Fossil fuels are fuels that are formed by the transformation of organic material residues underground under the influence of pressure and temperature over millions of years. These include coal, oil and natural gas and are used in many areas such as energy production, transportation and industry.

Global warming is the increase in the average temperature of the Earth due to the accumulation of greenhouse gases in the atmosphere. This is due to the increasing greenhouse gas emissions caused by human activities such as fossil fuel burning, deforestation and industrial activities. This increase leads to climate change and negative effects, so it is important to reduce greenhouse gas emissions.

The Earth has a natural greenhouse effect due to trace amounts of water vapor (H2O), carbon dioxide (CO2), methane (CH4) and nitrous oxide (N2O) gases in the atmosphere. These gases allow solar radiation to reach the Earth's surface and absorb infrared radiation emitted by the Earth, causing the surface to warm. However, it is necessary to distinguish between the natural greenhouse effect and the enhanced greenhouse effect. The natural greenhouse effect is due to the natural amount of greenhouse gases and is of vital importance. Without this effect, the Earth's surface would be approximately 33 degrees colder. The enhanced greenhouse effect refers to the additional radiative forcing resulting from the increased greenhouse gas concentrations caused by human activities. Gases such as Carbon Dioxide (CO2), Methane (CH4), Nitrous Oxide (N2O), Hydrofluorinated Carbons (HFCs), Perfluorinated Carbons (PFCs), Sulfur Hexa Fluoride (SF6) are the main greenhouse gases.

Carbon dioxide is a gas found in trace amounts in the Earth's atmosphere. It is also found dissolved in the oceans. It is a byproduct of cellular respiration and a key component of photosynthesis. Carbon dioxide is also a greenhouse gas produced as a byproduct of human activities. Emissions are the release of greenhouse gases and/or their precursors into the atmosphere over a period of time and area. Carbon dioxide emissions are emissions from the burning of fossil fuels and cement production.

Natural or man-made systems that absorb greenhouse gases from the atmosphere and store them are called carbon sinks. Forests are the most common type of sink. Other sinks include soil, peat, permafrost, ocean water, and carbonate deposits in the deep ocean. Carbon sinks cover about 30% of the land surface. About 45% of the carbon stored on land is bound to these sinks. Therefore, carbon sinks are a key tool in helping to combat climate change.

Ecological footprints are a measure of the impact of an individual or community on the environment. It can also be expressed as the amount of resources consumed. The concept of ecological footprint was introduced by Wackernagel and Rees in 1990 to assess the environmental impacts associated with human activities. Ecological footprints measure the rates at which resources are consumed and waste is produced. The assessment of ecological footprints is also related to biologically productive areas or biocapacity. Ecological footprints measure regular demand, while biocapacity refers to uninterrupted supply. Ecological footprint and biocapacity figures change from year to year according to population, per capita consumption, production efficiency and productivity.

The biocapacity of a city or nation represents the productivity of its ecological assets, including arable land, forest land, fishing grounds, and built-up land. Biocapacity can also be expressed as the capacity of a given biologically productive area to generate a continuous supply of renewable resources and absorb wastes emitted. If the ecological footprint of the area exceeds its biological capacity, it is no longer sustainable.

It is the amount of greenhouse gas emitted into the atmosphere by activities carried out by individuals, companies and society. It is the term used to express the amount of greenhouse gas emitted into the atmosphere by production, transportation, heating, energy consumption or any purchased product as "carbon dioxide gas equivalent (CO2e)". The carbon footprint calculation indicates how much more biocapacity we need. Under normal conditions, the biocapacity per person is expected to be greater than the ecological footprint per person.

Regulations and circulars have been published on the monitoring, tracking, reporting, verification of greenhouse gases and the accreditation of verification organizations. Within the scope of the said legislation, facilities that carry out the activities in Annex-1 of the regulation are subject to the regular reporting process of greenhouse gas emissions verified by accredited verification organizations every year. The chronological order of the regulations in question is as follows: Regulation on Monitoring of Greenhouse Gas Emissions (Official Gazette dated May 17, 2014 and numbered 29003) Communiqué on Monitoring and Reporting of Greenhouse Gas Emissions (Official Gazette dated July 22, 2014 and numbered 29068) Communiqué on Verification of Greenhouse Gas Emission Reports and Authorization of Verification Institutions (Official Gazette dated April 2, 2015 and numbered 29314) Regulation on Amending the Regulation on Monitoring of Greenhouse Gas Emissions (Official Gazette dated June 29, 2016 and numbered 29757) Regulation on Amending the Regulation on Monitoring of Greenhouse Gas Emissions (Official Gazette dated May 31, 2017 and numbered 30082) Communiqué on Verification of Greenhouse Gas Emission Reports and Communiqué on Accreditation of Verifier Organizations (Official Gazette dated December 2, 2017 and numbered 30258) Communiqué on Amendments to the Communiqué on Monitoring and Reporting of Greenhouse Gas Emissions (Official Gazette dated February 5, 2021 and numbered 31386) Regulation on the Service Units of the Climate Change Presidency and Working Procedures and Principles (Official Gazette dated June 21, 2022 and numbered 31873)

Karbon ayak izi bir ürün veya hizmetin ömrünün her aşamasından (malzeme üretimi, imalat, kullanım ve kullanım ömrü sonu) kaynaklanan emisyonların toplanmasıyla hesaplanmaktadır. Bir ürünün yaşam döngüsü boyunca ısıyı atmosferde tutma yeteneği değişen farklı sera gazları (CO2, CH4, N2O gibi) salınabilir. Bu farklılıklar, her bir gazın küresel ısınma potansiyeli ile açıklanmaktadır ve bu karbondioksit eşdeğerlerinin kütle birimi cinsinden bir karbon ayak izi ile sonuçlanmaktadır.

Carbon footprint can be reduced by reviewing all processes that cause carbon emissions throughout the life cycle of the product, from raw materials to processing, use and disposal. This process covers all stages that indirectly cause carbon emissions throughout the raw material extraction, processing processes, transportation and supply chain. It is important to reduce energy use in these stages, obtain the energy used from renewable sources instead of fossil fuels, reuse a product in different ways and, as much as possible, not produce waste to be disposed of.

According to the United Nations Framework Convention on Climate Change, “Climate change” is defined as a change in climate resulting from human activities that directly or indirectly disrupt the composition of the global atmosphere, in addition to natural climate change observed over comparable time periods. Global climate change refers to the increase in the average surface temperatures of the Earth and changes in climate as a result of the rapid increase in the accumulation of greenhouse gases (H2O, CO2, CH4, O3, N2O, HFCs, PFCs, SF6) released into the atmosphere by human activities such as the use of fossil fuels, land use changes, deforestation and industrial processes, which strengthen the natural greenhouse effect.

It can be calculated under two separate headings: personal and corporate. Personal carbon footprint expresses how much of the emission released to the world during people's annual life activities we are personally responsible for. Personal carbon footprint is also divided into two as primary and secondary carbon footprint. Primary carbon footprint is the emission value resulting from the energy consumption of people in order to meet their needs in daily life. While primary footprint directly harms the world, the effect of secondary footprint is indirect. It expresses the amount of greenhouse gases indirectly released in terms of carbon during the life of the products we use from manufacturing to consumption and even to their destruction in nature. Corporate carbon footprint is the amount of emission resulting from the direct or indirect activities of a business. Corporate carbon footprint is addressed in three categories as direct, indirect and other indirect carbon footprint. Direct carbon footprint refers to the emissions generated through fossil fuels and fossil fuels used by institutions to continue their activities. Indirect carbon footprint is related to electrical energy and includes emissions such as steam, cooling and keeping warm that the institution purchases from supplier institutions. Finally, the other direct and indirect carbon footprint refers to the emissions that cover all products used by institutions within the supply chain, subcontractor activities, rental vehicles and even employees' transportation for business purposes.

The Conference of Parties, or COP in short, is a conference organized by the United Nations with the high-level participation of states, regional organizations and civil society actors. The conferences are based on environmental issues in the world. The focal points of these Conferences of Parties, which are organized at certain intervals, are climate change, desertification and biodiversity. Although the business world is mostly interested in the Conference of Parties related to climate change, three global agreements were actually adopted at the United Nations Conference on Environment and Development (Rio Earth Summit) held in 1992. These are; United Nations Framework Convention on Climate Change (UNFCCC), United Nations Convention to Combat Desertification (UNCCD) and United Nations Convention on Biological Diversity (UNCBD). The agreements utilize a common approach to restore the balance of soil, climate, biodiversity and nature. The best-known Conference of the Parties (COP) is the UNFCCC Conference of the Parties, which is usually held annually with the theme of climate change, including the 21st Conference of the Parties (COP21), which culminated in the adoption of the Paris Agreement in France in 2015. A conference of the parties has been held annually since the entry into force of the UN Framework Convention on Climate Change in 1994. The first conference of the parties was held in Berlin, Germany, in 1995. Among these conferences, the Kyoto Protocol was signed at the 3rd Conference of the Parties in 1997, and the Paris Agreement was adopted at the 21st Conference of the Parties in 2015. The most recent, COP27, was held in Egypt from 6–18 November 2022. COP28 will take place in the United Arab Emirates from 30 November to 12 December 2023.

The United Nations Climate Change Conference held at COP27 2022 was held in Sharm El Sheikh. A draft final declaration was published regarding the issues decided at the conference. This text reiterated many decisions taken at COP26 held the previous year, and emphasized the importance of the decisions taken in the Paris Agreement and the Glasgow Climate Pact. It also reiterated the demand for all party countries to review and strengthen their national contribution declarations. It was stated that limiting the temperature increase in the atmosphere to 1.5 degrees instead of 2 degrees would significantly reduce the negative effects of climate change, and it was emphasized that more efforts should be made to limit the temperature increase to 1.5 degrees. It was confirmed that in order to limit the temperature increase to 1.5 degrees, global greenhouse gas emissions should be reduced by 43% by 2030 compared to the 2019 level. The most striking issue among the decisions taken at the conference was the establishment of a fund to compensate developing countries for the losses and damages they suffered as a result of climate change. Developing countries, especially African countries, are faced with many economic and human problems stemming from climate change. For this reason, this fund planned to be established to cover their losses and damages is considered a historic development. Another striking point is that, although the draft text includes the phrase “accelerating measures to gradually reduce coal energy and phasing out and rationalizing inefficient fossil fuel subsidies” and emphasizing “the importance of increasing the share of renewable energy in the energy mix,” the text does not include a call to gradually end fossil fuel consumption, especially coal. Another important issue discussed at the conference was the food crisis. Food security, one of the important components of combating climate change, was among the issues discussed at COP27, especially at a time when the ongoing war between Russia and Ukraine increases the risks to the food industry. With the efforts of 275 governments, multinational companies, universities and other civil society organizations, a decision was made to allocate more than $8 billion for “green agriculture” practices. The Green Agriculture Fund aims to ensure that farmers and farms adapt to the fight against climate change and to increase global food security. COP27 also witnessed important developments for Turkey. Minister of Environment, Urbanization and Climate Change Murat Kurum, who attended COP27, announced that Türkiye's target, which was previously determined as a 21 percent reduction in emission rates, has been increased to 41 percent. With this commitment, an emission reduction of approximately 500 million tons is targeted in 2030. It was also stated that greenhouse gas emissions will reach their peak by 2038 at the latest and that from that point on, progress will be rapidly made towards the net zero emission target of 2053. On the other hand, it was announced that Türkiye is a candidate to host the 31st Climate Change Conference.

The United Nations established two organizations, the World Meteorological Organization and the United Nations Environment Programme, in 1988 to assess the risks of climate change caused by human activities. The aim of the panel is to provide scientific information to states at all levels to develop climate policies. The IPCC currently has 195 members. Thousands of people around the world contribute to the work of the IPCC. Experts evaluate thousands of scientific articles for IPCC assessment reports, providing comprehensive summaries of the drivers, impacts and future risks of climate change, how to adapt and how to reduce risks. Experts and states conduct open and transparent reviews in IPCC processes. The IPCC 6th Assessment Report, published in 2021, describes the increase in human-induced carbon dioxide and other greenhouse gas emissions, the rapid increase in global and regional temperatures, and the effects of global warming of 1.5 °C and 2 °C on natural and human systems.

Climate change risk factors are considered in two categories: physical risks from weather and climate change affecting the economy, and transition risks from the transition to a low-carbon economy. Physical risk factors are categorized as acute risks related to extreme weather events and chronic risks related to gradual changes in climate. The frequency and severity of each type of risk can vary significantly and can be difficult to predict. While human activities and decisions affect exposure to physical climate risks, the location, timing and magnitude of specific physical events cannot be controlled. Acute physical risks are often caused by natural events such as deadly heat waves, floods, wildfires and hurricanes. Chronic physical risks include rising sea levels, rising average temperatures and desertification, which can lead to further developments of chronic climate events. Transition risks can arise through changes in public sector policies, innovations and changes in the affordability of existing technologies.

It is a policy document that includes and directs climate change adaptation activities at national, local and regional levels, prepared with the aim of contributing to the coordination of adaptation activities; in addition to identifying country-specific impacts, activating different institutions and administrative tools, with the broad participation of business world and civil society actors.

The Climate Change Adaptation Strategy and Action Plan published in 2012 includes water resources management, agricultural sector and food security, disaster risk management, ecosystem services, biodiversity and forestry and human health sectors. Work is ongoing to update this plan by the end of 2023. All sectors will be included in the scope in the following periods.

The general objective of İDEP is to combat climate change by determining actions appropriate to national conditions to limit greenhouse gas emissions, to increase resilience by managing the effects of climate change and thus to promote combating and adapting to climate change in Türkiye. The plan covers the years 2011-2023.

CCAP, which was created based on the sectors in the Annex A list of the Kyoto Protocol and the sectors in the National Climate Change Communication reporting format of the United Nations Framework Convention on Climate Change (UNFCCC), includes targets and actions under the headings of energy, buildings, transportation, industry, waste, agriculture, land use and forestry, cross-sectoral common issues and harmony.

Renewable energy is energy obtained from natural resources that can renew themselves at a higher rate than the rate of consumption. Solar, wind, geothermal are a few of the renewable energy sources.

According to the United Nations Environment Programme, it is an economy that reduces environmental risks and ecological scarcities while increasing well-being and social equity. A green economy can also be defined as an economy that is low-carbon, resource-efficient and socially inclusive. In a green economy, employment and income growth is driven by public and private investment in such economic activities, infrastructure and assets that enable the reduction of carbon emissions and pollution, the increase of energy and resource efficiency, and the prevention of the loss of biodiversity and ecosystem services.

Greenwashing is when a company or organization spends more time and money marketing themselves as sustainable than actually minimizing their environmental impact. It is also considered a deceptive advertising method to win over consumers who choose to support businesses that care about improving the planet. Greenwashing plays a valuable role in combating environmental problems such as climate change, ocean pollution, air pollution, and global species extinction. The term was first coined in a 1986 article by environmentalist Jay Werterveld.

It is a certificate that proves that electricity is obtained from a renewable energy source. Companies can certify that the electricity they use is provided by renewable sources by purchasing a green energy certificate. Green energy certificates can help companies achieve their clean energy goals, reduce energy-related scope 2 greenhouse gas emissions, and support the renewable energy market.

It is the certificate obtained as a result of the verification of greenhouse gas emission reduction projects by an independent supervisory organization and certification by a voluntary carbon standard organization and expressed in carbon dioxide equivalent tons.

ESG, or Environmental, Social and Corporate Governance criteria, evaluate non-financial risks and opportunities in addition to traditional financial analysis of companies. Through criteria determined under three headings, a company's environmental impact, relations with its employees, policies for gender equality, inclusiveness of senior management and financial transparency are examined.

The Green Climate Fund (GCF) is a fund established to support developing countries in reducing greenhouse gases and adapting to climate change within the scope of the financial mechanism provided for by the United Nations Framework Convention on Climate Change and the Paris Agreement. The executive body of the GCF was approved by the UNFCCC on December 11, 2011. The projects supported by the GCF and the support costs are published on the official website. As of March 2023, 216 projects are in the implementation phase with a fund of 12.0 billion.

Bonds that generate funds for climate-related, environmentally friendly and sustainable projects are called green bonds. Examples of projects that green bonds provide financing for include projects on energy efficiency, biodiversity protection, clean transportation and sustainable water. The first green bond was issued in 2007 by the European Investment Bank under the name Climate Awareness Bond (which is allocated to renewable energy and energy efficiency projects). The World Bank issued its first green bond in 2008. According to the Climate Bond Initiative, an international, investor-focused initiative, as of mid-March 2023, green bonds were issued at $96.7 billion, with a cumulative total of $2.281 trillion in green bonds.

These are bonds issued by governments, development banks or other institutions to invest in marine and ocean-based projects with environmental, economic and climate benefits. Blue bonds are inspired by the concept of green bonds. The first blue bonds (Seyschelles Blue Bond, Nordic Sea Blue Bond) were introduced in 2018. The Republic of Seychelles issued its first blue bond on 29 October 2018. The World Bank supported the development of the bond. The Nordic Investment Bank issued its first blue bond on 24 January 2019.

It is a law that was published in the Official Gazette on July 9, 2021 and entered into force on July 29, 2021. It was made to make political statements legally binding and to give a strong political message to the stakeholders and the business world. In line with the target determined by the Constitutional Court, it aimed to make the goal of being climate neutral in 2050 a legal target for EU institutions and member states and to create a predictable business environment for industry and investors. A minimum 55% reduction in greenhouse gas emissions compared to 1990 levels by 2030 was also added to the targets.

It includes the European Union’s plans to harmonize EU legislation with the aim of reducing greenhouse gas emissions by at least 55% compared to 1990 levels by 2030. The proposals discussed within the scope of the package include the establishment of a Border Carbon Adjustment Mechanism, reform of the EU Emissions Trading System (ETS), revision of directives on energy efficiency, renewable energy and energy taxation, establishment of regulations on alternative fuel infrastructure for sustainable transport, revision of land use and forestry regulations, tightening of carbon emission standards for vehicles, establishment of ReFuelEU aviation and FuelEU maritime regulations to increase the use of greener fuels in shipping and aviation. The Social Climate Fund proposal discussed within the scope of the package was approved by the Council in a vote on 25 April 2023. The revision of the EU Emissions Trading System was also accepted in a vote held on the same date.

SKDM covers the iron and steel, aluminum, cement, fertilizer, electricity and hydrogen sectors. The scope includes various user products (downstream products) where primary products are used as inputs and the production processes are not complex in order to prevent trade diversion. In addition, certain inputs (precursors) used in the production of products within the scope of SKDM are included in the scope. Within this framework, products within the scope of SKDM will be subject to obligations imposed by the legislation both in cases where they are directly imported to the EU and in cases where they are used as inputs during the production phase of other SKDM products. While determining the scope of SKDM, which is designed as an equivalent mechanism of ETS to be implemented at the import stage, sectors and product groups where carbon emission measurement can be made relatively easily on a product basis were selected from among sectors with a high risk of production shifting outside the EU. The legislative text regarding the Border Carbon Adjustment Mechanism was adopted by the EU Council on 25 April 2023. The text was signed by the European Parliament and the EU Presidency on 10 May 2023. The Regulation Text on the Establishment of the European Union Border Carbon Adjustment Mechanism was published in the EU Official Gazette dated 16 May 2023 and numbered L130. The GTIPs within the scope of SKDM included in the relevant legislation text are presented in List-1. List 1: List of GTIPs within the scope of SKDM Cement 2507.00.80 Other kaolin clays 2523.10.00 Cement; Clinker 2523.21.00 Cement; Portland; White 2523.29.00 Cement; Portland; Other 2523.30.00 Cement; alum 2523.90.00 Other Cements Hardening Under Water Electrical Energy 2716.00.00 Electrical Energy Chemicals 2804.10.00 Hydrogen Fertilizer 2808.00.00 Nitric Acid; Sulfonitric Acids 2814 Pure Ammonia or Aqueous Solutions of Ammonia 2834.21.00 Potassium Nitrate 3102 Nitrogenous Mineral or Chemical Fertilizers 3105 Mineral or Chemical Fertilizers Containing Two or Three of Nitrogen, Phosphorus and Potassium (Except HS Code 3105.60.00) Iron - Steel 72 Iron and Steel (Except the following HS Codes) 7202.2 Ferro-silico 7202.3 Ferro-silico-manganese 7202.50.00 Ferro-silico-chromium 7202.70.00 Ferro-molybdenum 7202.80.00 Ferro-tungsten and ferro-silico- tungsten 7202.91.00 Ferro-titanium and ferro-silico-titanium 7202.92.00 Ferro-vanadium 7202.93.00 Ferro-niobium 7202.99 Other ferro-alloys 7202.99.10 Ferro-phosphorus 7202.99.30 Ferro-silico-magnesium 7202.99.80 Other ferro-alloys 7204 Waste and scrap of cast iron, iron or steel, or ingots obtained by their remelting 2601.12.00 Iron ores and concentrated iron ores (excluding roasted iron pyrites) (agglomerated) 7301 Sheet pilings of iron or steel; Iron or Steel Welded Profiles 7302 Railway and Tramway Line Material of Iron or Steel (Rail, Switch Tongues, Switch Hubs, Tensioners 7303.00 Cast Iron Thin and Thick Tubes and Hollow Profiles 7304 Iron (Except Cast Iron) and Steel Thin and Thick Tubes and Hollow Profiles (Seamless) 7305 Other Iron or Steel Thin and Thick Tubes (Welded, Riveted) (Circular Sections) 7306 Other Iron or Steel Thin and Thick Tubes and Hollow Profiles 7307 Iron or Steel Pipe Fittings (Couplings, Elbows and Sleeves, etc.) 7308 Iron or Steel Building and Construction Parts, Iron or Steel Prepared for Use in Construction 7309.00 Iron or Steel Tanks, Cisterns, Tubs, etc. Containers (Volume > 300 Lt and Mechanical or Thermal Equipment 7310 Iron or Steel Tanks, Cisterns, Tubs, etc. Containers (Volume <= 300 Lt and Mechanical or Thermal Equipment 7311.00 Iron or Steel Compressed or Liquidized Gas Containers 7318 Iron or Steel Screws, Bolts, Nuts, Laths, Hooks, Rivets, Pins, Wedges, Washers (Including Spring Washers) and Other Articles 7326 Other Articles of Iron or Steel Aluminum 7601 Unwrought Aluminium 7603 Aluminium Powders and Flakes 7604 Aluminium Rods and Profiles 7605 Aluminium Wires 7606 Aluminium Sheets, Plates, Strips (Thickness 0.2 mm. ) 7607 Sheets and Strips of Aluminum (Thickness <= 0.2 mm) 7608 Thin and Thick Tubes of Aluminum 7609.00.00 Aluminum Pipe Fittings (Couplings, Elbows, Sleeves, etc.) 7610 Construction of aluminum (excluding prefabricated structures in 94.06), construction

Designed in line with World Trade Organization (WTO) rules and other international obligations of the EU, the SKDM system will operate as follows: Upon entry into force of the SKDM in 2026, EU-based importers will purchase carbon certificates corresponding to the carbon price set for the relevant products they import, as if the products in question were produced under the EU’s carbon pricing rules. On the other hand, if a non-EU producer can show that they paid a price in a country outside the EU for the carbon used in the production of imported goods, the relevant amount will be fully deductible from the costs incurred under the SKDM. The SKDM will therefore help reduce the risk of carbon leakage by encouraging producers in non-EU countries to green their production processes. The SKDM is already in place in several parts of the world, such as California, where there is a regulation for certain electricity imports. Other countries, such as Canada and Japan, are planning similar initiatives. In addition, organizations such as the IMF and the OECD have recently conducted studies to examine how such measures could support international efforts to reduce greenhouse gas emissions. In their statement published after their meeting on 9-10 July 2021, G20 Finance Ministers raised the need for closer international coordination on the use of carbon pricing mechanisms. Since then, efforts to establish a “Climate Club” have continued. Revenues from SKDM will be transferred to the EU budget as specified in the December 2020 Inter-Institutional Agreement on budget and own resources.

The SKDM functions in the same way as the ETS, in that the system is based on the purchase of certificates by importers. The price of the certificates will be calculated based on the weekly average auction price of EU ETS allowances expressed in €/tonne CO2e emissions. In order to take part in the SKDM and purchase SKDM certificates, importers will have to register with the SKDM, either individually or through a representative. The final SKDM agreement foresees that the new mechanism will be implemented by the European Commission in coordination with the competent authorities of the relevant Member State. The Commission will therefore be responsible for the review and verification of declarations, as well as the management of a central platform for the sale of SKDM certificates to importers. In order to import products covered by the SKDM into the EU, importers must declare the quantity of goods imported into the EU in the previous year and the embodied emissions in these goods by 31 May each year. They must also surrender the SKDM certificates they purchased from the Commission. By ensuring that importers pay the same carbon price as EU-based producers under the EU ETS, SKDM will ensure equal treatment of products produced in the EU and imported from other countries, preventing carbon leakage.

The import of products within the scope of the SKDM Regulation will be carried out, as is the case currently, either by direct importers or indirect customs representatives who carry out customs procedures on behalf of importers. During the transition period, no approval/registration process is foreseen for importers other than the regular registration processes included in the EU customs legislation. During this period, importers or indirect customs representatives importing SKDM products will report on the products they imported in that quarter for each quarter within the first month following the report (SKDM Report). For example, the SKDM Report will be submitted by the end of April for imports made in the January-March period. The valid date range for the first of the emission and carbon fee paid in third countries reports to be made quarterly is envisaged as 1-31 January 2024. Even if the first reporting date is changed according to the needs, in any case, data collection will start as of 1 October 2023 for the notification of emissions or this date will be taken as the starting point for the data to be submitted. The work of an expert group established by the European Commission on emission monitoring and calculation methodologies that will form the basis of reporting is ongoing. Since reporting is the main element of the transition period application, emission calculation and reporting methodologies will be among the first secondary regulations to be issued after the publication of the SKDM Regulation. Another important point to consider is that there is no verification requirement for reporting emissions during the transition period between 1 October 2023 and 31 December 2025. In this context, it is not mandatory to receive verification services from third-party greenhouse gas verification companies for reporting. As mentioned above, during the transition period, the Commission will periodically review the reports, identify deficiencies and deviations from the normal situation, and regularly inform the competent authorities of the Member States in order to assess whether penal action is required against importers. On 17 August 2023, the European Commission adopted the procedures and principles regarding the implementation of the transition period of the Border Carbon Adjustment Mechanism (SKDM). The transition period will start on 1 October 2023 and continue until the end of 2025. The Implementing Regulation details the transition reporting obligations for EU importers of SKDM goods, as well as the transition methodology for calculating embodied emissions released during the production process of SKDM goods. The Commission has published guidance on the practical application of the new rules for EU importers and non-EU installations, to assist both importers and third-country producers. It also notes that specific IT tools have been developed to help importers make and report these calculations, as well as educational materials, webinars and training to support businesses once the transition mechanism begins. Importers will be asked to collect fourth-quarter data by 1 October 2023, but their first report will only need to be submitted by 31 January 2024

The Social Climate Fund will be used by Member States to finance measures and investments to support vulnerable households, microenterprises and transport users, as well as to help them cope with the price impacts of the emissions trading system for buildings, road transport and additional sectors. The Fund will be financed primarily from revenues from the new emissions trading system, up to a maximum of €65 billion (to be supplemented by national contributions). It is set up on an interim basis to cover the years 2026–2032. The Fund may also cover temporary direct income support.

With the European Green Deal Investment Plan dated January 14, 2020, it was announced that the European Commission will establish an EU Green Bond Standard (EUGBS). The aim of the EU GBS is to establish a bond standard for sustainable investment financing on a voluntary basis. It is envisaged that the regulation in question will be beneficial for both issuers and green bond investors. There are four main conditions in the proposed framework for the EU GBS, which is planned to be open to green bond issuers from within and outside the EU. The funds collected by the bond should be allocated to projects that comply with the EU taxonomy, detailed reporting should be provided to ensure transparency in the distribution of bond revenues, compliance with the regulation and taxonomy should be reviewed by external auditors, and the said external auditors should be audited by the European Securities Markets Authority (ESMA). The aim is for the European Green Bond Standards to be compatible with the existing standards (ICMA Green Bond Principles, Climat Bonds Initiative Climat Bonds Standards). The European Commission published its proposal on June 6, 2021. The Next Generation EU Green Bond Framework of 7 September 2021 foresees the issuance of approximately €250 billion worth of green bonds on the markets by the end of 2026. On 2 November 2021, the European Parliament published amendments to the text proposed by the Commission. The Council determined its position on the proposal on 13 April 2022. Tripartite discussions started on 12 July 2022. Currently, the Council negotiators and the European Parliament have reached a provisional agreement on the creation of European green bonds.

The Paris Agreement is a declaration prepared by the countries themselves regarding their greenhouse gas emission reductions. The Paris Agreement foresees periodic review of Nationally Determined Contributions (NDCs) and gradual increase in targets.

According to the National Contribution Declaration submitted by Türkiye on September 30, 2015, greenhouse gas emissions were expected to be reduced by 21% compared to the reference scenario in 2030. Minister of Environment, Urbanization and Climate Change Murat Kurum stated that Türkiye updated its National Contribution Declaration for 2030 at the High Level Ministerial Meeting of the Conference of the Parties to the 27th United Nations Framework Convention on Climate Change. Türkiye's target for reduction from increase was raised to 41% with the new statement.

Carbon pricing is a cost-effective tool that governments can use as part of their broad climate strategies. Carbon pricing instruments can generally be divided into two categories: direct and indirect. In direct carbon pricing, a price incentive is applied in proportion to the greenhouse gas emissions of the relevant product or activity. Examples of this include carbon tax and Emissions Trading System. On the other hand, in indirect carbon pricing, the price of the product related to carbon emissions is changed without being proportional to the emissions released. Examples include fuel and commodity taxes, fuel subsidies affecting energy consumers. Regulatory and investment incentives do not fall into this category. As of April 2022, there are 68 carbon pricing instruments (CPI) operating worldwide, and plans have been made for the implementation of three of them. The carbon pricing instruments in effect cover approximately 23% of the world's total greenhouse gas emissions.

The Emissions Trading System (ETS) is one of the emerging market instruments for carbon pricing. The ETS mechanism was developed with the aim of reducing carbon dioxide and other greenhouse gases that cause the climate crisis. The purpose of the Emissions Trading System, which is a difficult concept designed with a multi-disciplinary understanding, is to encourage companies to switch to low-emission production models. With the ETS, a cap-and-trade system can be used to determine a cap on greenhouse gas emissions and make carbon allocations (baseline-and-credit system). Cap-and-trade systems, which apply a cap or absolute limit to emissions within the scope of ETS and emission allowances, are generally distributed free of charge or sold by auction for the amount of emissions equivalent to the cap. Base and credit systems are systems where baseline emission levels are defined for individual regulated entities and credits are given to entities that reduce their emissions below this level. These credits can be sold to other entities that exceed the baseline emission levels. In the ETS, the price of carbon is determined by the supply and demand of emission allowances or emission credits. As of April 2022, the number of places where it is implemented or planned to be implemented worldwide is 34. In 2021, for the first time, the revenue from the ETS exceeded the revenue from the carbon tax. In order for the ETS to operate properly, the rules that will provide balance between market stability, allowance price and costs must be determined correctly.

Carbon tax is one of the market instruments used for carbon pricing, such as the Emission Trading System (ETS). Carbon tax is based on taxing fossil fuels that cause carbon emissions according to their carbon and equivalent carbon content. In short, it determines a price directly for carbon by defining a price per ton of carbon dioxide. Therefore, there is no flexibility in the carbon tax, there is a fixed fee, and the system is designed based on the fee. ETS starts from the emission level. In ETS, emission limitations are imposed in order to meet environmental targets. In carbon tax, the amount to be paid is determined first and the emission amount is shaped according to the actions of the actors in the market. In ETS, the carbon fee remains uncertain while the emission amount is determined. As of April 2022, the number of carbon tax mechanisms implemented or planned to be implemented worldwide is 37. Carbon tax rates increased in 2021 and early 2022, although not as much as ETS. Historically, carbon taxes have generally generated more revenue than ETS. However, the carbon tax fell behind the ETS in 2021. This shows that ETS prices increased much faster than fixed-price instruments. In addition, the increase in the share of allocations made through auctions instead of free allocations was also effective.

Carbon tax is one of the market instruments used for carbon pricing, such as the Emission Trading System (ETS). Carbon tax is based on taxing fossil fuels that cause carbon emissions according to their carbon and equivalent carbon content. In short, it determines a price directly for carbon by defining a price per ton of carbon dioxide. Therefore, there is no flexibility in the carbon tax, there is a fixed fee, and the system is designed based on the fee. ETS starts from the emission level. In ETS, emission limitations are imposed in order to meet environmental targets. In carbon tax, the amount to be paid is determined first and the emission amount is shaped according to the actions of the actors in the market. In ETS, the carbon fee remains uncertain while the emission amount is determined. As of April 2022, the number of carbon tax mechanisms implemented or planned to be implemented worldwide is 37. Carbon tax rates increased in 2021 and early 2022, although not as much as ETS. Historically, carbon taxes have generally generated more revenue than ETS. However, the carbon tax fell behind the ETS in 2021. This shows that ETS prices increased much faster than fixed-price instruments. In addition, the increase in the share of allocations made through auctions instead of free allocations was also effective.

The upper limit in the Emissions Trading System is determined by two approaches: top-down and bottom-up. In the top-down approach, an upper limit is determined by considering environmental targets. In the bottom-up approach, targets are determined by considering the emission reduction capacities of the sectors. There are two methods for determining the upper limit: fixed upper limit and variable upper limit. Fixed upper limit provides environmental certainty. ETS becomes inefficient when the economy slows down. The variable upper limit changes according to economic performance. When the economy slows down, the upper limit narrows. Reliable economic performance data is needed.

It is distributed in two ways: free distribution and auction sales. In free allocation, historical emissions of sectors are examined. There are two methods here: grandfathering and benchmarking. Grandfathering means allocation by looking at past emissions, while benchmarking compares the performances of sectors. If past data is available, it can be said that the grandfathering approach is simple. It was also used in the pilot phase of the EU Emission System. The benchmarking approach provides free allocation to companies performing below a certain emission level. It can be said that it encourages and rewards higher environmental performance. This approach requires understanding complex industrial processes and high-level data access. The auction part is the source that causes the funds to be created.

As of January 1, 2026, which is the beginning of the actual implementation period in which financial obligations will arise within the scope of SKDM, imports of products within the scope of the regulation can only be made by “authorized SKDM obligor (authorized CBAM declarant)”. During this period, it will be possible to carry out import/customs transactions directly through the importer company or customs consultants (indirect customs representatives). In terms of collecting financial obligations, the condition of being a resident is introduced among the authorization criteria of the SKDM obligor. Within this framework, it is envisaged that the authorized SKDM obligor will essentially be an importer directly established in the EU. However, an indirect customs representative of an importer company established in the EU, who is also established in the EU, can become an authorized SKDM obligor, if consented. For importers not established in the EU, the authorized SKDM obligor can only be the indirect customs representative of the importer company established in the EU.

Information on embedded emissions for products subject to SKDM must be provided by manufacturers established outside the EU to importers registered in the EU. In the event that the requested information is not available, EU importers will be able to use the default values ​​for CO2 emissions for each product (even after the final system is in place) to determine the number of certificates they need to purchase. However, importers will be able to demonstrate the actual emissions through a reconciliation procedure and deliver the appropriate number of SKDM certificates accordingly.

In principle, all imports from non-EU countries will be covered by the SKDM. However, certain third countries participating in the ETS or connected to the EU’s emissions trading system will be excluded from the mechanism. This applies to members of the European Economic Area and Switzerland. The SKDM will apply to electricity produced in and imported from countries that want to integrate their electricity markets with the EU until these markets are fully integrated. These countries may be exempted from the mechanism under strict conditions, subject to the implementation of certain obligations and commitments. In such a case, the EU will review the exemptions granted in 2030, after which time the countries in question must have implemented the decarbonization measures they have committed to and an emissions trading system equivalent to the EU.

In preparing the SKDM proposal, the Commission has consulted widely, both publicly and through consultations with specific stakeholders. In addition, the Commission has held extensive bilateral consultations with public authorities, business associations, individual companies and NGOs in both EU and non-EU countries. Targeted consultations have been held with senior executives and policy makers from the basic materials sectors, associations, manufacturers, NGOs. During this transition period, the Commission will continue to work in collaboration with industry and relevant countries to ensure the smooth implementation of the mechanism, create synergies where possible and promote globally effective decarbonisation. This work will help develop the regulation, which the Commission will finalise by mid-2025 and which will also determine the final methodology to be used when the SKDM comes into force on 1 January 2026. At the same time, the European Commission fully supports and participates in efforts to design and implement effective climate change mitigation policies worldwide, such as the Inclusive Forum for Climate Change Mitigation Approaches (IFCMA) in the OECD and the Climate Club supported by the G7. The EU also stands ready to cooperate with low- and middle-income countries to decarbonise their manufacturing industries. The Union will also support less developed countries with the necessary technical assistance.

Offsets are emission reductions from project-based activities outside the scope of the ETS that can be used for compliance. Offsets increase the cap and reduce costs. However, it is important to set offset usage rules consistent with the overall objective of the ETS and to take offsets into account when defining the cap.

Banking and borrowing are two methods that provide flexibility over ETS phases. Banking is when allowances issued in one reduction year (or phase) of the ETS are used in subsequent years (or phases) of the ETS. Borrowing is when allowances for future reduction periods are used for the current ETS period.

Countries that signed this protocol committed to reduce their emissions of carbon dioxide and five other greenhouse gases or, if they are unable to do so, to increase their rights through carbon trading. The protocol requires countries to reduce the amount of carbon they emit into the atmosphere to 1990 levels. The protocol, signed on 11 December 1997, entered into force on 16 February 2005. There are currently 192 protocol parties. Annex B to the Kyoto Protocol sets out binding emission reduction targets for 37 industrialized countries, countries in transition and countries in the EU.

Türkiye became a party to the Kyoto Protocol on 26 August 2009. The protocol expired in 2020. The Paris Agreement was accepted for the period after 2020.

The UNFCCC, which was opened for signature at the United Nations (UN) Conference on Environment and Development held in Rio de Janeiro in 1992, entered into force on March 21, 1994. The 198 countries that have ratified the convention are called parties to the convention. The UNFCCC encourages party countries to reduce greenhouse gas emissions, cooperate on research and technology, and protect greenhouse gas sinks (e.g. forests, oceans, lakes).

Our country joined the United Nations Framework Convention on Climate Change on May 24, 2004. The convention, to which 198 countries are parties, takes into account the development priorities and special conditions of countries in reducing greenhouse gas emissions. In this direction, it adopts the principle of "common but differentiated responsibilities and relative capabilities".

Annex-1 Countries: Countries in this group are obliged to limit greenhouse gas emissions, protect and develop greenhouse gas sinks, and also to report the measures and policies they have taken to prevent climate change and to communicate current greenhouse gas emissions and data on emissions. This group consists of two sets of countries. The first group includes countries that were members of the OECD as of 1992 (including Turkey) and the EU, while the second group includes countries in the process of transition to a market economy. There are a total of 42 countries and the EU in Annex-1. Our country has a unique position under the UNFCCC negotiations. In this context, Turkey is the only country in Annex-I that is not a transition economy and whose “special conditions” have been accepted by the decisions of the Conference of the Parties. Annex-II Countries: In addition to the obligations they have undertaken in the first group, countries in this group are obliged to take all kinds of steps to transfer environmentally sound technologies, especially to developing countries, or to encourage, facilitate and finance access to these technologies. Annex II includes 23 countries and the EU. Non-Annex Countries: These countries are encouraged to reduce greenhouse gas emissions, cooperate in research and technology transfer, and protect greenhouse gas sinks, but are not subject to specific obligations. There are 154 countries in this group.

The principle of "common but differentiated responsibilities and relative capabilities" is included in the United Nations Framework Convention on Climate Change, which was opened for signature after the Rio Earth Summit in 1992. This principle states that all countries should contribute to the protection of the environment and the construction of sustainable development, but that in order to achieve this goal, responsibilities should be assumed by taking into account the magnitude of the role played by countries in environmental degradation and their socio-economic conditions.

The Millennium Development Goals are a common agenda adopted by the whole world in 2000 to fight poverty. The decision was made at the United Nations' New York Millennium Summit in 2000. It includes eight goals accepted by 192 member countries of the United Nations and planned to be achieved by 2015. These eight goals are to eradicate extreme poverty and hunger, achieve universal primary education, promote gender equality and empower women, reduce child mortality, improve maternal health, combat HIV/AIDS, malaria and other diseases, ensure environmental sustainability, and develop global cooperation for development.

The Paris Agreement was adopted at the 21st Conference of the Parties to the UN Framework Convention on Climate Change (UNFCCC) held in Paris in 2015. The agreement entered into force on 4 November 2016, as a result of the condition that at least 55 parties, accounting for 55% of global greenhouse gas emissions, had ratified the agreement as of 5 October 2016. It aims to limit the increase in global average surface temperature to 2 degrees and, if possible, to below 1.5 degrees in order to prevent the climate crisis. Turkey signed the Paris Agreement on 22 April 2016. The Law on the Approval of the Ratification of the Paris Agreement entered into force on 7 October 2021.

It is defined as a development model that can meet the needs of today's generations without compromising the ability to meet the needs of future generations. The definition of sustainable development was first made in the Brundtland Report in 1986. Global goals for sustainable development were first set forth with the Millennium Development Goals in 2000.

The Sustainable Development Goals (SDGs), also known as the Global Goals, are a universal call to action that includes targets to be achieved by the United Nations member countries by the end of 2030. It entered into force in January 2016. It focuses on the solution of social, cultural and ecological issues consisting of 17 main headings.

No Poverty No Hunger Health and Quality of Life Quality Education Gender Equality Clean Water and Sanitation Accessible and Clean Energy Decent Work and Economic Growth Industry, Innovation and Infrastructure Reducing Inequalities Sustainable Cities and Communities Responsible Production and Consumption Climate Action Life Below Water Life on Land Peace, Justice and Strong Institutions Partnerships for Purposes

It is the roadmap in which the EU announced on December 11, 2019, its goal of becoming the first carbon-neutral continent in 2050 and its new growth strategy. The plan includes concrete actions for becoming carbon neutral in 2050, promoting the efficient use of resources for a clean and circular economy, and reducing biodiversity and pollution. The European Green Deal covers all sectors and the European Commission covers the policy areas of clean energy, sustainable industry, construction and renovation, sustainable transport, biodiversity, farm to table, pollution prevention, and climate action. It sets out the necessary investment and accessible financing instruments.

It is an action plan consisting of a total of 32 targets and 81 actions under 9 main headings, prepared by the Ministry of Trade of the Republic of Turkey, aiming to support our country's transition to a sustainable and resource-efficient economy in line with its development goals. It was prepared under the leadership of the Ministry in cooperation with public institutions and organizations and the private sector in order to ensure timely adaptation to the transformation, especially the comprehensive changes envisaged by the European Green Deal, and to turn the risks we will face into opportunities. The Presidential Circular regarding the Action Plan was published in the Official Gazette dated 16.07.2021.

The EU taxonomy targets: Climate change mitigation, Climate change adaptation, Sustainable use and protection of water and marine resources, Transition to a circular economy, Pollution prevention and control, Protection and restoration of biodiversity and ecosystems.

The regulations planned to be implemented with the EU taxonomy envisage not only a “green” classification but also a detailing to include “brown or red” activities. With the brown criterion, it is expected that three performance levels will be created within the taxonomy structure; significant contribution (green), serious harm (brown or red) and a middle category that neither significantly contributes nor causes serious harm.

The Greenhouse Gas Protocol is the main global standard for public and private sector organizations to measure emissions. The standards apply to operations, value chains and climate change mitigation actions. The Greenhouse Gas Protocol was established in 1998 to address the need for an international standard that companies could use to calculate and report their greenhouse gas emissions. The first corporate standard was published in 2001. The Greenhouse Gas Protocol is the most widely used international carbon accounting tool. It was created in partnership between the World Resources Institute and the World Business Council for Sustainable Development.

Sera Gazı Protokolü (Greenhouse Gas Protocol) sera gazlarını üç kapsama ayırmaktadır. Kapsam 1 emisyonlar sahip olunan ya da kontrol edilen kaynakların doğrudan emisyonlarını göstermektedir. Diğer deyişle doğrudan üreticinin sorumluluğu olarak görülen emisyonlardır. Örnekleri şu şekilde sıralayabiliriz: Sabit yakma (kazan, fırın, türbin, ısıtıcı, incinerator, motor vb), Mobil yakma (otomobil, kamyon, gemi, uçak gibi), Proses emisyonu (Çimento üretiminde kalsinasyon kaynaklı CO2, petrokimya endüstrisinde katalitik kraking prosesinden kaynaklı CO2, alüminyum ergitmede PFC emisyonları gibi), Kaçak emisyonlar (ekipman bağlantılarından, atıksu arıtma tesisinden, soğutma kulelerinden, gaz işleyen tesislerden kaynaklananlar gibi). Kapsam 2 emisyonlar satın alınan elektriğin, tüketilen buharın, ısının ve soğutmanın tüketiminden kaynaklanan dolaylı emisyonlarla ilgilidir. Çoğu zaman, elde edilen elektrik kapsam 2 emisyonlarının tek kaynağıdır. İletim ve dağıtım sırasında enerji kullanılıyorsa, kapsam 3 emisyonlarına girmektedir. Kapsam 3 emisyonları, bir değer zinciri tarafından üretilen ve kapsam 2'ye dahil edilmeyen diğer tüm dolaylı emisyonları içermektedir. Şirketin operasyonlarıyla ilgilidir. Örnekleri şu şekilde sıralayabiliriz: Satın alınan mal ve hizmetler (bu mal ve hizmetlerin satın alınmadan önce üretilmesiyle ilgili tüm emisyonlar dahil), İş seyahati (hava ve demiryolu seyahati, taksi kullanımı gibi) ve çalışanların işe gidiş gelişleri, Atıkların bertarafı (depolama alanları, atık su arıtma), Nakliye ve dağıtım.

It is the standard for calculating and reporting the amount of greenhouse gas emissions released into the atmosphere by institutions and organizations as a result of their activities.

It is an international standard that defines the requirements for companies to characterize the carbon footprint of their products. Its main purpose is to determine the greenhouse gas emissions produced at each stage of a product's life cycle.

Life cycle assessment is a tool for assessing the potential environmental impacts of a product throughout its life cycle, from natural resource extraction to production and use, and waste management. Life cycle assessment essentially involves identifying and quantifying relevant environmental burdens, assessing the potential environmental impacts of these burdens, and evaluating available options to reduce these environmental impacts.

Eco-labels are markings placed on product packaging or in e-catalogues that can help consumers and corporate buyers to quickly and easily identify products that meet certain environmental performance criteria and are therefore considered 'environmentally preferable'.

The environmental label was created to promote products/services with reduced environmental impacts from the raw material supply process to the disposal process and to provide consumers with accurate, non-misleading, scientifically based information. There is no obligation to obtain an environmental label, this is a voluntary application. Applications can be made for hand-washing dishwashing detergent, personal care and cosmetic group products, tourist accommodation service group, textile group, ceramic coating products, and cleaning paper group products. In sectors where the criteria are published; producers, manufacturers, exporters, importers, service providers, wholesalers and retailers can apply for the environmentally friendly label. The use of the environmental label is granted for a period of 4 years. If requested 180 days before the end of the period, the period can be extended as a result of the evaluation made by the technical review committee by the Ministry.

According to the Greenhouse Gas Emission Statistics published by TÜİK on March 29, 2023, of the total greenhouse gas emissions in 2021, which are 564.4 million tons of carbon dioxide equivalent, 402.5 million tons (71.3%) originated from the energy sector; 75.1 million tons (13.3%) from industrial processes and product use; 72.1 million tons (12.8%) from agriculture; and 14.7 million tons (2.6%) from the waste sector.

According to the Greenhouse Gas Emission Statistics published by TÜİK on March 29, 2023, total greenhouse gas emissions in 2021 increased by 7.7% compared to the previous year, reaching 564.4 million tons of carbon dioxide equivalent. While total greenhouse gas emissions per capita were 4 tons of carbon dioxide equivalent in 1990, they were calculated as 6.3 tons in 2020 and 6.7 carbon dioxide equivalent in 2021.

According to the Greenhouse Gas Emission Statistics published by TÜİK on March 29, 2023, the total greenhouse gas emissions calculated as 564.4 million tons of carbon dioxide equivalent in 2021 were 452.7 million tons of carbon dioxide equivalent (80.2%) CO2; 64.0 million tons of carbon dioxide equivalent (11.3%) CH4; 40.3 million tons of carbon dioxide equivalent (7.1%) N2O; and 7.4 million tons of carbon equivalent (1.3%) F-gases.

It was established in 2005. The EU ETS is the world's first international emissions trading system. The first phase was piloted between 2005-2007. This phase addressed carbon emissions from energy-intensive sectors and power plants. There was a penalty of 40 euros per ton for non-compliance. The second phase took place between 2008-2012. 3 new countries (Iceland, Liechtenstein, Norway) joined. The free carbon distribution rate was around 90%. The penalty for non-compliance was around 100 euros. The third phase took place between 2013-2020 and the system has changed significantly compared to the first 2 phases. More sectors and gases were covered, a single EU-wide limit was introduced instead of the previous system, and an auction method was adopted for the distribution of rights instead of free distribution. The EU ETS is currently in its 4th phase, covering the years 2021-2030. According to the legislation of the Fit For 55 package, which the European Council voted on 25 April 2023, the overall emission reduction target in sectors covered by the EU ETS is being increased to 62% by 2030 compared to 2005 levels. Emissions from maritime transport will also be included in the EU ETS for the first time. Most large ships will be included in the EU ETS from the outset, while other large ships, also called ocean-going vessels, will first be included in the ‘MRV’ regulation on monitoring, reporting and verification of CO2 emissions from maritime transport. They will then be included in the EU ETS. Non-CO2 emissions (methane and N2O) will be included in the ‘MRV’ regulation from 2024 and in the EU ETS from 2026. A new and separate emissions trading system (ETS2) has been established for buildings, road transport and additional sectors (mainly small industry). The Social Climate Fund will be used by Member States to support vulnerable households, micro-enterprises and transport users and to finance measures and investments that will help them cope with the price impacts of an emissions trading system for buildings, road transport and additional sectors. The fund will be financed mainly from the revenues from the new emissions trading system, supplemented by national contributions, up to a maximum of €65 billion. Temporarily established for the period 2026-2032. Free emission permits for the aviation sector will be phased out and full auction will be implemented from 2026. Until December 31, 2030, 20 million will be allocated to encourage aircraft operators to switch from fossil fuel use.

These are carbon rights granted under the EU Emission Trading System. They are carbon emission rights granted free of charge in order to gradually decarbonize carbon-intensive sectors. The total rights are limited. Free distributions are gradually reduced each year. Since 2005, the EU has been regulating emissions from facilities and power plants in energy and carbon-intensive sectors such as electricity, paper, cement, iron and steel, petroleum products, chemical products and air transport under the EU Emission Trading System (ETS). Accordingly, EU producers who meet certain conditions must purchase “emission rights” (European Union Allowance, EUA) at a price determined in the free market for each ton of carbon they emit into the atmosphere. The number of rights bought and sold on the market is reduced over time in line with climate targets, thereby increasing the cost of not transforming for energy and carbon-intensive sectors.

The World Bank launched a technical support program called “Partnership for Market Readiness (PMR)” in 2011 to contribute to the efforts of countries to reduce greenhouse gas emissions for the global fight against climate change and to effectively use market-based emission reduction mechanisms, and Turkey joined this program in 2013. PMR-Turkey has been conducting studies on the implementation of monitoring, reporting and verification legislation and the effects of various carbon pricing mechanisms on the economy since 2013. The first step in establishing any carbon pricing system is to establish a mechanism for the accurate measurement, reporting and verification of emission measurements of sectors. Turkey took the first step in this regard by preparing the Monitoring-Reporting-Verification (MRV) Guide in 2014. Then, communiqués were published and sectoral training activities were initiated. The “Communiqué on the Verification of Greenhouse Gas Emissions and Accreditation of Verifying Organizations” published in the Official Gazette numbered 30258 entered into force in December 2017. Within the scope of the legislation, facilities that carry out the activities in Annex-1 of the regulation are subject to regular monitoring, reporting and verification processes every year.

The carbon market enables countries with a certain emission target to buy and sell emission allowances among themselves within the framework of the emissions trading mechanism. A tradable carbon credit is equal to one ton of carbon dioxide or the equivalent amount of a different greenhouse gas that is reduced, sequestered or avoided. In this context, countries are allocated carbon emission quotas and are expected to share these quotas among their producers. If any country exceeds its own emission quota, it can purchase carbon emission quotas from countries that produce less. This has created a market based on reducing emission values. These markets are also called “carbon trading markets”. There are generally two types of carbon markets: compliant and voluntary. Compliance markets are created as a result of any national, regional and/or international policy or regulatory requirement.

Voluntary carbon markets refer to the voluntary issuance, purchase and sale of carbon credits. Voluntary carbon markets allow carbon emitters to offset their emissions by purchasing carbon credits emitted by projects that aim to eliminate or reduce greenhouse gases in the atmosphere. The Voluntary Carbon Market Project Registration Communiqué, prepared for the registration of projects for the Voluntary Carbon Market developed in our country and the monitoring of carbon certificates obtained from these projects, was published in the Official Gazette dated October 9, 2013 and numbered 28790 and entered into force. The Communiqué aims to effectively and up-to-dately register projects that reduce greenhouse gas emissions in Türkiye and are developed to obtain carbon certificates. For this purpose, the Communiqué imposes a reporting obligation on project owners as well as Voluntary Carbon Standard Organizations and Independent Auditing Organizations. The Communiqué will ensure that greenhouse gas emissions reduced as a result of projects developed from Voluntary Carbon Markets in Türkiye are recorded and monitored. Accordingly, project owners who obtain carbon certificates must register with the Ministry and submit the project design document, approval report and verification reports of their projects to the Ministry by the end of this year. For projects to be developed after this, the project must be registered with the Ministry within 30 days of obtaining the carbon certificate. The aim of the projects to be registered with the Communiqué is to determine where and with which project the carbon reduction certificates are created, to prevent double counting and to ensure transparency and integrity in the market. In addition, it is also aimed to increase the reliability of carbon certificates produced in Türkiye.

Carbon leakage is defined as the increase in carbon dioxide emissions outside of countries that have taken local mitigation measures divided by the decrease in emissions from these countries. This may lead to a shift in investment and production from countries that have capped emissions to countries that have not capped their emissions. This may result in increased emissions in countries that have not capped their emissions. This process is called carbon leakage. EU-based companies may move their carbon-intensive production outside the EU or replace EU products with more carbon-intensive imports. The EU wants to prevent this. The EU has published a list of sectors and subsectors at risk of carbon leakage. The first list was implemented between 2013-2014, and the second list was implemented between 2015-2019. It was decided that the second list would also be valid for 2020. In February 2019, the new list, which will be valid for Phase 4 (2021-2030), was accepted and published in May 2019.

The circular economy can be described as a new way to create value and ultimately wealth. It works by using resources more efficiently by extending product life through improved design and service, and by moving waste from the end of the supply chain back to the beginning, not just once, but over and over again. The circular economy can provide a way to not only protect the environment, but also to use natural resources wisely, develop new sectors, create jobs and develop new skills.

The EU's Circular Economy Action Plan is a comprehensive set of legislative and non-legislative actions aimed at transforming the European economy from a linear model to a circular model. The Circular Economy Action Plan was presented by the European Commission in 2015 and adopted in 2018. It is an EU action plan that includes proposals for the reorganization of legislation on production, consumption, waste management, and the secondary raw material market. The Circular Economy Action Plan decision, one of the most important stones that constitutes the Constitutional Court, was adopted by the European Parliament on February 10, 2021. The plan in question addresses the product throughout its life cycle; it aims to support product design, circular economy processes, strengthen sustainable consumption, and ensure that resources remain within the EU economy for the longest possible period of time.

The aims of the EU Circular Economy Action Plan are; Making sustainable products the norm in the EU Strengthening the consumer and public buyer Focusing on sectors with greater circularity potential and intensive resource use (e.g. electronics, IT, batteries-vehicles, packaging, plastics, textiles, construction-buildings, food, water and nutrients) Reducing waste Making circularity a working system for people, cities and regions Leading global efforts on the circular economy.

Introduction of new regulatory provisions for the electronics and IT sector, including mobile phones, tablets and laptops, which are within the scope of the Ecodesign Directive. Withdrawal of the Ecodesign Directive and the EN 5028:2012 standard as of 18 November 2021 Implementing regulations for the right to repair, including upgrading old software Implementing legal regulations for the commonization of chargers for mobile phones and similar items Facilitating the collection of waste electrical and electronic goods for consumers, implementing the “Takeback” application for all types of electrical and electronic goods in all EU countries, taking measures for the safe reuse of information and communication products in particular, and ensuring access to the products for players operating in the reuse market Reviewing EU regulations on the restriction of the use of harmful substances in electrical and electronic goods Implementing a mandatory certification system for those engaged in electronic waste recycling activities for more qualified recycling and effective environmental protection Developing a circular and sustainable digitalization initiative and an information and communication technologies (ICT) and artificial intelligence plan by the European Commission

Zero Waste is a goal defined as a waste management philosophy that includes preventing waste, using resources more efficiently, reviewing the causes of waste generation, preventing or minimizing waste generation, and collecting and recycling waste separately at source. The goal is to have no waste. Since waste is an important source of raw materials, it is not desired to be disposed of. Reuse of waste is desired. Therefore, recycling is at the bottom of the zero waste hierarchy.

With the aim of protecting the environment, human health and all resources in waste management processes in line with the principles of sustainable development with the effective management of raw materials and natural resources, the Zero Waste Regulation was published on July 12, 2019. An amendment was made on October 9, 2021. With the amendment made to the Environmental Law on December 24, 2020, statements regarding the circular economy and zero waste were added. The zero waste project was launched in 2017.

The management of mining wastes is carried out within the scope of the “Mining Waste Regulation”, which was published in the Official Gazette dated 15.07.2015 and numbered 29417 and entered into force on 15.07.2017. Within the scope of the characterization of mining wastes, acid mine drainage analyses (sulphide-sulfur (S-2) analyses, static and kinetic tests) can be performed in laboratories with TÜRKAK accreditation or university laboratories until the authorization procedures are completed by the Ministry. Provisions regarding the management of inert mining wastes are available in the relevant sections of the Mining Waste Regulation. In accordance with the Regulation on Permits and Licenses Required to be Obtained by the Environmental Law for facilities where mining wastes are stored, it is mandatory to apply to the General Directorate of Environmental Impact Assessment, Permit and Inspection and first obtain a GFB (Temporary Activity Certificate) and then a License.

Following the political consensus on the EU taxonomy, the Commission launched in 2020 an in-depth analysis of whether nuclear energy should be included in the EU taxonomy as an environmentally sustainable activity. First, the Joint Research Centre (JRC), which provides science and knowledge services within the Commission, prepared a draft technical report on the significant harmless aspects of nuclear energy. The aim of this report prepared by the JRC was to provide evidence-based scientific support for European policy-making. The report does not represent the political position of the European Commission. The report was reviewed by two groups of experts in terms of environmental impacts. These reports will be used as information in the Commission’s decision-making process.

Carbon capture, usage and storage (CCUS) refers to a chain of different technologies that can prevent carbon dioxide produced by large factories and power plants from reaching the atmosphere and contributing to global warming.

Turkish Statistical Institute

The EU Corporate Sustainability Due Diligence Directive is part of the European Green Deal, a set of policy initiatives led by the European Commission that aims to align the European Union’s climate, energy, transport and taxation policies with a reduction of net greenhouse gas emissions by at least 55% by 2030. Together with other regulatory initiatives such as the Corporate Sustainability Reporting Directive or the EU taxonomy, it represents the next step towards sustainable trade under uniform European conditions. The European Commission published the draft EU legal framework for establishing due diligence on the environmental and social impacts of corporate activities in global supply chains on 23 February 2022. The Council’s position was determined on 1 December 2022. The Commission, the Council and the Parliament will begin a trilateral negotiation process once the Parliament approves its position on 1 June 2023. The draft is expected to become law in 2024. Once it enters into force, Member States will be required to transpose it into their legislation within two years.

The draft aims to promote sustainable and responsible corporate behavior along global value chains. In this way, companies will be held accountable for environmental or human rights violations committed by businesses in their supply chains. The draft will require companies to identify and, where necessary, prevent, eliminate or mitigate the negative impacts of their activities on the environment, such as child labor and exploitation of workers, human rights, pollution and biodiversity loss. They will also have to monitor and assess the impact of their value chain partners, including not only suppliers but also sales, distribution, transportation, storage, waste management and other areas.

According to the Commission draft, the first group included all EU limited companies with more than 500 employees and a global net turnover of more than €150 million. However, the European Parliament wants companies with their head office in the EU to be included in the scope, unlike the Commission draft. The second group included other limited companies that do not meet the thresholds in the first group but have more than 250 employees and a global net turnover of €40 million and operate in the specified high-impact sectors (apparel, animal husbandry, forestry, food and beverages, fossil fuels and metals extraction). The employee threshold level for high-impact sectors has been reduced to 50 and a global turnover of €8 million. Companies outside the EU will be exempt from the employee count criteria. The Parliament wants the new rules to cover EU-based companies in all sectors, including financial services. It is stated that the rules will come into effect for these companies two years after the first group. The Parliament also wants companies established in non-EU countries with a turnover of over €150 million to be included if at least €40 million of their turnover is generated in the EU. According to the Parliament’s position, companies in the scope must have a transformation plan for their economic activities with the aim of limiting the increase in global average atmospheric temperature to 1.5 degrees Celsius in line with the Paris Agreement. The list also includes specific violations of international environmental law in relation to the treatment, collection, storage and disposal of waste or the use of biological resources that may have adverse effects on biodiversity. Companies with more than 500 employees and a turnover of at least €150 million will also have to ensure that their business models and strategies are compatible with the transition to a sustainable economy and limiting global warming to 1.5°C. Companies that identify or are required to identify climate as a major risk or main impact in their activities will have to include emission reduction targets in their plans.

The draft regulation applies to the company’s own operations; its subsidiaries and value chains (direct and indirect business relationships). Companies in the scope must take appropriate measures. In order to comply with the corporate due diligence duty, companies must: Integrate due diligence into policies Identify actual or potential adverse human rights and environmental impacts Avoid or mitigate potential impacts Terminate or minimise actual impacts Establish and maintain a complaints procedure Monitor the effectiveness of due diligence policies and measures Communicate publicly about due diligence
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