SparkChange Physical Carbon EUA ETC (CO2) now available to European investors

  • SparkChange Physical Carbon EUA ETC (CO2) Europe’s first physically-backed Carbon Exchange-Traded Commodity has listed on Deutsch Börse XETRA and Borsa Italiana. [1]
  • SparkChange CO2 prevents emissions by withholding carbon allowances from polluters.
  • With $150 million in AUM the ETC withholds allowances equivalent to 1.5 million metric tonnes of CO2

7th June 2022

Europe’s first Exchange-Traded Product backed by physical EU carbon allowances (EUAs) has listed on the Deutsche Börse XETRA and Borsa Italiana stock exchanges.

SparkChange Physical Carbon EUA ETC (Ticker: CO2) offers investors a simpler way to invest in physical EU carbon allowances also known as “permits to pollute”. Companies classified as polluters by the EU must hold and redeem these permits in line with the amount of pollution they emit. Permit holders have the right to emit one tonne of carbon dioxide (CO2).

While other funds have tracked the price of carbon allowances using futures contracts and derivatives CO2 is the only physically-replicated carbon allowance ETC.[2] This means that it buys and holds carbon allowances in custody in-line with the fund’s AUM.

As a result as more money comes into the fund additional carbon allowances are purchased leaving fewer for Europe’s biggest polluters to buy to cover their greenhouse gas emissions. This makes fossil fuel consumption and polluting activity more expensive encouraging polluters to invest in more sustainable alternatives.

With $16 trillion and possibly more committed to net zero pledges -far greater than today’s available market of net zero investment opportunities -investors are buying carbon as an interim measure to start tackling their climate-related objectives.[3] Investing in physical carbon allowances directly impacts emission levels in a material way in six months of trading SparkChange CO2 has withheld 1.5m tonnes of CO2 permits. [4]

As well as being listed in the UK Germany and Italy CO2 is also passported to the Netherlands Finland Luxembourg Denmark Norway Sweden Belgium Spain and France making this investment opportunity widely available across Europe.

Elliot Waxman CEO of SparkChange commented: “Given the urgency surrounding the climate crisis and the demand we have seen for SparkChange CO2 we’re delighted to expand our product offering to Europe. The Emissions Trading System is the EU’s primary decarbonisation tool and providing more investors with access to carbon allowances creates greater environmental impact and helps mitigate the risk of carbon exposure. CO2 is therefore a vital ingredient in aiding the successful transition to a net zero economy.”

Nik Bienkowski co-CEO of HANetf said:“We are delighted to be listing SparkChange Physical Carbon EUA ETC (CO2) on Deutsche Börse XETRA Borsa Italiana and passporting across the other major EU Markets. While investors are no doubt attracted to carbon allowances as an alternative asset class the physical replication of the fund is also highly appealing to those looking to align their values and investment portfolios. Investors can either use to hedge the carbon impact of their investments or invest in CO2 as an alternative asset class.

When investing in the ETC investors are reassured that their money is actively reducing the amount of carbon that Europe’s biggest polluters can emit. I cannot envisage a more direct way for investors to facilitate the much-needed transition to a decarbonized economy than with the SparkChange Physical Carbon EUA ETC.”

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