ENACTMENT OF THE CLIMATE LAW AND EMERGING LEGAL OBLIGATIONS FOR COMPANIES

The Climate Law No. 7552 (the “Law”) was adopted by the General Assembly of the Grand National Assembly of Türkiye on 2 July 2025 and entered into force upon its publication in the Official Gazette No. 32951, dated 9 July 2025.

This Law provides a roadmap based on the principle of green growth and sustainable development, in line with Türkiye’s goal of achieving net-zero emissions by 2053.

Following Türkiye’s ratification of the Paris Climate Agreement, the Law emerges as a strategic regulation aimed at mitigating environmental risks and enhancing the economy’s resilience to climate change.

The Law introduces a comprehensive framework for regulating and monitoring companies’ environmental impacts.

Key provisions of particular relevance to companies are outlined below:

a. Emission Reduction and Climate Adaptation Activities

The Law requires that companies reduce their greenhouse gas emissions in line with strategies and action plans aligned with the net-zero target. Accordingly, companies are required to:

• Improve energy, water, and raw material efficiency, and utilize renewable energy and clean technologies.
• Establish zero-waste systems and protect carbon sinks.
• Conduct climate risk assessments and develop resilient practices in the agriculture and feed sectors.
• Identify disaster risks and establish early warning systems.

b. Emissions Trading System (“ETS”)

The Emissions Trading System is regulated under Article 9 of the Law and aims to control environmental impact by imposing emission limits on companies. Under the ETS, entities carrying out activities that cause direct greenhouse gas emissions, the principles of which will be determined through a regulation, will need to satisfy the below requirements:

• Obtain a greenhouse gas emission permit from the Climate Change Presidency (in Turkish, “İklim Değişikliği Başkanlığı, the Presidency”), which has been outlined in the Law, for operations that result in direct greenhouse gas emissions, as defined in the relevant regulation. (The Climate Change Presidency was established as an affiliated institution of the Ministry of Environment, Urbanization and Climate Change by Presidential Decree No. 85, dated 29 October 2021). The Presidency shall formulate national and international policies, strategies, and actions within the scope of Türkiye’s efforts to combat and adapt to climate change. The Presidency also leads negotiation processes and ensures coordination among relevant institutions and organizations.
• Submit an annual allowance corresponding to their verified annual greenhouse gas emissions. Non-compliance with the allowance submission requirement will result in administrative fines stipulated under Article 14 of the Law titled “Administrative Sanctions.”
• Not to use allowances (in Turkish, “tahsisatlar”) as collateral (in Turkish, “teminat”) or such allowances could not be sequestrated (in Turkish, “haciz”) and they must be monitored electronically.

It should be noted although a penalty reduction of 80% will be applied during the pilot period; full legal compliance must be achieved within three years.

c. Audit and Data Sharing 

The Law requires companies to submit annual emission reports and share their data on the National Geographical Information Platform(in Turkish, “Ulusal Coğrafi Bilgi Platformu”) for the purpose of monitoring climate change-related activities. These reports aim to ensure transparent monitoring of corporate activities and facilitate data sharing with relevant regulatory authorities.

d. Financial and Technological Support Mechanisms

The Law offers various incentives and support mechanisms for green investments. Within this scope:

• Under the Turkish Green Taxonomy, a classification system will be introduced to identify which investments are environmentally sustainable, along with related principles and technical criteria. Grants (in Turkish “hibe”) and loans (in Turkish “kredi”) will be provided for qualifying green investments.
• R&D support will be offered for innovative technologies such as carbon capture and hydrogen projects.
• Financial instruments such as circular economy models and insurance tools will be introduced.

The Law imposes significant administrative sanctions for non-compliance. Companies that fail to submit verified greenhouse gas emission report within the specified period may be subject to monetary penalties ranging from TRY 500,000 (approx. EUR 11,000) to TRY 5,000,000 (approx. EUR 106,000). In addition, failure to fulfil ETS obligations may incur additional allowance requirements and severe penalties.

It is of utmost importance for companies to ensure compliance with this new legal framework in order to mitigate legal risks. In this regard, companies are strongly advised to review their internal systems, update their strategies, and invest in appropriate technologies to ensure compliance.

Our Law Firm remains at your disposal for any further clarifications you may need.

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