This paper examines whether rising relative energy costs among foreign competitors lead to higher domestic markups. I follow prior environmental and trade literature by using energy prices as a proxy for environmental stringency. The hypothesis is built upon and motivated by the theoretical model in Baccianti & Schenker (2021) which shows that carbon leakage to firms with a comparative cost advantage might be captured through increases in markups by such firms. I estimate markups with the DeLoecker and Warczynski (2012) approach and find only little impact of energy price differences on markups. On a large financial dataset from AMADEUS, simple fixedeffect regression results hover around a domestic 1% markup increase in response to a one standard deviation increase in energy prices among foreign competitors. The effect diminishes and becomes statistically insignificanct once accounting for endogeneity concerns with a 2SLS and Blundell-Bond estimator.