Turkey moves to close EU loophole with its own emissions trading scheme

The government of Turkey is moving forward with its own carbon pricing scheme, comparable with the EU Emissions Trading System (ETS), denying shipowners the opportunity to use its ports to avoid tariffs.

The ETS levies a 50% tax on emissions from vessels from outside Europe calling at EU ports – a vessel travelling from a port in Asia might have been able to make a tactical transhipment call in Turkey to dodge an ETS fee.

Ports within 300 nautical miles of EU waters, such as Tangier Med, are covered by a special ETS amendment, but the concern is shared for ports further away but still relatively close, such as Port Said, in Egypt.

Turkey’s Asyaport, was also thought to be a possibility for ETS dodgers, and has experienced a bump in transhipment traffic this year. Container throughput surged 50.9% year on year in Q1, to 545,000 teu, and at nearby Aliaga, it jumped 33%, to 501,800 teu, and at Izmir by 24%, to 572,800 teu. EU nearshoring and the Red Sea crisis have also contributed to this bump. But if it gains approval from President Erdoğan, the move by Turkey would close this loophole, bringing some 10m tonnes of annual CO2 emissions under regulation.

As an aspirant EU member, Turkey’s parliament aims to align its emissions regulations with the EU. And while the move would no doubt mitigate the economic gains made by ports in Turkey from shipowner tax-dodging, the country values its relationship with the EU. It’s one of its biggest trading partners, accounting for €96bn in exports, as well as becoming a key near-shoring location for EU firms.

“The emissions trading system is one of the most important tools in the fight against climate change,” said Alparslan Bayraktor, Turkey’s minister of energy and natural resources, recently.