The Türkiye Green Taxonomy Regulation (“Regulation”), issued by the Ministry of Environment, Urbanisation and Climate Change on the basis of Article 8(1)(c) of Climate Law No. 7552 dated 2 July 2025 (“Climate Law”), entered into force on 24 September 2026.

The Regulation establishes a national classification system for determining which economic activities qualify as environmentally sustainable based on certain environmental objectives and technical criteria (“Taxonomy”). Most notably, the Regulation introduces a mandatory taxonomy reporting obligation for banks, insurance, reinsurance and pension companies, brokerage houses, investment trusts and portfolio management companies, which will apply as of 1 January 2029.

Set forth below is a summary of the main features of the Regulation:

1. Purpose and Scope of the Regulation

Pursuant to Article 1 of the Regulation, the purposes of the Regulation are (i) to support economic activities aligned with sustainable development goals, (ii) to encourage the flow of financing towards sustainable investments, and (iii) to prevent greenwashing in the market.

The Regulation also sets out the conditions for applying the Taxonomy, the technical screening criteria, the reporting and verification processes, the related administrative and technical procedures, and the Online Taxonomy Management System to be used by the relevant institutions, organisations, enterprises and financial institutions.

2. New Definitions

The Regulation introduces several new definitions specific to the Taxonomy, such as “economic activity”, “eligible economic activity”, “aligned economic activity”, “technical screening criteria”, “minimum social safeguards”, “taxonomy transition plan”, “transitional activities”, “enabling activities” and “life cycle”. Notably, “greenwashing” is defined as the deceptive use of public relations, financing, advertising or marketing methods to create the perception that the products or services of an institution, organisation or an enterprise substantially contribute to one or more environmental objectives, do no cause a significant harm to the other objectives and comply with the minimum social safeguards.

3. Eligible and Aligned Economic Activities

The Regulation distinguishes between two categories of economic activities:

• Eligible Economic Activities: The economic activities listed in Annex 1 of the Regulation are considered “eligible economic activities” ( 4(1)(ü)). Annex 1 organises these activities by sector (including forestry, energy, manufacturing, transport, construction and real estate, water suuply, sewerage and waste management, information and communication, finance and insurance, agriculture and tourism). The activities covered range from renewable electricity generation, hydrogen and battery manufacturing to cement, aluminium, iron and steel manufacturing, electric vehicle charging stattions, building renovation and recycling.

Annex 1 further marks certain activities as either (i) “transitional activities” (i.e., activities that support the transition to a climate-neutral economy, have the lowest greenhouse gas emission levels in sectors or industries where low-carbon economic and technological alternatives are not yet available, and do not hamper the development and deployment of such alternatives (Art. 4(1)(ı))), or (ii) “enabling activities” (i.e., activities that enable a substantial contribution to at least one environmental objective, have a substantial positive environmental impact on a life-cycle basis, and do not facilitate or encourage the use of carbon-intensive assets (Art. 4(1)(k))).

• Aligned Economic Activities: Eligible economic activities that cumulatively satisfy the following three conditions are regarded as “aligned economic activities” ( 6):
• substantial contribution to at least one environmental objective listed in Article 7 of the Regulation,
• no significant harm to any other environmental objective, and
• compliance with minimum social safeguards (i.e., procedures ensuring compliance with the OECD Guidelines for Multinational Enterprises, the UN Guiding Principles on Business and Human Rights and national labour and social security legislation, including the principles set out in the ten fundamental ILO conventions and the rights set out in the Universal Declaration of Human Rights ( 10)).

Conditions (i) and (ii) are assessed against the technical screening criteria set for the relevant environmental objective (Arts. 8 and 9).

In addition, the economic activity must comply with the applicable legislation relevant to its technical screening criteria (Art. 5(3)). As a result, an activity carried out in breach of such legislation, such as one operating without the required environmental permits, would not qualify as taxonomy-aligned.

4. Environmental Objectives

The environmental objectives against which the alignment of economic activities is assessed under Article 6 are set out in Article 7 of the Regulation as follows:

• the reduction of greenhouse gas emissions (climate change mitigation),
• adaptation to climate change,
• the sustainable use and protection of water and marine resources,
• the transition to a circular economy,
• pollution prevention and control, and
• the protection and restoration of biodiversity and ecosystems.

5. Technical Screening Criteria

The technical screening criteria are to be determined by the Presidency of Climate Change (“Presidency”), the authority responsible for administering the Taxonomy. Pursuant to Article 11 of the Regulation, the criteria are determined, among other things, by reference to the short- and long-term impacts of the relevant activity, as well as the life cycle environmental impact of the activity and of the products and services it generates. The Regulation further provides that the criteria are to be quantitative where possible, are to cover all relevant activities within a sector without distorting competition, and are to be easy to use and verifiable. Under the criteria to be set by the Presidency, production activities using solid fossil fuels will not be considered environmentally sustainable (Art. 11(2)).

The technical screening criteria will be published on the Presidency’s official website and reviewed regularly and any updates must be published by 15 December each year and apply from the following year (Art. 11(3)–(6)).

6. Taxonomy Reporting and Key Performance Indicators (KPIs)

Under Article 13, the Regulation introduces a taxonomy reporting regime and adopts a two-tiered approach, distinguishing between (i) institutions, organisations and enterprises and (ii) financial institutions.

• Voluntary Reporting for Institutions, Organisations and Enterprises: For institutions, organisations and enterprises carrying out at least one “eligible economic activity”, reporting is voluntary and, if undertaken, must follow the reporting templates to be published by the Presidency ( 13(1)).
• Mandatory Reporting for Financial Institutions as of 1 January 2029: Reporting is mandatory for financial institutions, namely (i) brokerage houses, investment trusts and portfolio management companies, (ii) banks operating under the Banking Law No. 5411, and (iii) insurance, reinsurance and pension companies operating under the Insurance Law No. 5684 and the Private Pension Savings and Investment System Law No. 4632 ( 13(2)).

These institutions are, however, not required to carry out taxonomy reporting until 1 January 2029 (Provisional Art. 1).

The reporting procedures and principles for each category will be determined separately by the Capital Markets Board (Sermaye Piyasası Kurulu), the Banking Regulation and Supervision Agency (Bankacılık Düzenleme ve Denetleme Kurumu) and the Insurance and Private Pension Regulation and Supervision Agency (Sigortacılık ve Özel Emeklilik Düzenleme ve Denetleme Kurumu), as relevant (Art. 13(5)).

Taxonomy reports are prepared on the basis of the technical screening criteria and in accordance with the reporting templates to be published by the Presidency. Each report covers the reporting period of the preceding year and must be uploaded to the Online Taxonomy Management System by the end of the sixth month following the end of the relevant financial period. Uploaded reports will, as a rule, be publicly available, while information and documents other than the taxonomy reports may be shared with third parties only with the consent of the relevant entity. A taxonomy transition plan forms a complementary element of the report, and the procedures governing transition plans and the verification of reports will be determined by the Presidency (Arts. 13, 14, 15, 20(3) and 22(1)).

Additionally, the taxonomy reports are built around key performance indicators, which show the extent to which the reporting entity’s activities are eligible for, or aligned with, the Taxonomy across the environmental objectives (Art. 12(1)). For institutions, organisations and enterprises, these indicators consist of the share of turnover, capital expenditure and operating expenditure derived from taxonomy-eligible or taxonomy-aligned products and services. For financial institutions, they consist of sector-specific ratios reflecting how and to what extent their activities take into account and contribute to the environmental objectives (Art. 12(2)). Voluntarily reporting entities need not include the indicators of an eligible activity whose turnover, capital expenditure or operating expenditure falls below 10% of the respective total (Art. 13(8)).

7. Specific Implications for Financial Institutions

Pending the first mandatory reporting cycle, two features of the Regulation are of particular relevance to financial institutions. First, their key performance indicators will be calculated on the basis of the data and key performance indicators reported by institutions, organisations and enterprises (i.e., their clients) (Art. 12(3)). Second, they may request such institutions, organisations and enterprises to carry out taxonomy reporting in respect of transactions relevant to their own reporting (Art. 13(4)). Therefore, the transition period until 1 January 2029 offers financial institutions the opportunity to establish internal data collection and classification processes and to begin obtaining taxonomy data from their clients ahead of the first mandatory reporting cycle.

8. Administrative Fines

Reporting entities that fail to fulfil the notification, information and document submission obligations required for reporting under Article 13 of the Regulation are subject to administrative fines under Article 14(6), (9) and (11) of the Climate Law (Art. 23).

This information is provided for your convenience and does not constitute legal advice. It is prepared for the general information of our clients and other interested persons. This should not be acted upon in any specific situation without appropriate legal advice. This information is protected by copyright and may not be reproduced or translated without the prior written permission of Ergün Avukatlık Bürosu.