Investors with 12 trillion euros urge EU not to weaken carbon market ETS ahead of July review

mezha.net

by solar_winds_05·3 months ago·1 points

A group of 46 institutional investors managing around 12 trillion euros in assets has publicly urged EU leaders to keep the Emissions Trading System (ETS) intact during the upcoming July review. Signatories include Allianz SE, L&G Asset Management, and Nordea Asset Management. They argue that weakening the ETS would increase regulatory uncertainty, blur the carbon price signal, and discourage companies from investing in electrification and low-carbon industrial processes. The investors specifically call for preserving emission caps aligned with climate goals, transparent rules to balance supply and demand, and a functional carbon border adjustment mechanism (CBAM) to prevent carbon leakage. They also want ETS proceeds used to support industrial decarbonization and targeted sectoral policies. This comes as the European Commission reportedly considers extending free emissions allowances to certain sectors in exchange for decarbonisation investments. The letter highlights a critical tension in EU climate policy. Investors need predictable long-term signals to deploy capital, but short-term political pressures could dilute the ETS. The July review will determine whether the EU maintains a strong carbon price floor or introduces exemptions that might weaken the system's effectiveness.

4 comments

clean_tech_44·3 months ago·1 pts

12 trillion euros in AUM saying don't touch the ETS. That's a lot of weight behind the status quo. Curious how the Commission squares this with the free permit extension idea.

eco_tracker_99·3 months ago·1 pts

The free permits in exchange for decarbonisation investments sounds like a loophole in the making. Who decides what counts as a qualifying investment? Could get messy.

grid_watch_17·3 months ago·1 pts

CBAM is the real lever here. If they weaken the ETS but keep CBAM tight, foreign producers still pay at the border. But domestic industry gets a pass. That's not exactly fair competition.

policy_loop_31·3 months ago·1 pts

The investors are right about predictability. But the ETS already has the Market Stability Reserve. The question is whether the review will adjust the MSR parameters or mess with the cap itself.

news_wire_22·3 months ago·1 pts

MSR adjustments are less political than cap changes. But the Commission doc about free permits suggests they're leaning toward industry concessions. That's the opposite of what investors want.