I. INTRODUCTION
As is known, within the framework of Türkiye's climate policy, the Climate Law No. 7552, a cornerstone of national climate policy, entered into force on 2/07/2025. The Climate Law establishes the architecture for an emissions trading system and provides for the issuance and use of carbon credits within a national framework, thereby delineating both environmental obligations and economic opportunities. In line with these objectives, on 1/08/2025 the Ministry of Environment, Urbanisation and Climate Change published for public consultation the Draft Regulation on Carbon Crediting and Offsetting (the "Regulation"). The Regulation derives its legal basis from the Climate Law and Articles 551, 632 and 792/D of Presidential Decree No. 4, and functions as secondary legislation setting out the implementing rules governing carbon markets. In this context, the consultation draft defines the national crediting scheme branded "Turquoise Credit" and sets out how it will operate within carbon markets.
As detailed below, the Regulation provides for the establishment of the Türkiye Carbon Offsetting System (the "TR COS"). Through this system, the aim is to conduct offsetting processes within the voluntary carbon markets and the Türkiye Emissions Trading System (the "TR ETS") under an integrated structure. Upon review, the Regulation contains provisions that enable the generation of carbon credits from projects outside the ETS, the use of these credits in trading, while also allowing their use, at specified rates, toward compliance with ETS obligations. The Regulation also sets out the procedures and principles for credits developed in Türkiye to obtain recognition in international markets. Accordingly, the objective is to ensure that the credits envisaged to be generated under this framework are reliably defined and rendered a valid instrument at both the national and international levels.
II. FUNDEMENTAL PRINCIPLES
1. What Are Carbon Credits, the Türkiye Carbon Offsetting System, and Turquoise Credit? What Is the Nature and Operation of Turquoise Credit, and What Fundamental Principles Are Envisaged in the Draft Regulation?
A carbon credit is a certificate representing one tonne of carbon dioxide equivalent, arising from projects aimed at reducing greenhouse-gas emissions or removing them from the atmosphere. Such credits may be generated from projects such as renewable energy, energy efficiency, afforestation, or carbon capture and storage. Projects are assessed against international standards, verified by independent bodies, and once recorded in the registry system, may be traded on voluntary carbon markets. Carbon credits enable undertakings to fulfil their emissions obligations; for individuals, they serve as a tool to reduce personal carbon footprints. In this respect, a carbon credit is, by its nature, not a financial debt instrument but a commitment certificate that evidence emission reductions in the fight against climate change and gains value through market-based mechanisms.
In the Draft Regulation, the Türkiye Carbon Offsetting System is envisaged as a national mechanism that enables the generation of carbon credits from emission-reduction and removal projects outside the scope of the Türkiye Emissions Trading System. Under the Regulation, each carbon credit produced within this scope is designated a "Turquoise Credit", and each such credit represents one tonne of carbon dioxide equivalent. Thus, the TR COS is positioned as a complementary element of the TR ETS; the use of credits obtained from projects outside the ETS scope for offsetting purposes is permitted.
In this sense, Turquoise Credit is an environmental certificate generated under the TR COS and defined as Türkiye's national carbon credit. Each Turquoise Credit signifies that one tonne of carbon-dioxide equivalent greenhouse-gas emissions has been reduced or removed from the atmosphere. In this respect, it ensures that the environmental contribution to combating climate change is documented transparently while also conferring a tangible market value.
According to the Draft Regulation, the TR COS will be implemented subject to certain principles. Within this framework, projects within the scope of the system must contribute to at least three of the United Nations Sustainable Development Goals (the "SDG"), and one of these contributions must be directed to combating climate change. Thus, the TR COS adopts a holistic approach that safeguards not only emission reductions but also social and environmental benefits.
The Draft Regulation also emphasises that Turquoise Credit is specific to the TR COS and is founded on the principle of preventing double counting. In this context, projects under which Turquoise Credits are generated must not have been previously certified under any international carbon crediting programme, and the same emission reduction must not be subject to duplicate certification through YEK-G or similar certificates.
2. What Roles Do the Turkish Standards Institute and The Turkish Accreditation Agency Assume Within the Scope of the TR COS?
The Turkish Standards Institute (the "TSI"), pursuant to Article 7 of the Regulation, is responsible for the operation of the TR COS. TSI regulates the process from project applications through to the issuance of Turquoise Credits; it develops, updates and implements methodologies. It also operates the Türkiye Carbon Offsetting Registry System, where projects are recorded, and tracks credits. In addition, determining the principles for the training and certification of personnel who will serve at validation and verification bodies, publishing guidance and procedures to steer implementation, and sharing annual activity reports with the public are among TSI's duties. In this way, TSI ensures that the carbon market operates in a transparent, reliable and auditable manner.
The Turkish Accreditation Agency (the "TÜRKAK"), pursuant to Article 8 of the Regulation, is responsible for accrediting the independent organisations that will audit projects. In this context, TÜRKAK assesses the compliance of organisations that will carry out validation and verification activities with international standards, performs authorisation procedures, and confirms these competencies through periodic audits. It also strengthens the transparency and reliability of the system by sharing up-to-date information on accredited, suspended, or accreditation-withdrawn organisations with the public and relevant institutions.
3. How Are Projects and Turquoise Credits Issued Under the TR COS?
The TR COS rests on a multi-stakeholder structure involving the Climate Change Directorate, TSI, TÜRKAK, and validation and verification bodies. The system operates through three main stages: development of methodologies; project application and registration; and, finally, monitoring, verification, and the issuance of credits.
At the methodology-development stage, applications submitted by natural or legal persons are first reviewed by the Directorate and then referred to TSI for evaluation. Methodologies prepared by TSI or deemed suitable by it are resubmitted to the Directorate for approval, thereby determining the criteria under which projects will generate carbon credits.
Project applications and the registration process constitute the second step of the TR COS. Project owners submit their applications in accordance with the procedures published by TSI. Projects found suitable are reviewed by validation bodies, which prepare a report. Once this report is submitted to TSI, the project is recorded in the Türkiye Carbon Offsetting Registry System, and a dedicated account is opened for the project owner.
At the monitoring, verification and credit-issuance stage, projects are monitored on an annual basis; the amounts of emission reduction or removal achieved are reported by verification bodies and submitted to TSI. Turquoise Credits are issued to the project owner's account based on the approved amounts. All transactions relating to these credits, such as issuance, transfer, cancellation, withdrawal and retirement, are likewise carried out through the registry system.
4. How Is the Use of Carbon Credits in the TR ETS and Voluntary Commitments Regulated?
The Regulation confers on the Climate Change Directorate the authority to determine the procedures and principles governing offsetting transactions. The Directorate sets the criteria and limits within which carbon credits may be used in the TR ETS and announces these rules to the public. In addition, the Directorate's approval is required for Turquoise Credits to be traded on organised markets that include any clearing guarantee.
Under the TR ETS, only carbon credits generated in Türkiye and Turquoise Credits obtained from the TR COS may be used for offsetting purposes. However, such credits may cover only a specified portion of an installation's allowance-surrender obligation; the ratio will be determined periodically by the Directorate. Furthermore, credits to be used within the ETS must be valid for no more than five years from their date of generation. Moreover, the use of YEK-G certificates or other energy-related certificates for offsetting under the ETS is prohibited.
In respect of voluntary commitments, Turquoise Credits used to discharge TR ETS obligations may not be reused for voluntary commitments. Credits used for voluntary purposes are retired in the registry system and thereby rendered invalid. In this way, each credit can be used only once, preventing double counting. In addition, it is envisaged that public institutions and organisations will develop incentive mechanisms to support voluntary carbon offsetting.
5. How Is the Türkiye International Carbon Registry System Structured?
The Regulation envisages the establishment of the Türkiye International Carbon Registry System for the purpose of ensuring that projects linked to international carbon markets are tracked in a regular and auditable manner in Türkiye. This system, to be operated by the Climate Change Directorate, will provide for the registration of projects developed in Türkiye under international crediting programmes, as well as the tracking of carbon credits imported from abroad.
Project owners operating outside the TR COS are obliged to register their projects in the system within ninety days after the registry system is opened. In addition, protocols will be concluded between the Climate Change Directorate and international carbon crediting programmes to ensure that the two systems operate in harmony. This arrangement also enables links to be established with the market mechanisms defined in Article 6 of the Paris Agreement. The principles regarding account types, transaction processes and contribution shares.
III. CONCLUSION
If the Draft Regulation enters into force, it is, by virtue of its content and the mechanism it envisages, undoubtedly capable of steering the development of Türkiye's carbon market. We consider that the mechanism designed within the Turquoise Credit framework will enable the institutionalisation of emission-reduction projects as a distinct asset class tradable on the capital markets by strengthening investor confidence; in this way, market depth could increase meaningfully. While the success of this framework in practice depends on the timely adoption of secondary legislation and its support by effective supervision and audit mechanisms, the entry into force of the Regulation can foster a qualitative deepening in the institutional and functional infrastructure of carbon markets in Türkiye, thereby enhancing the country's potential to become a regional benchmark.
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