UBS Asset Management has launched the UBS European Physical Carbon Exchange Traded Commodity (ETC), offering exposure to the EU’s emissions allowances market.
According to the asset manager, the product provides a convenient way for investors to access the EU carbon market via major stock exchanges without the cost and hassle of opening a special registry account.
The EU Emissions Trading System, the world’s largest carbon market, issues allowances that permit companies to emit one tonne of carbon dioxide or equivalent greenhouse gases. These allowances are capped and reduced annually to meet the EU’s climate targets, ensuring emissions decrease over time.
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Each unit owned by an investor is withheld from industrial firms, creating scarcity that can drive up prices, benefiting investors and encouraging lower-emission production methods. While tied to the EU’s climate policy, the ETC itself does not claim any sustainability objectives.
André Mueller, head of client coverage at UBS Asset Management, commented: “While absolute greenhouse gas cuts are needed, carbon markets support net-zero targets by encouraging businesses to reduce their emissions. The UBS European Physical Carbon ETC provides investors with exposure to the EU carbon market in a simple and accessible way.”
The new ETC will be listed on the London Stock Exchange, SIX Swiss Exchange and XETRA.
