diff --git a/pkg/cfn/builder/karpenter.go b/pkg/cfn/builder/karpenter.go
index 3982598ac5..18531f9df8 100644
--- a/pkg/cfn/builder/karpenter.go
+++ b/pkg/cfn/builder/karpenter.go
@@ -49,6 +49,7 @@ const (
 	ec2TerminateInstances            = "ec2:TerminateInstances"
 	ec2DescribeImages                = "ec2:DescribeImages"
 	ec2DescribeSpotPriceHistory      = "ec2:DescribeSpotPriceHistory"
+	ec2DescribeCapacityReservations  = "ec2:DescribeCapacityReservations"
 	// IAM
 	iamPassRole                      = "iam:PassRole"
 	iamCreateServiceLinkedRole       = "iam:CreateServiceLinkedRole"
@@ -175,6 +176,7 @@ func (k *KarpenterResourceSet) addResourcesForKarpenter() error {
 				ec2TerminateInstances,
 				ec2DescribeImages,
 				ec2DescribeSpotPriceHistory,
+				ec2DescribeCapacityReservations,
 				iamPassRole,
 				iamCreateServiceLinkedRole,
 				iamGetInstanceProfile,
diff --git a/pkg/cfn/builder/karpenter_test.go b/pkg/cfn/builder/karpenter_test.go
index f68aec3baa..8269cdcddc 100644
--- a/pkg/cfn/builder/karpenter_test.go
+++ b/pkg/cfn/builder/karpenter_test.go
@@ -137,6 +137,7 @@ var expectedTemplate = `{
                 "ec2:TerminateInstances",
                 "ec2:DescribeImages",
                 "ec2:DescribeSpotPriceHistory",
+                "ec2:DescribeCapacityReservations",
                 "iam:PassRole",
                 "iam:CreateServiceLinkedRole",
                 "iam:GetInstanceProfile",
@@ -297,6 +298,7 @@ var expectedTemplateWithPermissionBoundary = `{
                 "ec2:TerminateInstances",
                 "ec2:DescribeImages",
                 "ec2:DescribeSpotPriceHistory",
+                "ec2:DescribeCapacityReservations",
                 "iam:PassRole",
                 "iam:CreateServiceLinkedRole",
                 "iam:GetInstanceProfile",
@@ -482,6 +484,7 @@ var expectedTemplateWithSpotInterruptionQueue = `{
                 "ec2:TerminateInstances",
                 "ec2:DescribeImages",
                 "ec2:DescribeSpotPriceHistory",
+                "ec2:DescribeCapacityReservations",
                 "iam:PassRole",
                 "iam:CreateServiceLinkedRole",
                 "iam:GetInstanceProfile",