The following letter was circulated to the EU Heads of State or Government, European Council President António Costa, and European Commission President Ursula von der Leyen ahead of the European Council meeting on 19–20 March 2026. We approached the members of the European Council directly to emphasize the importance of safeguarding the integrity of the EU Emissions Trading System (EU ETS) and to highlight its central role in strengthening the Union’s competitiveness, investment certainty, and long‑term decarbonisation.
Dear President von der Leyen,
Dear President Costa,
Dear Heads of States,
Over the past two decades, the EU Emissions Trading System (EU ETS) has become the core of the Union’s climate policy. The EU ETS has reduced emissions cost-effectively and steered investments towards low-carbon solutions, while also strengthening Europe’s energy security, and economic renewal. Now, as the system is being prepared to meet the needs of 2040 and the next decade, its foundations are being unjustifiably called into question.
Some actors have voiced concerns that the EU ETS could undermine Europe’s competitiveness. Some Member States have even proposed suspending the system during the review process. Such demands threaten the long-term policy stability on which many companies and investors have relied when committing billions of euros to low-carbon solutions.
The EU ETS is an ally of Europe’s long-term competitiveness, not an enemy. Over the past decades, it has been one of Europe’s most important drivers of economic renewal and technological transformation. It provides a clear and predictable price signal that makes the development and adoption of low-emission solutions economically viable. The system has accelerated the scaling of new technologies and steered markets towards solutions that strengthen Europe’s long-term competitiveness. Competitiveness and carbon pricing are not in conflict; rather, competitiveness and economic resilience require a transition away from fossil fuels.
The ongoing conflict in the Middle East only highlights the strategic imperative to phase-out fossil fuels. Europe should not rely on volatile, expensive, and vulnerable fossil fuel imports. The EU ETS provides the necessary incentives for the energy transition.
Structural differences in electricity prices between Europe and its global competitors cannot be resolved by weakening the EU ETS. Europe must strengthen its investment capacity and accelerate the transition towards a competitive, low-emission energy system that supports industrial renewal and large-scale deployment of new technologies.
Policy predictability is essential. If the EU ETS is undermined now, investment certainty will erode, existing and planned projects will be put at risk, and Europe’s ability to carry out the necessary economic and technological transformation will be weakened.
Our appeal is clear: the European Council must firmly commit to preserving and strengthening the EU ETS. The effectiveness of the system must not be weakened during or after the review process.
Europe’s economic, technological, and climate-resilient future depends on consistent and predictable policy. Now is not the moment to undermine the foundation on which companies, investors, and citizens have built their trust.
17.3.2025 in Helsinki
Tuuli Kaskinen, Chief Executive Officer, Climate Leadership Coalition
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