European carbon prices fell to near six month lows on 12 February after fresh political pressure to reform the bloc’s carbon market ahead of an EU leaders’ summit.

Allowances under the European Union Emissions Trading System were trading at €73.01/mtCO2e by midday, their lowest level since mid August, according to Intercontinental Exchange data.

Prices have dropped by almost €20/mtCO2e since mid January amid expectations of potential changes to free allocations and supply caps.

At the European Industry Summit in Antwerp, German Chancellor Friedrich Merz said the ETS should be revised or postponed, if it undermines industrial competitiveness.

He stressed the system’s purpose is to cut emissions while enabling companies to transition to low carbon production, adding that policymakers should be open to change if it fails to deliver.

Czech Prime Minister Andrej Babiš echoed calls for reform, arguing that carbon prices should be capped at €30/mtCO2e to protect European industry.

The intervention follows a period in which EUAs briefly exceeded €90/mtCO2e in January, intensifying concerns among manufacturers already grappling with high energy costs.

Meanwhile, Ursula von der Leyen defended the ETS, urging member states to reinvest more auction revenues into industrial decarbonisation.

The European Commission is scheduled to review the ETS in the third quarter of 2026, with debate likely to focus on price predictability and competitiveness.