Recent Development
On 24 September 2026, the Ministry of Environment, Urbanization and Climate Change published the Turkish Green Taxonomy Regulation (“Regulation”). The Regulation aims to establish the procedures and principles of the Turkish Green Taxonomy to support economic activities aligned with sustainable development goals, encourage the flow of finance towards sustainable investments, and prevent greenwashing.
The Regulation enacted pursuant to the Climate Law No. 7552 (“Climate Law”), establishes a framework for the classification and reporting of sustainable economic activities in Türkiye, drawing on a structure that is broadly aligned with the environmental objectives and key assessment criteria set out under the EU Taxonomy Regulation (Regulation (EU) 2020/852).
The Regulation is available here.
What Does the Regulation Introduce?
A. Key Concepts and General Principles
- The Regulation defines the “Turkish Green Taxonomy” (Taxonomy) as a “classification system that contributes to the mobilization of climate finance by establishing principles and criteria for economic activities that contribute to combating climate change in line with specified environmental objectives” and defines “greenwashing” as “misleading use of public relations, financing, advertising or marketing practices to create the impression that a product or service of an institution, organization or undertaking makes a substantial contribution to one or more environmental objectives, does not significantly harm other environmental objectives and complies with minimum social safeguards”.
- The Taxonomy is based on the principles of transparency, sustainability and environmental integrity.
B. Criteria for Taxonomy-Aligned Economic Activities, Environmental Objectives and Technical Screening Criteria
- The Regulation classifies the economic activities listed in the annex of the Regulation (Annex-1) as “eligible economic activities” and those activities that satisfy the relevant requirements as “taxonomy-aligned economic activities”.
- In this respect, the eligible economic activities listed in Annex-1 span a wide range of sectors, including forestry, energy, manufacturing, transportation, construction and real estate, water and waste management, information and communication, agriculture, and tourism. Examples of activities falling within the scope of the Taxonomy include renewable energy generation, hydrogen and battery manufacturing, energy-efficient building projects, electric vehicle charging infrastructure, data centers, crop and livestock production, and tourism accommodation activities.
- To qualify as a taxonomy-aligned economic activity, the following three conditions must be satisfied cumulatively:
- Making a “substantial contribution” to at least one of the environmental objectives set out under the Regulation, namely (i) climate change mitigation, (ii) climate change adaptation, (iii) the sustainable use and protection of water and marine resources, (iv) the transition to a circular economy, (v) pollution prevention and control and (vi) the protection and restoration of biodiversity and ecosystems
- Causing “no significant harm” to any of the other environmental objectives
- Complying with minimum social safeguards
- Technical screening criteria will serve as the basis for assessing whether an economic activity makes a “substantial contribution” to environmental objectives and whether it causes “no significant harm” to other environmental objectives. Under the Regulation, the “substantial contribution” criterion is defined as “the criteria established to assess whether an economic activity makes a substantial contribution to environmental objectives within the scope of the Turkish Green Taxonomy”, while the “do no significant harm” criterion is defined as “the criteria established to ensure that an economic activity, while making a substantial contribution to one or more environmental objectives, does not harm any of the other objectives”.
- These criteria will be determined by the Climate Change Presidency (“Presidency”), taking into account the short- and long-term environmental impacts of economic activities, lifecycle considerations, applicable legislation, carbon footprint standards, and sectoral and market conditions. The Regulation envisages that the criteria will be quantitative wherever possible and will be user-friendly and verifiable.
- The Regulation further provides that, in accordance with the technical screening criteria to be determined by the Presidency, manufacturing activities involving the use of solid fossil fuels will not be regarded as environmentally sustainable economic activities.
- Technical screening criteria will be published on the Presidency’s website, and any updates announced by 15 December of a given year will enter into force in the following year. Although the draft Turkish Green Taxonomy Regulation previously published by the Presidency included proposed technical screening criteria for various sectors and economic activities, the final technical screening criteria have not yet been published.
C. Reporting Obligations and Key Performance Indicators
- Reporting obligations are divided into two categories: (i) institutions and undertakings carrying out at least one eligible economic activity may report on a voluntary basis, whereas (ii) brokerage firms, investment trusts, portfolio management companies, banks, and insurance, reinsurance and pension companies are subject to mandatory reporting obligations. However, as part of the transitional period, financial institutions will be exempt from taxonomy reporting until 1 January 2029.
- Key performance indicators include ratios relating to revenue, capital expenditures and operating expenditures generated from taxonomy-eligible or taxonomy-aligned activities, as well as ratios demonstrating the extent to which financial institutions take environmental objectives into account and contribute to such objectives. In calculating their own key performance indicators, financial institutions will rely on the most recent data and indicators disclosed by reporting institutions and undertakings.
- Reports must be uploaded to the Online Taxonomy Management System by the end of the sixth month following the end of the relevant financial reporting period (e.g., by 30 June of the following year for companies reporting on a calendar-year basis). Financial institutions that are subject to mandatory reporting may request institutions and undertakings to prepare reports under the Regulation in respect of transactions and activities that may be relevant to their own reporting obligations.
- The procedures and principles applicable to the reporting obligations of financial institutions will be determined separately by the Capital Markets Board of Türkiye, the Banking Regulation and Supervision Agency and the Insurance and Private Pension Regulation and Supervision Agency, as applicable. All reporting carried out under the Regulation must be based on the applicable technical screening criteria.
- For institutions and undertakings reporting on a voluntary basis, the relevant key performance indicators may be excluded from reporting where the share of revenue, capital expenditures or operating expenditures derived from eligible economic activities accounts for less than 10% of the relevant total item.
- The taxonomy transition plan (i.e., the strategic plan to be prepared by institutions, organizations and undertakings to ensure compliance with the Taxonomy’s technical screening criteria or to manage risks arising from the transition to a low-emission economy) constitutes a complementary element of taxonomy reports. The verification process and the procedures and principles relating thereto will be determined by the Presidency.
D. Sanctions
- Failure by reporting entities to comply with their obligation to provide the notifications, information and documents required for reporting purposes under the Regulation will trigger the administrative sanctions set out in the Climate Law. In this respect, a violation of the obligation to provide information, documents or data, or the submission of misleading statements, may result in an administrative fine of TRY 213,333 for the year 2026.
- In the event that the same violation is repeated within three (3) years from the notification of the administrative fine, the fine will be increased by one-fold for the first repeat violation and by two-fold for subsequent repeat violations. The maximum administrative fine that may be imposed for each violation has been set at TRY 62,745,000 for the year 2026.
Conclusion
The Regulation establishes the first comprehensive taxonomy framework in Türkiye for the classification and reporting of sustainable economic activities. The practical scope of taxonomy alignment will become clearer once the technical screening criteria to be published by the Climate Change Presidency are issued.
In this respect, institutions and undertakings should assess whether their activities qualify as eligible economic activities, begin monitoring the relevant activity-level data, and closely follow the technical screening criteria and secondary legislation to be issued under the Regulation. Financial institutions, on the other hand, should take the necessary steps to prepare for the mandatory reporting period commencing in 2029.
