A coalition of 50 investors, collectively representing €13.4 trillion in assets, have called on EU leaders to support a ‘robust and predictable’ EU Emissions Trading System. In a letter written to EU leaders, the group of investors (the Institutional Investors Group on Climate Change) stated that “competitiveness, energy security, resilience and climate neutrality [are] mutually reinforcing goals for a strong European economy.”
While recognising the challenges arising from global fragmentation, the group also recognise the role investors have in managing risks and mobilising capital for Europe’s competitive clean transition: “In this context, one message is critical: a robust and predictable EU Emissions Trading System (ETS) must remain the bedrock of Europe’s clean industrial future.”
The group point to the role the ETS has had in incentivising low-carbon innovation and creating investment opportunities across sectors – critical benefits for institutional investors with diversified, economy-wide portfolios – and assert that the ETS should remain the bedrock of Europe's clean industrial strategy, with the upcoming review offering an opportunity for evolution, not dilution.
The group stress that the next phase of the ETS – one of Europe’s most effective policy tools – should strengthen that signal by preserving a clear long-term carbon price signal, supporting cost-effective decarbonisation and giving companies and investors the certainty needed to deploy capital into electrification, industrial transformation and strategic clean technologies. They also stress that ETS must form part of an overall policy package that addresses specific investment barriers and drivers. We urge the European Council to adopt a clear statement at its meeting of 18-19 June in support of a robust and predictable EU ETS that is strengthened as an investment signal.
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