This study examines the relationship between EU ETS carbon prices and industrial production in Sweden during the period 2020-2025. The study examines whether this relationship differs between high energy-intensive industries and low- to medium energy-intensive industries. The theoretical framework that this thesis is based on is the Porter Hypothesis, which suggests that environmental regulation may stimulate innovation and efficiency improvements. This hypothesis is then contrasted against the traditional view, which argues that environmental regulation increases production costs and may reduce industrial performance. The empirical analysis uses OLS regressions with the Industrial Production Index as the main dependent variable and EU ETS prices as the main explanatory variable. Industry fixed effects, interaction models, time fixed effects, and robustness checks using value added and employment are also included in the empirical analysis. The results found in the thesis provide mixed evidence. The main IPI regressions show a positive association between ETS prices and production for high energy-intensive industries, while the robustness checks and industry-level correlations suggest that the results should be carefully interpreted. To summarize, the results found in this study are somewhat more consistent with the traditional view, meaning that higher carbon prices may create cost pressures for energy-intensive industries. However, the results are not strong enough to fully reject the Porter Hypothesis either, and therefore neither of the hypotheses can be fully confirmed.