VERTIS GLOBAL CARBON FUND

Emissions Trading Investment

INVESTING IN COMPLIANCE
CARBON
MARKETS
GLOBALLY

01

Capture the carbon price appreciation in selected ETS markets

02

Extract underpriced emission allowances available in the market

03

Enhance decarbonization
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As authorities limit the supply of Emission Allowances, its price progressively increases. Polluting becomes more expensive, incentivizing the transition to low-emissions technologies.

ONE OF THE BEST WAY TO ADDRESS EMISSIONS IS THROUGH CARBON PRICING INSTRUMENTS

The principle of carbon pricing is to make the polluter pay. If polluting is expensive, an economic incentive to reduce emissions is created. There are multiple ways to price carbon, but in general, we can classify them in two groups: the compliance and voluntary instruments

CARBON PRICING INSTRUMENTS

Is pretty straight forward. Local authorities stablish a direct and fixed price on GHG emissions and oblige certain industries to pay for each ton of CO2e emitted. Since more pollution means more taxes, a tax creates an incentive to lower emissions by switching to less polluting fuels or processes.

This mechanism puts in place a cap-and-trade system where authorities

  • Identify the most CO2 intensive industries and include them in the system
  • Set an overall cap on their total emissions, which is reduced over time.
  • Oblige covered companies to purchase a “permission to pollute” for each ton of CO2 emitted every year.
  • These permissions are known as “allowances” and contrary to the carbon tax, the price of allowances is not fixed. The supply of allowances decreases over time, causing their price to progressively increase.
  • Companies can purchase the permission either from the authorities or from other companies with surplus of allowances.
  • 1 Emission Allowance= Permission to emit 1tCO2
  • A proportion of these emission allowances is provided for free to the obliged companies to ease their energy transition and to limit the risk of carbon leakage.

  • Are designed for any company to reinforce its environmental commitments by compensating the unavoidable emissions from their activity on a voluntary basis.
  • Credits are generated by projects that reduce, absorb, or avoid or emissions outside the scope of activities of the company. For example, a renewable energy installation or a forestry project can generate carbon credits.
  • Companies can buy these credits to offset their unavoidable emissions, that’s why such credits are also known as “carbon offsets”. Carbon credits are governed by various international standards.
  • There Is virtually no limit to the supply of credits, companies can buy them at any time. Besides, these credits can take different forms depending on the standard that issues them. However, there is a common feature to all of them: each credit represents 1tn of CO2 reduced/absorbed or avoided.
  • 1 VER, CER, VCU, ERT…= 1tCO2 reduced, absorbed, or avoided

COMPLIANCE CARBON MARKETS REACHED A VALUE OF MORE THAN $850 BILLION IN 2021.*

SOURCE: BLOOMBERG

*These figures do not represent the fund’s performance