"SparkChange CO2 prevents emissions by withholding carbon allowances from polluters. This means investors can achieve both environmental impact and potential returns - together at the same time." Jan Ahrens, CEO of SparkChange
SparkChange Physical Carbon EUA ETC (Ticker: CO2) is designed to offer investors a means of accessing the properties of physical European Union carbon Allowances ("EUAs"). SparkChange CO2 is backed by physical EUAs and therefore tracks the price of EUAs (excluding fees).
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An EUA is a permit to pollute 1 tonne of CO2 (Source: European Commission). The EU Commission automatically issues fewer EUAs each year in order to decrease CO2 emissions over time, creating the potential for upward price pressure and driving scarcity value.
Each SparkChange CO2 is physically-backed by one EUA which will be adjusted for accumulated management fees since launch. EUAs held within the ETC structure cannot be used by polluters, ensuring direct and positive environmental impact. In contrast, futures-based products do not affect the supply of EUAs. SparkChange CO2 also avoids the performance drag associated with EUA futures-based products. This drag (known as “contango”) erodes the value of a futures-based investment over time, at the expense of the investor. As CO2 uses physical EUAs rather than futures, investors will not suffer from this effect.
This works in three ways: 1) While the physical carbon ETF holds physical EUAs, industrial firms can’t use those EUAs to pollute. 2) Under EU law, holding EUAs for twelve months or more triggers additional permits being cancelled in future years. 3) As polluters and investors compete for a reduced supply of EUAs, prices may rise until it becomes too expensive for polluters to continue using dirty fossil fuels, incentivising the switch to cleaner energy.
The value of the ETC will be affected by movements in the price of the underlying EUAs, the value may go up as well as down.
The abandonment, termination or non-renewal upon expiration of a trading scheme may cause the price of EUAs to fall (potentially to zero).
Investors' capital is at risk and investors may not get back the amount originally invested and should obtain independent advice before making a decision. Any decision to invest should be based on the information contained in the relevant prospectus.
* Based on Carbon Entitlement per Security multiplied by Price of EUA
** Source: Bloomberg, EEX Spot price
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HANetf funds are available to buy through self-directed platforms and brokers, and intermediary platforms across Europe listed in the link below. If you would like more information on how to trade with APs/market makers, please contact our Capital Markets Team at [email protected].
Although SFDR is not applicable to ETCs, it should be noted that EUAs are recognised as a ‘valid’ way to achieve net zero targets by the Institutional Investors Group on Climate Change (IIGCC)and Paris Aligned Investors Initiative (PAII).
The benchmark is physical European Union carbon emissions allowances which each allow the holder (if so desired) to emit 1 tonne of carbon dioxide equivalent or other greenhouse gas in accordance with the rules of the European Union Emissions Trading System.
SparkChange is a provider of specialist carbon investment products and data, enabling investors to achieve both positive environmental impact and financial returns.
The company was established by experts in environmental products and scalable technologies to set a new standard in carbon investing.
SparkChange is on a mission to revolutionize access to physical carbon. More investors with access means a bigger impact on the environment. That doesn’t just change a world of investing. It can change the future of our planet.
+44(0) 203 794 1800
HANetf Ltd, 107 Cheapside,
London, EC2V 6DN
The price of any Shares or the value of an investment in ETPs may go up or down and an investor may not get back the amount invested. Past performance is not a reliable indicator of future performance. This material is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any financial instrument or product or to adopt any investment strategy. Any decision to invest should be based on the information contained in the appropriate prospectus and after seeking independent investment, tax and legal advice.
These products may not be available in your market or suitable for you. The content of this document does not constitute investment advice nor an offer for sale nor a solicitation of an offer to buy any product or make any investment.
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