The best carbon credit ETFs/ETCs

How to invest in carbon emission allowances using ETFs/ETCs

0.35% p.a. - 0.89% p.a.
annual total expense ratio (TER) of carbon credit ETFs/ETCs
on carbon emission allowances, which are tracked by ETFs
on carbon emission allowances
 
The best indices for carbon credit 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

1 month: -9.07%
1 year: -43.74%
 

Carbon credit ETFs/ETCs in comparison

The most important factors at a glance

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 GBP
TER
in %
Use of profits Fund domicile Replication method
WisdomTree CarbonJE00BP2PWW32 171 0.35% p.a. Accumulating Jersey Swap-based
HANetf SparkChange Physical Carbon EUA ETCXS2353177293 66 0.89% p.a. Accumulating Ireland Physically backed
WisdomTree California CarbonJE00BNG8LN89 2 0.49% p.a. Accumulating Jersey Swap-based

Source: justETF.com; As of 02/03/2024

 

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 -8.84% -24.19% -35.96% -45.49% -
WisdomTree Carbon -8.69% -24.57% -36.04% -46.25% -
WisdomTree California Carbon -1.84% 1.51% 11.42% - -
ETF   2024
in %
2023
in %
2022
in %
2021
in %
2020
in %
WisdomTree California Carbon 2.08% - - - -
WisdomTree Carbon -30.82% -8.53% 4.66% - -
HANetf SparkChange Physical Carbon EUA ETC -31.44% -7.84% 7.56% - -

Source: justETF.com; As of 29/02/2024; Calculations in GBP including dividends