The European Council sets the European Union's overall political direction and priorities. It consists of the heads of state or government of all EU member states, along with the President of the European Council and the President of the European Commission. Unlike other EU institutions, it does not pass laws, but its strategic decisions significantly influence the EU's climate and environmental policies.
In the context of carbon markets, the European Council plays a pivotal role by defining the EU's long-term climate objectives and strategy. For instance, it was instrumental in establishing the EU's commitment to climate neutrality by 2050 and in setting ambitious emission reduction targets. The Council's decisions provide the political framework within which the EU ETS operates and evolves, guiding subsequent legislative work by other EU institutions.
Not to be confused with "Council of the European Union" or "Council of Europe".