Dr. Hakan Çınar: What I Realized About the New Trade War We’re Not Ready For

Last week, while speaking at a panel during TİM’s Innovation Week, I brought up the topic of green logistics and the EU’s Carbon Border Adjustment Mechanism (CBAM). The moment I did, I realized just how close this policy really is—and how unprepared many of our exporters still are.

At first glance, it might seem like something distant, affecting only a handful of industries like steel, cement, aluminum, fertilizers, electricity, and hydrogen. But in reality, this is just the beginning. These sectors are the pilot phase; others—textiles, ceramics, automotive, chemicals, and more—will soon follow. What struck me during that session was how companies outside these initial sectors didn’t see it as their issue at all. But the truth? It absolutely is.

Not an Environmental Policy — A Trade Barrier

The CBAM, which the European Union will fully enforce on January 1, 2026, isn’t just an environmental regulation. For Turkish exporters, it’s effectively a trade barrier. In simple terms, it means a “carbon tax” will be applied to products imported into the EU based on their carbon footprint. The goal is to protect European producers and keep “carbon-heavy” manufacturing outside EU borders.

So far, companies have only been required to report emissions since 2023—but starting January 2026, the financial impact begins. Exporters who fail to meet the required standards will either pay a carbon tax or lose access to their biggest market. And since the EU accounts for 41% of Türkiye’s total exports, nearly one out of every two Turkish products will fall under CBAM’s scope.

The Price of Inaction

Here’s what this really means:
If a Turkish company hasn’t invested in reducing emissions, it will soon face an additional cost of €80–100 per ton exported to the EU. For energy-intensive sectors, that’s roughly a price increase of 8–15%. In a global market where margins are thin, that could erase competitiveness overnight.

Then comes the reporting challenge. From January 2025, exporters must declare the carbon emissions data of every shipment to the EU. If those figures aren’t verified by independent auditors, customs authorities could hold or even reject the goods. In other words, carbon transparency is becoming the new trade standard.

And the financial side isn’t much easier. Global banks and export credit agencies are increasingly denying loans to companies without green transition plans. This means firms with high carbon footprints will not only struggle to export—but also to find financing. The pressure will be especially heavy on SMEs, which already operate with limited resources.

A Looming Industrial Bottleneck

Türkiye’s industrial base remains heavily dependent on fossil energy. While renewable investments are growing, their share in total production is still around 20%. Most industrial plants lack carbon measurement and reporting systems, which leaves us dangerously exposed to CBAM compliance risks in 2026.

Without urgent investment, we’re heading for a situation where our factories won’t be able to prove how clean—or dirty—their production is, and buyers in Europe will simply move elsewhere.

Carbon Tax or the Dawn of a New Competition Era?

This isn’t just about avoiding a carbon tax. It’s the beginning of a new industrial order—one where competitiveness is measured by carbon intensity, not just price or quality.

First, the energy transition in manufacturing must accelerate. Solar and wind capacity should be expanded across industrial zones, and the use of green electricity should be incentivized. Second, every company needs to build a carbon measurement system and calculate its carbon footprint using international standards (like ISO 14064), verified by independent institutions.

But this transformation can’t happen without access to funding. That’s why banks and Eximbank must expand green financing programs and make them more accessible. Without this support, many exporters—especially smaller ones—will be left out of the global supply chain altogether.

Turning Compliance into Opportunity

The Carbon Border Adjustment Mechanism may look like a bureaucratic burden, but in truth, it’s the new name of industrial policy. Türkiye shouldn’t approach it with a compliance mindset, but with a vision for opportunity.

Because from now on, competition isn’t just about who produces cheaper—but who produces cleaner. If Turkish industry manages this transition right, green transformation can evolve from an obligation into a new growth model—one that strengthens our position in the global marketplace instead of weakening it.

The green transition isn’t a passing trend; it’s the ticket to staying in the game. The CBAM clock is ticking, and the train is leaving the station. The only question left is:
Will Turkish industry be on board—or left watching from the platform?

Source: Dunya.com