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Greenstar Capital Carbon Fund
EU Physical Carbon Allowances Fund
Introduction
Invest in EU ETS
Greenstar Capital is the first fund based in the EU to offer investors the opportunity to participate in a sustainable and innovative fund that actively invests and trades in physical “CO2 emission rights” issued under the “Emissions Trading System” set up by the EU in 2005 (EU-ETS). Physical emission allowances have until now been difficult or impossible to obtain among private and professional investors as would be market participants who do not fall under the EU ETS do not have the necessary access and knowledge to trade and hold the allowances. There are some providers, but they use complex and non-transparent instruments including Contracts for Difference (CFD), Futures and Options with margin requirements.
EU EMISSIONS TRADING SYSTEM
Proven effective in reducing CO2 emissions
The EU ETS has proven to be an extremely effective system and has so far led to a 40% reduction in total emissions within the sectors covered by this system. The tradable allowances function place a price on CO2 emissions that sectors that fall under the regulations must account for, surrendering the corresponding number of allowances to the government every year, depending on their emissions (1 emission allowance represents 1 ton of CO2 emissions). By using a market, the EU aims for efficiency - with cheaper emission cuts coming first - and guarantees that the carbon price will reflect real costs of decarbonisation. Under the EU's Fit for 55 package, 4.3% fewer rights are auctioned every year, making the market tighter every year with the aim of increasing the price of the rights. This increases the costs of emitting CO2 and accelerates the transition to more sustainable alternatives. The Fund offers investors the opportunity to benefit from this rising market: using the infrastructure, extensive network and market knowledge of the fund manager.
MARKET DEVELOPMENTS
Increases of 143% in 2021 and 33% in 2020
The prices of CO2 emission rights increased by 33% in 2020 and by 143% in 2021. With the current price of 80 euros per tonne, there is still plenty of upside potential, given costs of cutting emissions the and the further tightening of supply resulting from the EU's Green Deal, whereby the EU has, among other things, the objective of being climate neutral by 2050. As a result, over coming years some analysts forecast that prices may rise above 200 euros per tonne. The energy, gas and coal markets also influence the price of CO2 emission rights and are closely monitored by the fund management to determine the purchase and sale times and thus optimize the return of the fund.
SUMMARY
Monthly entry
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Invest in the energy transition, benefit from the “EU Green Deal” where more far-reaching taxes on emissions are expected and contribute directly to a reduction in CO2 emissions.
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Tightening market “by design”
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AFM registered
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Investing in the energy transition
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Strong market expertise
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State-of-the-art infrastructure and large network within the sector
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Transparent costs
Minimum investment €100,000, first entry date 5/2/2022
