ETFdb Logo
ETFdb Logo
  • ETF Database
  • Channels
    • Active ETF
    • Alternatives
    • Beyond Basic Beta
    • China Insights
    • Climate Insights
    • Commodities
    • Core Strategies
    • Crypto
    • Disruptive Technology
    • Dividend
    • Dual Impact
    • Emerging Markets
    • Energy Infrastructure
    • ESG
    • ETF Building Blocks
    • ETF Education
    • ETF Strategist
    • Fixed Income
    • Free Cash Flow
    • Future ETFs
    • Global Diversification
    • Gold/Silver/Critical Minerals
    • Innovative ETFs
    • Institutional Income Strategies
    • Leveraged & Inverse
    • Managed Futures
    • Market Insights
    • Megatrends
    • Modern Alpha
    • Multi-Asset
    • Night Effect
    • Portfolio Strategies
    • Retirement Income
    • Richard Bernstein Advisors
    • Tax Efficient Income
    • Thematic Investing
    • Volatility Resource
  • Tools
    • ETF Screener
    • ETF Country Exposure Tool
    • ETF Sector Tracker Tool
    • ETF Database Categories
    • Head-To-Head ETF Comparison Tool
    • ETF Stock Exposure Tool
    • ETF Issuer Fund Flows
    • Indexes
    • Mutual Fund To ETF Converter
    • ETF Data for Journalists
    • ETF Nerds
  • Research
    • First Bitcoin ETF
    • ETF Education
    • Equity Investing
    • Dividend ETFs
    • Leveraged ETFs
    • Inverse ETFs
    • Index Education
    • Index Insights
    • Top ETF Sectors
    • Top ETF Issuers
    • Top ETF Industries
  • Webcasts
  • Themes
    • AI ETFs
    • Blockchain ETFs
    • See all Thematic Investing ETF themes
    • ESG Investing
    • Marijuana ETFs
  • Multimedia
    • ETF 360 Video Series
    • ETF Trends on Videos
    • ETF Trends on Podcasts
    • ETF Prime Podcast
  • Company
    • About Us
    • Swag Store
  • PRO
    • Pro Content
    • Pro Tools
    • Advanced
    • FAQ
    • Pricing
    • Free Sign Up
    • Login
  1. Climate Insights Channel
  2. The Guide to Global Carbon Markets in May
Climate Insights Channel
Share

The Guide to Global Carbon Markets in May

Karrie GordonMay 13, 2022
2022-05-13

The energy crisis in the EU, the global reverberations caused by Russia’s war in Ukraine, and the subsequent sanctions and pivot away from reliance on Russian oil and gas have had an impact on most portfolios, whether allocated internationally or domestically. One way to position for Europe’s transition to greater renewable energy, as well as the global transition away from fossil fuel dependence, is through exposure to the carbon cap-and-trade programs worldwide.

The EU’s law-making representative body, the European Parliament, is set to convene next week on May 16th and will be voting on amendments to the “Fit for 55,” the roadmap for emissions reduction of at least 55% by 2030, reported KraneShares in the Climate Market Now blog. The reforms will target the EU Emissions Trading System (EU ETS), and proposals include adjusting the emissions cap, introducing a more aggressive annual reduction of the cap, and stiffening the Market Stability Reserve that provides price stability and works to align demand and supply of allowances, per the European Parliamentary Research Service.

Within the U.K. specifically, the government has requested that the three operating coal-fired power plants continue operation past their scheduled closure date in September to help lessen the energy costs and reliance on much costlier natural gas. The U.K. is also currently considering reforming its own ETS from 2024–2030, leaning towards a higher emissions cap than its current one to keep it on target for net-zero emission by 2050.

Carbon Markets in the U.S.

The stateside cap-and-trade program in California, which also includes Quebec, is considering moving the goalposts up for carbon neutrality to 2045 after a report from the state’s Air Resources Board that modeled different scenarios for an end-goal of 2035 versus 2045. If and when the new timeline is enacted, it will mean changes to the low carbon fuel standard for California and the cap-and-trade program in 2023.

The Regional Greenhouse Gas Initiative that includes Northeastern states in the U.S. has a solid support from utility buying that is expected to continue through the summer as carbon-emitting fuel sources like oil will continue to experience increased demand. Also looming is the potential addition of Pennsylvania to RGGI in the third quarter, though the state’s entry is still in contention from within and is caught up in state courts.

“Any delay to the state’s debut could be seen as bullish since Pennsylvania would have the largest allocation of all participating states, and its entry is seen as bringing additional supply to the market,” KraneShares explained.

KraneShares offers a suite of ETFs with a variety of targeted exposures to global cap-and-trade carbon allowance markets that invest in carbon credit futures. These funds include the KraneShares Global Carbon Strategy ETF (KRBN ), which invests in carbon allowances futures globally from the EU, California markets, RGGI, and the U.K., as well as the more targeted KraneShares European Carbon Allowance Strategy ETF (KEUA ) and the KraneShares California Carbon Allowance Strategy ETF (KCCA ).

For more news, information, and strategy, visit the Climate Insights Channel.


Content continues below advertisement

Loading Articles...
Help & Info
  • Contact Us
Tools
  • ETF Screener
  • ETF Analyzer
  • Mutual Fund to ETF Converter
  • Head-To-Head ETF Comparison
  • ETF Country Exposure Tool
  • ETF Stock Exposure Tool
  • ETF Performance Visualizer
  • ETF Database Model Portfolios
  • ETF Database Realtime Ratings
  • ETF Database Pro
More Tools
  • ETF Launch Center
  • Financial Advisor & RIA Center
  • ETF Database RSS Feed
Explore ETFs
  • ETF News
  • ETF Picks of the Month
  • ETF Category Reports
  • Premium Articles
  • Alphabetical Listing of ETFs
  • Best ETFs
  • Browse ETFs by ETF Database Category
  • Browse ETFs by Index
  • Browse ETFs by Issuer
  • Compare ETFs
Legal
  • Terms of Use and Privacy Policy
  • © 2023 VettaFi LLC. All rights reserved.
Follow ETF Database
Follow ETF Database

Advertisement

Is Your Portfolio Positioned With Enough Global Exposure?

ETF Education Channel

How to Allocate Commodities in Portfolios

Tom LydonApr 26, 2022
2022-04-26

A long-running debate in asset allocation circles is how much of a portfolio an investor should...

Core Strategies Channel

Why ETFs Experience Limit Up/Down Protections

Karrie GordonMay 13, 2022
2022-05-13

In a digital age where information moves in milliseconds and millions of participants can transact...

}
X