Basic Regulations In The Energy Market And Market Actors

By / September 1, 2025

Basic Regulations In The Energy Market And Market Actors

Table of Contents

Abstract

Energy markets are defined as economic and legal areas where activities are carried out in the fields of electricity, natural gas, oil, LPG, and nuclear energy, and where a balance between free competition and public service is established.

The study first addresses the concept of the energy market and the duties of the competent administrative authorities. The policy-making role of the Ministry of Energy and Natural Resources, the regulatory and supervisory function of EMRA, the executive activities of public institutions such as TEİAŞ and BOTAŞ, and the positions of TENMAK and EPİAŞ in the market are explained in detail. Subsequently, the types of energy markets are examined in turn.

In conclusion, energy law emerges as a discipline that aims not only to ensure the free functioning of markets but also to protect the public interest, safeguard the environment, ensure supply security, and guarantee consumer rights. In this respect, energy law is of strategic importance for Türkiye’s economic development and sustainable energy policies.

1. Introduction

Energy is one of the most fundamental elements shaping the economic, social, and political structure of modern societies. Energy sources, ranging from electricity to natural gas, oil to nuclear energy, are critical not only for the sustainability of economic activities but also for national security, environmental policies, and social welfare. Energy law stands out as a branch of law that regulates this multidimensional field, aiming to strike a delicate balance between free market principles and the public interest.

The development of energy markets in Türkiye has historically been shaped by a transition from centralized models based on state monopoly to structures based on free market principles. Liberalization movements gained momentum in the 1980s, and with the establishment of the Energy Market Regulatory Authority (EMRA) in 2001, the legal and institutional framework of energy markets was rebuilt. Electricity, natural gas, petroleum, LPG, and nuclear energy markets have been regulated by laws specific to their respective fields, with the aim of both promoting competition and ensuring supply security.

In this context, the most fundamental function of energy law is to ensure the continuity of energy supply, the protection of the environment, the observance of consumer rights, and the safeguarding of public interests while fulfilling the requirements of a market economy. Therefore, energy law is not merely a field that regulates economic relations; it is also a discipline that encompasses the public service dimension and strengthens the regulatory role of the state.

2. Energy Market Concept

The energy market can be defined as an economic area where activities such as the production, transmission, distribution, wholesale and retail sale, import, and export of energy sources such as electricity, natural gas, oil, and LPG are carried out, based on supply and demand balance and controlled by regulatory institutions. This market has been liberalized by removing it from state monopoly and structured in accordance with competition rules and the principles of a market economy.

The energy market is not only an economic structure but also an area that carries public service characteristics and has social impacts. Therefore, energy markets must be managed by maintaining a delicate balance between free competition and public interest.

3. Competent Administrative Authorities and Their Functions Regarding the Operation of Energy Markets

3.1. Ministry of Energy and Natural Resources (MENR)

The Ministry of Energy and Natural Resources is the primary institution responsible for determining, planning, and implementing Türkiye’s energy and natural resource policies. It determines the country’s short- and long-term energy and natural resource needs and develops the necessary policies and strategies accordingly, conducting studies on the exploration, operation, development, evaluation, and protection of resources. Unless otherwise specified in relevant legislation, it submits policy proposals, determines pricing policies, and, when necessary, sets prices for all processes from energy production to transmission and distribution, taking into account public interest, security, and economic developments. In addition, the Ministry supervises and directs the investment and operation programs of affiliated and related organizations, develops strategies on renewable energy and energy efficiency, and conducts research and coordination activities for the preparation of long-term energy policies. The Ministry, which also performs other duties assigned by laws and presidential decrees, aims to ensure that energy and natural resources are used in the most efficient way for the benefit of the country.

3.2. Energy Market Regulatory Authority (EMRA)

The Energy Market Regulatory Authority (EMRA) is an independent public institution responsible for regulation, supervision, and oversight activities in Türkiye’s energy markets. The Authority, which has public legal personality and administrative and financial autonomy, operates in conjunction with the Ministry of Energy and Natural Resources and is headquartered in Ankara. It aims to ensure that the electricity, natural gas, petroleum, and LPG markets to operate in a safe, sustainable, competitive, and transparent manner.

In the electricity market, EMRA carries out tasks such as issuing licenses that regulate the activities of legal entities, monitoring market performance, determining performance standards, and preparing and implementing secondary legislation. It also supervises licensed companies to ensure that tariffs are prepared, modified, and implemented, guaranteeing that the market operates in accordance with the Electricity Market Law.

In the natural gas market, managing the licensing and certification processes for activities such as import, transmission, distribution, storage, trade, and export are among EMRA’s core functions. The Authority examines and regulates market and system operations, develops secondary legislation, sets tariffs, and supervises market actors to ensure that the market operates in accordance with the Natural Gas Market Law.

In the petroleum market, EMRA licenses refining, processing, mineral oil production, storage, transmission, distribution, transportation, and dealership activities. It determines the scope of these activities, their rights and obligations, regulates secondary legislation, and monitors market prices to ensure a functioning market in accordance with the Petroleum Market Law.

In the liquefied petroleum gas (LPG) market, the Authority conducts licensing processes for distribution, transportation, autogas dealerships, storage, and LPG cylinder manufacturing and maintenance. It determines the scope and conditions of activities, regulates secondary legislation, monitors price formations, and ensures market supervision and control, thereby establishing a market order in accordance with the LPG Market Law.

Within the scope of these duties, EMRA aims to provide consumers with sufficient, high-quality, continuous, low-cost, and environmentally friendly energy markets, contributing to the creation of a competitive, transparent, and sustainable market order.

3.3. Türkiye Electricity Transmission Inc. (TEİAŞ)

The Turkish Electricity Transmission Corporation (TEİAŞ) is a public economic enterprise responsible for electricity transmission in Türkiye. It was established in 2001 as a result of the restructuring of the electricity sector and the division of the Turkish Electricity Production and Transmission Corporation, and began operations on October 1, 2001. TEİAŞ, whose entire capital belongs to the Treasury of the Republic of Türkiye, is affiliated with the Ministry of Energy and Natural Resources and holds the monopoly on operating the high-voltage transmission system.

TEİAŞ began its activities in 2003 with a transmission license obtained from the Energy Market Regulatory Authority and became the sole authorized institution for electricity transmission. The institution, which has legal personality and autonomy in its activities, is subject to private law provisions and is open to audit by the Court of Accounts.

The institution’s main duties are to transmit electricity, take over and operate existing and new transmission facilities, plan new investments, ensure supply-demand balance, carry out load distribution and frequency control, prepare tariffs and submit them to EMRA for approval, implement network and ancillary services regulations, monitor system reliability in real time, and carry out international interconnection activities.

TEİAŞ is also responsible for providing connection and transmission services to all system users without discrimination. TEİAŞ, which has been operating in synchronous parallel operation with the European Network of Transmission System Operators for Electricity (ENTSO-E) since 2010, has adopted the continuous, reliable, economical, and environmentally conscious transmission of electricity as its fundamental principle.

3.4. Pipeline Transportation of Petroleum Inc. (BOTAŞ)

BOTAŞ (Petroleum Transportation Corporation) is a public economic enterprise affiliated with the Türkiye Wealth Fund. Founded in 1974, BOTAŞ gained the status of an economic state entity in 1995 and joined the Türkiye Wealth Fund in 2017. The institution is responsible for the operation and management of oil and natural gas pipelines, which are of strategic importance in Türkiye’s energy infrastructure.

BOTAŞ’s main tasks include the transmission, storage, and trade of natural gas and petroleum; the construction and operation of pipelines, compressor stations, and LNG/FSRU terminals; and the execution of national and international pipeline projects. The institution is also responsible for making investment plans, establishing and operating new transmission facilities to support Türkiye’s energy security.

The institution is organized throughout Türkiye and carries out its activities through various regional directorates and operating units. Although BOTAŞ lost its monopoly in natural gas trading outside of transmission activities under Law No. 4646, its duty to ensure the safe, continuous, and efficient operation of pipelines and energy infrastructure continues.

In summary, BOTAŞ is a key energy institution that ensures the safe, uninterrupted, and efficient operation of Türkiye’s oil and natural gas transmission systems, makes strategic investments, and participates in international projects.

3.5. Turkish Energy, Nuclear, and Mining Research Institute (TENMAK)

The Turkish Energy, Nuclear and Mining Research Institute (TENMAK) is a public institution affiliated with the Ministry of Energy and Natural Resources, established in 2020 by Presidential Decrees No. 4 and

The institution has taken over the duties of the Turkish Atomic Energy Agency, the National Boron Research Institute, and the Rare Earth Elements Research Institute, and operates in the fields of energy, mining, ionizing radiation, particle accelerators, and nuclear technology.

TENMAK has undertaken the task of producing new products, developing existing products, and supporting innovation in order to increase and sustain our country’s competitive power. The institution is responsible for conducting and commissioning scientific research, coordinating, encouraging, and supporting research; and carrying out research and development activities in cooperation with the public and private sectors.

Based in Ankara, TENMAK comprises research units such as the Nuclear Energy Research Institute, Boron Research Institute, Rare Earth Elements Research Institute, Clean Energy Research Institute, and Energy Research Institute. In addition, coordination units, technology transfer offices, R&D centers, and training and information centers, along with support units, ensure that the institution effectively fulfills its duties.

In summary, TENMAK is a strategic public institution that conducts scientific research and technology development activities in the fields of energy, nuclear energy, and mining in Türkiye, aiming to produce and develop new products and technologies.

3.6. Türkiye Energy Exchange (EPİAŞ)

EPİAŞ (Energy Markets Operation Inc.) is a public-private partnership established to ensure the efficient, transparent, and reliable operation of organized energy markets in Türkiye. The company’s main duties and responsibilities are defined in Article 11 of the Electricity Market Law No. 6446.

EPİAŞ is responsible for operating organized wholesale electricity markets such as the Day-Ahead Market, Intraday Market, and Forward Electricity Market. It also conducts Spot and Forward Natural Gas Market and Organized YEK-G Market activities and performs all settlement and billing processes related to these markets. Settlements for the Balancing Power Market and Ancillary Services Market operated by TEİAŞ are also carried out by EPİAŞ.

The institution also undertakes responsibilities related to transparency and data management. It publishes data related to the markets it operates through the Transparency Platform and ensures that market participants have access to up-to-date information. In addition, it performs critical tasks such as the operation of YEKDEM, YEK-G certification and market, free consumer transactions, and the settlement of Natural Gas Market imbalances.

EPİAŞ carries out financial settlement and other financial transactions in market operations; provides licensed market participants with trading environments that give rise to physical delivery obligations; and ensures that energy markets are transparent, reliable, and competitive. As one of the few market operators that develops its own software systems, it continuously improves its technological infrastructure and provides services in line with international standards.

3.7. Competition Authority

The Competition Authority is the public institution responsible for protecting free and fair competition in Türkiye. Its primary mission is to prevent unfair competition in the market, protect the rights of consumers and businesses, and increase economic efficiency. In this context, the authority monitors agreements that restrict competition, monopolies, and illegal mergers and acquisitions; when violations are detected, it applies administrative measures and fines. It also evaluates exemption and negative determination requests, approves appropriate agreements, and continuously monitors the impact of its decisions on the relevant markets. The Authority’s administrative duties also include personnel appointments, budget approval, and procurement of goods and services.

From an energy law perspective, the Competition Authority is particularly important in the electricity and natural gas markets. Since electricity and natural gas transmission and distribution activities are natural monopolies, direct competition is not possible in these areas. However, ensuring competition in production and supply activities is among the Authority’s duties. The Authority identifies prohibited agreements and unlawful transactions in the energy market, intervenes in violations, and imposes administrative penalties. It supervises mergers and acquisitions and provides flexibility in certain cases by issuing exemption and negative clearance certificates. In this way, it guarantees the maintenance of an effective, transparent, and fair competitive environment in the energy market.

In summary, the Competition Authority ensures that markets operate fairly and competitively in the energy sector through both preventive and corrective measures, acting in line with sectoral regulations while taking into account structural issues such as natural monopolies and network effects.

3.8. Ministry of Environment, Urbanization, and Climate Change

The Ministry of Environment, Urbanization and Climate Change is a ministry structured to implement policies and practices in the areas of environment, urbanization, and climate change in Türkiye. Its history dates back to the Ministry of Public Works, established in 1848, and later to the Ministry of Public Works and Housing. Independent organization in the field of environment began in the 1970s, and institutional structures were strengthened with the enactment of the Environmental Law No. 2872 in 1983. The Ministry of Environment and Urbanization was established in 2011, and in 2021, the name of the Ministry was changed to the Ministry of Environment, Urbanization, and Climate Change to encompass climate change efforts.

The main duties and powers of the Ministry include preparing legislation on settlement, environment, and construction; implementing and supervising urban transformation projects; ensuring the development of professional services; preventing environmental pollution and protecting natural values; implementing climate change adaptation and mitigation policies; managing affiliated and related institutions; and providing services related to meteorology, desertification, and erosion control. The Ministry coordinates the central and provincial organizations, as well as institutions such as TOKİ, the General Directorate of National Real Estate, and the General Directorate of Local Governments.

In terms of energy law, the Ministry is responsible for monitoring the environmental impacts of energy projects and ensuring compliance with environmental legislation. It conducts environmental impact assessments and licensing processes for energy production, transmission, and distribution projects, and monitors energy investments for compliance with sustainability and environmental sensitivity principles. Furthermore, within the framework of climate change policies, it plays a regulatory role in reducing greenhouse gas emissions in the energy sector and promoting the use of renewable energy.

4.1. Electricity Market

4.1.1. Historical Development of Electricity Market Activities

The historical development of electricity in Türkiye began in 1902 with hydroelectric energy generated by a 2 kW water mill established in the Tarsus district of Mersin. Although this project is now considered a micro power plant, it was a significant starting point for the development of hydroelectricity in Türkiye at that time.

The development of electricity in Türkiye is historically evaluated in six main periods:

First Period: Concessions and Dispersed Applications (1902-1970): This period began with the first power plant with a capacity of 2 kW, and power plants were established through concession agreements with foreign companies starting in the 1910s. Due to the operation of many different organizations in the sector during this period.

With the establishment of the Republic of Türkiye in 1923, installed capacity reached 33 MW. Starting in the 1930s, with the development of industry, electricity began to be used for purposes beyond lighting. In 1932, under the leadership of Atatürk, water-related studies were initiated under the Ministry of Public Works, and in 1935, the Electricity Works Survey Administration (EİE) was established. During this period, dams and hydroelectric power plants such as Seyhan, Sarıyar, Hirfanlı, Kesikköprü, Demirköprü, and Kemer were designed and built. By 1940, 28 hydroelectric power plants had been commissioned. Etibank and İller Bankası carried out the construction of small-scale hydroelectric power plants and the electrification of villages and towns. While hydroelectricity accounted for 4.4% of total installed capacity in 1950, the establishment of the General Directorate of State Hydraulic Works (DSİ) in 1954 led to a focus on hydroelectric projects, and this share rose to 35% by the end of the period.

Second Period: Integration (Semi-Monopoly) Period (1970-1982): Due to the increasing production, distribution, and transmission needs in the country, the TEK law came into force in 1970, and the Turkish Electricity Authority (TEK) was established. This partially eliminated fragmentation in the sector and developed an interconnected network, which is an important system, especially for hydroelectric projects. Major projects such as Keban (1330 MW), Karakaya (1800 MW), Atatürk (2400 MW), Altınkaya (700 MW), and Oymapınar (540 MW) were implemented or planned during this period. By the end of the period, the installed capacity of hydroelectric power plants reached 3082 MW, accounting for 53% of total production.

Third Period: Public Monopoly Period (1982-1983): In 1982, during the military administration, municipal electricity distribution networks were incorporated into TEK, resulting in a brief period of public monopoly in the electricity sector. During this period, only 157 MW of installed capacity was added to the system.

Fourth Period: Opening to the Private Sector (1984-2001): Public control over hydroelectric projects continued during the 1970-1983 period. However, towards the end of the 1990s, due to electricity supply shortages and insufficient public resources, the TEK monopoly was lifted and the sector was opened to private entrepreneurs. With Law No. 3096, the Build-Operate (BO), Build-Operate-Transfer (BOT), Operating Rights Transfer (ORT), and autoproducer models were implemented. However, due to planning deficiencies and misguided policies, only 18 hydroelectric power plants were commissioned under the BOT model, 1 plant under the OOR model, and 23 plants under the autoproducer status over a period of 17 years. Inadequate investment in the 1990s led to problems in the electricity supply-demand balance and short-term power outages. Furthermore, the perception that hydroelectric power plants were unreliable was created, increasing dependence on natural gas power plants.

Fifth and Sixth Period: Market and Free (Competitive) Market Period (2001-…): Following the failure of the models implemented under Law No. 3096 and efforts to harmonize with World Bank and EU legislation, the Electricity Market Law No. 4628 entered into force on March 3, 2001. The new market model has been implemented since September 3, 2002. The purpose of this law is to create a competitive, financially strong, stable, and transparent electricity market that will ensure that electricity is provided to consumers in a sufficient, high-quality, continuous, low-cost, and environmentally friendly manner. At the same time, an independent regulation and supervision mechanism has been established in the market.

In summary, the historical development of electricity in Türkiye has evolved from hydroelectric production, which began in 1902, to the present day through public control, private sector participation, and market- based competition processes; hydroelectric power plants have played a critical role in both energy supply security and sectoral planning throughout this process.

4.1.2. Types of Activities in the Electricity Market

The main types of activities carried out in the electricity market under Law No. 6446 are as follows:

Production Activity: The activity of converting energy sources into electrical energy in electricity production facilities by public or private sector production companies and organized industrial zone legal entities within the framework of a production license obtained from EMRA. (Article 7)

Transmission Activity: An activity exclusively carried out by TEİAŞ (Turkish Electricity Transmission Company) and covering the transportation of electrical energy between production or distribution systems. (Article 8)

Distribution Activity: An activity carried out by a distribution company within the scope of its license, covering the delivery of electrical energy to consumers via the distribution network in the region specified in the license. (Article 9)

Wholesale and Retail Sales: Wholesale sales activity refers to sales made for the purpose of reselling electrical energy and/or capacity, while retail sales activity refers to the direct sale of electrical energy to consumers. These activities are carried out by production companies and public and private sector supply companies under a supply license, within the framework of the Law and relevant regulations (Article 10).

Market Operation Activity: “Market operation activity refers to the operation of organized wholesale electricity markets and the financial settlement processes of activities carried out in these markets, as well as other financial transactions related to such activities.” (Article 11)

Import and Export: Export activity is an activity that can be carried out by companies holding a supply license or production companies, with the approval of the Ministry and the consent of the Board, to countries with established international interconnection conditions for electricity energy and/or capacity with the approval of the Ministry and the Board. Import activity is the supply of electricity and/or capacity from countries with which international interconnection conditions have been established by companies holding a supply license, with the approval of the Ministry and the Board. (Article 12)

Aggregation Activity: This is an activity carried out by aggregators authorized by network users and involves managing users’ electricity or capacity purchase and sale transactions. (Article 12/A)

Public Service Nature: Electricity supply is a fundamental public service within the scope of the social state principle. Pursuant to Articles 5 and 167 of the Constitution, the state is obliged to intervene in energy services for the purpose of public welfare and the regulation of economic life.

However, with Law No. 6446, electricity market activities were not removed from the scope of public services; rather, they were made possible to be carried out by private legal entities, and administrative control mechanisms were established for these services.

License-Based Structure: According to Article 5/2(a) of Law No. 6446, “Legal entities engaged in market activities, except for the exceptions in this Law, must obtain a separate license for each activity and, if the activities in question are to be carried out in more than one facility, for each facility, before commencing their activities.”

Each activity in the electricity market is subject to licenses issued by EMRA. These licenses are administrative acts based on public authority and are evaluated according to the technical and financial adequacy of the applicant. Licenses are non-transferable, subject to a term, and may be revoked by EMRA.

Public-Private Sector Balance: Electricity market activities are carried out by private companies, with the public sector assuming a regulatory and supervisory role. In this respect, while the activities are subject to private law, they are carried out within a regulatory framework that bears the character of public law.

4.1.4. Licensing Principles in Electricity Markets Pursuant to Law 6446

Definition of License: According to Article 5/1 of Law No. 6446, “A license is a permit issued to legal entities to carry out market activities registered under the provisions of this Law.” Accordingly, a license is an administrative procedure that grants the authority to carry out a specific activity in the electricity market under specific conditions and for a specific period. As a permit based on public authority, licenses are issued exclusively by EMRA.

Legal Nature: Licenses are subject to public law and constitute administrative acts. They may be issued, amended, or revoked unilaterally. They must be granted in the public interest and are subject to administrative judicial review.

4.3. Natural Gas Market

4.3.1. The Formation Process of the Natural Gas Market

Before 1980 and the Establishment of BOTAŞ: Natural gas use in Türkiye began in the late 1970s, with import and transmission activities being carried out by BOTAŞ (Boru Hatları ile Petrol Taşıma A.Ş.), which was established in 1984. In the 1990s, BOTAŞ held a monopoly position in the natural gas market, carrying out import, transmission, distribution, and sales operations on its own.

Liberalization with Law No. 4646 (2001): Law No. 4646 on the Natural Gas Market, which came into force in 2001, formed the legal basis for the transition to a free market structure. This Law separated natural gas activities, facilitated the entry of the private sector into the market, and aimed to gradually end BOTAŞ’s vertically integrated structure. The Energy Market Regulatory Authority (EMRA) was established as the regulatory authority, and the market was placed under EMRA supervision.

Market Reforms and Current Developments: With EMRA regulations, a license-based structure was established in the natural gas market; tariffs and access rights were regulated. Although competition was limited in the 2020s, the number of importing companies increased and BOTAŞ’s market share decreased. The Natural Gas Market Balancing System, which came into force in 2023, has enabled the market to operate in a more flexible manner based on supply and demand balance.

4.3.2. Types of Natural Gas Market Activities

All legal entities operating in the natural gas market must obtain a license issued by the Energy Market Regulatory Authority (EMRA). Different license types are regulated according to the nature of the activity.

Import: Natural gas can be procured from abroad with an import license. Importing companies must obtain a separate license for each contract. The company must have technical and economic competence, provide guarantees regarding the gas source and transmission system, and fulfill its storage obligations. Imported gas can be sold to wholesale companies, exporters, or free consumers.

Production: Natural gas exploration and production activities are carried out in accordance with the provisions of the Petroleum Law, and licenses are issued by the General Directorate of Petroleum Affairs. Production companies can offer the gas they obtain to the market by obtaining a wholesale sales license or export it by obtaining an export license. The amount sold directly to free consumers cannot exceed 20% of the national consumption estimate.

Transmission: A transmission license is required to transport natural gas through the national transmission network. Transmission companies are obliged to connect users who wish to connect to the system to the most suitable network. They must work in coordination with other transmission companies for system security and efficiency. The existing and planned national transmission network belongs to BOTAŞ, but new line investments can also be made by other transmission companies.

Storage: A storage license is required for the storage of natural gas underground or above ground (gas/LNG). The company must have technical and economic competence and commit to offering capacity in an impartial and equal manner. Storage companies are required to publish their service fees and capacities.

Wholesale Sales: A wholesale sales license is required to sell natural gas to free consumers or other companies. Import license holders can also sell without obtaining a wholesale sales license. Companies must make adequate supply plans, take storage measures, and ensure the safe operation of the system. The annual sales volume of each wholesale company cannot exceed 20% of national consumption.

Export: Companies wishing to sell natural gas abroad must obtain an export license. Companies must prove their technical and economic competence and guarantee that exports will not disrupt the operation of the system or the country’s needs. Companies exporting LNG cannot engage in domestic delivery activities unless specified in their licenses.

Urban Distribution: Natural gas distribution in a city is carried out under a distribution license granted for a specific period to the company that wins the tender opened by EMRA. The relevant municipality is invited to become a 10% partner in the distribution company. Distribution companies are responsible for meeting demand, performing internal installation checks, and taking the necessary measures for safe use. Distribution companies can hold licenses for a maximum of two cities, but this number can be increased by a decision of the Board.

Compressed Natural Gas (CNG): A CNG license must be obtained for the transportation of compressed natural gas and its delivery to areas not reached by the transmission network. The facilities and equipment must comply with national or international standards.

Liquefied Natural Gas (LNG): A liquefaction license is required for facilities to be established for the liquefaction, storage, or resale of natural gas produced domestically or imported. Liquefaction activities are not considered storage activities and are licensed independently. Facilities must comply with international technical standards.

4.3.3. Licensing Process in the Natural Gas Market

Legal entities wishing to operate in the natural gas market must obtain a license from the Energy Market Regulatory Authority (EMRA). The licensing process consists of the stages of preparing the application documents, submitting them to the Authority, and evaluation by the Board.

Application Procedure: Legal entities wishing to obtain a license apply to EMRA by preparing the License Application Form and Letter of Commitment, along with the information and documents specified in the Natural Gas Market Licensing Regulation, in a complete manner. The application file is prepared in a single copy and submitted to the Authority. If more than one license application is submitted, the originals or notarized copies of the documents may only be included in one file. Photocopies certified as true copies by the legal entity may be included in the other files. Having previously applied to the Authority does not exempt the applicant from the obligation to submit the required information and documents in new applications.

License Term: Licenses are granted for a minimum of 10 years and a maximum of 30 years at a time. An extension may be requested from the Board for the continuation of licenses that have expired.

Documents Required in the Application File: The application file shall include the legal entity’s identity and authorization documents, information demonstrating financial adequacy, documents related to technical infrastructure, detailed explanations regarding the scope of activities, and letters of commitment. These documents may vary depending on the type of license.

Review and Evaluation of the Institution: EMRA reviews the information and documents in the application file for compliance with the legislation. If any deficiencies are found, the applicant is notified and requested to complete the deficiencies. If all conditions are met, the Board decides to grant the license.

Licensee Obligations: Legal entities holding licenses are obligated to pay license fees, conduct their activities in accordance with technical and financial requirements, provide the necessary information and documents for EMRA inspection, and provide fair and transparent services to consumers.

The natural gas market licensing application process is based on legal entities applying to the Authority with comprehensive information and documents, EMRA evaluating these applications, and granting fixed- term licenses to those deemed suitable. This regulation ensures that the financial, technical, and legal adequacy of actors operating in the market is pre-audited and that the market operates in a secure, transparent, and competitive manner.

4.4. Petroleum Market

4.4.1. Development of the Petroleum Market

Early Period: State Monopoly Dominance: Petroleum activities in Türkiye were first regulated by the Petroleum Law of 1926, and a more comprehensive system was established by the Petroleum Law No. 6326 of 1954. During this period, oil exploration, extraction, and evaluation activities were largely carried out by the state. The Turkish Petroleum Corporation (TPAO), established in 1954, became the most important public institution in this field.

Liberalization Process: The Petroleum Market Law No. 5015, which came into force in 2003, fundamentally reorganized the petroleum market in Türkiye. With this law: The state monopoly was abolished, a structure based on the free market principle was established, and the Energy Market Regulatory Authority (EMRA) was appointed as the regulatory authority.

Current Structure: Today, the petroleum market has a multi-actor and competitive structure, ranging from refining to distribution, fuel stations to control mechanisms. The market is based on a licensing system; supply security, environmental protection, and consumer rights protection form the basis of current regulations.

4.4.2. Types of Petroleum Market Activities

Activities to be carried out in the petroleum market are subject to licenses issued by the Energy Market Regulatory Authority (EMRA). The types and scopes of licenses are as follows:

Refinery License: Issued to facilities that process crude oil to produce fuel and other products. Refineries may also engage in storage, transportation, and distribution activities, provided they are covered by their license. They are responsible for producing special fuels requested by the Turkish Armed Forces for national security purposes.

Processing License: Issued to facilities that will engage in the processing of specific petroleum products outside of refineries.

Mineral Oil License: Required for facilities that produce mineral oil and base oil.

Storage License: Issued to legal entities wishing to establish and operate facilities for the storage of fuel or petroleum products.

Transmission License: Issued to businesses that transport petroleum and petroleum products via pipelines.

Transportation License: Covers the transportation of petroleum products by means other than pipelines (road, sea, rail).

Distributor License: Grants the right to distribute fuel, establish a dealer network, and conduct wholesale sales activities. Distributors are required to establish a dealer control system and comply with certain market share limits.

Dealer License: Obtained to enable fuel stations to operate. Dealers can only purchase products from the distributor with whom they have a contract.

Free User License: Issued to large consumers who purchase petroleum products in quantities exceeding their own needs.

Bulk Delivery License: Required for companies that deliver fuel to sea and air vehicles.

4.5. Liquefied Petroleum Gas (LPG) Market

4.5.1. Development of the LPG Market

Early Period and State Monopoly: Until the late 1980s, LPG production and distribution in Türkiye were largely controlled by the state. Public institutions such as TÜPRAŞ and BOTAŞ played an active role in this area.

Liberalization and Establishment of the Regulatory Framework: With the adoption of the LPG Market Law No. 5307 in 1993, the LPG market gained a legal foundation and the liberalization process was initiated. With this Law: Market entry was made subject to licensing. The Energy Market Regulatory Authority (EMRA) was appointed as the regulatory and supervisory authority for the market. Private sector participation in the market was encouraged, and legal regulations were put in place to ensure competitive conditions.

Current Situation: Today, the LPG market is a dynamic sector with numerous private and public companies operating in the production, import, filling, distribution, and sales stages. Transparency, consumer safety, and environmental protection principles are at the forefront of the market’s operation.

4.5.2. Types of Activities in the LPG Market

A license from EMRA is required to operate in the LPG market. These activity types and their scopes are as follows:

Production (with a Refinery License): LPG production is carried out only by refineries. Refineries can produce LPG with the refinery license they obtain under the Petroleum Market Law.

Distribution (Distributor License): Only holders of a distributor license may engage in LPG distribution activities. These include autogas LPG distribution to dealers, bulk LPG sales and refueling to users, bottled LPG distribution and marketing, transportation, filling, and storage activities. Distributors must comply with technical regulations.

It is mandatory to have suitable storage and/or filling facilities. Distributors’ domestic market share cannot exceed 45%. Distributors enter into contracts with dealers and are responsible for maintaining their supply.

Transportation (Transportation License): A transportation license is required for the transportation of LPG in bulk or autogas form. Transportation vehicles must comply with technical regulations.

Storage (Storage License): This is the activity of storing LPG safely. Storage license holders are obliged to offer their spare capacity to third parties upon request. Storage tariffs are prepared by license holders and are subject to EMRA approval.

Filling (Filling License): Required for filling LPG cylinders and refueling at stations. Only cylinders bearing the facility’s own brand may be filled at filling stations.

Cylinder Manufacturing (Manufacturing License): Required for the production of LPG cylinders. Production facilities must comply with technical regulations.

Cylinder Inspection, Repair, and Maintenance (Inspection License): Mandatory for periodic inspection, maintenance, and repair of LPG cylinders. Disposal of cylinders unfit for use is also covered under this license.

Autogas Dealership (Dealership License): This covers the activities of dealers who have a single-source contract with a distributor. Dealers can only sell LPG from the distributor with whom they have a contract. Cylinder filling and sales are prohibited at autogas stations. Dealers are required to employ a responsible manager.

4.5.3. Licensing Process in the LPG Market

The licensing process in the LPG market is carried out as follows, within the framework of the LPG Market Law and the LPG Market Licensing Regulation:

Licensing Requirement: A license is required for distribution, transportation, autogas dealership, storage, cylinder manufacturing, filling, inspection, repair, and maintenance activities. Licenses are issued only to the rightful owner, whether an individual or a legal entity.

Application Prerequisites: The applicant (individual/company) must have completed the necessary permits, approvals, and documents in areas such as zoning, environment, occupational health, and safety. They must have the physical assets necessary to carry out the activity. (Licenses are not granted based on commitments.)

Application and Evaluation: Applications are made electronically. Autogas dealership applications are made only through the distributor license holder company with which the dealer has signed a contract. Applications are evaluated within 60 days at the latest. Reasons are provided for rejected applications.

No Debt Condition: The applicant must not have any overdue premiums/penalties owed to the Social Security Institution (SGK) or any debts owed to the tax office. For a distributor license, there must also be no outstanding revenue share or participation share debts.

License Fee: License fees are determined annually by the EMRA Board Decision. Fees are paid into the EMRA’s bank account.

Information to be Included in the License Certificate: Nature of activity, type and geographical location of the facility, technology to be used, capacity and quantity information.

Rights and Obligations of License Holders: License holders are obligated to provide LPG in accordance with technical regulations, take out compulsory insurance, not harm the environment, and compensate third parties for any damages caused. Licenses shall not be granted to individuals and company partners who have been convicted of smuggling.

4.6. Nuclear Energy

4.6.1. Development of Nuclear Energy

First Initiatives in Türkiye: Work on nuclear energy in Türkiye began in the 1950s, and the Atomic Energy Commission (AEK) was established in 1956. The first nuclear power plant projects were planned in the 1970s in Mersin Akkuyu and Sinop, but they were not implemented due to various political and economic reasons.

Current Status: Nuclear energy policies gained momentum again in the 2000s, and the Akkuyu Nuclear Power Plant (NPP) project was launched with an intergovernmental agreement signed between Türkiye and the Russian Federation in 2010. The Akkuyu NPP is being built under a build-own-operate (BOO) model, similar to the build-operate-transfer model, and will be Türkiye’s first nuclear power plant. In addition, new nuclear power plant projects in Sinop and İğneada are on the agenda.

4.6.2. Nuclear Energy: Legal and Institutional Framework

The legal framework for nuclear energy activities in Türkiye is defined by various laws and regulations: The Turkish Energy, Nuclear and Mining Research Institute (TENMAK), established by Decree Law No. 702, is authorized to develop nuclear energy and related technologies. The Nuclear Regulation Law (2021) established the Nuclear Regulation Authority (NRA) as an independent authority, granting it jurisdiction over nuclear safety, radiation safety, and licensing processes. In addition, the Environmental Impact Assessment (EIA) Regulation sets environmental standards for nuclear projects.

Energy and Natural Resources Ministry (MENR): Nuclear Energy policy.

Nuclear Regulatory Authority (NRA): As an independent regulatory authority, it issues licenses, sets safety standards, and carries out oversight duties.

TENMAK: Responsible for scientific research, development, and domestic technology production.

4.6.3. Nuclear Energy Projects and Activities

Akkuyu Nuclear Power Plant: Construction is being carried out by Russia under an agreement signed in 2010. It will consist of 4 units and have a total installed capacity of 4800 MW. Once the plant is commissioned, it is expected to meet approximately 10% of Türkiye’s electricity needs.

Sinop Nuclear Power Plant: Planned in cooperation with Japan and France.

İğneada Project: It has been brought to the agenda within the framework of possible cooperation with China.

4.6.4. Safety and Oversight in Nuclear Energy

The most critical factor in nuclear energy is safety. NRA conducts safety inspections at all stages of power plant construction, operation, and decommissioning. In addition, radiation safety, emergency plans, and waste management are carried out in accordance with international standards. Türkiye cooperates with the International Atomic Energy Agency (IAEA) in this area.

Supply Security: Nuclear energy provides diversity in electricity generation and reduces dependence on external sources.

Carbon Neutral Goals: Nuclear energy plays a critical role alongside renewable sources in achieving zero emission targets.

Domestic Contribution: Projects envisage the training of local engineers and technology transfer.

5. Conclusion

The liberalization of energy markets has become one of the cornerstones of Türkiye’s energy policies; comprehensive reforms in the fields of electricity, natural gas, oil, LPG, and nuclear energy have established a market economy-based structure. In this process, the policy-making role of the Ministry of Energy and Natural Resources, the regulatory and supervisory functions of EMRA, the research and development activities of TENMAK, and the executive duties of public institutions such as TEİAŞ and BOTAŞ have formed the institutional basis of energy law.

However, it is clear that liberalization alone is not sufficient in energy markets. The effective operation of legal instruments such as privatization, licensing, tariffs, expropriation, and investment incentives; transparency, competition, and consumer rights protection in markets; and consideration of environmental and social impacts are the determining factors for the success of energy law.

Renewable energy and nuclear energy projects, in particular, are of strategic importance for Türkiye in terms of both strengthening its energy supply security and achieving its carbon neutrality goals. However, issues such as high investment costs, environmental risks, social reactions, and the financial burden created by foreign exchange-based support mechanisms are among the main issues that energy law must address in the coming period.

Ultimately, energy law should be seen not only as regulating the market but also as the legal basis for leaving future generations a safe, sustainable, and fair energy system.

References

Electricity Market Law 6446,
Natural Gas Market Law 4646,
Petroleum Market Law 5015,
LPG Market Law 5307,
Presidential Decree on the Organization of the Presidency 1, RG: 10.07.2018, No: 30474.
Law 5346 on the Use of Renewable Energy Sources for Electricity Production,
Law 5654 on the Establishment and Operation of Nuclear Power Plants and the Sale of Energy,
Electricity Market Licensing Regulation,
Energy Market Regulation Authority (EMRA) Official Website, https://www.epdk.gov.tr

Kaplan, O. (2023). An examination of the functions of the administration in Turkish law with regard to the production of electrical energy from renewable energy sources. Yaşar Law Journal, 5(2), 297–336.

 

Attorney Yalçın Torun

Intern-Attorney Şirin Çakır

© 2025 Torun Law Firm – All Rights Reserved.
This article is protected under the provisions of the Law on Intellectual and Artistic Works (No. 5846). The content, in whole or in part, may not be copied, reproduced, published, or shared on any other website without the prior written permission of the author and Torun Law Firm.
This material may only be shared by licensed attorneys, for professional purposes, without any modifications, and with full attribution to the author and the source.
Any unauthorized use may result in legal and criminal liability.

Leave a Comment

Your email address will not be published. Required fields are marked *

Scroll to Top