Industries are working to reduce their carbon footprints as regulatory, government, and investor pressures increase. In the more recent string of industry changes was the announcement by Chevron at the end of February of its partnership with Carbon Clean, an industrial carbon capture company that offers cost-effective opportunities for corporations looking to reduce their carbon emissions, as reported in the press release.
Carbon Clean hits the sweet spot of offering carbon capture technology that is more affordable than many of the other options on the market; price has long been a barrier to such technologies. The technology that it employs also seeks to reduce disruption at the sites that it is deployed at and bring about faster permitting.
Chevron is one of the latest in a string of companies from the oil and gas industry to announce stronger commitments to emission reductions as pressures mount on all fronts. They have committed to the growth of biofuels, hydrogen, and energy offsets as well as new, renewable energy opportunities and technologies, such as what Carbon Clean offers.
“We are working to remove the biggest barriers to the adoption of widespread industrial carbon capture,” said Aniruddha Sharma, co-founder and CEO of Carbon Clean, in the press release. “It is vital that we decarbonize hard-to-abate sectors while developing new low-carbon technologies. This latest investment and our work with partners, such as Chevron, will provide us with the opportunity to deliver exponential growth in carbon capture and meet ever-rising demand.”
Investing in the Carbon Transition through Carbon Allowance Markets
For investors looking to capture the growth potential in carbon allowance markets, which can help to supply pressures on some of the high carbon emission entities while also capitalizing on a world transition to zero-net carbon emissions, KraneShares offers a suite of funds.
The KraneShares Global Carbon ETF (KRBN) takes a global approach to invest in carbon markets by seeking to track the IHS Market’s Global Carbon Index. The index includes the major European and North American cap-and-trade carbon allowance programs, which had an annual trading volume of $683.9 billion in 2021 and seeks to track the most traded carbon credit futures contracts within those markets.
The KraneShares European Carbon Allowance ETF (KEUA) offers targeted exposure to the European Union Allowances cap-and-trade carbon allowance program only and is actively managed. The fund’s benchmark is the IHS Markit Carbon EUA Index, an index that tracks the most-traded EUA futures contracts, a market that is the oldest and most liquid for carbon allowances.
The KraneShares California Carbon Allowance ETF (KCCA) offers targeted exposure to the California Carbon Allowances cap-and-trade carbon allowance program only and is actively managed. The fund’s benchmark is the HIS Markit Carbon CCA Index, an index that tracks the most-traded CCA futures contracts, a market that encompasses roughly 80% of California’s greenhouse gas emissions and has also covered Quebec’s emissions since it expanded in 2014.
KRBN carries an expense ratio of 0.78%, while KCCA and KEUA both carry an expense ratio of 0.79%.
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