The first quarter of 2025 proved that carbon markets are no longer operating in isolation from broader federal policymaking. From tariff tactics threatening global trade to an executive order challenging the autonomy of state-led climate programs, U.S. policy developments sent ripples through global compliance carbon markets. While policy-driven volatility continues to reverberate across asset classes, we’ve also seen robust support emerge, particularly in California, where efforts to uphold the market’s longevity and role as a critical policy tool have intensified. As federal rhetoric continues to shift, Q1 served as a reminder that policy pressure can catalyze support for the market and long-term growth. In our Spring 2025 Carbon Quarterly Report, we provide a deep dive into recent price action and policy updates across the largest, most liquid carbon markets included in the KraneShares Global Carbon Strategy ETF (Ticker: KRBN).

Global Carbon Market Highlights:

• EUAs adjust to global trade uncertainty
• UKA rallies, recovering last year’s losses on linkage expectations
• CCA opportunity at the floor, strengthened local support
• RGGI sold out at auction on historically strong demand
• Washington sees key legislative developments

For KRBN standard performance, top 10 holdings, risks, and other fund information, please click here.