The real risk in the EU carbon border levy is uncertainty, not cost

Institution: SETA
Author: Sezen Kaya Sönmez
Country · language: Türkiye · Turkish
Affiliation: Government-aligned think tank

Summary

Sönmez argues that the main challenge of the EU's Carbon Border Adjustment Mechanism stems not from cost but from uncertainty in its relationship with multilateral climate frameworks. The mechanism draws its legitimacy from the Paris Agreement, yet its scope and implementation criteria are set entirely within the EU's own institutional processes.

According to the author, climate policy is no longer merely an environmental matter; it is a field where trade tensions, industrial strategies and great-power competition intersect. Türkiye is a typical example: its direct exposure under the current scope is limited, but if the scope widens it could become one of the EU's most affected trading partners. COP31, to be held in Antalya, offers Türkiye a diplomatic opportunity to move scope criteria and methodologies onto multilateral ground through trade dialogue mechanisms. The piece contains no quantitative impact estimate.

Blind spot

What the West misses: the EU presents the mechanism as a technical measure against carbon leakage; from a trading partner's perspective, unilateral rule-setting and the cost of uncertainty come to the fore. Weakness of this reading: there is no quantitative impact estimate, and the timetable for Türkiye's own emissions trading system is not discussed.

Talay assessment

Bottom line

Sönmez's finding that the main risk is uncertainty rather than cost is persuasive: the scope and methodology of the mechanism, which entered its implementation period on 1 January 2026, depend on unilateral EU decisions, narrowing exporters' planning horizon. However, there is no quantitative impact estimate and Türkiye's own emissions trading system timetable is not discussed, even though domestic carbon pricing is the country's most concrete lever. The chance of COP31 moving scope criteria onto multilateral ground is limited; the EU is not expected to cede its rule-making authority. The most likely path is limited technical dialogue with the EU retaining control.

Likely effects

Turkish exportersNegative1–6 months
Although the impact under the current scope is limited, the possibility of wider scope forces manufacturers exporting to the EU to take investment and emissions measurement decisions under uncertainty.
Hosting COP31Positive1–6 months
COP31 in Antalya gives Türkiye the opportunity to put the link between trade and climate on the agenda and to build common positions with developing trade partners.
Multilateral climate regimeNegative6 months+
Mechanisms that draw legitimacy from the Paris Agreement but set their criteria unilaterally pull climate policy into trade tension and industrial rivalry; similar measures risk spreading.
Türkiye's carbon pricingPositive6 months+
Because the EU mechanism can take account of the carbon price paid in the country of origin, a domestic emissions trading system could keep that cost in Türkiye; uncertainty falls as the timetable becomes clearer.

Possibilities, ranked

1
EU retains control, dialogue stays technical75%
COP31 references the trade–climate dialogue but decisions on scope and methodology stay within EU institutions; partners gain little beyond technical consultation.
Watch: The reference to trade dialogue in the COP31 outcome text containing no binding element
2
Scope widens, trade tensions escalate20%
The EU extends scope to new sectors; affected partners respond with World Trade Organization cases or countermeasures, and Türkiye becomes one of the most affected.
Watch: An EU regulatory proposal widening scope; a WTO filing by trade partners
3
Multilateral work programme on common methodology5%
Through the trade dialogues established in Belém, a time-bound process on scope criteria and common methodology begins; uncertainty partly recedes.
Watch: Agreement at COP31 on a concrete timetable and reporting obligations for common methodology work

Probabilities are calibrated judgement based on the sources, not measurement, and are revised as new information arrives. Not investment advice.

Original publication: setav.org · 3 September 2026

This page summarises the institution's view and does not reflect the view of Talay Insight. No direct quotation is used.