Economists Benoit Leguet and Jean Pisani-Ferry argue that Europe should instead strengthen the EU's Emissions trading System (ETS) to support industrial competitiveness, accelerate technological innovation, and maintain global leadership in low-carbon technologies.
The EU carbon market occupies a central place in climate policy
The EU ETS has set limits on emissions from European industry since 2005. The system currently covers approximately 40 percent of greenhouse gas emissions in the European Union, including electricity generation, energy-intensive industries, and intra-European aviation.
Under the ETS, companies must maintain emission quotas for their carbon production. These quotas are market-based, creating a carbon market that provides financial incentives to reduce emissions. After earlier adjustments, the carbon price has stabilized at around €60-€80/ton of carbon in 2025.
The system enters a new phase in 2026
The carbon market is currently entering a new phase, which has caused concern among some industrial producers.
Two major policy changes are scheduled to begin in 2026. First, free emission quotas for energy-intensive industries will begin to decline faster before being completely eliminated by 2034, increasing
