How Will the Emissions Trading System Market Work? What Does the New Regulation Bring?

The question of how allowances will be bought and sold under the Türkiye Emissions Trading System (TR ETS) has now been answered. The Regulation on the Operation of the Türkiye Emissions Trading System Market, prepared by the Energy Market Regulatory Authority (EPDK), entered into force upon publication in the Official Gazette on 21 October 2026. It sets out on which platform and under which rules carbon allowances will change hands.

A Quick Reminder: What Did the ETS Regulation Say?

The Regulation on the Türkiye Emissions Trading System, which entered into force on 27 August 2026, set the system's basic rules. Under it, the pilot phase covers 2026 and 2027 emissions and applies to large installations in the electricity generation, cement, iron and steel, aluminium and fertiliser sectors. 2026 is a reporting-only year; the carbon price takes effect from 2027.

The logic of the system is simple: every installation must surrender one "allowance" for every tonne of carbon it emits. Some allowances are given free of charge, and the shortfall must be purchased. For example, if a factory with annual emissions of 120,000 tonnes receives 100,000 tonnes of free allowances, it needs to buy the remaining 20,000 tonnes on the market. The new regulation explains how this trading will take place.

What Does the New Regulation Bring?

The market will be run by Energy Markets Operation Inc. (EPİAŞ), which also operates the electricity and natural gas markets. Allowances will be traded in two separate markets:

• Primary market (auctions): Where the state puts allowances up for sale for the first time. Auction volumes and times will be announced at least 10 business days before each auction. Bids will be submitted in lots of 100 allowances, and all matched participants will trade at the last bid price that clears the volume.
• Secondary market (spot): Where companies buy and sell the allowances they hold with each other. A company with more allowances than it needs can sell, and one with a shortfall can buy. Rules for forward trading will be set separately.

All allowance movements will be tracked per installation in the Registry, which works like a kind of "carbon bank account." Free allowances will also be transferred to these accounts.

What Should Companies Do?

Operators covered by the TR ETS must open an account in the Registry. This requires three steps:

1. Signing a participant agreement with the central settlement institution that manages cash payments and collateral.
2. Applying electronically to EPİAŞ.
3. Signing the Registry participation agreement.

Trading also requires posting collateral, and bids cannot exceed the amount of collateral posted. This is why allowance purchases should already be part of companies' cash planning.

In short, the ETS rules are now complete on paper. The regulation's entry into force does not mean the first auction will take place immediately, but it shows that preparations have reached their final stage. What matters most is accurate, verified emissions data, which directly determines how many allowances will need to be purchased. To prepare your greenhouse gas data for the ETS process, get in touch with our experts.