Turkey's first "Climate Law Proposal" passed the Parliament

Negotiations on Turkey's first "Climate Law Proposal" have been completed (Photo: AA)

The proposal includes definitions such as “Just transition”, “Primary market”, “Offset”, “Emissions Trading System (ETS)”, “Embedded greenhouse gas emissions” and “Voluntary carbon markets”, “Climate justice”.

According to the proposal, which determines the general principles in combating climate change, Turkey's principle of "common but differentiated responsibilities and relative capabilities" will be taken into account in combating climate change, and the approaches of equality, climate justice, precaution, participation, integration, sustainability, transparency, just transition and progress will be taken as basis.

Public institutions and organizations, as well as real and legal persons, will be obliged to comply with the measures and regulations to be taken in the public interest and to implement them in a timely manner.

In the National Contribution Declaration, the country's development priorities and special conditions will be taken into account in line with the net zero emission target and measures will be taken within this framework.

Progress regarding greenhouse gas emission reduction and climate change adaptation activities will be monitored on an annual basis by the Climate Change Presidency.

The Climate Change Presidency will be authorized to ensure coordination between institutions, determine activities and standards, monitor developments, and organize market-based mechanisms regarding carbon pricing, within its scope of duty, in order to take the necessary measures.

Public institutions and organizations, as well as real and legal persons, will make plans and projects, have them made, implement them, support them and cooperate within the framework of their own authorities and responsibilities.

Without prejudice to the provisions of the Law on the Protection of Personal Data, the Climate Change Presidency will be authorized to directly request information, documents and data deemed necessary for the implementation of the regulation from public institutions and organizations and real and legal persons. Those from whom information and documents are requested will share them with the Presidency free of charge within the requested period.

The Presidency will primarily obtain the data it needs for its own work and operations from the National Geographic Information Platform. It will also transfer the data it obtains and the data it produces to the National Geographic Information Platform to be shared with public institutions and organizations.

The Climate Change Presidency will be able to obtain data that is not available in the National Geographic Information Platform by making a protocol with the relevant public institutions and organizations. The procedures and principles regarding the sharing of information and documents related to national defense and national security will be determined jointly by the Ministry of Environment, Urbanization and Climate Change and the relevant ministry.

The Ministry of Environment, Urbanization and Climate Change may delegate its powers to the Presidency when necessary, provided that its boundaries are clearly defined and in writing.

(Photo: AA)

CLIMATE CHANGE COMBATING ACTIVITIES The proposal determines climate change combating activities. Accordingly, greenhouse gas emissions will be reduced in line with the National Contribution Declaration, net zero emission target and the strategy and action plans published or updated by the Climate Change Presidency.

The greenhouse gas emission reduction activities specified on a sectoral basis in the National Contribution Declaration will be carried out within the scope of the duties and responsibilities assigned to the relevant institutions and organizations by legislation.

In order to implement the sectoral policies and achieve the targets included in the National Contribution Declaration, the current duties and responsibilities of the relevant institutions and organizations will be reviewed in line with the needs that arise. In this context, the relevant public institutions and organizations can make arrangements within the framework of the National Contribution Declaration and net zero emission target by taking the opinion of the Ministry and the relevant institutions.

Relevant public institutions and organizations will be responsible for adapting, preparing, implementing, monitoring and updating planning tools that include medium and long-term targets within the framework of greenhouse gas emission reduction activities.

Institutions and organizations will be responsible for taking reduction measures such as energy, water and raw material efficiency, preventing pollution at source, increasing the use of renewable energy, reducing the carbon footprint of products, businesses, institutions and organizations, using alternative clean or low-carbon fuels and raw materials, expanding electrification, developing and increasing the use of clean technologies, and implementing these measures by taking into account just transition requirements, as well as establishing, implementing and monitoring a zero waste system, in order to be implemented in the sectors included in the National Contribution Declaration in line with the net zero emission target and circular economy approach.

In order to balance the emissions towards achieving the net zero emission target, measures will be taken by the relevant institutions and organizations to prevent carbon sink losses in forests, agriculture, pastures and wetlands, and the number of sink areas and protected areas will be protected and increased.

In line with the National Contribution Declaration, net zero emission target and strategy and action plans published or updated by the Presidency of Climate Change, adaptation activities will be carried out by the relevant institutions and organizations to prevent existing or potential losses and damages related to climate change, to minimize risks or to take advantage of opportunities.

In addition, climate change adaptation activities included in the National Contribution Declaration will be carried out within the scope of the duties and responsibilities given to institutions and organizations by legislation.

In order to implement the sectoral policies and achieve the targets included in the National Contribution Declaration, the current duties and responsibilities of the relevant institutions and organizations will be reviewed in line with the needs that arise. In this context, the relevant public institutions and organizations can make arrangements within the framework of the National Contribution Declaration and net zero emission target by taking the opinion of the Ministry and the relevant institutions.

Relevant public institutions and organizations will be obliged to prepare or have prepared planning tools and vulnerability and risk analyses related to adaptation to climate change at national and local scales, to take these prepared tools and analyses into consideration in investment and planning activities and to implement them.

Planning tools will be prepared and implemented by relevant public institutions and organizations to ensure effective management of water resources against the effects of climate change.

Measures will be taken by relevant public institutions and organizations to reduce the effects of climate change on ecosystems and biodiversity and to ensure sustainable ecosystem management, the quality and rate of protected areas will be increased by ensuring the preservation of marine and terrestrial protected areas, and land degradation will be balanced in areas affected or likely to be affected by climate change.

Sustainable management of sink areas created in non-forest areas within the scope of combating desertification and erosion, afforestation and soil conservation will be ensured in line with the net zero emission target.

In line with the goals of ensuring food security with a climate change resistant product pattern in order to ensure the sustainability of the agricultural sector by the relevant public institutions and organizations, by observing the balance between the protection and use of natural resources, ecosystems and biodiversity, and by disseminating the necessary techniques and technologies, planning tools that take into account the ecosystem-based adaptation approach, nature-based solutions and water budget in the agricultural sector will be developed and climate change resistant practices will be disseminated accordingly.

In order to reduce the losses and damages caused by disasters caused by climate change, risk assessment, monitoring, information and early warning systems will be developed based on integrated disaster management.

(Photo: AA)

PLANNING AND IMPLEMENTATION In the plans, programs, strategies, action plans and other policy documents prepared by institutions and organizations, the principles determined by the strategy and action plans published by the Climate Change Presidency for combating climate change within the scope of the green growth vision and net zero emission target will be taken into consideration.

Climate change strategy and action plans will be prepared, implemented, monitored, evaluated and updated on a national or regional scale periodically under the coordination of the Climate Change Presidency and in cooperation with relevant institutions and organizations, in order to reduce greenhouse gas emissions and carry out climate change adaptation activities.

In order to determine the strategy, action and application areas in accordance with the conditions of the province and to ensure their implementation, a Provincial Climate Change Coordination Board will be established in each province under the chairmanship of the governor, consisting of representatives from the provincial or regional organizations of the relevant institutions and organizations, if any, and representatives of local governments. The secretariat of the Board will be carried out by the provincial organization of the Ministry of Environment, Urbanization and Climate Change, and the working procedures and principles of the Board will be determined by the Ministry.

Local climate change action plans will be prepared or have prepared under the coordination of the governor, by the metropolitan municipality in metropolitan cities, by the provincial municipality and the special provincial administration in other provinces, with the participation of relevant institutions and organizations, in a holistic plan for each province, taking into account the requirements of a just transition for the purpose of reducing greenhouse gas emissions and adapting to climate change, and will be submitted to the Provincial Climate Change Coordination Board for a decision.

During the preparation or monitoring processes of local climate change action plans, relevant institutions and organizations will share the documents, information and data requested from them within the framework of the relevant legislation.

Sectoral vulnerability and risk analyses will be prepared and updated periodically by the Presidency using climate models to form the basis for strategy and action plans.

PRINCIPLES REGARDING FINANCIAL INSTRUMENTS Developing and using climate finance and climate change combat incentive resources, developing insurance instruments, encouraging green and sustainable capital market instruments, bank financing and other financing instruments will be essential for the activities and investments to be made by institutions and organizations to combat climate change.

Within the framework of circular economy targets and zero waste practices, studies on the reuse of products, the use of waste as by-products, alternative raw materials, and the determination of mandatory usage rates of products obtained through recycling and recovery will be carried out by the Ministry of Environment, Urbanization and Climate Change in coordination with the relevant ministries, and support mechanisms will be developed in this regard.

The Climate Change Presidency will prepare national, sectoral and thematic reports; develop climate change incentive mechanisms to facilitate the channeling of financial resources to investments to combat climate change; and establish and execute the Türkiye Green Taxonomy.

A Border Carbon Adjustment Mechanism (BCDM) may be established to address the embedded greenhouse gas emissions of imported goods in the Turkish Customs Territory. The reporting, scope, content, procedures and principles regarding the BCDM will be determined by the Ministry of Trade in coordination with the relevant ministries.

Increasing technological self-sufficiency capacity will be determined as the primary target in the planning and implementation tools prepared by the relevant institutions and organizations, and the development and widespread use of clean technologies will be the basis.

The Presidency will be authorized to follow up on new technological developments aimed at combating climate change, such as carbon capture and storage technologies and hydrogen technology, to cooperate with relevant institutions to develop projects in these areas, to direct institutions to work in these areas, and to coordinate with relevant institutions.

Institutes and research and application centers may be established in coordination with relevant institutions affiliated to the Presidency.

Education, awareness-raising and capacity-building activities will be carried out by institutions and organizations to increase public awareness and sensitize society about the effects of climate change.

The necessary work to update the curriculum and teaching programs at all levels of education and to train a green workforce will be carried out by the Ministry of National Education and the Council of Higher Education in coordination with the relevant ministries.

The procedures and principles of the applications will be determined by the relevant public institutions and organizations within their responsibilities, in line with the National Contribution Declaration, long-term climate change policy documents and the determined net zero emission target, after receiving the opinion of the Ministry.

According to Turkey's first "Climate Law Proposal", the ETS will be established by the Climate Change Presidency, national allocation planning will be prepared and allocations will be distributed. In this context, flexibility mechanisms and market stability mechanisms can also be developed. The market operator will operate the ETS market.

Within the scope of ETS, businesses that carry out activities that directly cause greenhouse gas emissions, the principles of which are determined by the regulation, will be required to obtain a greenhouse gas emission permit from the Climate Change Authority in order to carry out these activities.

Within the scope of the procedures and principles determined by the Regulation, the greenhouse gas emission permit will be updated or cancelled by the Presidency as a result of changes in the nature or operation of the facility and changes in the real or legal persons holding the greenhouse gas emission permit during the validity period of the greenhouse gas emission permit.

Businesses included in the ETS will be required to submit annual allowances corresponding to their verified annual greenhouse gas emission value.

The enterprise that fails to fulfill its allocation delivery obligation will be obliged to deliver an amount of allocation equal to the greenhouse gas emissions that constitute the basis for the sanction when delivering its allocations for the next calendar year.

Free allocations can be provided within the scope of ETS. National allocation plans will be published in the Official Gazette. Transactions and transactions related to allocations to be traded in the ETS market will not be subject to the provisions of the State Tender Law.

Allowances cannot be subject to collateral agreements. Free allowances subject to delivery obligations cannot be seized unless they are transferred from the account in the transaction recording system to which they were first transferred.

It will be mandatory to issue allocations electronically and monitor the rights related to them on a per-rights basis.

Cessation of the operation of the facilities before the time of fulfillment of the delivery obligation, liquidation of the enterprise, or a decision to enter into a composition will not prevent the fulfillment of the delivery obligation.

The assets in the default guarantee account created with the collateral subject to financial reconciliation and other financial transactions cannot be used for purposes other than their intended purpose, cannot be seized, cannot be mortgaged, cannot be affected by the liquidation decisions of the administrative authorities, cannot be included in the bankruptcy estate and cannot be subject to precautionary measures.

The Carbon Market Board will be chaired by the Minister of Environment, Urbanization and Climate Change, and will consist of one deputy minister from each Ministry of Environment, Urbanization and Climate Change, Ministry of Energy and Natural Resources, Ministry of Treasury and Finance, Ministry of Industry and Technology, Ministry of Trade, Ministry of Agriculture and Forestry, Ministry of Transport and Infrastructure, Vice President of the Presidency for Strategy and Budget, President of the Capital Markets Board, President of the Energy Market Regulatory Authority and President of Climate Change.

The secretariat of the Board will be carried out by the President. When deemed necessary, representatives of other public institutions and organizations, non-governmental organizations, professional organizations, universities and the private sector may be invited to the meetings without the right to vote.

The Board will approve the national allocation plan, decide on the distribution of free allowances in the ETS market, determine the amount of allowances to be offered for sale in the primary market, decide on the rate at which offset transactions can be used within the ETS, determine the plans, policies, strategies and actions related to the ETS, identify the sectors, projects and activities that will be subject to the international carbon market, determine the relevant limitations and the basic policy regarding import and export.

The Carbon Market Board will meet with a two-thirds majority of the total number of members. Meeting decisions will be taken by open voting and a simple majority of the total number of members. In the event of a tie, the decision will be made in accordance with the vote cast by the board chairman.

The Advisory Board will be composed of the President of the Union of Chambers and Commodity Exchanges of Turkey as the chairman, one representative from the Independent Industrialists' and Businessmen's Association, the Turkish Industrialists' and Businessmen's Association, the International Investors Association, the Turkish Exporters' Assembly, the Foreign Economic Relations Board, the Banks Association of Turkey, the Insurance, Reinsurance and Pension Companies Association of Turkey, the Financial Institutions Association and the Capital Markets Association of Turkey at a decision-making level, a representative from the Presidency and, if necessary, one representative from other public institutions and organizations, professional organizations, non-governmental organizations and universities that will be invited depending on the subject.

The secretariat of the Advisory Board will be the Union of Chambers and Commodity Exchanges of Turkey. The Advisory Board will make advisory decisions on strategies and actions related to the ETS and the international carbon market. The secretariat will send these decisions to the Presidency with justifications for submission to the Carbon Market Board.

The Presidency will manage the allocation processes and the monitoring, reporting and verification process of greenhouse gas emissions, organize offset activities, determine the use of carbon credits within the scope of the ETS, carry out work and procedures for developing policies and making decisions on importing and exporting carbon credits at the international level, cooperate with other markets, and carry out studies to determine plans and policies for mutual recognition agreements within the scope of the ETS.

DUTIES The Energy Market Regulatory Authority will determine the procedures and principles for market surveillance and control regarding market-distorting behavior within the scope of the ETS market, after consulting the Capital Markets Board.

The market operator will conduct financial reconciliation transactions and other financial transactions related to the markets and will be obliged to report market-distorting behavior to the Presidency and the Energy Market Regulatory Authority.

The market operator will organize the trading of allowances and other standardized contracts related to emissions trading deemed appropriate by the Presidency and the Energy Market Regulatory Authority on the ETS market and will perform the market operator duties.

In addition, the Market Operator will establish a transaction recording system for the purpose of carrying out the issuance, holding, transfer, cancellation and redemption of allowances, will monitor and store the registered allowances and their rights electronically on the basis of right holders, and will ensure the confidentiality of the records within the framework stipulated in the relevant legislation.

The central settlement institution will carry out collateral management and cash clearing activities related to the ETS market.

In order to ensure market transparency, free allocation data, verified annual greenhouse gas emission values ​​and information on the allocation delivery obligations of facilities may be shared with the public in accordance with the Carbon Market Board decision. The relevant provisions of the Electricity Market Law will be reserved for the information and documents to be requested by the Energy Market Regulatory Authority and the market operator within the scope of the surveillance and audit activities to be carried out in the ETS market.

The proposal would allow for offsetting to be made in order to meet a portion of the allocation obligations under the Emissions Trading System (ETS) with an equivalent amount of carbon credits.

The principles of a national carbon crediting and offsetting system that generates carbon credits through activities aimed at reducing or eliminating greenhouse gas emissions and increasing sink areas, to be used in offsetting transactions to be carried out within the scope of the ETS and voluntary commitments, will be determined by the Climate Change Presidency.

If the information, documents and data submitted regarding these equalization projects are determined to be erroneous or fraudulent, the said equalization amount cannot be used for the allocation delivery obligation and it will be deemed that the allocation delivery obligation has not been fulfilled. In this case, sanctions will be imposed on the project owner.

Within the scope of this regulation, the principles regarding the use and production of carbon credits and the establishment and implementation of the national carbon credit system will be determined by the Climate Change Presidency.

Cooperation will be made with relevant institutions for the development of national standards and methodologies. Owners of domestic projects that have started or will start producing carbon credits with national or international standards in any voluntary carbon market in the country will be obliged to register their projects in the carbon credit registration system within the period determined by the Presidency of Climate Change.

In this context, the Climate Change Presidency will be able to cooperate with organizations that develop international standards.

The proposal also regulates the provisions regarding the special revenues to be obtained within the scope of the regulation and the budgeting of these revenues.

To be used for the purposes specified in the regulation, "revenues to be obtained within the scope of obtaining greenhouse gas emission permits", "revenues from sales of allowances in the primary market within the scope of the ETS, revenues from transactions originating from the market stability mechanism", "50 percent of the revenues obtained by the market operator from the ETS market", "contributions received for carbon credits authorized in international carbon markets", "50 percent of administrative fines imposed within the scope of the Law" will be recorded as special revenues.

All amounts corresponding to these revenues will be foreseen as special appropriations in the budget of the Climate Change Presidency and will be used by the Presidency.

The President will be authorized to add appropriations in return for revenues exceeding the appropriation amount and to record portions of the amounts recorded as appropriations that are not spent within the year as appropriations carried over to the following year's budget.

On the other hand, the procedures and principles regarding the collection of these revenues and the use of the appropriations allocated in the budget will be determined by the regulation to be issued by the Climate Change Presidency upon the approval of the Ministry of Treasury and Finance and the Presidency of Strategy and Budget.

The Presidency will be authorized to establish a revolving fund. The Climate Change Presidency will be authorized to establish a revolving fund. The establishment capital of the revolving fund will be 10 million Turkish Liras. The President will be authorized to increase the said capital amount up to 5 times.

The fields of activity, duties, income, expenses, operation, audit and implementation procedures and principles of the revolving fund enterprise will be regulated by the regulation to be issued by the Climate Change Presidency with the approval of the Presidency of Strategy and Budget and the Ministry of Treasury and Finance.

These revenues cannot be used for purposes other than green transformation and combating climate change.

The bill also regulates the use of support for green transformation and combating climate change.

Accordingly, in order to support Turkey's green transformation and fight against climate change, climate-friendly investments with a high potential for reducing greenhouse gas emissions or adapting to climate change, as well as activities that contribute to meeting the need for research, development and sectoral technological transformation required by green growth, and the mechanisms implemented within this scope will be supported.

In line with the decisions of the Carbon Market Board, appropriate mechanisms will be established for legal entities and public institutions and organizations operating in strategic priority sectors, especially in the sectors within the scope of the ETS, to use or encourage the use of green transformation, combating climate change and just transition supports.

The income from the institutions and organizations will be used within the scope of the duties of the relevant institutions and organizations to make, have made or encourage climate investments, to support the development of insurance instruments to reduce the risk perception and borrowing costs of climate investments, to encourage the issuance of green and sustainable capital market instruments, to support the development and implementation of financial instruments that can provide guarantees and grant and financing cost support.

The stock amount of multi-year commitments for the use of green transformation and climate change support cannot exceed twice the total of the finalized special income realization of the last 4 years, calculated by increasing each year at the revaluation rate in relation to the previous year.

The procedures and principles regarding the implementation of this provision will be determined by the Ministry of Environment, Urbanization and Climate Change, after taking the opinions of the Presidency of Strategy and Budget, the Ministry of Treasury and Finance, and the relevant public institutions and organizations.

ADMINISTRATIVE FINES The bill also determined administrative sanctions related to the obligations included in the regulation.

Accordingly, those who fail to submit a verified greenhouse gas emission report within the time limit, in violation of prohibitions or restrictions regarding the monitoring of greenhouse gas emissions, will be subject to administrative fines ranging from 500 thousand Turkish lira to 5 million Turkish lira. The procedures and principles regarding the implementation of this provision will be determined by the regulation, taking into account the annual emission calculated conservatively according to the installed capacity of the facilities. These fines will be applied twice to businesses within the scope of ETS.

Those who use, import, trade or market substances that deplete the ozone layer in violation of the procedures and principles, prohibitions or restrictions determined by the legislation on substances that deplete the ozone layer will be fined 2.5 million Turkish Lira; real persons and legal entities who provide maintenance, repair and service to products or equipment containing substances that deplete the ozone layer will be fined 250 thousand Turkish Lira; those who do not comply with the labeling provisions of products or equipment containing substances that deplete the ozone layer will be fined 120 thousand Turkish Lira.

Those who use, trade or market fluorinated greenhouse gases in violation of the procedures and principles, prohibitions or restrictions regarding fluorinated greenhouse gases will be subject to an administrative fine of 2.5 million Turkish Lira and will not be issued a Hydrofluorocarbon Control Certificate for 3 to 6 months.

Those who import hydrofluorocarbons without quota or in quantities exceeding the quota will be fined 1 million Turkish lira and their quota will be cut in proportion to the amount exceeding the quota the following year.

An administrative fine of 120 thousand Turkish lira will be imposed on those who do not comply with the provisions on labeling containers, products or equipment containing fluorinated greenhouse gases.

Those who do not enter notifications and reports into the database on time or do not update the data will be given an administrative fine of 120 thousand Turkish lira.

Real and legal persons who interfere with equipment that contains fluorinated greenhouse gases or whose operation is based on these gases will be given an administrative fine of 120 thousand Turkish liras.

In case of failure to submit a verified greenhouse gas emission report on time within the scope of the legislation on monitoring greenhouse gas emissions, contrary to the procedures and principles, prohibitions or limitations regarding the Emission Trading System (ETS), transactions other than the fulfillment of the delivery obligation on the allocations in the accounts in the transaction recording system will be prevented.

The blockage on the accounts will be lifted upon submission of the verified greenhouse gas emission report. The removal of the blockage on the accounts upon submission of the report will not prevent the application of administrative fines.

Among the businesses included in the ETS, those operating without a greenhouse gas emission permit or those continuing their activities with a greenhouse gas emission permit that has expired or been cancelled will be subject to an administrative fine of 5 Turkish lira for each ton of carbon dioxide equivalent emissions included in the report with the highest emission value submitted to the Presidency of Climate Change in the last 5 years, while businesses without a verified annual greenhouse gas emission report will be subject to an administrative fine of 1 million Turkish lira to 10 million Turkish lira.

In the penalties to be applied to businesses without a verified greenhouse gas emission report, the basis will be to evaluate them according to equivalent businesses with verified greenhouse gas emission reports in terms of sector and capacity. The amount and principles regarding which cases and which capacity facilities this will be applied to will be determined by the regulation to be issued by the Presidency of Climate Change.

Those who fail to deliver the required amount of allowances within the ETS period will be subject to an administrative fine equal to twice the higher of the primary market weighted average allowance price for the last 3 months of the year to which the verified greenhouse gas emission report pertains and the secondary market weighted average allowance price for the last 3 months for each allowance not delivered.

The greenhouse gas emission permits of businesses that fail to fulfil at least 80% of their obligations to deliver their allowances under the ETS within the deadline for 3 consecutive years will be cancelled and new greenhouse gas emission permits will not be issued for 3 to 6 months.

Project owners who fail to register their projects in the carbon credit registration system within the period determined by the Climate Change Presidency will be subject to an administrative fine of 120 thousand Turkish lira. The administrative fine will not eliminate the registration obligation of the project.

An administrative fine of 170 thousand Turkish Lira will be imposed on real persons and private legal entities who do not fulfill their obligation to provide information, documents and data stipulated in the regulation and who make misleading statements.

Within the scope of activities subject to this regulation, in case of violation of the relevant articles of the electricity market legislation, administrative sanctions will be applied by the Energy Market Regulatory Authority. In the implementation of this provision, the provisions of the Turkish Penal Code and other laws regarding the act constituting a crime will be reserved.

The administrative fines specified in the proposal will be increased by one fold for the first occurrence and by two fold for the second and subsequent occurrences , within 3 years from the date on which the acts requiring the imposition of these fines are notified to the relevant party.

The Ministry of Environment, Urbanization and Climate Change may grant a one-time period not exceeding one year to those who act contrary to these regulations and bylaws to correct the said non-conforming activity. If the non-conformity is not corrected at the end of the given period, the activity will be partially or completely suspended by the Ministry until the non-conformity is corrected. Granting a period and suspending the activity will not prevent the implementation of the administrative fines foreseen in the bill.

Within the scope of the proposed law, the amount of administrative fines to be imposed for each act cannot exceed 50 million Turkish lira.

Without prejudice to the provisions of the Electricity Market Law, the Climate Change Presidency will have the authority to audit actions that are subject to administrative sanctions due to failure to fulfill the obligations set forth in this regulation.

In cases where on-site inspection and auditing are required, if deemed necessary, the audit will be carried out by the provincial organization of the Ministry of Environment, Urbanization and Climate Change on behalf of the Presidency in cooperation with the relevant units of the Climate Change Presidency.

The proposal stipulates that the necessary facilities must be provided and the necessary information and documents must be provided to ensure that the inspection staff does not experience any problems during the inspections to be carried out by the Climate Change Presidency.

The authority to make administrative sanction decisions foreseen in the regulation will belong to the Climate Change Presidency.

The Presidency shall be authorized to inspect for the provisions of the Environmental Law. A report shall be prepared by the authorized inspectors, whose qualifications and scope are determined by the regulation, regarding the acts requiring the application of administrative sanctions. The Presidency shall evaluate the report and make the necessary administrative sanction decision.

The administrative sanction decision will be notified to the relevant party by the Climate Change Presidency. A lawsuit can be filed against the Presidency in the administrative courts regarding administrative sanction decisions. Filing a lawsuit will not stop the collection of the fine imposed by the administration. The provisions of the Law on Violations will be applied regarding the collection procedure of administrative fines.

Unless otherwise provided in the law, the procedures and principles regarding the implementation of this regulation will be determined by the Climate Change Presidency.

In cases not covered by this regulation, the relevant provisions of the Environmental Law, the Law on Violations, the Electricity Market Law and other laws will be applied to the extent that they are consistent with their nature.

The bill makes changes to the Environmental Law to avoid duplication in the duties of the Climate Change Presidency and to ensure that authority can be transferred to the Presidency when necessary.

Accordingly, the Climate Change Presidency is given the authority to monitor whether the provisions of the Environmental Law are complied with.

The proposal repeals the provision in the Environmental Law that determines administrative fines imposed on those who violate prohibitions or limitations regarding the monitoring of greenhouse gas emissions.

NEW PROVISION ADDED TO THE ELECTRICITY MARKET LAW The bill also amends the Law on the Organization and Duties of the Energy Market Regulatory Authority.

Accordingly, the Energy Market Regulatory Authority (EMRA) will be responsible for fulfilling the duties and using the powers granted to the Energy Market Regulatory Authority by the Electricity Market Law and other laws regarding the Emission Trading System.

The proposal adds a new provision to the Electricity Market Law. Accordingly, if market-distorting behavior or attempts that may lead to such distorting effects are detected in all markets and bilateral agreements, including the Emission Trading System market operated by EPİAŞ or for which financial reconciliation is carried out, the EMRA will impose an administrative fine of up to 2 million Turkish liras on real persons and 20 million Turkish liras on legal entities, depending on the severity of the violation.

However, if a benefit is gained or damage is caused by committing this act, the amount of the administrative fine to be imposed cannot be less than twice this benefit or damage.

The procedures and principles regarding taking and implementing all kinds of measures necessary to ensure the effective and healthy functioning of the market, including temporarily suspending partially or completely the authorization of the relevant persons to operate in the market in order to prevent market-distorting behaviors, and the matters to be taken into consideration in determining the amount of administrative fines will be regulated by the Energy Markets Board through a regulation, after taking the opinion of the Capital Markets Board.

A pilot period will be implemented before the ETS is fully implemented. The scope, duration and procedures and principles of the pilot period will be determined by the Carbon Market Board after receiving the opinions of the relevant institutions, organizations and civil society organizations. During the pilot period, administrative fines imposed due to failure to fulfill the obligations specified in the regulation will be applied by reducing them by 80 percent.

Within 3 years from the date of entry into force of the regulation, businesses that will be included in the scope of the ETS will be required to obtain a greenhouse gas emission permit. Within the three-year period, businesses will be deemed to have a greenhouse gas emission permit for a one-time period in order to continue their activities within the scope of the ETS. If deemed necessary, the Climate Change Presidency will be authorized to extend the period specified in this paragraph up to 2 years from the expiration dates in accordance with the decision of the Carbon Market Board.

The provision regarding the imposition of an administrative fine of 120 thousand Turkish Lira on project owners who do not register their projects in the carbon credit registration system within the period determined by the Presidency of Climate Change will start to be implemented with the announcement of the period determined by the Presidency on the official website.

The preparation and adaptation obligations regarding the legislation and planning tools specified in the bill will be fulfilled by the relevant institutions and organizations by 31 December 2027 at the latest. The President will be authorized to extend this period for up to one year.

Local climate change action plans will be prepared by 31 December 2027 at the latest. The Ministry of Environment, Urbanization and Climate Change will be authorized to extend this period for up to one year.

The CHP's proposal for amendment to the paragraph in the bill that includes the definition of "Emission Trading System" in order to reduce emissions in order to fulfill the zero emission commitment by 2053 in the Paris Climate Agreement was accepted.

According to the accepted proposal, the definition of the Emissions Trading System was revised as "a national and international market-based mechanism that operates on the principle of setting an upper limit on greenhouse gas emissions in line with the net zero emissions target and encourages greenhouse gas emission reductions through the purchase and sale of allowances."

On the other hand, according to another accepted proposal of the CHP, local climate change action plans will be prepared or have prepared under the coordination of the governor, by the metropolitan municipality in metropolitan cities, by the provincial municipality and the special provincial administration in other provinces, with the participation of relevant institutions and organizations, in a holistic plan for each province, taking into account the requirements of just transition for the purpose of reducing greenhouse gas emissions and adapting to climate change, and will be submitted to the Provincial Climate Change Coordination Board for a decision.