Signals amidst the noise

Welcome to Carbon Risk — helping investors navigate 'The Currency of Decarbonisation'! 🏭.

Next week's meeting of EU leaders in Brussels on 19-20 March could provide crucial insights into the future direction of the EU emissions trading scheme.

As regular readers of Carbon Risk will know all too well, Europe's flagship climate policy has been under the cosh for most of 2026. Some European governments, most notably Italy have even called for the market to be suspended. Meanwhile, industry leaders, mostly those struggling with high energy prices and international competitiveness, have called for drastic reforms.

The recent US/Israeli conflict with Iran has added fuel to the political conflagration, with EU policymakers now apparently reopening their 2022 energy crisis playbook, considering all options to alleviate the impact on households and businesses.

But not everyone is so negative!

As I discussed previously, the EU's top business lobby, BusinessEurope has called for reforms to the Europe's carbon market, but it has also offered its support, stating that the "ETS should remain a central part of EU’s climate policy in a post-2030 framework."

Elsewhere 100 European industrial firms, including EDF, Heidelberg and SSAB have come together to voice their support for the EU ETS, stating in a letter to EU Heads of State that undermining it "would erode investment certainty and damage Europe’s industrial future."

Indeed, much of the negative industrial feedback following the EU leaders meeting in Antwerp on 11th February appears to have been exaggerated. An investigation by Politico found that many of the companies that had appeared as signatories to the letter and were seen to be calling for drastic measures had done no such thing.

Ahead of what could be a pivotal week lets have a look at how the EU carbon market is positioned.