Climate Law No. 7552 and the Green Transformation Support Program: What Foreign Investors Need to Know
A Guide for Foreign Investors on Climate Law No. 7552 and the Green Transformation Initiative
Climate Law No. 7552 and the Green Transformation Support Program: What Foreign Investors Need to Know
Introduction
On July 9, 2025, Turkey took a decisive step in aligning with its 2053 Net Zero Emission target and its Paris Agreement commitments by enacting Climate Law No. 7552 and amending the Green Transformation Support Program Implementation Principles. This law is not only a tool for environmental transformation but also a defensive mechanism against the EU Carbon Border Adjustment Mechanism (CBAM), ensuring carbon revenues remain within Turkey while mitigating the financial burdens CBAM would place on Turkish exporters.
This premium, SEO-optimized guide for investors, renewable energy firms, manufacturers, and ESG-conscious foreign entrepreneurs provides:
A clear breakdown of the Climate Law and Turkey’s Emission Trading System (ETS)
Strategic insights into CBAM readiness and carbon cost containment
Key application and compliance details of the updated Green Transformation Support Program
Practical analysis on how these frameworks will shape investment and operational decisions in Turkey
Table of Contents
1. Climate Law No. 7552: Structure and Purpose
Climate Law No. 7552 positions Turkey on the path to its 2053 Net Zero goals, with a central focus on creating a domestic Emission Trading System (ETS) aligned with global carbon markets.
Key elements include:
Establishment of a Climate Change Directorate under the Ministry of Environment for technical and administrative operations.
Strategic decision-making centralized under a Carbon Market Board composed of senior representatives from economic ministries and regulatory authorities.
Enforcement mechanisms with double-market price penalties for companies failing to meet annual emission obligations, ensuring continuous market activity.
These provisions combine economic pragmatism with regulatory clarity, making the law a backbone for Turkey’s green market transition.
2. Turkey’s Emission Trading System (ETS)
How It Works
Turkey’s ETS follows a cap-and-trade model, where:
Annual emission caps are set for high-emission sectors.
Emission allowances are allocated to companies, who can trade surplus allowances if they reduce emissions or purchase additional ones if they exceed caps.
Market Management
Operated by EPİAŞ (Turkey’s Energy Markets Operator).
Free allowances will be granted to sectors vulnerable to international competition, while others will be auctioned.
A pilot phase will run with 80% penalty reductions to allow industrial adaptation before full implementation.
3. CBAM, Carbon Revenue Retention, and Strategic Positioning
The EU’s CBAM imposes additional carbon costs on imported carbon-intensive products.
Turkey’s domestic ETS enables:
Offsetting ETS payments against CBAM obligations.
Retention of carbon revenues within Turkey, financing local green transition investments instead of transferring funds to the EU.
This structure is designed to shield Turkish exporters while accelerating domestic decarbonization and industrial competitiveness.
4. Financing Green Transformation
Revenue Allocation:
- ETS auction revenues will be ring-fenced for green transformation and climate action projects, prohibiting cross-budget diversions.
Just Transition Funding:
- Up to 10% of revenues will support workers and communities affected by the green transition, enhancing social legitimacy.
Green Workforce Development:
- The Ministry of Education and universities will update curricula to prepare a workforce skilled in green technologies and sustainable practices.
5. Green Transformation Support Program Updates
The amended regulation aims to facilitate low-carbon, resource-efficient production compatible with circular economy principles.
Key Requirements:
Roadmap Report: Companies must prepare a facility-specific roadmap aligned with ministry templates, projecting a minimum five-year green transformation strategy.
Green Transformation Team & Leader: Mandatory for each project, including an authorized leader for digital submissions and coordination.
Application Process:
Submissions via the online portal by the designated green transformation leader.
Only one active application per facility at a time.
Applications undergo formal review, correction windows, and eligibility filtering.
Scope and Supports:
Supports additional investments in existing facilities; greenfield investments and R&D projects are excluded.
Renewable energy (solar/wind) can be included in the project scope but excluded from incentive certificates.
Approved projects qualify for incentives under Decree No. 9903.
Monitoring, Revision, and Completion:
Progress tracked by ministry-appointed evaluators.
Approved revision requests processed through the General Directorate.
Projects failing to meet targets will lose "Green Transformation Center" status but may qualify under alternative incentive programs.
6. Practical Considerations for Investors
| Aspect | Implications for Investors |
| ETS Implementation | Compliance planning required for emission-intensive industries, with opportunities for carbon credit trading. |
| CBAM Readiness | Reduces risk of EU CBAM payments, preserving export competitiveness. |
| Funding Opportunities | Access to ring-fenced green funds for transformation projects. |
| Workforce Planning | Early alignment with green workforce development can reduce HR and compliance costs. |
| Project Strategy | Focusing on facility upgrades over new investments leverages incentive mechanisms effectively. |
These mechanisms position Turkey as a forward-looking, ESG-aligned investment destination for manufacturers and renewable energy developers.
7. Conclusion
Climate Law No. 7552 and the Green Transformation Support Program are not merely compliance burdens but strategic opportunities for foreign investors in Turkey:
Align with Turkey’s Net Zero 2053 roadmap.
Gain a first-mover advantage in the carbon markets.
Offset CBAM liabilities.
Access dedicated funding for green upgrades.
Position your brand in line with global ESG trends.
If you are considering expanding your operations in Turkey or aligning your production with global green requirements while maximizing incentives, now is the time to act.
Call to Action
We assist foreign investors and manufacturers in designing and executing ETS compliance strategies, CBAM readiness assessments, and Green Transformation Program applications in Turkey.
Contact us to schedule a private, tailored consultation to:
Evaluate your eligibility for green transformation incentives.
Model your ETS exposure and trading strategy.
Structure your investment to align with upcoming Turkish climate regulations.
Prepare your operations for the future while maximizing your compliance advantage.
info@ozmconsultancy.com
