Türkiye’s close integration with European manufacturing could leave a broader range of its industrial exports exposed to the European Union’s proposed expansion of the Carbon Border Adjustment Mechanism (CBAM). The changes would extend carbon-related considerations beyond covered steel and aluminium commodities to selected finished products, potentially affecting Turkish suppliers already familiar with the mechanism’s existing requirements.
The European Commission has proposed extending CBAM to downstream goods with significant steel or aluminium content from 2028, initially covering 180 product categories. The European Parliament supports a broader scope, while the Council has put forward its own adjustments. As of 12 October 2026, the proposed additions remain under negotiation and do not constitute current import obligations.
Industrial supply chains face closer scrutiny
The potential impact is concentrated in supply chains serving Germany, Italy and other EU manufacturing centres. Turkish companies supply metal mountings, fabricated products, engineering components and machinery-related goods that may incorporate steel or aluminium produced at separate industrial installations.
Under an expanded framework, compliance could require importers to establish a clearer connection between the finished component, its metal precursors, the relevant manufacturing processes and the information supplied to the final EU customer.
Türkiye benefits from relatively short freight times to European markets, established customer relationships, production flexibility and the ability to customise products. However, the country’s competitive position in basic steel has already faced pressure. EUROFER recorded a 16% year-on-year decline in Turkish finished-steel shipments in the first half of 2026, although Türkiye remained the EU’s largest supplier by volume share, accounting for 15.7% of finished-steel imports.
An extension of CBAM to downstream products would bring carbon-related sourcing decisions into a wider part of Türkiye’s industrial export base, beyond the commodity markets already affected by the mechanism.
Supplier-specific emissions data becomes more important
Potential carbon exposure cannot be reliably assessed by applying a single national emissions factor to every Turkish manufacturer. Steel production involves different furnace routes, while aluminium can be produced through primary or secondary processes, resulting in different emissions profiles.
A fabricator’s own electricity consumption also does not establish the full embedded emissions of the metal it purchases. Relevant installation information and precursor data would need to be documented according to the methods ultimately applicable under the expanded rules.
For Turkish exporters, access to upstream production records could therefore become an important part of maintaining European customer relationships. Companies that can identify the origin of their materials and provide reliable emissions information may be better positioned to respond to buyer requests as negotiations progress.
Contract terms and investment decisions could shift
Commercial arrangements may begin changing before the proposed legislation enters into force. European manufacturers could seek contractual provisions allowing them to request emissions records, obtain audited material declarations and renegotiate prices if regulatory requirements change.
Turkish suppliers able to provide the requested information promptly could gain an advantage in procurement decisions, including before a particular finished product becomes subject to a CBAM certificate obligation.
The proposal also raises questions about investment and sourcing strategy. Turkish manufacturers that secure verified lower-emission steel or aluminium may be better positioned to negotiate longer-term supply agreements with selected mills and preserve European contracts. Conversely, if EU buyers demand price reductions to compensate for anticipated carbon-related costs, processors with limited margins could face additional commercial pressure.
Proximity remains valuable, but data matters
The eventual impact will depend on the negotiations in Brussels, the final product classifications and the capacity of Turkish industry to organise and verify upstream emissions data. Until the rules are adopted, exporters and importers must distinguish potential future exposure from obligations already in force.
Türkiye’s geographic proximity to Europe and its established industrial links will remain important competitive advantages. However, under a broader CBAM framework, logistics and pricing may no longer be sufficient to determine the most attractive supply offer. Material traceability, emissions documentation and the ability to substantiate production data could become increasingly important factors in European procurement decisions.
