Fuelling an emissions market

The carbon emissions credits market is heating up as investors are increasingly able to tap into the theme via structured products and exchange-traded funds. But how viable is the carbon theme as an underlying and what challenges do structured products based on carbon credits face? Emma Dunkley reports

The first carbon exchange-traded commodity (ETC) was launched in Europe at the end of October, paving the way for retail investors to gain exposure to the carbon emissions allowance futures market. The ETC was issued by ETF Securities (ETFS) and listed on the London Stock Exchange, tracking futures contracts in the European Union Emissions Trading Scheme (ETS). The ETC represents a watershed for retail investors, as it provides them with direct exposure to carbon emissions pricing via spot and