Finance
EU's von der Leyen defends carbon market after leaders' criticism
Published by Global Banking & Finance Review®
Posted on February 12, 2026
3 min readLast updated: February 12, 2026
Quick Summary
EU's von der Leyen defends the carbon market, emphasizing its benefits and existing safeguards amid EU leaders' calls for revision.
EU's von der Leyen Advocates for Carbon Market Amid Criticism
EU's Emissions Trading System Under Scrutiny
By Kate Abnett and Philip Blenkinsop
Criticism from EU Leaders
BRUSSELS, Feb 12 (Reuters) - The European Union's emissions trading system has "clear benefits" and existing safeguards to modulate the carbon price if it rises too high, European Commission President Ursula von der Leyen said on Thursday, after some government leaders called for the system to be revised.
Defending the ETS
The leaders of countries including Germany, Italy and the Czech Republic this week said the EU should consider revising its ETS, amid calls from industry to reduce the price it imposes on their pollution.
Impact on Industries
Von der Leyen told a news conference after a summit of EU government leaders that the ETS - which is the EU's most important climate change policy - was crucial for clean tech industries whose investments depend on a reliable CO2 price. She said the scheme had returned 200 billion euros in revenues to national governments' budgets since its launch in 2005.
"The ETS has also elements that if the price for whatever reason is going too high, or the economic circumstances are tough, that you can with the 'market stability reserve', modulate the price," von der Leyen said, adding that the Commission will look into these elements in an upcoming review of the ETS, due in July.
German Chancellor Friedrich Merz also defended the ETS on Thursday, after saying on Wednesday the EU should be open to revising or postponing it.
"There are colleagues who are very critical of this. I don't share this criticism in this form. The ETS system, which has now existed for 20 years... has ensured that we in Europe have implemented an effective instrument that makes growth possible without simultaneously generating additional CO2 emissions," Merz told reporters following Thursday's summit.
Asked about his comments on Wednesday, Merz said the ETS's purpose was to promote innovation by pricing CO2 emissions. "This purpose must, of course, be regularly reviewed. If we have achieved this purpose, we can improve it, and that is precisely what I said," he added.
The ETS forces power plants and industries to buy CO2 permits when they pollute, to provide a financial incentive to reduce emissions. The price of EU carbon permits tumbled on Thursday, after leaders suggested revising the policy.
(Reporting by Kate Abnett, Philip Blenkinsop; Editing by Benoit Van Overstraeten and Nia Williams)
Key Takeaways
- •Von der Leyen defends the EU's emissions trading system.
- •EU leaders call for potential revisions to the ETS.
- •The ETS is crucial for clean tech industry investments.
- •The system has generated significant revenue since 2005.
- •German Chancellor supports the ETS's role in innovation.
Frequently Asked Questions about EU's von der Leyen defends carbon market after leaders' criticism
1What is the EU's Emissions Trading System?
The EU's Emissions Trading System (ETS) is a market-based approach to controlling pollution by providing economic incentives for reducing emissions of pollutants.
2What are carbon permits?
Carbon permits are allowances that enable companies to emit a certain amount of carbon dioxide. Companies must buy permits for their emissions, creating a financial incentive to reduce pollution.
3What is market stability reserve?
A market stability reserve is a mechanism designed to manage the supply of carbon allowances in the market, helping to stabilize carbon prices during economic fluctuations.
