Turkish carbon pricing after Climate Law No. 7552: an assessment of the CBAM and the National Emissions Trading System

Purpose This study aims to examine the legal implications of the design of Türkiye’s Climate Law No. 7552 and the National Emissions Trading System (TR-ETS) in relation to the “carbon price effectively paid” deduction under Article 9 of the European Union (EU) Carbon Border Adjustment Mechanism (CBAM) Regulation. Design/methodology/approach The study uses a doctrinal-comparative method. It rests on an analysis of EU and Turkish primary legislation, the case law of the Court of Justice of the European Union (CJEU) and the Turkish Constitutional Court, and secondary literature, and it is supported empirically by Turkish Statistical Institute (TurkStat) foreign trade data. Findings Because the 100 % free allocation envisaged for the pilot phase not only brings the carbon price actually paid by covered installations close to zero but also engages the “rebate or other form of compensation” clause in the second sentence of Article 9, the TR-ETS in its present form offers Turkish exporters little protection from the CBAM burden during the pilot years. Research limitations/implications The indicative burden calculation is based on an assumed sector-average emission intensity; facility-specific calculations may vary. The findings should be reassessed once the expected implementation process regarding third-country carbon price offsetting is adopted. Practical implications The study proposes a deduction-optimised design that raises the auction share, sets a floor price, adds support through a carbon tax and strengthens the MRV infrastructure. Originality/value This study presents a doctrinal analysis of the legal relationship between Turkiye’s new climate legislation and the reduction mechanism set out in Article 9 of the CBAM, and proposes a comparative framework that could also be applied to other third countries that have begun with partial free allocation.