EU Carbon Credits – A Massive ESG Opportunity

Published on: March 22nd, 2021

The EU has a huge mandate to aggressively reduce carbon emissions by around 60% by 2030. This has led to a BIG opportunity…

Comments

  • BT
    Bill T.
    9 April 2021 @ 05:08
    When you plot the EUA future with the S&P, looks pretty correlated to me.
  • AP
    Aneil P.
    1 April 2021 @ 00:34
    What ETF or instrument do you buy to shadow this opportunity?
  • NI
    Nymann I.
    22 March 2021 @ 19:48
    Isn’t there a UK ETF or tracker - I think I’ve seen one?
    • RK
      Roger K.
      28 March 2021 @ 09:08
      For UK/ EU based retails traders cannot buy the US ETFs either. Ridiculous (EU related shite)...
  • HS
    Hirun S.
    24 March 2021 @ 01:32
    What does it mean to be a 40 vol instrument?
    • HM
      Harry M. | Real Vision
      24 March 2021 @ 18:03
      The instrument has a 40% annualized vol.
    • SC
      Sanjeev C.
      27 March 2021 @ 01:28
      vol as in volatility, not volume (I've made that mistake before)
  • JF
    Jonathan F.
    24 March 2021 @ 17:29
    My broker thinks I'm an official idiot now. Trying to figure out this trade is like buying your 1st bitcoin. There is margin in the mysterious though!
    • SC
      Sanjeev C.
      27 March 2021 @ 01:24
      :)
  • MF
    MICHAEL F.
    22 March 2021 @ 14:49
    What is the name of the MO Futures contract?
    • RP
      Raoul P. | Founder
      22 March 2021 @ 14:55
      EU ETS or EU Carbon
    • MF
      MICHAEL F.
      22 March 2021 @ 15:10
      Thank you. Just to make sure I am looking at the right one, trading around $42.50 for Dec21?
    • HM
      Harry M. | Real Vision
      22 March 2021 @ 15:19
      On Interactive Brokers if you use ECF you should find them.
    • MF
      MICHAEL F.
      22 March 2021 @ 15:24
      Got it. Thank you both very much.
    • MC
      Mathieu C.
      22 March 2021 @ 15:59
      ECF
    • SP
      Stephen P.
      22 March 2021 @ 19:34
      I found them on IB using ICE ECX EUA - a range of futures. I'm trying to get my permissions to buy them.
    • BT
      Bill T.
      23 March 2021 @ 00:19
      What does the infinity symbol mean in the ECF continuous Dec contract? Does it imply no expiration date?
    • BM
      Brent M.
      25 March 2021 @ 23:25
      Hi Raoul and Harry, I'm going to go forward with this one. Love it. Question - I'm new to IB and I'm new to Futures. Should I definitely go with the Dec 2021 contract? Why not the March 2022 or later dated Futures? And, sorry, noob question, can these be cashed out prior to expiry? Thank you!
  • AM
    Aengus M.
    22 March 2021 @ 15:31
    page 5: "........ten lower-income US member states......." EU?
    • ML
      Morten L.
      25 March 2021 @ 20:12
      Must be
  • DM
    Dez M.
    22 March 2021 @ 21:16
    ECF futures contract on Interactive Broker require to put down 100% margin, which costs about 50K USD. Is that what you guys are getting? It seems easier to hold the ETF instead. If there's anybody else who can find a better alternative that requires lower margin please let me know.
    • BF
      Ben F.
      23 March 2021 @ 12:30
      getting same
    • IO
      Igor O.
      25 March 2021 @ 08:19
      Getting same. And not allowed to trade etf as a retail.
    • DS
      David S.
      25 March 2021 @ 14:37
      Interactive Brokers are trash. Their margin requirement is 100% of the notional contract value
    • SJ
      Srinivasa J.
      25 March 2021 @ 17:46
      I may be wrong, on IB I found ECF (Apr 26'21) $ 39.66 on 3/25/21 and found other months as well till Dec 2027. What am I missing?
  • BT
    Bill T.
    23 March 2021 @ 00:05
    Are we going to get a RV bump on the EUA futures tmrw?
    • HM
      Harry M. | Real Vision
      24 March 2021 @ 18:02
      Im curious too!
  • HP
    Henry P.
    24 March 2021 @ 16:37
    Interesting note on the KRBN factset: "Also worth noting, the Chairman of the fund’s sub-advisor is former US Secretary of State, John Kerry."
  • CH
    Christopher H.
    24 March 2021 @ 13:31
    Is there an option for EU-investors to participate in this trade, besides the futures?
  • FK
    Firoze K.
    22 March 2021 @ 15:55
    Has anyone managed to find the futures contract on Saxo?
    • JF
      Jonas F.
      22 March 2021 @ 16:03
      I can only find KRBN on Saxo.... anybody who has found a way on Saxo?
    • OD
      Oliver D.
      22 March 2021 @ 16:09
      I found the ECX EUA (CFIZ2) contract on Saxo. Not sure if this is the right one to trade...
    • JF
      Jonas F.
      23 March 2021 @ 15:32
      Did any of you find a way to trade on Saxo? I cant find anything... any help?
    • DF
      David F.
      23 March 2021 @ 16:15
      Yes, CFIZ2 is the Carbon Credit Futures, I believe
    • JW
      JW2 W.
      24 March 2021 @ 13:17
      As far as I could tell on Saxo you can buy two futures contracts: the EXC EUA Dec 2021 futures contract but note that for 1 contract it has a 6.5K USD margin impact. And you can buy the Dec 2022 expiry which has a 6,1K USD margin impact. There is also a Dec 21-22 spread which has double the margin impact. It seems far easier to buy the ETF's. Saxo does not list the ETF's but for example, Swissquote does.
  • RK
    Ralf K.
    24 March 2021 @ 10:46
    GRN (an ETN) tracks the future much better than KRBN, since it contains almost only the European future and not also the Californian one.
  • MG
    Maroje G.
    23 March 2021 @ 16:20
    Did anyone find the options Raoul mentioned? Can't seem to find them on the index
    • MG
      Maroje G.
      23 March 2021 @ 16:20
      on the futures I meant
  • NI
    Nymann I.
    22 March 2021 @ 20:06
    Found it: Wisdom Tree’s ETFS Carbon (CARB/CARP), tracks ICE
    • BF
      Ben F.
      23 March 2021 @ 11:32
      how do you get exposure to this? I can't find it in in interactive brokers, or my UK brokerage account?
    • BF
      Ben F.
      23 March 2021 @ 11:42
      "However, the product was delisted in early June after swap counterparty Shell Trading Switzerland terminated its agreement with WisdomTree on the back of significant energy market volatility and sharp falls in the price of carbon." https://www.etfstrategy.com/kfa-funds-launches-first-us-listed-carbon-emission-allowances-etf-48595/
  • WM
    William M.
    22 March 2021 @ 18:46
    My apologies, I rarely use my IB account. When I try to find ECF on the IB trade it comes up with a list of non related funds/companies. How can I navigate to the correct instrument in IB?
    • LH
      Luis H.
      23 March 2021 @ 00:58
      ICE ECX EUA futures ECF IPE
  • RS
    Rodrigo S.
    22 March 2021 @ 23:50
    There is a crypto token called moss carbon credit.
  • AB
    Avik B.
    22 March 2021 @ 23:08
    Has anyone found the options contracts on IB? I see the futures - ECF, but don’t see options.
  • JS
    Jonathan S.
    22 March 2021 @ 15:36
    Hi Raoul, What brokerage service are you using as it does not seem to be on Interactive brokers.
    • JS
      Jonathan S.
      22 March 2021 @ 15:38
      Same as JG. Sorry.
  • JF
    Jonas F.
    22 March 2021 @ 15:37
    I subscribed to the pro-membership yesterday (primarily) as I hoped you would release a trade-proposal on the EU carbon scheme. So I am really happy to read it already now. Thanks. Now, let me explain.... I only recently started crypto, macro and Real Vision but I got 20 years experience with the EU (Commission, Parliament and Council), including some experience with the energy, climate and 'green' projects. I also know a good part of the politicians and bureaucrats involved. On that basis I can say that there is 100 % political and institutional backing for the carbon initiative these days in Brussels. Its is in many ways THE political and economic flagship and a must-succeed dossier (also because EU is messing up on the economy and covid). All the 3 institutions and nearly all EU Member States strongly supports it. I am less familiar with the investing aspects but from a political and institutional aspect this EU carbon initiative is gonna get ALL the support needed. Few issues get higher priority here in Brussels....
  • JG
    J G.
    22 March 2021 @ 15:26
    Coulnd't find these futures in Interactive Brokers. Would anyone be able to point me towards the ticker there?
    • JG
      J G.
      22 March 2021 @ 15:28
      Sorry, the comments below refreshed while i was typing, please ignore!
  • WB
    Wes B.
    22 March 2021 @ 15:24
    Love it. Started buying KRBN last week. Not 100% confident this is most liquid contract but the futures contract I bought using IBKR was symbol ECF Dec contract.