This study examines the relationship between emissions compliance under the European Union Emissions Trading Scheme (EU ETS) and pricing patterns across regulated and unregulated industries in EU countries. Using panel data from 2005 to 2019, the analysis incorporates fixed year and country effects, as well as three-year compliance lags, to explore potential cost pass- through mechanisms. Contrary to initial hypotheses, results indicate that compliance behaviors are associated with price reductions in several indices, such as Electricity and Clothing, suggesting that firms may absorb compliance costs or capitalize on positive market dynamics. These findings highlight the complexity of cost pass-through and suggest the need for more ambitious policy adjustments to achieve the intended economic and environmental goals of the EU ETS. Future research should explore the mechanisms driving these trends and their broader implications.