Türkiye is preparing to price industrial emissions domestically while India is pursuing recognition of its emissions verification capabilities in the European Union, as steel and aluminium exporters in both countries face increasing demands for reliable carbon data under CBAM.
The developments highlight two different approaches to managing the EU’s carbon border requirements: establishing domestic carbon markets and securing access to accredited independent verification.
Türkiye establishes operating rules for its emissions trading pilot
Türkiye’s Ministry of Environment, Urbanisation and Climate Change published implementation arrangements for the pilot phase of its emissions trading system on 1 October 2026, following the adoption of the country’s emissions trading regulation in August.
The pilot covers the 2026 and 2027 emissions years, with qualifying installations in electricity generation, cement, iron and steel, aluminium and fertilisers included in its scope.
Covered installations must meet reporting obligations for 2026 emissions, while the first requirement to surrender allowances will apply to emissions from 2027. The rules also establish provisions for production benchmarks, free allowances, activity reporting and emissions verification.
Domestic carbon pricing does not automatically remove CBAM liabilities
Turkish steel, aluminium and cement producers supply substantial volumes to EU customers and face increasing pressure to demonstrate the embedded emissions of their products.
The domestic trading system could strengthen emissions monitoring and provide the regulatory infrastructure needed for more reliable industrial carbon accounting. Qualifying carbon costs actually paid in Türkiye could eventually be recognised when calculating CBAM obligations, subject to the applicable EU rules.
However, establishing a domestic emissions trading scheme does not automatically exempt Turkish exports from CBAM. EU importers need evidence that an eligible carbon price was effectively paid on the relevant embedded emissions, taking account of applicable rebates, free allowances and other adjustments.
For Turkish steelmakers, the resulting financial exposure will depend on the relationship between domestic carbon costs, European carbon prices and production efficiency.
Electric arc furnace operators may benefit from lower direct emissions intensity compared with conventional blast-furnace producers. Their electricity procurement arrangements, material inputs and emissions monitoring systems will nevertheless remain relevant to their overall carbon exposure.
Carbon trading could influence Turkish industrial investment
The introduction of domestic carbon pricing may affect investment decisions across energy-intensive industries. Manufacturers could face stronger incentives to improve emissions monitoring, install cleaner production equipment, expand scrap-based steelmaking and secure lower-carbon energy supplies.
Banks financing Turkish industrial companies will increasingly need to assess potential carbon liabilities alongside conventional operating costs.
Türkiye’s pilot therefore marks a shift towards domestic emissions pricing while its industrial exporters continue competing in markets where verified carbon performance is becoming increasingly important to commercial contracts.
India seeks European recognition for domestic emissions verification
India is pursuing greater recognition of its emissions verification capabilities under the EU carbon border framework, as concerns grow that limited access to suitably accredited assessors could constrain exports of steel, aluminium and other industrial products.
The Indian government has established a Committee on Export Preparedness for EU CBAM, bringing together officials, regulators and industry representatives to coordinate compliance measures.
The country’s National Accreditation Board for Certification Bodies has engaged with prospective verification organisations. According to a September report in the Financial Express, two validation and verification bodies had applied for EU- and UK-related CBAM accreditation arrangements.
Commerce Minister Piyush Goyal has sought European recognition of India’s accreditation capabilities. Discussions with the European Commission’s taxation and customs authorities are also examining possible arrangements.
Verification access affects the use of actual emissions values
India’s initiative addresses a distinction between producing technically sound emissions information and obtaining the independent verification required for EU importers to use actual emissions values.
The EU framework relies on appropriately accredited verification bodies. Domestic accreditation or industrial certification outside the EU does not automatically provide the recognition required under the European system.
This is particularly important for Indian manufacturers whose actual emissions are below applicable country or product default values. Accepted verification can allow importers to establish carbon liabilities using more representative emissions data, potentially improving the supplier’s competitive position.
Where the necessary documentation is not accepted, buyers may instead calculate contract exposure using less favourable default values.
Indian steelmakers face upstream emissions data requirements
Emissions verification presents additional challenges for India’s steel industry, where production routes and emissions intensities vary among large integrated mills, electric arc furnace operators and smaller processing facilities.
Downstream steel manufacturers must also obtain reliable emissions information for precursor materials. The Indian government is working with the Ministry of Steel to improve access to upstream data, including information from suppliers of billets, slabs and other inputs.
Without adequate verification capacity, manufacturers may remain commercially exposed even after investing in cleaner production technologies. Equipment upgrades alone cannot resolve the issue; producers also need effective monitoring systems, traceable production records and access to independent assessment.
India’s efforts reflect the growing importance of emissions assurance services in international industrial trade, where exporters’ ability to secure recognised verification and supply commercially usable carbon data increasingly affects their position with European customers.
