Turkey's Distinctive Position in International Climate Governance
Turkey has traced a structurally distinctive trajectory within the international climate regime. Despite its inclusion in the UNFCCC Annex I list, Turkey was exempted from Annex II obligations — a dual status that legitimately reflects Turkey's far smaller historical emissions responsibility compared to Western industrialized nations, China, and India (Atiyas & Dutz, 2023). Turkey maintained this position as a principled negotiating stance in pursuit of equitable treatment within the international framework. The ratification of the Kyoto Protocol in 2009, followed by accession to the Paris Agreement in 2021 — at COP26 — reflects Turkey's careful approach to balancing development priorities with climate commitments, as well as its legitimate concerns about fair treatment in international negotiations.
The political economy of this process is multi-layered. Turkey conditioned its Paris Agreement ratification on recognition as a developing country with access to the Green Climate Fund — a demand that reflected legitimate concerns about equitable access to climate finance for developing economies. The Updated Nationally Determined Contribution (NDC) sets an ambitious 41 percent reduction target relative to a business-as-usual scenario, with the scope of the target expected to be further clarified in the coming period (Republic of Turkiye, 2023). The Long-Term Climate Strategy published in 2024 articulates a 2053 net-zero objective as a strategic vision, with sectoral decomposition and interim milestones planned as the next phase of the process (Republic of Turkiye, 2024).
Against this background, Climate Law No. 7552 represents a landmark as the first comprehensive legislative initiative to strengthen Turkey's climate governance framework. The law's genesis in the intersection of EU Green Deal negotiations, CBAM requirements, and national decarbonization objectives is evident from the trajectory of the legislative process.
Legislative Architecture of Law 7552
Statutory Basis for the Emissions Trading System
The law's central component is the establishment of a legal foundation for the Turkey Emissions Trading System (TR-ETS). It defines obligations for greenhouse gas monitoring, reporting, and verification (MRV) and delineates the general framework for a carbon pricing mechanism. While the initial scope is anticipated to cover the energy, iron and steel, cement, refinery, and ceramics sectors, the operational details are delegated entirely to secondary legislation.
This approach is a common and pragmatic choice in framework legislation technique, providing flexibility through the regulation of operational details via secondary legislation (Atiyas & Dutz, 2023). The matters deferred to secondary legislation — allocation methodology, price floor and ceiling mechanisms, pilot phase timeline — constitute the substantive core of system design, and their careful elaboration is important for strengthening policy coherence.
GHG Inventory and MRV Obligations
The law imposes annual monitoring, reporting, and verification obligations on installations exceeding specified emission thresholds. Preparation of monitoring plans, annual verification of reports by accredited bodies, and submission to the competent authority are mandated. The alignment of the MRV system with the EU Monitoring and Reporting Regulation (MRR) is of strategic significance for meeting reporting requirements under CBAM (European Commission, 2023).
Institutional Mandates and Inter-Ministerial Coordination
The law structures the institutional architecture of climate policy at three levels. The Ministry of Environment, Urbanization, and Climate Change is designated as the lead institution responsible for overall coordination and TR-ETS administration. The Climate Change Directorate, established within the Ministry, assumes the technical capacity development function. The High Council on Climate Change, constituted as an inter-ministerial body, is positioned as the apex decision-making organ for strategic coordination.
This institutional design must be assessed alongside the findings of Parry et al. (2023) regarding Turkey's climate policy institutional capacity. IMF Working Paper WP/23/108 underscores that strengthening institutional coordination holds significant potential for enhancing the effectiveness of Turkey's mitigation policies (Parry et al., 2023).
Strengths of the Law
Legal Certainty for Market-Based Instruments
The most fundamental contribution of Law 7552 is the creation of legal certainty for market-based instruments. Regulatory predictability is a determinative variable for the private sector's long-term investment decisions; the codification of emissions trading's legal foundations at the statutory level provides a reference framework for planning decarbonization investments. This aligns with the World Bank's identification of "regulatory credibility" as a precondition for the effectiveness of carbon pricing instruments (World Bank, 2024).
Alignment with EU Acquis Trajectory
The law explicitly signals its objective of alignment with the EU climate acquis. The structural similarities between TR-ETS and EU-ETS raise the long-term prospect of linking the two systems. Were such linkage to materialize, the deduction of carbon prices paid by Turkish exporters under CBAM would become feasible — a central element of Turkey's strategy for managing its CBAM exposure (OECD, 2025).
Mandatory Corporate-Level Emissions Reporting
The establishment of MRV obligations at the statutory level constitutes a structural step toward strengthening Turkey's emissions data infrastructure. The production of facility-level verified emissions data is an essential prerequisite not only for domestic policy design but also for integration into international carbon markets.
Next Steps and Areas for Continued Development
Articulation of Sectoral Emission Reduction Targets
One of the most significant areas for the law's future development is the articulation of binding sectoral emission reduction targets. While it references a general net-zero objective, quantified interim targets and carbon budgets for the energy, industry, transport, and agriculture sectors have been deferred to secondary legislation. Considering that the EU Climate Law (Regulation 2021/1119) mandates binding interim targets and requires sectoral roadmaps, completing this area of regulation will further strengthen Turkey's international standing.
The articulation of sectoral targets is important for advancing the law from its framework character to the operational level. As Parry et al. (2023) observe, supporting targets with quantitative binding force can significantly enhance the effectiveness of Turkey's mitigation policies.
Strengthening the Enforcement Regime with Graduated Sanctions
The law contains general provisions on non-compliance with MRV obligations, with the elaboration of a graduated sanctions mechanism deferred to the next phase. Administrative fine amounts and application conditions are to be determined by secondary legislation. Lessons learned from the EU-ETS experience demonstrate that the deterrent quality of enforcement mechanisms is directly correlated with the environmental effectiveness of the system; accordingly, the establishment of a graduated and proportionate enforcement framework will be an important step in consolidating the system's effectiveness (Ellerman et al., 2016).
The global rise of climate litigation constitutes an important indicator of enforcement regime effectiveness. According to Grantham Institute (2024) data, 2,666 climate litigation cases have been recorded across 55 countries worldwide, with 233 new cases filed in 2023 alone. Approximately 70 percent of these cases have been filed since 2015, the year the Paris Agreement was adopted. Cases in the Global South have exceeded 200; the Indian Supreme Court's landmark ruling in M.K. Ranjitsinh and Others v. Union of India, recognizing the constitutional right to be free from the adverse effects of climate change, represents a watershed moment. Climate litigation has triggered reforms to climate framework laws in Ireland and Germany. This trend underscores the potential for Turkey's enforcement framework under Law No. 7552 to face legal accountability pressures in future periods and highlights the importance of robust enforcement mechanisms (Setzer and Higham, 2024).
Clarification of the ETS Operationalization Timeline
The law establishes a solid legal basis for TR-ETS, with the system's operationalization timeline to be determined through secondary legislation. The pilot phase start date, allocation methodology, the ratio of free allocation to auctioning, and price floor and ceiling mechanisms are in the process of being elaborated. Clarifying these elements will further reinforce the principle of legal certainty — one of the law's key strengths — and provide market participants with the predictability needed for investment planning.
Advancing Just Transition Provisions to the Programmatic Level
The law has incorporated the concept of "just transition" into the legal framework, and advancing this important principled step with programmatic measures is a priority for the next phase. Developing concrete provisions regarding retraining programs for workers in carbon-intensive sectors, regional economic transformation funds, and social protection mechanisms will strengthen the law's social dimension. Lessons learned from the EU's Just Transition Mechanism and Just Transition Fund provide a valuable reference framework for Turkey's development of its legal infrastructure in this domain. The preparation of comprehensive transition plans, particularly for regions with concentrated coal mining and cities hosting energy-intensive industrial facilities, will enhance public acceptance and facilitate the socioeconomic transition.
Establishing a Statutory Link Between ETS Revenue and Climate-Related Expenditure
The revenue allocation mechanism for emissions allowance auction revenues has not yet been regulated in the law, and is expected to be addressed through secondary legislation. While the EU-ETS requires at least 50 percent of auction revenues to be allocated to climate-related expenditure, establishing a similar earmarking mechanism for TR-ETS would ensure that revenues generated from carbon pricing are directed toward climate objectives and strengthen the system's public legitimacy.
Comparative Dimension: Learning from International Experiences
Turkey's legal framework warrants comparative analysis with the carbon market experiences of other jurisdictions. China — the world's largest source of emissions — operated a comprehensive pilot phase before launching its national ETS in 2021 and expanded sectoral coverage incrementally; however, its insufficient development of enforcement mechanisms has constrained the system's environmental effectiveness (Zhang, 2021). South Korea, by contrast, prepared a detailed framework law for its ETS that became operational in 2015, defining three-year allocation periods and phased transition mechanisms. The Korean experience demonstrates that the extent to which a framework law incorporates operational detail is a determinative variable in system success (Kim & Lim, 2023).
From a comparative perspective, China's national ETS reached 8 billion tCO₂ in coverage by 2024 and strengthened its enforcement mechanisms through the Interim Regulations effective May 2024, raising non-compliance penalties to 5-10 times market value. Korea's Fourth Basic Plan adopted in December 2024 (covering 2026-2035) increased benchmark-based allocation to 75 percent and introduced a Market Stabilization Mechanism, enhancing the system's adaptive capacity (ICAP, 2024b; ICAP, 2024c).
Within this comparative framework, Turkey has the advantage of learning from both EU and Asian experiences to design the model best suited to its own circumstances. The opportunity to avoid design errors encountered by pioneering jurisdictions is a strategic asset that Turkey should leverage in its secondary legislation process.
Conclusion
Climate Law No. 7552 constitutes a turning point in Turkey's climate policy history. The establishment of the first comprehensive legal framework for greenhouse gas emissions management, the provision of a statutory basis for carbon pricing, and the clarification of alignment with the EU acquis trajectory are developments to be noted positively.
For the law's transformative potential to be fully realized, the articulation of sectoral targets, the strengthening of the enforcement regime with graduated sanctions, the clarification of the ETS operationalization timeline, the advancement of just transition provisions to the programmatic level, and the establishment of a statutory link between ETS revenues and climate-related expenditure emerge as priority agenda items for the period ahead. According to IMF (2023) modeling, an approach relying solely on expenditure-based policies would increase the debt-to-GDP ratio by 45 percentage points, jeopardizing fiscal sustainability; this reinforces the fiscal preferability of a revenue-generating ETS for middle-income countries such as Turkey. The quality of secondary legislation and the continuity of implementation resolve will determine the law's real impact. As Parry et al. (2023) emphasize, strengthening institutional coordination and ensuring implementation consistency are the key factors determining the effectiveness of Turkey's climate policies.
References
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- Parry, I., Black, S., Minnett, D., Mylonas, V., & Vernon, N. (2023). How to Cut Methane Emissions: Turkey. IMF Working Paper WP/23/108. Washington, DC: International Monetary Fund.
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- Setzer, J. and Higham, C. (2024). Global Trends in Climate Change Litigation: 2024 Snapshot. London: Grantham Research Institute on Climate Change and the Environment.
- IMF (2023). Fiscal Monitor: Climate Crossroads, Chapter 1. Washington, DC: International Monetary Fund.
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- ICAP (2024c). Korea Emissions Trading System (K-ETS) Factsheet. Berlin: International Carbon Action Partnership.