Written by: Inci Hazal Kılıç

In December 2025, the European Commission published a legislative proposal (2025/0419(COD)) that extends the Carbon Border Adjustment Mechanism (CBAM) to downstream products and introduces anti-circumvention measures. The proposal envisages bringing approximately 180 steel and aluminum-intensive downstream products under its scope as of January 1, 2028. The file is currently progressing through the ordinary legislative procedure: the compromise text prepared by the Cyprus Presidency was negotiated in the Council's CBAM Ad Hoc Working Group, and this text is scheduled to reach a "general approach" at the Council of the EU (ECOFIN) meeting on June 12, 2026. Once this step is taken, after the Parliament also adopts its position, the file will be brought to the trilogue table. The target date of January 1, 2028, is included in the proposal, but some EU industrial groups argue for this date to be brought forward due to the risk of circumvention, meaning the date is not yet politically settled.

If you ask me, the real significance of this file goes beyond a technical timeline step. The definition of CBAM is changing for Turkish exporters.

Until now, most of the CBAM discussions in Turkiye focused on upstream sectors: steel mills, cement plants, aluminum producers, fertilizers, and hydrogen. The scope in the Commission's proposal breaks this framework. The vast majority of the products on the list (about 94%) are intermediate and industrial goods with high steel/aluminum content, but the scope also includes final consumer products such as washing machines, refrigerators, and freezers, white goods components, automotive parts (such as engines, gearboxes, chassis), and freight vehicles. As an important detail, finished passenger cars are not on this initial list, but parts produced by the automotive supply industry are directly within the scope. That is, Turkish manufacturers, who until now thought "we are one step away from this, CBAM is our supplier's problem," are now becoming the direct primary addressees.

For the Turkish automotive supply industry, white goods manufacturers, fasteners, and precision metal-processing exporters, the question is no longer "how will the steel mill I source from calculate its CBAM." The question is how to prepare my own product carbon footprint, based on the embedded emissions in the products I export across borders, in a format that the CBAM verifier will accept.

I would like to share two realistic preliminary observations. First, the number of downstream manufacturers in Turkiye that routinely calculate embedded emissions at the product level and possess ISO 14067 and PCR-based LCA discipline is far below the number of installations that will fall under the downstream scope. When the current corporate carbon footprint reporting is redirected toward the product level, where to place the activity code-based supply chain data becomes a concrete data architecture problem. At the Scoop platform, this is exactly the problem we are trying to solve, while in the sector as a whole, we are still at the very beginning.

The second and even more critical observation is verifier capacity. Under CBAM, embedded emissions are verified by independent verifiers accredited by an EU/EEA member national accreditation body in according with Regulation 765/2008, while verification activities begin in 2027 based on full-year data for the 2026 calendar year. An insufficient number of accredited verifiers during the initial years of the definitive period is a concern that even the Commission has cited as a justification in its own default-value legislation. In the current framework, mutual recognition between accreditation bodies operates among EU/EEA national accreditation bodies through European Accreditation (EA) peer evaluation; the verifier does not need to be established in the EU but must hold an EU/EEA accreditation. Therefore, in the current scenario, TÜRKAK accreditation alone is not sufficient for a verifier established in Turkiye to perform CBAM verifications. Capacity remains dependent on EU/EEA-accredited bodies and their local offices. If the current structure continues, there is no infrastructure capable of meeting the verification demand of thousands of additional Turkish installations that will fall under the downstream scope on January 1, 2028, in a timely manner.

The Default Value Cost Issue

In 2026, the first year of the CBAM definitive implementation period, the transitional/reporting period ended on December 31, 2025, and default emission values are applied with a 10% markup. Set by IR 2025/2621, this rate increases to 20% in 2027 and to 30% from 2028 onwards. (In the fertilizer sector, the markup operates as a flat 1% instead of this gradual increase.) This means that an exporter unable to submit actual verified emissions data will bear a CBAM obligation through a 30% markup on the default value starting in 2028. For downstream sectors, this leaves approximately 18–19 months to build the capacity to present actual emissions data in a market where verifier capacity is already limited.

When advising steel exporters, I always think of this number in this way: the premium paid under default values is not a price, but a tax on lack of preparation. For the downstream manufacturer, this tax is now coming to the table, and the preparation time is cut in half.

Interaction with National ETS

The 2026–2027 pilot period of Turkiye's Emissions Trading System (TR-ETS) covers installations emitting over 50,000 tCO2e annually: electricity generation, cement, iron-steel, aluminum, fertilizer, ceramics, chemistry, and refinery sectors. Allocation is 100% free during the pilot period. The vast majority of downstream manufacturers already fall outside the scope of the TR-ETS pilot.

The critical point I see here is that because allocation is entirely free during the pilot period, an effective carbon price is not formed at the installation level. This indicates that the probability of Article 9 of the EU CBAM (reduction of CBAM obligation by the carbon price effectively paid in a third country) providing any practical mitigation for downstream products is currently close to zero. Even if the upstream steel manufacturer pays for carbon under the TR-ETS in the future, the installation that processes that steel and exports it to the EU as an automotive part will face a separate verification and obligation for its own embedded emissions. How to prevent double counting at the product level is also a technical issue; there is not yet a clear mechanism for this within the CBAM framework.

What Should Be Done in Practice?

For downstream Turkish manufacturers likely to fall within the scope of CBAM, the tasks that must be started this week are:

1. Map your product portfolio according to the scope in the draft text. Extract CN codes for finished products, components, and intermediate goods that you think are steel and aluminum-intensive. The list may still change during the trilogue process, but the framework in the Commission's proposal has become clear by now.

2. Plan the transition from current corporate carbon inventory to product level. Installations that have not established the link from corporate carbon footprint to product carbon footprint will have to bridge this gap by the end of 2027. A single-product-single-PCR approach will not be sustainable for a downstream portfolio.

3. Arrange your verifier contract early. Accredited CBAM verifiers will face a surge in demand in 2027 when verification activities begin. Manufacturers who do not reserve capacity early will default back to the cost of default values.

4. Bridge TR-ETS pilot data to a format that the EU verifier will accept. MRV data collected during the pilot must be matched with an chain of evidence acceptable on the EU side, in a way that will open the door to Article 9 assessments when necessary.

5. Review the CBAM cost pass-through clauses in your contracts. Companies that have not clarified which party bears the CBAM obligation and how embedded emissions data will be shared for deliveries in 2027 and beyond will find themselves in a difficult position in early 2028.

Conclusion

The real change created by the Commission's downstream proposal and the upcoming step on the Council's agenda on June 12 is operational, not political. CBAM is ceasing to be a niche problem for six upstream sectors and is transforming into the operational discipline of an ever-growing portion of the value chain that Turkiye exports to the EU. Approximately 43% of Turkish exports go to the EU (42.7% in 2025), and while the portion of this share that touches CBAM will significantly increase with the downstream expansion, discussing this issue still within the framework of "steel mill regulation" is the main reason for the lack of preparation I observe on the ground.

The next 18–19 months is the period in which the gap between the Turkish manufacturer who can provide verified emissions data and the one operating under penalties through default values will become structural. You need to determine now which side of this gap you want to stand on.