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Türkiye envisions central role for ETS in 2024-2030 climate strategy

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On 23 May 2024, the Turkish government released the English version of its "Climate Change Mitigation Strategy and Action Plan" (CCMSAP), initially released only in Turkish in late March

The CCMSAP outlines climate strategies for 2024 to 2030 to achieve climate neutrality by 2053. It includes measures for various sectors such as energy, transportation, agriculture, and waste management. Carbon pricing measures represent a significant portion of the plan, particularly the establishment of an Emissions Trading System (ETS) in Türkiye. The CCMSAP aims to align the ETS in Türkiye with the European Union ETS (EU ETS) and the Carbon Border Adjustment Mechanism (EU CBAM). 

The CCMSAP details four primary strategies designed to enhance market-based mechanisms for reducing emissions:

  • Establishing an Emissions Trading System (ETS) in Türkiye
  • Conducting infrastructure studies on other carbon pricing instruments
  • Building infrastructure for the voluntary carbon market and national offset system
  • Evaluating participation in Article 6 of the Paris Agreement

These strategies are supported by 20 specific actions aimed at developing a comprehensive carbon pricing framework. Each action within this framework identifies responsible institutions, stakeholders, timelines, and monitoring indicators. 

Key actions relevant to the ETS launch include:

  • Establish pilot period: Begin by establishing a pilot period to facilitate the system entry of the installations covered by the scope before the ETS implementation period.
  • Define initial scope and expansion plan: Determine the initial scope of the ETS under current conditions and lay out a legislative plan to expand the scope for greater alignment with Türkiye’s NDC and EU legislation.
  • Set emissions cap: Decide on the emissions cap by carefully considering the economic and social impacts.
  • Plan ETS revenue utilization: Strategize the use of ETS revenue to ensure a low-carbon economy and just transition, in line with green development targets.
  • Define offset mechanisms: Establish rules for the potential use of national and international offsets.
  • Conduct supporting studies: Conduct various studies including economic, financial, social, and technical impact analyses for energy-intensive sectors. Evaluate the inclusion of financial actors in the ETS market, conduct historical emissions studies for free allowance distribution, and conduct sector-specific information and visibility studies on ETS practices.

Türkiye has been preparing for the use of carbon pricing instruments to help achieve its mitigation targets with efforts gathering pace in recent years. During COP28, the Directorate of Climate Change of the Ministry of Environment, Urbanization, and Climate Change, serving as the key coordinating body for ETS implementation, announced plans to clarify the cap and allocation approach through the publication of the National Allocation Plan in late 2024 with trading in the pilot phase starting in early 2025. As Türkiye prepares for the pilot ETS launch, efforts are underway to finalize a draft Climate Law establishing the legal framework for the national ETS, expected to be presented to Parliament in 2024.

Türkiye's efforts to introduce carbon pricing are supported by collaborations with the Partnership for Market Implementation (PMI) and the European Union. These collaborations provide technical assistance, capacity building, and funding to support the development of market-based mechanisms and the adoption of an ETS, aligning Türkiye's climate policies with international standards and best practices.

The establishment of the ETS, starting with the pilot phase, represents a significant milestone in Türkiye's climate policy. As a candidate for EU accession, aligning with the EU ETS framework is a crucial step in Türkiye's integration process.

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