CBAM and Turkish Exporters: From Carbon Compliance to Competitive Advantage

Introduction

The European Union’s Carbon Border Adjustment Mechanism (CBAM) has entered its definitive phase as of 1 January 2026, marking a significant shift in how carbon emissions are considered in international trade. During the transitional period, which ran from October 2023 to December 20251, the primary obligation was the reporting of embedded emissions associated with CBAM-covered imports. With the definitive regime beginning on 1 January 2026, CBAM has moved beyond reporting towards a financial adjustment mechanism. EU importers are now required to account for the embedded emissions of imported goods through the purchase of CBAM certificates, subject to the applicable rules and adjustments.

For Turkish companies exporting CBAM-covered products such as iron and steel, aluminium, cement, fertilisers, electricity and hydrogen to the EU, carbon performance is increasingly becoming a factor in market access, cost competitiveness and customer relationships. While the formal CBAM obligations sit primarily with EU importers and declarants, exporters outside the EU play a critical role in providing the emissions data required for CBAM reporting and compliance.

For Turkish manufacturers, this means that understanding CBAM is no longer simply a matter of regulatory awareness. Companies need robust emissions data, reliable calculation processes and a clear understanding of how carbon intensity may affect their competitiveness in the EU market.

What Does CBAM Mean for Turkish Exporters?

Although the legal obligation to declare CBAM goods and surrender CBAM certificates rests primarily with the EU importer, the mechanism creates significant implications for producers located outside the EU. As the EU’s fifth-largest trading partner, Turkey exports CBAM-covered products to the EU that account for approximately 6–7% of its total exports.

The importer’s CBAM obligation depends on the embedded emissions associated with the imported goods. Consequently, EU importers increasingly require reliable emissions information from their non-EU suppliers. This creates a direct link between production processes in Turkey and carbon-related costs at the EU border. For Turkish manufacturers, the quality and credibility of product-level emissions data can therefore become commercially significant.

The issue is particularly relevant for industries with high energy and process emissions, including iron and steel, aluminium, cement and fertiliser production. These sectors are deeply integrated into European value chains, meaning that changes in carbon-related costs may have implications beyond the immediate CBAM reporting process.

CBAM may therefore increasingly influence supplier selection, procurement decisions and customer expectations within European value chains. In addition to price and product quality, the carbon intensity and transparency of production may become increasingly relevant criteria for Turkish exporters seeking to maintain or expand their position in the EU market.

Risks, Challenges and Opportunities

For Turkey, CBAM represents both a potential trade-related constraint and an important catalyst for industrial decarbonisation.

On the one hand, CBAM may create a competitiveness risk for carbon-intensive Turkish producers. Where production processes have relatively high embedded emissions, the associated carbon cost may increase the effective cost of supplying the EU market. This exposure is particularly relevant for energy-intensive industries whose competitiveness has traditionally been influenced by energy prices, production efficiency and access to international markets.

The challenge is not limited to the financial impact of CBAM itself. Differences in emissions intensity between producers may increasingly translate into differences in market competitiveness. A producer with lower embedded emissions may be better positioned to manage carbon-related costs and respond to increasingly stringent environmental requirements from European customers.

A second challenge concerns data quality and methodological capacity. For many companies, one of the most significant challenges associated with CBAM may be the quality and structure of the underlying data. CBAM-related information may need to be collected across different organisational functions, including production, energy management, finance, sustainability and environmental teams. Data originating from different systems may need to be reconciled and connected to specific production processes and products. Companies that lack sufficiently traceable emissions data may face greater uncertainty in determining their actual embedded emissions.

On the other side, CBAM can create significant opportunities for Turkish industry.

Turkey’s close integration with European supply chains means that investments in lower-carbon production can generate benefits beyond regulatory compliance. Improvements in energy efficiency, renewable electricity procurement, process optimisation, fuel switching and low-carbon technologies can reduce embedded emissions while potentially improving operational efficiency and long-term competitiveness.

CBAM may also accelerate the development of product-level carbon accounting and emissions management capabilities within Turkish industry. Such capabilities can provide companies with better visibility over their production-related emissions and support more informed investment and decarbonisation decisions.

More broadly, CBAM can be viewed as part of a structural shift in international trade in which carbon performance is increasingly incorporated into economic decision-making. The strategic significance of CBAM for Turkey consequently extends beyond the immediate cost of carbon. It may act as a catalyst for industrial modernisation, technological investment and the transition towards lower-carbon production. However, realising this opportunity will depend on access to financing, suitable technologies, reliable emissions data, and a clear domestic carbon-pricing and climate-policy framework.

Turkey’s ETS and CBAM

Turkey’s national Emissions Trading System (ETS) is being established under Climate Law No. 7552, which was adopted by the Turkish Grand National Assembly in July 2025 and entered into force upon its publication in the Official Gazette on 9 July 2025. The Climate Law provides the legal basis for carbon pricing in Turkey and mandates the establishment of a national ETS, while leaving the detailed implementation rules to secondary legislation. Following the enactment of the Climate Law, as of August 2026, the Turkey Emissions Trading System Regulation, published in the Official Gazette, has formally entered into force, marking the beginning of the ETS pilot implementation phase4.

The Turkish ETS is being introduced through a pilot phase during 2026–2027, allowing regulated installations and authorities to test the monitoring, reporting and verification framework, allowance allocation methodologies and market infrastructure before the first full compliance period. Under the Climate Law, the remaining secondary legislation and implementation plans are expected to be completed by the end of 2027, paving the way for the transition from the pilot phase to full implementation.

This phased approach reflects Turkey’s objective of gradually introducing domestic carbon pricing while aligning its industrial sectors with international climate policy developments, particularly the EU ETS and the CBAM. While the two systems are separate, they are closely connected through carbon pricing and emissions data. Under the EU CBAM framework, a carbon price effectively paid in the country of production may, subject to the applicable rules and supporting evidence, be taken into account when determining the CBAM obligation at the EU border. As Turkey’s ETS develops, understanding how domestic carbon pricing interacts with CBAM will therefore become increasingly important for exporters seeking to manage their overall carbon cost exposure.

For Turkish exporters, the challenge is not simply to comply with two separate regulatory frameworks, but to understand how their emissions data, carbon costs and reporting processes interact across both systems. The Turkish ETS is expected to strengthen the infrastructure for monitoring, reporting and verification, while CBAM requires EU importers and non-EU producers to provide increasingly detailed information on the embedded emissions of traded goods. Companies that establish reliable emissions data, understand the carbon intensity of their products and processes, and identify potential CBAM exposure early will be better positioned to manage both regulatory requirements and future carbon costs.

Importantly, the EU’s CBAM obligation is phased in gradually through the CBAM factor, reflecting the gradual withdrawal of free allocation under the EU ETS. The factor starts at 2.5% of embedded emissions in 2026, rising annually to 48.5% in 2030 and 100% in 2034. In practice, this means the carbon cost of CBAM-covered goods will increase over the decade, making early investment in reliable emissions data and carbon reduction increasingly important for exporters.

As the Turkish ETS moves beyond its pilot phase and CBAM certificate costs increase over time, building this capability will become not only a compliance exercise, but an important part of maintaining competitiveness in the EU market.

How Can Aither Support Turkish Companies with CBAM?

The first CBAM declaration for imports made in 2026 will be submitted on 30 September 2027. To use actual emissions data in this declaration, the 2026 data must have been verified by an accredited verifier. Unverified data will instead have to be reported using default values with an additional 10% uplift for 2026, and this difference will directly translate into higher certificate costs.

In other words, getting your 2026 emissions data ready for verification now is the most concrete step you can take to determine, and potentially reduce, the CBAM cost payable in 2027.

At this point,, our CBAM support is tailored to companies’ products, production processes and level of readiness. We assess export portfolios, relevant CN codes and production processes to determine potential CBAM exposure and identify the key regulatory, methodological and data requirements.

We help companies develop robust product-level embedded emissions calculations by mapping relevant production processes, emission sources, activity data and applicable emission factors. Our focus is on establishing transparent, traceable and consistent calculation approaches that can be maintained over time. We also help address data gaps and put in place practical processes for collecting, managing and documenting the information needed for CBAM reporting.

Where companies already have corporate carbon inventories, product carbon footprints or environmental reporting systems, we assess their alignment with CBAM

Beyond compliance, we help translate emissions data into practical decarbonisation strategies. This can include opportunities in energy efficiency, renewable energy, fuel switching and process optimisation, which can be assessed from both technical and economic perspectives to support effective prioritisation.

In addition to advisory and technical support, Aither offers an end-to-end solution for organisations navigating CBAM. Through our network of experienced carbon market traders, we can also support the procurement of CBAM certificates, helping companies address both the technical and commercial aspects of compliance. By combining regulatory expertise, emissions calculations, decarbonisation strategies and access to carbon market solutions, we provide a single, integrated service that supports organisations throughout their entire CBAM journey.

Illustrative Example

The following example is entirely hypothetical and is provided solely to illustrate how a company’s potential CBAM liability may be assessed. Actual liabilities depend on verified embedded emissions, the applicable CBAM benchmark for the product, the weekly average EU ETS allowance price, and any eligible carbon price already paid in the country of origin.

Assume a producer exports 10,000 tonnes of primary aluminum to the EU in 2027.

Determine emissions subject to CBAM

Emissions subject to CBAM = Embedded emissions − (Benchmark × CBAM factor) Per tonne = 8.0 − (6.0 × 95%) = 2.3 tCO₂e/t Total emissions subject to CBAM = 2.3 × 10,000 = 23,000 tCO₂e

Scenario A – No carbon price paid in country X

CBAM certificates required: 23,000 Estimated CBAM liability: 23,000 × €85 = €1.955,000

Scenario B – Carbon price already paid domestically

Gross obligation (same as A) = 23,000 certificates → €1,955,000

Carbon price paid domestically = €20 × 80,000 = €1,600,000

Estimated CBAM liability = €1,955,000 − €1,600,000 = €355,000

Scenario C – Operational improvements

Assume embedded emissions fall to 6.5 tCO₂e/t with the help of operational improvements / decarbonization activities. Estimated emissions subject to CBAM = 6.5 − (6.0 × 95%) = 0.8 tCO₂e/t Total CBAM emissions = 10,000 x 0.8 = 8,000 tCO₂e

Estimated CBAM liability = 8,000 x €85 = €680,000

Summary: