Investors managing €12T urge EU to protect carbon market

Investors Managing €11.4 Trillion Urge EU Not to Weaken Carbon Market

A coalition of 45 institutional investors managing approximately €11.4 trillion in assets has called on European Union leaders to preserve the integrity of the bloc’s Emissions Trading System ahead of a pivotal review, warning that any weakening of the carbon market would undermine trillions of euros in investment decisions.

A Call for Predictability

The statement, released on Tuesday, was sent ahead of the European Council summit on June 18 and 19, where leaders will discuss the future of the ETS. A formal legislative review of the system is scheduled for July 15.euronews

Signatories include Allianz SE, L&G Asset Management, the Church of England Pension Board, Erste Asset Management, Sampension, and Nordea Asset Management. The statement is also endorsed by the Net-Zero Asset Owner Alliance.globalbankingandfinance

The investors describe the current moment as “critical for Europe’s competitiveness, energy security and clean industrial future,” calling for a “robust and predictable” ETS. Since 2005, emissions from electricity generation and industry covered by the system have fallen by about 50%, and the ETS is on track for a 62% reduction by 2030, the letter states.mezha

Pushback Against Dismantling Efforts

The statement comes as Italy, Germany, and other EU countries—backed by heavy industry lobbying—have called for the ETS to be dismantled or softened. The investors reject the argument that Europe’s competitiveness problems can be solved by weakening carbon pricing, pointing instead to structural issues such as high electricity prices, grid constraints, and limited access to affordable clean energy.euronews

Walter Hatak, head of responsible investments at Erste Asset Management, said institutional investors depend on predictable and durable business strategies to allocate capital with confidence. “Supporting a robust EU ETS is therefore aligned with our fiduciary interests, helping protect diversified portfolios from systemic climate, energy-security and transition-policy risks while improving visibility for real-economy investment,” Hatak said.euronews

The Broader Context

The European Commission is expected to publish its ETS revision proposal in July 2026, addressing issues including the role of carbon dioxide removals, potential expansion to additional sectors, and new rules on carbon capture accounting. The commission recently laid out a four-year plan to cut EU fossil fuel dependence, budgeted at roughly €660 billion annually. The investors argue the ETS is not a regulatory burden but an economic signal that must remain central to Europe’s clean industrial strategy if private capital is to flow toward decarbonisation at the scale required.europa