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 LEGAL LEGİSLATİON

REGULATORY GUIDE TO CARBON FOOTPRINT AND SUSTAINABILITY 

 FUNDAMENTAL LEGAL FRAMEWORK

The comprehensive Carbon Footprint and Sustainability Regulatory Guide, published and enacted by the Ministry of Environment, Urbanization, and Climate Change as of 2026, is based on Law No. 7410 on Carbon Footprint Reduction and Combating Climate Change. The objective of this law is to establish the legal infrastructure necessary to achieve Türkiye's 2053 Net Zero Emission target, mitigate the negative impacts of climate change, ensure the transition to a low-carbon economy, establish carbon transparency, and implement sustainable development principles.

  • Key Definitions: Under Law No. 7410, "Carbon Footprint" refers to the total greenhouse gas emissions (expressed in $CO2e) caused by a product, service, or organization throughout its life cycle. "Sustainability" refers to the principle of meeting the needs of current generations without compromising the ability of future generations to meet their own needs.

  • Core Principles: The legislation adopts the principles of "polluter pays," prevention and precaution, reduction at source, life cycle approach, transparency, accountability, and reliance on scientific and technical bases.

 CLIMATE RISK AND GREEN FINANCING

Law No. 5436 on Climate Change Adaptation and Green Development mandates companies with an annual turnover exceeding 250 million TRY or more than 500 employees to prepare a Climate Risk Assessment Report. This report must include:

  • Physical risk analysis (floods, droughts, heatwaves, etc.).

  • Transition risk analysis (policy, technology, market risks).

  • Financial impact assessment and adaptation action plans.

Green Financing Regulations: Banking and financial institutions are required to allocate at least 5% of their credit portfolios to green projects, with tax incentives provided for green bond issuances. Under the Paris Agreement Compliance Regulation, a 41% emission reduction target has been set for 2030, with sectoral commitments including: Energy (30%), Industry (25%), Transport (20%), Buildings (15%), and Waste (10%).

REPORTING, VERIFICATION, AND ETS

Carbon Footprint Reporting and Verification Regulation:

  • Mandatory Annual Reporting: For organizations with a turnover > 500 million TRY, > 1,000 employees, or energy consumption > 5,000 TOE.

  • Biennial Reporting: For organizations with a turnover between 100–500 million TRY.

  • Verification: Verification must be conducted by bodies accredited by the Turkish Accreditation Agency (TÜRKAK).

Emission Trading System (ETS) Regulation:

Effective from 2027, sectors including power generation (>100 MW), iron-steel, cement, refineries, and domestic aviation will be integrated into the system.

  • Pricing: Minimum permit price for 2027 is set at 300 TRY/ton $CO2

  • Penalties: 2,000 TRY/ton $CO2 for unpermitted emissions and 500,000 TRY for false reporting.

PRODUCT LABELING AND CIRCULAR ECONOMY

Product Environmental Footprint and Labeling Regulation:

A phased mandatory labeling schedule has been established:

  • 2027: Electronics and White Goods.

  • 2028: Textiles and Furniture.

  • 2029: Food and Packaging.

  • 2030: All Consumer Goods.

  • Label Content: Total carbon footprint, life cycle distribution, sector benchmarks, and a QR code for detailed report access.

Circular Economy and Resource Efficiency Law: Extended Producer Responsibility (EPR) has been expanded to electronics, batteries, packaging, motor vehicles, tires, and textiles. 2030 recovery targets include 65% for packaging and 75% for electronic waste.

INCENTIVES, AUDITS, AND PENALTIES

Incentives: The Climate Transition Fund provides 40% tax reductions, 50% insurance premium support, VAT exemptions, and R&D grants up to 10 million TRY.

Audit System: Under the Climate Change Audit Regulation, companies are graded (A-D). Grade A companies receive a 2-year audit exemption, while Grade D results in the suspension of operations.

Administrative Fines Schedule:

  • Failure to Report: 500,000 TRY (1,000,000 TRY for repeats).

  • Greenwashing: 500,000 TRY and an advertising ban.

  • Data Manipulation: 1,000,000 TRY and license suspension.

Criminal Liabilities: New crimes have been defined under the Environmental Crimes Law:

  • Climate Data Falsification: 2–5 years imprisonment.

  • Carbon Fraud: 3–8 years imprisonment.

IMPLEMENTATION TIMELINE AND CORPORATE STRATEGY

  • 2026: Reporting begins for large-scale companies.

  • 2027: ETS launch for energy and industry.

  • 2028: Carbon tax for all fossil fuel users.

  • 2030: Full compliance for all economic units.

Legal Advice for Companies: We recommend integrating environmental clauses into all commercial contracts, developing supplier audit protocols, reviewing insurance coverage for climate risks, and establishing dispute resolution mechanisms.