Stockholm (NordSIP) – S&P Dow Jones Indices has announced the launch of the S&P GSCI Carbon Emission Allowances (EUA) EUR. The new index, which the index provider claims is the first of its kind a benchmark for European Carbon Emission Allowances and is an expansion of the single-commodity series of indices based on the S&P GSCI.
“Broadening the financial instruments available to traders and investors in the global carbon market is an important goal of the S&P GSCI Carbon Emission Allowances (EUA) EUR,” said Fiona Boal, Head of Commodities and Real Assets at S&P Dow Jones Indices. “Investors utilize this market to express a specific view on the price of carbon, to hedge risks or offset more carbon-heavy investments in their portfolios or combine carbon emissions with other assets to create energy-transition or low-carbon strategies while promoting the transition to a lower carbon economy.”
The EU emissions trading system (EU ETS) is a market-based method developed to reduce global greenhouse gas emissions by companies. The EU ETS is the world’s first international emissions trading system based on the ‘cap and trade’ principle. Within the cap, companies receive or buy emission allowances, which they can trade with one another as needed. The S&P GSCI Carbon Emission Allowances (EUA) EUR index is based on the ICE EUA Futures Contract and represents the first carbon emissions single-commodity index for the S&P GSCI index series and is designed to provide investors with a way to capture opportunities in this market.