Türkiye's Historic Milestone: The Nation's First Climate Law
Türkiye has reached a pivotal juncture in its pursuit of a sustainable future with the enactment of its foundational Climate Law in July 2025. This significant legislation is far more than a mere environmental declaration; it establishes a comprehensive legal framework designed to underpin Türkiye's ambitious 2053 net-zero emission target and its overarching green growth agenda. By formalizing prior commitments into a legal mandate, the Climate Law elevates climate action from an aspirational policy to an enforceable national imperative. This transformative shift heralds a period of accelerated green investment, driven powerfully by both essential environmental compliance and compelling economic competitiveness.
The General Assembly of the Turkish Parliament, Ankara, Türkiye, July 2, 2025. (DHA Photo)
Core Pillars of the New Climate Law
The Climate Law introduces several fundamental mechanisms poised to reshape Türkiye's economic and energy contours profoundly:
Emissions Trading System (ETS): A central and transformative feature is the establishment of an Emissions Trading System (ETS). This sophisticated market-based mechanism will impose a direct and measurable economic cost on greenhouse gas emissions. This cost will strongly incentivize companies to invest in and adopt cleaner, more sustainable solutions, thereby rendering clean energy ventures demonstrably more profitable. A crucial pilot phase is anticipated to commence as early as October 2024 or 2025, with the comprehensive system fully implemented by October 2026. This staggered approach allows for market familiarization and robust preparation.
Strategic Alignment with EU CBAM: Crucially, the law is meticulously designed for strategic alignment with the European Union's Carbon Border Adjustment Mechanism (CBAM). By developing its own ETS, Türkiye aims to ensure that the carbon costs associated with emissions from its industrial exports remain within the national economy, rather than being transferred to the EU. This proactive measure is vital for preserving and enhancing the competitiveness of Turkish industries and exports in the global marketplace. The strong economic rationale underpinning this alignment underscores the likely firmness of the law's implementation.
The "Just Transition" Framework: The law formally integrates the principle of "Just Transition" (Adil Geçiş) as a fundamental component of its climate strategy. A notable provision allocates 10% of the Climate Change Presidency's revenues specifically for "Just Transition" initiatives. This creates a direct and impactful financial link between carbon pricing mechanisms and social equity, providing a predictable and dedicated resource for fostering green job creation, supporting workforce retraining, and ensuring that communities reliant on carbon-intensive industries are not left behind during the green transformation.
Robust Adaptation Planning and Resilience: Beyond efforts to mitigate emissions, the law places significant emphasis on proactive adaptation to the unavoidable impacts of climate change. It mandates the preparation, diligent implementation, and continuous monitoring of comprehensive national-scale strategies and action plans. These national efforts will be strongly complemented by Local Climate Change Action Plans, which are required to be established by December 31, 2027. This multi-level approach aims to build climate-resilient urban centers, ensure efficient and sustainable water management practices, and strengthen national disaster and risk management capabilities across the country.
Expanding Opportunities for Clean Energy Innovators
The Climate Law demonstrably creates compelling opportunities for forward-thinking businesses across the clean energy sector:
Accelerated Renewable Energy Investment: The ETS will directly penalize high-emission sectors, fundamentally making investments in renewable energy sources—such as solar, wind, hydro, and geothermal—significantly more attractive. Türkiye’s National Energy Plan (2022) already outlines ambitious targets for 2035, projecting a substantial increase in total installed electrical energy capacity to 189.7 GW. This includes a major expansion in solar energy (52.9 GW) and wind energy (29.6 GW), ultimately boosting the share of renewable energy sources in the electricity mix to an impressive 64.7%. Furthermore, the Ministry has proposed a "super permit" scheme, designed to streamline and considerably reduce approval periods for renewable energy projects, thereby accelerating their development and deployment.
Emerging Carbon Market Dynamics: The establishment of a national Emissions Trading System (ETS) alongside a framework for national carbon crediting and offsetting introduces significant new market dynamics. Businesses subject to the ETS can fulfill a portion of their emission obligations by utilizing offsets, which involves acquiring carbon credits generated from approved emission reduction activities. This mechanism actively fosters a new and dynamic market for projects that successfully reduce or remove greenhouse gas emissions, offering additional revenue streams beyond traditional energy generation or industrial output. This could include projects in areas like energy efficiency, sustainable agriculture, or industrial process improvements.
New Frontiers in Green Technologies: The law actively encourages the rapid development and widespread deployment of cutting-edge clean technologies. This includes a particular focus on hydrogen energy and Carbon Capture and Storage (CCS) technologies. The introduction of carbon pricing fundamentally alters the economic viability of these sophisticated solutions, thereby opening promising new investment avenues, particularly crucial for the decarbonization of hard-to-abate industrial sectors. These technologies are critical for achieving net-zero goals where direct electrification or renewable energy substitution is challenging.
Decentralized Climate Resilience Markets: The mandate for provincial-level adaptation plans and coordination boards will drive localized demand for tailored climate resilience solutions. This encompasses innovative approaches in smart water management, developing robust and resilient urban infrastructure, and implementing climate-smart agricultural practices. This expands the investment landscape considerably, moving beyond conventional large-scale renewable energy generation to encompass distributed and community-level solutions.
Navigating the Evolving Landscape
While the law clearly signals robust governmental backing for a nationwide green transformation, businesses must remain acutely aware of several key considerations:
Implementation Nuances: Although the law provides a strong overarching framework, its ultimate effectiveness and impact will critically depend on the detailed secondary legislation and subsequent specific policy decisions. Close monitoring of these forthcoming regulations, including precise ETS rules, allowance allocation methodologies, and CBAM implementation guidelines, is paramount for managing compliance risks and identifying continuously evolving market opportunities.
Compliance Requirements and Reporting: Companies engaged in activities that directly lead to greenhouse gas emissions will face significant new legal and operational obligations. This includes obtaining mandatory emission permits and submitting annual allowances that precisely match their verified emissions. Non-compliance can lead to substantial administrative fines, ranging from TRY 500,000 to TRY 50 million. Consequently, affected businesses will need to invest considerably in establishing robust monitoring, reporting, and verification (MRV) systems to ensure adherence.
Persistent Fossil Fuel Reliance: Despite the progressive nature of the new law, Türkiye's energy mix still heavily relies on fossil fuels, which constituted over 80% of its total energy supply in 2023. Türkiye also remains Europe's largest coal power generator. Furthermore, Türkiye's target of 47% renewables by 2030 is currently below the International Energy Agency's (IEA) Net Zero Emissions scenario, which suggests a global share of 60% renewable electricity. This highlights the ongoing and pressing need for more ambitious, legally binding sectoral targets and definitive roadmaps for gradually phasing out fossil fuels to align fully with net-zero objectives.
The Path Forward for Green Growth
Türkiye's Climate Law is far more than a mere environmental regulation; it represents a strategic and comprehensive economic blueprint for a nationwide green transformation. The establishment of the ETS, the proactive focus on CBAM readiness, and the unequivocal signals for burgeoning clean energy investments are poised to profoundly reshape Türkiye's energy and industrial landscape for decades to come.
A deep and nuanced understanding of these intricate mechanisms and their wide-ranging implications is now indispensable for successfully navigating this dynamic new era of climate governance. By proactively adapting and embracing innovation in response to these fundamental shifts, businesses are exceptionally well-positioned to capitalize on the significant and lasting opportunities presented by Türkiye's resolute commitment to a net-zero future.
