EU carbon prices saw a significant drop on Thursday morning, plummeting by seven percent to the lowest level since August. This decline comes in the wake of a joint appeal by leaders from Germany, Italy, and the Czech Republic urging the European Union to consider revising its Emissions Trading System (ETS). German Chancellor Friedrich Merz highlighted the urgency of the situation during a meeting with industrial leaders, who expressed concerns about the current carbon pricing strategy and suggested that EU intervention is necessary to reduce prices and make emissions allowances more manageable for businesses.

Merz specifically mentioned that the EU should remain receptive to re-evaluating the ETS or at least postponing certain measures to better accommodate the needs of various industries. The ETS is considered the EU's most critical climate change policy, mandating that power plants and industries must purchase CO2 permits when they pollute, with a cap on the number of permits available in the market aimed at gradually reducing emissions over time. Such discussion around intervention indicates a growing concern among EU member states regarding the impact of carbon pricing on their economies and industries.

The overall support for revisiting the ETS from other EU leaders underscores a collective recognition of the challenges posed by the current carbon pricing framework. As the EU continues to navigate its climate policy objectives, the decisions made in response to these recent calls could significantly influence both environmental strategies and industrial competitiveness in the region.