Şener GENÇER
Aegean Plastic Industrialists' Association (EGEPLASDER)
Chairman of the Board
A completely different world awaits Turkish industry, especially sectors with high emission output and energy consumption, starting from January 1, 2026. The Border Carbon Adjustment Mechanism (CBAM), an EU Regulation, is the most important of the tools emerging from the Union's "Fit for 55" package, serving Europe's goal of becoming the "First Neutral Continent" by 2050.
The European Union, aiming to prevent carbon leakage and increase the effectiveness of the Emission Trading System (ETS) with the Border Carbon Adjustment Mechanism (CBAM), seeks to contribute to global carbon reduction and achieve the goal of keeping the planet's average temperature below two degrees.
While our industrialists face difficulties in accessing financing resources due to the challenges experienced by the Turkish economy, they are also preoccupied with the question, "What will be the cost of CBAM for us?" The transitional period application of the Regulation, which came into force on May 17, 2023, began in October 2023 and will continue until January 1, 2026. This period includes reporting and data collection obligations.
After January 1, 2026, in addition to this, a period of financial obligations related to carbon content will begin. The European Union, unable to impose taxation on countries outside its own, mandates importers established in member countries of the Union to obtain Carbon Certificates.
From 2026 onwards, the sectors that must possess Carbon Certificates when exporting to EU countries will initially be iron and steel, cement, aluminum, fertilizers, electricity, and hydrogen.
These sectors will gradually be followed by petroleum, paper, glass, ceramics, plastics, and bricks. A difficult, challenging, and certainly costly period awaits the Turkish economy.
Our plastics sector will be included in this process in the second phase. However, a difficult, arduous, and costly period awaits all our producers, especially those who export.
ROOFTOP PV SYSTEMS ARE INCREASING
Companies, seeing that the upcoming CBAM period will affect them first, are rapidly implementing their carbon capture strategies and continuing their investments to meet a significant portion of their consumed energy from renewable energy sources.
In our plastics sector, we are pleased to observe that many of our producer colleagues are investing in renewable and clean energy sources, especially Rooftop Solar Energy systems.
The fact that the system will cover almost all sectors by 2030 is a reality that should not be overlooked at this point. Our companies producing in sectors included in CBAM will need to obtain certificates through the Emission Trading System (ETS). The cost of these certificates will be calculated for €/ton CO2 based on weekly ETS prices.
HOW WILL ETS WORK?
While a certain ceiling value will be determined and restricted for energy production and industrial facilities, a quota will be set for each facility. Facilities causing carbon emissions below the quota will be able to sell the difference to facilities that need it, i.e., those causing carbon emissions above the quota. The carbon value will be determined according to market conditions. Facilities unable to meet their carbon quota will face monetary penalties.
Our scientists on the subject state that, according to current calculations, Turkish companies that export 45 to 50 percent of their exports to EU countries are highly likely to face an additional annual cost of 20 billion euros.
It is in our hands to reduce or increase this cost. For example, if the carbon price is 50 euro/ton, 22 euros of a 100 euro cement export will be paid as Border Carbon Tax. The first three countries most affected by this system will be Russia, China, and Turkey.
ONLY ONE YEAR LEFT
In short…
There is a raised fist about to come down on countries like ours. We can either take this punch to our face or, with rational policies, turn the crisis into an opportunity and shake hands with the fist-making hand. Facilities causing carbon emissions below their quota within the ETS will be able to sell the difference to facilities that need it, i.e., those causing carbon emissions above the quota.
This mechanism will also mean a significant revenue stream for companies and even countries preparing for post-2026 with rational policies. Turkey lags behind developed countries with an annual CO2 emission of 452 million.
However, this data should not reassure us. Our emission values are low compared to countries like China and the USA, but we are among the top 10 countries with the fastest-growing emissions. Primarily, our relevant Ministries, umbrella organizations of our business world, our sectoral associations and federations; they need to prepare all of us for the new order we will face in not too long, about a year from now.
This content has been translated using artificial intelligence technology.