News / MediaCarbon Allowances

KraneShares Expands Carbon Market Offering with Launch of European and California Carbon ETFs: KEUA and KCCA 

New York, N.Y. October 5, 2021 – Krane Funds Advisors, LLC, (“KraneShares”), an asset management firm known for its global exchange-traded funds (ETFs) and innovative investment strategies, is pleased to announce the expansion of its carbon market offering with the launch of the KraneShares European Carbon Allowance ETF (KEUA) and the KraneShares California Carbon Allowance ETF (KCCA).

Under the cap-and-trade programs, carbon allowances put a price on carbon emissions, engaging market forces to tackle climate change. Each emissions trading program covered in the KraneShares suite is a powerful policy tool for achieving the ambitious climate targets set in the Paris Agreement.

The two new funds join KraneShares growing carbon market suite; the KraneShares Global Carbon ETF (NYSE: KRBN) listed in July 2020 on the New York Stock Exchange. Since its inception, the fund has accumulated over $900 million in assets under management (AUM) and returned 105.45%.1 KRBN is the first, largest, and most liquid publicly-listed carbon allowance ETF in the world.2 KRBN currently offers exposure to three major cap-and-trade programs: European Union Allowances (EUA), California Carbon Allowances (CCA), and the Regional Greenhouse Gas Initiative (RGGI). 

“Through the phenomenal success of KRBN, we learned that many of our clients also want targeted exposure to the underlying markets,” said Luke Oliver, Managing Director and Head of Strategy at KraneShares. “KEUA and KCCA provide access to the component carbon allowance markets at various stages of their growth cycle. With these new ETFs, investors can take a customizable precision-approach to invest in carbon markets.”

  • The KraneShares European Carbon Allowance ETF (KEUA) provides exposure to the European Union Allowances (EUA) cap-and-trade program, the world’s oldest and most liquid carbon allowance market. The program aims to reduce emissions by at least 55% of 1990 levels by 2030 and climate neutrality by 2050. It covers approximately 40% of the EU’s total emissions.3
  • The KraneShares California Carbon Allowance ETF (KCCA) provides exposure to the California Carbon Allowances (CCA) cap-and-trade program and covers approximately 80% of the state’s emissions. In 2014, the program expanded to cover Quebec. The program plans to achieve a 40% reduction from 1990 greenhouse gas levels and carbon neutrality by 2045.4

“We believe investors are attracted to the carbon allowance investment opportunity because they see its low-correlated growth potential, which can also have a positive impact on the planet,” said Jonathan Krane, CEO of KraneShares. “Our Europe and California carbon ETFs join KRBN in expanding KraneShares’ position as a leader in carbon market investment solutions.” 

“Economists agree that one of the best policy tools we have to confront the enormous challenge of climate change are emissions trading programs,” said Eron Bloomgarden, Co-Founder of Climate Finance Partners, the non-discretionary subadvisor to KRBN, KEUA, and KCCA. “Our suite of carbon market ETFs helps to catalyze climate-action and complement the progress of cap-and-trade programs. We believe there may also be significant upside potential in the market as the world addresses the climate crisis.”

For more information about KRBN, KEUA, or KCCA, email [email protected].

About KraneShares

Krane Funds Advisors, LLC is the investment manager for KraneShares ETFs. Our suite of China-focused ETFs provides investors with solutions to capture China’s importance as an essential element of a well-designed investment portfolio. We strive to provide innovative, first to market strategies that have been developed based on our strong partnerships and our deep knowledge of investing. We help investors stay up to date on global market trends and aim to provide meaningful diversification. Krane Funds Advisors, LLC, is a signatory of the United Nations-supported Principles for Responsible Investing (UN PRI). The firm is majority-owned by China International Capital Corporation (CICC). 

About Climate Finance Partners

Climate Finance Partners (CLIFI) serves as the non-discretionary subadvisor to KRBN, KEUA and KCCA. CLIFI delivers innovative climate finance solutions and investment products to address capital needs for emerging environmental challenges. CLIFI is led by a team of investment professionals with deep experience in the fields of traditional investment and environmental finance. The Advisory Board is Chaired by Nobel Laureate, Robert Engle.

Diversification does not ensure a profit or guarantee against a loss.

KRBN Performance as of 9/30/21

Average Annualized %
 1 YrSince Inception
Fund NAV101.48%84.04%
Closing Price97.07%84.84%
Index99.69%82.88%

The performance data quoted represents past performance. Past performance does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investors shares, when sold or redeemed, may be worth more or less than their original cost and current performance may be lower or higher than the performance quoted. For performance data current to the most recent month end, please visit www.kraneshares.com. r-ks-sei

Citations

1. Data as of 9/30/21

2. Data from Bloomberg as of 10/1/21

3. IHS Markit, 12/31/2020

4. California Air Resources Board, 2017