Samsung Asset Management Lists European Carbon Emission Allowance Futures ICE ETF

[Asia Economy Reporter Junho Hwang] Samsung Asset Management on the 30th listed the 'KODEX Europe Carbon Emission Allowance Futures ICE(H) ETF,' which invests in European carbon emission allowance futures listed on the UK ICE Futures Exchange.

Carbon emission allowances are rights to emit a certain amount of greenhouse gases over a specified period. The shortfall or surplus between the actual carbon emissions and the allocated carbon emission allowances is traded using the emission allowance trading market. The price of emission allowances is determined by supply and demand differences.

This ETF tracks the nearest December futures price of the European Union Allowance (EUA) traded on the European ICE Exchange, based on the ICE EUA Carbon Futures Index ER. The contract roll occurs during the first 15 business days of September, October, and November each year, replacing the near-month December contract with the next year's December contract. The portfolio is expected to consist of approximately 85-90% EUA futures and 10-15% similar index-tracking ETFs.

Choi Chang-gyu, Head of ETF Consulting at Samsung Asset Management, stated, "The newly listed KODEX Europe Carbon Emission Allowance Futures ICE(H) ETF marks the starting point of decarbonization policies," adding, "We plan to introduce an ETF lineup that responds to ESG policies, including climate change ETFs currently in preparation for launch."

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