CBAM and Turkish Steel: Why EAF-Heavy Türkiye Has the Best CBAM Economics in Mediterranean Steel
Türkiye produces approximately 35–40 million tonnes of steel per year and is the largest non-EU steel exporter to the EU, dominated by Mediterranean shipments to Italy, Spain, and Greece. Distinctively among major steel exporters, Türkiye is EAF-heavy: approximately 75% of Turkish steel is produced via electric arc furnace, primarily on scrap inputs. This gives Türkiye a structural CBAM advantage over BF-BOF-dominant exporters like China, India, and South Korea — Turkish EAF steel has actual embedded emissions of typically 0.5–1.2 tCO2/t, well below the 2.18 EU default.
Why Turkish EAF Steel Wins on CBAM
Turkish EAF steel runs predominantly on scrap inputs. Scrap is treated as a recycled input with zero embedded emissions for CBAM purposes. The calculation reduces to: graphite electrode consumption + lime calcination + reheating fuels = approximately 0.4–0.7 tCO2/t direct emissions, with no indirect electricity emissions in scope for steel CN codes. Total actual: 0.5–1.2 tCO2/t depending on installation efficiency.
The saving versus the 2.18 default is approximately EUR 65–115 per tonne at current ETS prices. For İçdaş alone (3+ million tonnes per year EU-bound), the annual CBAM saving from documented actuals exceeds EUR 200 million.
Erdemir and the BF-BOF Subset
The 25% of Turkish steel produced via BF-BOF (dominantly at Erdemir Ereğli on the Black Sea coast and at Kardemir Karabük) has very different CBAM economics. Erdemir's integrated complex produces actuals in the 1.95–2.10 tCO2/t range — slightly below default, small documentable saving. Kardemir BF-BOF actuals are similar. For Erdemir specifically, the EU strategic relationship — Türkiye is in a customs union with the EU since 1995 — means CBAM compliance is operationally non-negotiable; the question is route optimisation, not market exit.
Why Türkiye Has Better CBAM Economics Than Most Competitors
The structural advantages stack:
- EAF-heavy mix: 75% scrap-fed EAF with very low actuals
- Geographic proximity: Mediterranean shipping costs are far lower than Asian-origin steel — combined with low CBAM cost, Turkish steel landed price in EU markets is highly competitive
- EU customs union since 1995: Most non-CBAM trade barriers have already been resolved; the regulatory infrastructure is mature
- Developing Turkish ETS: Türkiye is implementing a national ETS aligned with EU ETS structure as part of its EU accession journey. Equivalence could eventually be granted, further reducing CBAM cost via Article 9 deduction
Compare with other steel producers facing CBAM
Frequently Asked Questions
What is Türkiye's annual CBAM exposure on steel?
Estimated at EUR 700M–1.5B annually — but with the largest portion being recoverable through documented EAF actuals. Net effective exposure after actuals documentation is approximately EUR 200–500M.
Why is Turkish EAF steel CBAM-advantaged?
EAF steel runs primarily on scrap (treated as recycled, zero embedded emissions for CBAM). Direct emissions are approximately 0.5–1.2 tCO2/t versus the 2.18 default — saving EUR 65–115 per tonne. Approximately 75% of Turkish steel is EAF.
Should Erdemir document actuals?
Yes, but the saving is smaller than for EAF producers. Erdemir's BF-BOF actuals are 1.95–2.10 tCO2/t versus 2.18 default — saving of EUR 5–15 per tonne. At Erdemir's scale this is still meaningful annually.
Is Turkish ETS likely to gain CBAM equivalence?
Türkiye is implementing a national ETS as part of EU accession. Equivalence depends on price alignment, sector coverage, and free allocation rules matching EU ETS. Likely 2028–2030 at earliest.
Where can Turkish steel manufacturers find ISO 14065 accredited verifiers?
TÜRKAK accredits Turkish verification bodies. Major Turkish and international firms operate locally — Bureau Veritas Türkiye, SGS Türkiye, TÜV SÜD Türkiye, DNV Türkiye. See the Turkey verifier directory.
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