H1 2026 ESG Regulatory Review: CBAM, CSRD, and TR-ETS in Action

H1 2026 ESG Regulatory Review: CBAM, CSRD, and TR-ETS in Action

Executive Summary

• The Carbon Border Adjustment Mechanism (CBAM) entered its definitive regime on 1 January 2026. Authorised CBAM declarant status and embedded-emissions obligations apply above the single annual 50-tonne mass threshold for covered imports. Certificates for 2026 imports, however, will be purchased from February 2027; the first declaration and surrender are due by 30 September 2027.
• The first real CBAM certificate price references are now available. The price was €75.36/tCO2 for Q1 2026 and €75.28/tCO2 for Q2. Because the second figure was published on 6 July, after H1 closed, this report treats it as a post-period confirmation (European Commission, CBAM Certificate Prices, 2026).
• The scope of the CSRD narrowed materially during H1. Directive (EU) 2026/470 reset the threshold for EU undertakings at an average of more than 1,000 employees and net turnover exceeding €450 million during the financial year. Scope analysis needs to be refreshed against the new thresholds and national transposition, not the former “large undertaking” test.
• Assurance did not disappear. Omnibus I removed the empowerment to move to reasonable assurance; limited assurance remains. ISSA 5000 is a final standard and is generally effective for periods beginning on or after 15 December 2026. Data trails, materiality decisions, and internal controls therefore remain management priorities.
• For TR-ETS, H1 2026 was an implementation-preparation period rather than a live-market period. Climate Law No. 7552 is in force and requires a pilot, but the ETS regulation remained listed as a draft on the official website at the report's publication date. A 2026-2027 pilot, CBAM-sector coverage, and intensity-based allocation are strong design signals, not final market parameters.

The common message is straightforward: the three regimes do not ask for the same data, but each requires defensible boundaries, versioned calculations, source evidence, and accountable ownership. An enterprise “evidence layer” lets teams manage regulatory change with less rework than three separate reporting spreadsheets.

Review Framework: Separating “In Force” from “In Preparation”

This report focuses on developments between 1 January and 30 June 2026 and separately labels critical confirmations received by its 27 July publication date. The distinction matters. CBAM definitive-regime rules apply even though certificate sales begin in 2027; deferred purchasing does not remove financial exposure. The CSRD Omnibus directive is in force, while parts of its operation depend on national transposition and the application date of revised ESRS. Under TR-ETS, the primary law is in force while much of the market design remains in draft form.

Every regulatory claim should therefore be tested against four questions:

1. Is the text an adopted law or regulation, or a proposal or draft?
2. Are entry into force and the first reporting, payment, or surrender date the same?
3. Who carries the obligation: the installation, parent company, EU importer, or supplier?
4. Is the required output a calculation, disclosure, third-party verification, or evidence of payment?

Key Takeaway: The main calendar risk is treating “the start date” as one date. Operations, data collection, declaration, purchasing, and surrender may begin at different times; the controls calendar must show each separately.

1. CBAM: The Definitive Regime Started, While the Cash Cycle Extends into 2027

1.1 Operational changes that took effect in H1

CBAM's transitional period, from 1 October 2023 to 31 December 2025, focused on quarterly reporting and learning. The definitive regime that began on 1 January 2026 activated the financial framework of authorisation, annual declaration, and certificate surrender (Regulation (EU) 2023/956; Regulation (EU) 2025/2083). Cement, iron and steel, aluminium, fertilisers, electricity, and hydrogen remain covered.

The 2025 simplification amendment introduced a single annual mass threshold of 50 tonnes per importer, subject to specific treatment for electricity and hydrogen. An EU importer or indirect customs representative above the threshold needs authorised CBAM declarant status and must use a CBAM account number or valid application reference in customs processes. According to the Commission, the threshold exempts approximately 182,000 importers while keeping more than 99% of emissions in scope (European Commission, CBAM Simplification, 2025).

The Turkish producer is not the party legally surrendering certificates, but the EU declarant relies on installation, production-route, and product data held by the producer. The evidence request therefore travels through the commercial contract. Product code, production installation, direct and — for relevant sectors — indirect emissions, methodology, and verification evidence need to be linked at customer level.

1.2 What the first price data does — and does not — tell us

In 2026, the certificate price is the weighted quarterly average of EU ETS auction clearing prices; weekly pricing begins in 2027. The Commission published a Q1 price of €75.36/tCO2 on 7 April and a Q2 price of €75.28/tCO2 on 6 July (Commission Implementing Regulation (EU) 2025/2548; European Commission, Price of CBAM Certificates, 2026).

The difference is only €0.08, producing a flat picture across the first two references. Two observations are not enough to establish a price trend, and the certificate price is not the same as an importer's total CBAM cost. The number of certificates to surrender depends on embedded emissions, the adjustment reflecting EU ETS free allocation, and an eligible carbon price effectively paid in the country of origin. The choice between actual and default data and the quality of verification also affect calculated emissions.

Sales of certificates covering 2026 imports begin on the common central platform on 1 February 2027. The first CBAM declaration and corresponding surrender are due by 30 September 2027 (European Commission, CBAM Communication and News, 2026). “We have not purchased certificates yet” does not mean no obligation arose during H1; the evidence base for the 2027 settlement consists of 2026 customs and production records.

1.3 Enterprise controls implication

Build a monthly exposure-accrual model for CBAM, while assessing the accounting treatment separately under the applicable accounting policy. The model should contain distinct fields for import quarter, published price, product embedded emissions, free-allocation adjustment, carbon price effectively paid, and data confidence. This gives the CFO a view of exposure on completed imports and shows the sustainability team which supplier data remains unverified.

Key Takeaway: CBAM's main task in 2026 is not purchasing certificates. It is accumulating complete 2026 import and emissions evidence for the 2027 surrender. Deferred cash is not deferred data.

2. CSRD and ESRS: Omnibus Reduced Scope, Not the Need for Evidence

2.1 Scope change finalised during H1

Directive (EU) 2026/470, signed off by the Council on 24 February 2026 and in force from 18 March 2026, materially narrowed the CSRD's scope. The individual reporting threshold for EU undertakings is now net turnover exceeding €450 million and an average of more than 1,000 employees during the financial year. Separate EU turnover and subsidiary or branch tests apply to third-country groups; a Türkiye-headquartered group should not conclude on scope solely from the parent's employee count (Directive (EU) 2026/470, 2026).

The directive also provides a transitional exemption for 2025 and 2026 financial years to wave-one companies that began reporting for financial year 2024 but fall outside the new thresholds. For companies that remain in scope, the sustainability statement remains part of the management report and subject to limited assurance.

Scope assessment should not be a one-off legal memo. Group restructuring, acquisitions or disposals, average employee numbers, and net turnover can change the test at each close. A company outside direct scope may also continue receiving value-chain data requests from banks, customers, or an in-scope parent.

2.2 Revised ESRS: a significant post-period development

The Commission adopted revised ESRS on 3 July 2026, three days after H1 closed. According to the Commission, mandatory datapoints were reduced by more than 60% and total datapoints by more than 70%; materiality application was streamlined, and a voluntary standard plus a “value chain cap” was created for smaller companies outside scope (European Commission, Revised ESRS, 2026). The adopted acts were sent to the European Parliament and Council for a two-month scrutiny period and were not yet applicable on the adoption date.

This creates two parallel tasks. First, confirm which standard set applies to each financial year. Second, map the former disclosure inventory to “continues,” “changed,” “removed,” and “voluntary,” rather than deleting it. Premature disposal of historical data or control evidence makes it difficult to answer later requests for comparative information or assurance evidence.

2.3 Assurance practice: limited but real

Omnibus I removed the Commission's empowerment to adopt reasonable assurance standards in the future; it did not remove limited assurance. Directive (EU) 2026/470 provides for EU limited assurance standards to be adopted by 1 July 2027. During the gap period, national standards, ISAE 3000 (Revised), and CEAOB's non-binding 2024 guidelines support practice.

IAASB's ISSA 5000 is not an exposure draft. It is a final standard completed in 2024, generally effective for periods beginning on or after 15 December 2026 with early application permitted (IAASB, ISSA 5000, 2024). Practitioners consider not only the emissions total, but also the double materiality process, reporting boundary, estimates, management controls, and evidence trail for selected disclosures.

Key Takeaway: Omnibus brought fewer companies and fewer datapoints, not evidence-free reporting. For an undertaking that remains in scope, each material disclosure still needs a visible owner, method, source, control, and approval.

3. TR-ETS: The Law Is in Force, While Pilot Parameters Remain Draft

Climate Law No. 7552 was adopted on 2 July 2025 and entered into force on publication on 9 July 2025. It empowers the Climate Change Presidency to establish the ETS and allocate allowances, and defines the framework for greenhouse gas emission permits and annual allowance surrender by covered operators. Provisional Article 1 requires a pilot before full implementation and reduces administrative monetary penalties under the law by 80% during the pilot (Climate Law No. 7552, 2025).

The general transition period for operators to obtain emission permits is three years from entry into force — 9 July 2028 on the current calendar — and may be extended by up to two years by the Carbon Market Board. The permit date is not necessarily the pilot start or first surrender date.

Implementation capacity and secondary legislation remained on the agenda during H1 2026. The Climate Change Presidency's 2026 Performance Programme connects green-transition and institutional-capacity objectives to its resource plan. Its drafts page, however, still listed the “Regulation on the Turkish Emissions Trading System” as a draft at the report's publication date. An official 2025 workshop presentation describes a 2026-2027 pilot, CBAM sectors, and emissions-intensity-based allocation (Climate Change Presidency, Draft TR-ETS Presentation, 2025).

These inputs can inform budgets and systems design, but not claims of legal certainty. Every parameter in the risk register should include a source and status label: “law,” “draft regulation,” “Board decision pending,” or “official presentation.” A change to the draft then triggers a reassessment of the financial model.

The relationship between TR-ETS and CBAM also needs careful treatment. CBAM permits a deduction for a carbon price effectively paid in the country of origin for embedded emissions, taking rebates and other compensation into account (Regulation (EU) 2023/956, Article 9). The nominal value of TR-ETS allowances received for free is not a price effectively paid. This deduction is also legally distinct from formal linking between TR-ETS and the EU ETS.

Key Takeaway: The most robust TR-ETS investment is not forecasting the pilot price. It is making today's MRV file ready to support allowance and CBAM evidence. Draft rules may change; the need for verifiable fuel, production, and emissions data will not.

4. A Shared Data Architecture for All Three Regimes

CBAM operates at product and import level, CSRD at company and value-chain level, and TR-ETS at installation and direct-emissions level. The same natural gas invoice may support all three processes, but the boundary and output are not identical. A shared architecture should not force one number; it should produce different, reconcilable regulatory views from the same source data.

The shared evidence layer should include at least:

• Organisation and installation master data: ownership, consolidation status, permits, and accountable owners
• Source-stream and activity data: fuel, electricity, raw material, production, and transport data with period and unit
• Factor and methodology library: source, version, validity date, geography, and approval record
• Calculation ledger: input, formula, allocation, conversion, and result with prior versions retained
• Evidence repository: invoices, meter records, laboratory reports, supplier declarations, and verification statements
• Control and findings register: preparer, reviewer, exception, correction, retest, and closure date

This enables boundary reconciliation. The difference between the TR-ETS installation total and CSRD Scope 1, for example, becomes a bridge of explainable items such as out-of-scope sites, a different consolidation approach, or biomass treatment. CBAM product emissions are derived from the same installation total through product-allocation keys and CBAM methodology.

Key Takeaway: A “single source of truth” does not mean reporting the same result under every regime. It means being able to reconcile different results, calculated under different boundaries and rules, back to common sources.

5. Decision Matrix for Management

90-Day Implementation Plan

First 30 days — clarify scope and ownership

1. Form a working group covering legal, finance, sustainability, tax/customs, procurement, and installation operations.
2. Combine the CBAM product and customer list, CSRD group scope test, and potential TR-ETS installation list in one scope register.
3. Label each regulatory parameter as in force, draft, proposal, or institutional guidance.

Days 31-60 — test evidence and reconciliation

4. Select one CBAM product, one material ESRS emissions disclosure, and one prospective TR-ETS installation.
5. Trace from source evidence to reported output and back in both directions.
6. Build a reconciliation bridge between installation emissions, CSRD Scope 1, and CBAM product allocation.

Days 61-90 — run the financial model and assurance test

7. Run the 2026 exposure model using published Q1 and Q2 CBAM prices, showing a separate confidence level for unverified data.
8. Build low, base, and high scenarios for TR-ETS allocation and price; do not treat draft parameters as fixed facts.
9. Conduct a dry run on selected disclosures with internal audit or an independent assurance team and assign each finding to an owner and deadline.

Conclusion

H1 2026 was not a one-way story of “more ESG regulation.” CBAM moved from reporting into its financial regime; the scope of CSRD and the ESRS disclosure population narrowed materially; and TR-ETS progressed from statutory foundation toward pilot design without final market parameters. The common direction is less about collecting more or less data and more about producing the right data within the right boundary, under the right version, with evidence.

The enterprise priority for H2 is not another regulatory summary. It is an operating system that shows which calculation, control, and management decision changes when the rules change. That system can manage CBAM's 2027 cash and surrender cycle, the CSRD scope and ESRS transition, and final TR-ETS pilot rules on one shared corporate evidence base.

References

1. European Parliament and Council, “Regulation (EU) 2023/956 establishing a Carbon Border Adjustment Mechanism,” 2023.
2. European Parliament and Council, “Regulation (EU) 2025/2083 simplifying and strengthening the carbon border adjustment mechanism,” 2025.
3. European Commission, “CBAM Definitive Regime,” 2026.
4. European Commission, “Price of CBAM Certificates,” Q1 and Q2 2026 publications.
5. European Commission, “Commission Implementing Regulation (EU) 2025/2548 laying down the methodology for calculating CBAM certificate prices,” 2025.
6. European Parliament and Council, “Directive (EU) 2022/2464 as regards corporate sustainability reporting,” 2022.
7. European Parliament and Council, “Directive (EU) 2026/470 as regards certain corporate sustainability reporting and due diligence requirements,” 2026.
8. European Commission, “Revised European Sustainability Reporting Standards,” adopted 3 July 2026.
9. Committee of European Auditing Oversight Bodies, “Guidelines on Limited Assurance on Sustainability Reporting,” 2024.
10. IAASB, “International Standard on Sustainability Assurance 5000 — General Requirements for Sustainability Assurance Engagements,” 2024.
11. Official Gazette of the Republic of Türkiye, “Climate Law No. 7552,” 9 July 2025, No. 32951.
12. Climate Change Presidency of the Republic of Türkiye, “Draft Regulation on the Turkish Emissions Trading System” and “2026 Performance Programme.”