The effects of the carbon border adjustment mechanism on Türkiye's exports to the European Union

This study comprehensively examines the potential impacts of the European Union's (EU) Carbon Border Adjustment Mechanism (CBAM) on Türkiye's export structure. Within the framework of the evolution of global climate policies and the European Green Deal regulations, the risks and opportunities posed by CBAM for Türkiye have been evaluated. Based on the literature review and semi-structured interviews conducted with representatives from public institutions and industry associations, it has been determined that CBAM could lead to cost increases for exporters operating in carbon-intensive sectors. However, it could create long-term competitive advantages for companies that align with the green transition. The research findings highlight the potential impacts of CBAM on trade balance, firms' market diversification strategies, and the importance of carbon pricing mechanisms. It is emphasized that Türkiye must adapt to low-carbon production in order to maintain its position in the EU market, and that financing, infrastructure development, and government support are critical for the success of this process. Additionally, it was found that Türkiye could maintain its trade balance by turning to markets outside the EU, but that effective trade agreements and export incentives are necessary for this to happen. The implementation of CBAM underscores the need for the establishment of an emissions trading system and carbon pricing policies in Türkiye. The interviews suggest that incentive mechanisms should be developed to accelerate the industrial sector's transition to low-carbon production, support technology transfer, and strengthen the infrastructure for monitoring carbon footprints. It is anticipated that Türkiye's Climate Law, planned for enactment in 2025, will accelerate the green transition process and strengthen integration with the EU. In conclusion, CBAM brings about a significant transformation process for Türkiye's industrial policies, export strategies, and international trade relations. To adapt to CBAM, it is necessary to enhance institutional capacity, effectively implement carbon regulations, and activate green financing tools. Successfully managing Türkiye's green transition process will enable it to gain a competitive advantage in global trade in the long run.