CBAM and Emissions Trading Guide: the EU and Türkiye

A Turkish industrial company selling cement, steel, aluminium or fertilisers to Europe now sits at the intersection of two separate carbon regimes. The first is the EU's Carbon Border Adjustment Mechanism (CBAM): in its definitive period since 1 January 2026, it now has financial consequences. The second is the Turkish Emissions Trading System (TR ETS): established by Climate Law No. 7552, with its implementing regulation published on 27 August 2026 and a pilot phase that started with 2026 emissions.

This guide summarises both systems as of October 2026, based on official documents. For more detail, see the two guides in this cluster: Turkish Emissions Trading System and CBAM definitive period.

Status at a glance (October 2026)

What is CBAM?

CBAM is the mechanism that puts a price on the greenhouse gas emissions released in producing certain goods imported into the EU, equivalent to the carbon price an EU producer pays under the EU ETS. According to the European Commission's Questions and Answers document of 15 October 2026, the mechanism was established by Regulation (EU) 2023/956 of 10 May 2023 and applied with reporting obligations only during the transitional period from October 2023 to December 2025. During the transitional period, importers submitted quarterly reports and there was no financial obligation.

The simplification package the Commission announced on 26 February 2025 became law through Regulation (EU) 2025/2083 of 8 October 2025; the Commission announced its publication in the Official Journal of the EU on 20 October 2025. On 17 December 2025 the Commission also proposed a further amendment extending CBAM to downstream goods and adding anti-circumvention measures. According to the Questions and Answers document, this proposal is still being negotiated by the EU co-legislators as of October 2026, and its outcome is uncertain.

What changed in the definitive period?

• Authorisation: Importing CBAM goods into the EU requires the status of authorised CBAM declarant. Importers that applied by 31 March 2026 can continue importing above the threshold until a decision is taken on their application (DEHSt).
• 50-tonne threshold: No obligation arises if an importer's total annual net mass of CBAM goods does not exceed 50 tonnes. The threshold does not apply to hydrogen or electricity.
• Annual declaration: Quarterly reports have been replaced by an annual declaration. The deadline is 30 September of the following year; the first declaration, covering 2026 imports, is due on 30 September 2027.
• Certificates: Sales start on the common central platform on 1 February 2027. The certificate price is set as the weighted average of EU ETS auction prices, quarterly for 2026 and weekly from 2027.

Which products are covered? Sectors and CN codes

CBAM covers six sectors. Whether a product is in scope is checked against Annex I of the CBAM Regulation using its eight-digit Combined Nomenclature (CN) code. The table below lists the four-digit headings that appear in the Commission's August 2026 default values file; since each heading may contain exceptions, the definitive check must be made at eight-digit level.

The indirect emissions column is based on the Commission's Guidance Document 3: indirect emissions are counted only for goods not listed in Annex II of the Regulation, that is, cement and fertilisers.

What does the EU importer do, and what does the Turkish exporter provide?

The importer's obligations

By 30 September each year, the authorised CBAM declarant submits the declaration for the previous year's imports in the CBAM Registry and surrenders the certificates corresponding to the embedded emissions declared. From 2027, at the end of each quarter (31 March, 30 June, 30 September, 31 December), it must hold in its account certificates corresponding to at least 50% of the embedded emissions of the goods imported since the beginning of the year. Legally, only the declarant is responsible for the content of the declaration and the verification report.

Data the exporter (the producing installation) must provide

The Commission's Guidance Document 2 for non-EU operators (14 August 2026) expects the producer to prepare the following:

• Installation boundaries, production processes and production routes, with a written monitoring plan for each process.
• Direct emissions (by the calculation or measurement method) and measurable heat flows between processes.
• For cement and fertilisers, the quantity of electricity consumed and its emission factor (indirect emissions).
• The quantity, origin and embedded emissions of purchased precursors (for a steel producer, for example, pig iron or semi-finished products).
• Additional product-specific parameters, such as the clinker ratio for cement.
• The data needed to calculate the free allocation the installation would receive if it were located in the EU (free allocation adjustment).
• Where applicable, information on the carbon price paid in the country of production.

These data are transmitted in an operator emissions report, whose content is standardised by the methodology regulation, Implementing Regulation (EU) 2025/2547; the Commission's Excel tool is not mandatory but is recommended. The guidance strongly recommends, though for now on a voluntary basis, that producers register in the operator module of the CBAM Registry (O3CI): once data have been uploaded and verified, they can be shared with all importers, and each importer sees only the summary information. According to the guidance, from 2027 the system will also allow data sharing between producers that supply precursors. For a practical, supplier-side reading, see our post CBAM readiness: the supplier's perspective.

Embedded emissions: direct, indirect and precursors

Embedded emissions are the sum of the direct emissions attributed to producing one tonne of a product, indirect (electricity-related) emissions where they are in scope, and the embedded emissions of the precursors used. The Commission's guidance specifically notes that the concept resembles a product carbon footprint, but because it is based on EU ETS rules it can differ from GHG Protocol or ISO 14067 calculations. Even if you already have a corporate inventory, CBAM requires a separate process and a product-level monitoring structure; for inventory fundamentals, see the GHG Inventory cluster.

In essence, the calculation is:

Certificates to surrender = Quantity imported (t) × [Specific embedded emissions − Specific embedded free allocation] − Equivalent of the carbon price effectively paid in the country of origin

If the result for a good is negative, it is taken as zero (Commission Questions and Answers, question 3.7).

Default values or actual data?

Where verified actual data are not available, the importer uses the country-specific default values in Implementing Regulation (EU) 2025/2621 (corrected by 2026/1740, adopted on 20 July 2026). These values are applied with a mark-up of 10% in 2026, 20% in 2027 and 30% from 2028 (1% for fertilisers). The Commission states plainly that, because of this mark-up, using actual data will be more advantageous in most cases.

One detail stands out for Turkish exporters: in the Commission's August 2026 information file, the Türkiye table has no country-specific value for grey clinker or grey Portland cement (shown as "-"). In that case the rules require the "other countries and territories" table to be used, which is based on the average of the ten exporting countries with the highest emission intensity. For grey Portland cement this value is 1.440 tCO₂e/t (1.360 direct, 0.080 indirect); with the 2026 mark-up it rises to 1.584 tCO₂e/t. The same file lists, for Türkiye, for example 2.310 tCO₂e/t for ribbed reinforcing bar (CN 7214 20 00), 1.700 tCO₂e/t for unwrought aluminium (7601) and 2.270 tCO₂e/t for anhydrous ammonia (2814 10 00). The file is for information only; the legally binding values are those in Regulation 2026/1740.

For a step-by-step calculation and a rebar example, see the CBAM definitive period guide.

Free allocation adjustment and certificate price

The CBAM obligation is reduced by the amount of free allocation an EU producer would receive for the same product. This adjustment is calculated with the CBAM benchmarks in Implementing Regulation (EU) 2025/2620 and multiplied by the CBAM factor set in the EU ETS Directive. The factor reflects the gradual phase-out, until 2034, of free allocation to CBAM sectors under the EU ETS. The rates published by DEHSt:

In other words, in 2026 most embedded emissions are offset by the free allocation adjustment, but the adjustment shrinks every year and the net obligation grows. Benchmarks are given in two columns: column A (process-based) is used when calculating with actual data, and column B, which also includes precursors, is used when calculating with default values. The Commission expects CBAM benchmarks updated in line with the final EU ETS benchmarks for 2026-2030 to apply to goods imported from 1 January 2027.

The Commission calculates the certificate price as the volume-weighted average of EU ETS auction clearing prices. For 2026 imports, four quarterly prices are published (7 April 2026, 6 July 2026, 5 October 2026 and 4 January 2027); from 2027 the price is published weekly. We do not forecast prices in this guide; current values are available on the Commission's certificate price page.

Verification: who, and when?

In the definitive period, verification is required only where actual data are used; default values are not verified. For actual data to be used in a declaration, a positive report is needed from a verifier accredited for the relevant sector by a national accreditation body in the EU. The Commission says it expects the first CBAM accreditations to be granted around September 2026 and verification work to peak in early 2027. The rules are set out in Implementing Regulation (EU) 2025/2546 (verification principles) and Delegated Regulation (EU) 2025/2551 (accreditation). If you want to know what verifiers look at, our post the first 10 things checked in an emissions verification is a good starting point.

The Turkish Emissions Trading System: the framework created by the Climate Law

Climate Law No. 7552 was adopted on 2 July 2025 and entered into force on publication in the Official Gazette of 9 July 2025. Article 9 of the Law provides that the ETS is to be established by the Climate Change Directorate (İklim Değişikliği Başkanlığı), that covered installations must obtain a greenhouse gas emissions permit, and that they must surrender allowances equal to their verified annual emissions. Free allocation may be granted on the basis of historical emissions or benchmarks. The Law also provides that a carbon border adjustment mechanism (known in Turkish as SKDM) may be set up for goods imported into the Turkish customs territory, with its procedures and principles to be set by the Ministry of Trade; as of October 2026 we have not found any regulation on this mechanism.

Pilot phase

Provisional Article 1 of the Law provides that the ETS will start with a pilot phase and that administrative fines will be reduced by 80% during the pilot phase. According to the Carbon Market Board (Karbon Piyasası Kurulu) decisions KPK/2026/1, announced on 3 September 2026, and the procedures and principles published on 1 October 2026:

• The pilot phase covers emissions in the 2026 and 2027 system years.
• 2026 is reporting only; there is no surrender obligation apart from the voluntary complementary allowance price mechanism.
• The surrender deadline for 2027 emissions is the last business day of November 2028.
• For 2027, a 100% free allocation rate applies under the benchmark method.

Who is covered?

The ETS Regulation classifies installations by annual emissions, calculated conservatively on the basis of installed capacity: Category A, 50,000 tCO₂e or less; Category B, between 50,000 and 500,000 tCO₂e; Category C, above 500,000 tCO₂e. The ETS covers installations in Categories B and C. The pilot phase, however, is limited to those of these installations operating in the electricity generation, cement, iron and steel, aluminium and fertiliser sectors. Note that this list overlaps to a large extent with the sectors covered by CBAM.

The MRV foundation

Greenhouse gas monitoring obligations are not new in Türkiye: the monitoring, reporting and verification (MRV) regime that began with the Regulation on Monitoring of Greenhouse Gas Emissions of 17 May 2014 has been repealed by the new ETS Regulation and carried over into it. The core rules follow the same logic: an approved monitoring plan, a verified emissions report by 30 April each year, and a verifier assigned through MEDAS. The new documents specific to the pilot phase are the Monitoring Methodology Plan (İzleme Metodolojisi Planı, İMP) and the Activity Level Report (Faaliyet Seviyesi Raporu, FSR). The deadline for submitting the first Monitoring Methodology Plans was extended to 27 January 2027 by an announcement dated 14 October 2026.

For full details, the timeline and sanctions, go to the Turkish Emissions Trading System guide.

Where do CBAM and the TR ETS meet?

The link between the two systems is Article 9 of the CBAM Regulation: the authorised declarant may claim a reduction in the number of certificates equal to the carbon price effectively paid in the country of origin. The Commission's Questions and Answers document sets two important limits:

1. The price must not have been rebated or otherwise compensated. Free allocation under an ETS counts as such compensation and is deducted.
2. The type of evidence, its certification by an independent person and how the amount is attributed to the product will be set by an implementing act. The Commission writes that it plans to adopt this act in 2026; as of October 2026, no adopted text appears on the Commission's legislation page. The Commission is also considering publishing "default carbon prices" for countries that apply a carbon price.

Given the 100% free allocation rate during the TR ETS pilot phase, the effective carbon price that an average installation can deduct is likely to be limited. Installations with an emission intensity above the benchmark, however, will have to buy allowances to cover the shortfall. We discuss how exporters should read this issue in our analysis CBAM and TR ETS: two carbon prices for exporters.

What should you do now?

1. Map products to CN codes: Check every product sold to the EU against Annex I using its eight-digit CN code; do not forget products sold as precursors.
2. One data infrastructure: The TR ETS monitoring plan, the Monitoring Methodology Plan and the CBAM monitoring plan use the same measurement points and the same fuel and material flows. Build them in a single data model, not in separate spreadsheets kept by separate teams.
3. Compare with default values: Compare the Türkiye default value (or the "other countries" value) for your products with your own actual intensity. If the gap is large, verified actual data are a commercial necessity.
4. Plan your verifiers: CBAM requires an EU-accredited verifier; the TR ETS requires a verifier accredited by TÜRKAK, the Turkish Accreditation Agency. Plan both timelines together.
5. Data agreements with EU customers: Put in writing which data you will share, in which template, at what level of confidentiality and by what date; consider registering in O3CI.
6. Carbon price records: Keep documented records, attributable to individual products, of every surrender and purchase under the TR ETS; you will need them once the Article 9 rules are finalised.

Guides in this cluster

• Turkish Emissions Trading System (TR ETS): pilot phase, scope and obligations
• CBAM definitive period: the 2026 declaration, certificates and calculating embedded emissions

To prepare your CBAM data, measure the gap between default values and actual data, and give your EU customers a verifiable emissions report, see our CBAM readiness service; for TR ETS monitoring plans, Monitoring Methodology Plans and Activity Level Reports, see our ETS readiness service. At Alalëa, we recommend combining the data needs of both systems in a single monitoring structure.