obligations for Turkish Exporters

Quarterly Reports

EU importers must file a CBAM report for each quarter. Reports must include:

1. Total quantity of imported goods (in tonnes)
2. Total embedded emissions (in tonnes of CO2 equivalent)
3. Any carbon price paid in the country of origin (if applicable)

The first report was due by the end of January 2024, covering October-December 2023. Reports are submitted electronically through the European Commission's CBAM Transitional Registry (European Commission, 2023).

Embedded Emissions Calculation Methods

Three calculation methods are accepted during the transitional period:

After July 31, 2024, the use of default values was limited to a maximum of 20 percent of total embedded emissions (Commission Implementing Regulation 2023/1773, Article 4).

Why CBAM Exists: The Carbon Leakage Problem

To understand CBAM's requirements, it helps to understand why it was created. The EU operates the world's largest carbon market — the EU ETS — which puts a price on every tonne of CO2 emitted by European manufacturers. This carbon cost increases production costs for EU producers but does not apply to imported goods. Without a border adjustment, this creates two problems:

Carbon leakage: EU companies may relocate production to countries without carbon pricing, causing the same emissions to occur elsewhere — a net zero environmental benefit with a net loss of European industrial activity.

Competitive distortion: Importers bringing goods into the EU without a carbon cost advantage over EU producers who pay for their emissions under the ETS.

CBAM addresses both problems by extending the EU's carbon cost to imported goods. It is, in essence, a leveling mechanism — ensuring that the embedded carbon in imported cement, steel, or aluminium faces the same price as carbon emitted by EU-based production (European Parliament and Council, 2023).

For Turkish exporters, this means your products' carbon footprint now has a direct financial consequence in the EU market.

How Turkish Exporters Should Prepare

1. Build Your Emissions Data Collection Infrastructure

Establishing facility-level emissions data collection capability is critical. A greenhouse gas inventory aligned with ISO 14064-1 forms the foundation for CBAM reporting. Scope 1 (direct emissions) and Scope 2 (indirect energy emissions) data must be tracked reliably. Start with your production facilities that export CBAM-covered products to the EU — you do not need to inventory your entire company, only the facilities and production lines relevant to EU-bound products.

The data you need is operational: fuel consumption records (natural gas, coal, electricity bills), production volumes by product type, and process-specific parameters (clinker ratio for cement, EAF vs BOF for steel). Most of this data already exists in your operations — the challenge is structuring it for CBAM reporting rather than collecting it from scratch.

2. Strengthen Supply Chain Communication

EU importers will request embedded emissions data from their suppliers. Proactively preparing this data gives Turkish exporters a competitive advantage. Do not wait for your importer to ask — reach out with a standardized data package showing your facility's emission intensity per tonne of product. This positions you as a data-ready supplier and reduces friction in your customer's quarterly reporting process.

3. Plan for Verification

When the definitive period begins (January 1, 2026), embedded emissions data must be verified by accredited verifiers. Building familiarity with verification processes now provides a significant head start (ICAP, 2023). The verification market for CBAM is still developing, and verifier capacity — particularly those serving Turkish facilities — is limited. Securing a verifier relationship early avoids the bottleneck that will occur when verification becomes mandatory.

4. Monitor Carbon Pricing Developments

Turkey is planning to establish an Emissions Trading System (ETS) under Climate Law No. 7552. A national carbon pricing mechanism could allow CBAM financial obligations to be reduced for exports to the EU. Under Article 9 of the CBAM Regulation, carbon prices paid in the country of origin are deductible from CBAM certificate costs. When TR-ETS becomes operational, every Euro paid in domestic carbon tax translates directly into lower CBAM costs for Turkish exporters.

Key Dates

What to Do Next

The CBAM transitional period is a compliance opportunity for Turkish exporters. While there are no financial obligations during this phase, meeting reporting requirements and building embedded emissions calculation capacity is critical preparation for the definitive period starting in 2026.

Action Item: Start mapping your facility's embedded emissions profile today. The transitional period is your window for learning from mistakes — that window closes when the definitive period begins.