Three Key Developments in the EU in the First Half of 2026 Affecting Turkish Exporters and Industrial Companies

In the first half of 2026, three significant developments have emerged within the European Union with material relevance for Turkish exporters and industrial companies, spanning trade policy, carbon regulation, and sustainability law. Each of these developments may affect Turkish companies engaged in extensive trade relations with the EU in distinct respects. A summary of the three developments is set out below.

I. New EU Steel Safeguard Regulation: A Revised Tariff-Rate Quota Regime

Building on the European Commission’s proposal of 7 October 2025 (COM(2025)726), a political agreement was reached between the Council of the EU and the European Parliament on 13 April 2026. The plenary vote of the European Parliament is expected to take place on 19 May 2026, and, following the subsequent formal adoption steps, the Regulation is anticipated to enter into application as of 1 July 2026.

The new regime is designed to replace the existing safeguard measure, which is set to expire on 30 June 2026. It comprises three core elements:

  • The duty-free import quota is reduced by approximately 47%, to 18.3 million tonnes per year.
  • The out-of-quota customs duty is increased from 25% to 50%.
  • As of 1 October 2026, importers are expected to provide verifiable supporting documentation evidencing the country in which the raw steel or iron used in the production of the goods was first produced in liquid form and first cast into its solid form.

The so-called “melt-and-pour” requirement should not be understood as a general definition of origin replacing classic customs origin rules, but rather as a separate documentation obligation aimed at enhancing traceability within the steel supply chain, which may become significant in respect of future country-specific quota allocations. The manner in which such documentary information will be taken into account for the allocation and management of country-specific quotas will be clarified through implementing acts to be adopted by the European Commission and subsequent assessments.

Türkiye is among the leading exporters of steel to the EU; against this backdrop, a review of existing supply chain structures and documentation procedures may become relevant under the new regime.

II. Carbon Border Adjustment Mechanism (CBAM): Entry into the Definitive Phase

As of 1 January 2026, the CBAM has moved from the transitional period into its definitive application phase. From this date, EU-based importers — or their indirect customs representatives — importing carbon-intensive goods such as iron and steel, aluminium, cement, fertilisers, hydrogen, and electricity have become subject to the CBAM obligations of the definitive phase, with the financial process relating to the acquisition and surrender of CBAM certificates corresponding to the embedded emissions of imported goods having commenced. Pursuant to the single mass-based threshold of 50 tonnes per year applicable as of 2026, importers below this threshold may remain outside the scope of CBAM obligations.

Türkiye is among the principal third-country suppliers of CBAM-covered goods to the EU. This position may give rise to two key requirements for Turkish producers during the definitive phase:

  • The generation of verifiable and traceable emissions data at installation level.
  • The timely and complete transmission of such data to EU importers.

As default values apply where emissions data is not provided, this situation may lead to cost increases on the part of the importer and, consequently, to potential strain in the commercial relationship. Industry representatives have publicly expressed assessments suggesting that, in certain sectors such as cement, cost increases may exceed initial expectations.

In this context, the Emissions Trading System (ETS) envisaged in Türkiye under Climate Law No. 7552, published on 9 July 2025, is being considered as potentially capable of providing an offset against CBAM obligations. The actual offsetability, however, will depend not only on Turkish legislation but also on the EU’s CBAM implementing rules, the requirement of effective payment, and the applicable evidentiary mechanism.

III. Omnibus I Package: Substantial Simplification of CSRD and CSDDD

Directive (EU) 2026/470, published in the Official Journal of the European Union on 26 February 2026, introduced significant simplifications to the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD); it entered into force on 18 March 2026.

The key elements of the regulation include:

  • The scope of the CSDDD has been narrowed to companies with more than 5,000 employees and a net turnover exceeding EUR 1.5 billion.
  • For the CSRD, the new thresholds have been set at more than 1,000 employees and an annual net turnover exceeding EUR 450 million.

In addition, the so-called “stop-the-clock” measure previously adopted under the Omnibus I Package has postponed certain CSRD and CSDDD application timelines. As regards the European Sustainability Reporting Standards (ESRS), the draft revised ESRS opened for consultation by the European Commission on 6 May 2026 envisages a reduction of mandatory data points by more than 60% and of total data points by more than 70%. The consultation period runs until 3 June 2026, following which the final text is expected to be adopted by the Commission by way of a delegated act.

As Member States will be required to transpose the CSDDD into their respective national laws, a reassessment of existing national supply chain regimes — such as the Lieferkettensorgfaltspflichtengesetz (LkSG) in force in Germany — may become necessary in light of the new thresholds, the level of harmonisation, and the applicable transitional provisions.

This simplification may have direct implications for Turkish companies supplying EU customers. The scope of contractual requirements imposed by EU-based clients in relation to ESG certification, audit participation, and compliance costs may be reassessed in line with the simplifications introduced by the new directive.

Concluding Remarks

The three developments outlined above signal a concurrent restructuring of EU industrial policy, environmental regulation, and sustainability law. For exporters and industrial companies operating within the framework of the Customs Union between Türkiye and the EU, an integrated consideration of these three developments — together with a review of corporate structures, contractual relationships, and compliance processes — may prove material in this context.

The team at GEMS Schindhelm & Schindhelm Alliance, through its member offices, continues to provide advisory services on the practical implementation of these developments across all Member States of the European Union.

 

This text is provided for general information purposes only and does not constitute legal advice. For case-specific assessments, please contact our offices.

 

 



Author: Gürkan Erdebil