Thematic Investments

CO2 certificates - a beacon of hope for climate protection?

Vontobel Markets
14/03/2023 | 3 min read

Time is of the essence when it comes to combating climate change and minimising its consequences. The emission of greenhouse gases into the atmosphere has led to increasing global warming, which manifests itself in the form of natural disasters such as forest fires, floods and storms.

An important means of reducing global warming is CO2 emission rights and the trading of CO2 emission certificates based on them.

Sense and purpose of CO2 certificates

Our economic system contributes to prosperity, but also produces greenhouse gases such as CO2, which are mainly responsible for global warming. Therefore, one of the most important goals of climate policy is to reduce these greenhouse gases in the atmosphere. Both private individuals and companies should contribute to these goals. There are clear steps for companies to make their contribution to achieving the climate goals, such as avoiding/ reducing emissions or offsetting unavoidable CO2 emissions. Emissions trading was introduced to encourage companies to produce in a more environmentally friendly way. This gives them incentives to reduce their emissions and use more climate-friendly technologies

Note: Past performance is not a reliable indicator of future performance

How CO2 certificates work

CO2 emission reflect the right to emit a fixed amount of pollutants such as CO2 for a certain period of time. They can be traded on energy exchanges, which gives CO2 emission rights a market price. In order to meet climate targets, the amount of CO2 emissions allowed is limited. Companies therefore need a corresponding permit to be allowed to emit CO2. These allowances are also limited and are to be reduced in the long term. In Europe, companies that "want" to emit CO2 must have a CO2 certificate and be able to prove that their emissions are covered by CO2 certificates. The purchase of certificates leads to additional costs for companies, which can induce them to emit as little CO2 as possible in order to be economically successful.

Making CO2 emission certificates investable for private individuals

CO2 emission allowances could also be an interesting investment opportunity for investors. Usually, investors can invest in emission rights through futures traded on futures exchanges. To give investors the opportunity to participate in this price development, Vontobel offers various certificates on the ICE ECX EUA Future that reflect the price development of CO2 emission certificates with leverage. The ICE ECX EUA Future is a futures contract traded on the Intercontinental Exchange ICE Endex in the Netherlands. It is based on the European Union Allowance (EUA), the most important CO2 emission rights contract in Europe. One trading unit corresponds to one tonne of CO2 traded under the European Emissions Trading Scheme (EU ETS). The ICE ECX EUA Future serves as a price reference for trading EUAs and other CO2 emission rights in Europe.

Trading in price developments of CO2 emission rights with the Bull & Bear Certificate on ICE ECX EUA Future

Bull & Bear Certificate on the ICE ECX EUA Future offers investors the opportunity to participate directly in the price development of CO2 emission rights with leverage and thus to link their financial investment to an increasingly important resource. For example, with the leverage from 3-12 on a Bull & Bear certificate one can speculate in the price developments of CO2 futures contracts on a short-term basis, investors can benefit from the development of the markets, but must also bear the price risk of the underlying, the issuer risk and the path dependency of a Bull & Bear Certificate.

Bull & Bear products can be traded at your local brokerage firm or bank in the local currency. Bear in mind that this type of investment bear high risk and offers no capital protection.


This information is neither an investment advice nor an investment or investment strategy recommendation, but advertisement. The complete information on the trading products (securities) mentioned herein, in particular the structure and risks associated with an investment, are described in the base prospectus, together with any supplements, as well as the final terms. The base prospectus and final terms constitute the solely binding sales documents for the securities and are available under the product links. It is recommended that potential investors read these documents before making any investment decision. The documents and the key information document are published on the website of the issuer, Vontobel Financial Products GmbH, Bockenheimer Landstrasse 24, 60323 Frankfurt am Main, Germany, on and are available from the issuer free of charge. The approval of the prospectus should not be understood as an endorsement of the securities. The securities are products that are not simple and may be difficult to understand. This information includes or relates to figures of past performance. Past performance is not a reliable indicator of future performance.