The European Emissions Trading Scheme (EU ETS) aims to lower greenhouse gases inpollution-intensive industries. The success of the EU ETS, its policy framework and its pricingstrategy is both empirically acknowledged and disputed. The study contributes to the empiricalresearch on the effect of the price of EU ETS permits on carbon emissions. Therefore, the aimis to establish the relationship between the price of emission permits and CO2 emissions inrelation to each phase of the EU ETS, for Sweden and Finland with a focus on the Pulp andPaper Industry (PPI). Moreover, the focus lies on the difference in the effect of each EU ETSphase on CO2 emissions, allowing for discussion on the effectiveness of each phase. Using aNewey-West multiple linear regression analysis, we found statistically significant evidence thatduring Phase 3, EU ETS permit pricing had a negative effect on CO2 emissions for both Swedenand Finland, EU ETS permit pricing in Phase 1 seems to have a low positive effect on CO2emissions solely for Sweden, while Phase 2 does not have an effect on CO2 emissions for eithercountry. Our collected data implies some degree of ineffectiveness and uncertainty in thesuccess of the EU ETS framework and pricing strategy.