European Central Bank board member Frank Elderson has called for a credible and well-functioning carbon market in the EU, arguing that continued reliance on fossil fuels is dragging down the broader economy. Speaking in the context of the EU Emissions Trading System (ETS), Elderson stressed that a robust carbon price signal is essential to drive decarbonization and maintain competitiveness. The remarks come as the European Commission prepares to release its ETS reform and electrification action plan, now postponed to July 17. Elderson's warning ties carbon market integrity directly to macroeconomic stability. A weak or poorly designed ETS, he argued, would fail to shift investment away from fossil fuels and leave European industry exposed to volatile energy prices. The statement adds weight to the debate over the upcoming ETS reform, where internal Commission divisions have already surfaced. For market participants, the signal is clear: the ECB sees carbon pricing as a structural economic issue, not just an environmental one.
