EU ETS Under Pressure: Investors Warn Against Weakening Carbon Market Ahead of 2026 Review
carboncredits.comA group of 45 institutional investors managing €11.4 trillion in assets has urged EU leaders to protect the EU Emissions Trading System (ETS) ahead of a landmark 2026 review. Signatories include Allianz SE, L&G Asset Management, and Nordea Asset Management. They warn that weakening the carbon market could damage investor confidence and slow Europe's clean-energy transition. The investors argue that a stable ETS is critical for directing private capital into renewable energy, low-carbon projects, and clean technologies. Since 2005, emissions under the ETS have dropped by about half, and the system is on track for a 62% reduction by 2030. However, some EU member states and industrial groups are pushing for relief from carbon costs, citing competitiveness concerns. The European Commission is considering allowing industries to keep free emissions permits if they invest within the EU. Investors counter that weakening carbon pricing won't solve deeper issues like high electricity prices and slow grid expansion. They say the ETS remains central to Europe's climate strategy and long-term competitiveness.