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The report evaluates the EU ETS's impact on corporate investment behavior, finding that while it successfully reduced investment in carbon-intensive assets, its ability to trigger a shift toward low-carbon strategies is hindered by insufficient stringency and the use of free allowances. It highlights that the current cap reduction trajectory is insufficient to meet the EU's 80-95% emission reduction goal by 2050 and argues that the Clean Development Mechanism (CDM) creates uncertainty and reduces effective emission targets. The authors recommend tightening the ETS cap, phasing out offsets, reforming IFRS accounting practices to reflect the true value of allowances, and combining carbon pricing with technology-specific support schemes to create a more enabling environment for low-carbon projects.