The best carbon credit ETFs/ETCs
How to invest in carbon emission allowances using ETFs/ETCs
How can I invest in carbon emission allowances?
With ETFs you not only have the opportunity to invest in equity or bonds. You can also participate in the price development of commodities like carbon emission allowances. However, there are a few things you should know: commodity ETFs always track a whole basket of different commodities. There are no carbon emission allowances ETFs that are domiciled within the European Union. This is due to the regulatory framework which is defined by the UCITS directive. According to these guidelines, an index (and thus also corresponding ETFs) must always provide a minimum degree of diversification and may not consist of only one component. Consequently, regulations in the EU do not allow the launch of a carbon emission allowances ETF.If you want to invest in a single commodity like carbon emission allowances, you can do so via Exchange Traded Commodities (ETC). Please have a look at our article "What is an ETC?" for a detailed explanation of the similarities and differences between ETFs and ETCs.
How carbon credit ETCs work
ETCs can replicate the performance of carbon emission allowances in different ways. First, an ETC may track the spot price of carbon emission allowances and be physically backed. If this is the case, physical carbon emission allowances are used as collateral for the corresponding ETC. Second, ETCs can track the performance of carbon emission allowances using futures contracts. These ETCs are also backed with collateral, which is usually checked on a daily basis. However, the collateral in such a case is not in the form of physical carbon emission allowances, but in the form of cash investments or securities with top credit standing.In this investment guide you will find all ETCs that allow you to invest in carbon emission allowances.
Carbon EUA performance
Carbon credit ETFs/ETCs in comparison
When choosing a carbon credit ETF or ETC one should consider several other factors in addition to the methodology of the underlying index and performance of an ETF. For better comparison, you will find a list of all carbon credit ETFs/ETCs with details on size, cost, age, income, domicile and replication method ranked by fund size.
Compare all carbon credit ETFs/ETCs in detail
Compare all carbon credit ETFs/ETCs in a chart
| Provider ISIN | Fund size in m EUR | TER in % | Use of profits | Fund domicile | Replication method | |
|---|---|---|---|---|---|---|
| HANetf SparkChange Physical Carbon EUA ETCXS2353177293 | 144 | 0.89% p.a. | Accumulating | Ireland | Physically backed | |
| WisdomTree CarbonJE00BP2PWW32 | 77 | 0.35% p.a. | Accumulating | Jersey | Swap-based | |
| WisdomTree California CarbonJE00BNG8LN89 | 1 | 0.49% p.a. | Accumulating | Jersey | Swap-based | |
| SG ETC ICE EUA Futures-KontraktDE000ETC0001 | - | 4.00% p.a. | Accumulating | Germany | Swap-based | |
| UBS European Physical Carbon ETC XS2651539681 | - | 0.75% p.a. | Accumulating | Ireland | Physically backed |
Source: justETF.com; As of 25.12.24
Return comparison of all carbon credit ETFs/ETCs
The table shows the returns of all carbon credit ETFs/ETCs in comparison. All return figures are including dividends as of month end. Besides the return the reference date on which you conduct the comparison is important. In order to find the best ETFs, you can also perform a chart comparison.
| ETF | 1 month in % | 3 months in % | 6 months in % | 1 year in % | 3 years in % | |
|---|---|---|---|---|---|---|
| HANetf SparkChange Physical Carbon EUA ETC | 4.75% | -1.90% | -7.83% | -4.27% | -11.79% | |
| WisdomTree Carbon | 4.63% | -2.10% | -8.17% | -4.89% | -13.80% | |
| SG ETC ICE EUA Futures-Kontrakt | 4.13% | -2.27% | -9.31% | -7.59% | - | |
| WisdomTree California Carbon | -5.74% | 3.98% | -8.35% | -10.50% | - | |
| UBS European Physical Carbon ETC | 4.53% | -1.50% | -7.34% | - | - |
| ETF | 2024 in % | 2023 in % | 2022 in % | 2021 in % | 2020 in % | |
|---|---|---|---|---|---|---|
| WisdomTree California Carbon | -11.78% | - | - | - | - | |
| WisdomTree Carbon | -12.62% | -6.44% | -0.87% | - | - | |
| HANetf SparkChange Physical Carbon EUA ETC | -12.82% | -5.19% | 0.54% | - | - | |
| SG ETC ICE EUA Futures-Kontrakt | -14.90% | - | - | - | - | |
| UBS European Physical Carbon ETC | - | - | - | - | - |
Source: justETF.com; As of 30.11.24; Calculations in EUR including dividends