DWS introduces physical carbon exchange-traded commodity

DWS has launched the Xtrackers Physical Carbon EUA ETC Security (XEAL), a physical carbon exchange-traded commodity (ETC) that tracks the spot price performance of EU carbon emissions.

Listed on the Deutsche Boerse, XEAL features a total expense ratio of 0.79%.

The spot price for the ETC is determined by the European Energy Exchange and is physically backed by holding emission certificates.

This approach aligns with the EU’s policy to combat pollution, where companies emitting carbon dioxide hold emissions rights issued by the EU, each representing one tonne of carbon.

The EU limits emission allowances, requiring companies exceeding their certificate limits to buy rights from others. XEAL represents the second physically-backed EU Carbon Allowance (EUA) ETP in the European market, following the launch of the world’s first such product in November 2021.

SparkChange, in partnership with HANetf, introduced the SparkChange Physical Carbon EUA ETC (CO2), which has since accumulated $76 million in assets under management with a total expense ratio of 0.89%.

Prior to these physically-backed ETPs, WisdomTree launched the first carbon ETP in Europe, the WisdomTree Carbon (CARB), which tracks carbon futures.

Since its launch in August 2021, CARB has amassed $243 million in assets under management.

© 2023 funds europe

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