(Yicai Global) March 24 -- Chinese investment firm China International Capital Corp. launched a carbon futures exchange traded fund on the Hong Kong stock exchange today, extending the coverage of the special administrative region’s commodity ETFs to carbon credit products for the first time, Shanghai Securities News reported.

Managed by unit China International Capital Hong Kong Asset Management, the fund tracks the ICE EUA Carbon Futures Index which measures the performance of a long-only basket of European Union Allowance Contracts. Each EUA is an entitlement to emit one metric ton of carbon dioxide equivalent gas under the European Union Emissions Trading System.

The new ETF will allow investors to access one of the world’s largest, most liquid and most actively traded carbon markets, said CICC HKAM Managing Director Lin Ning.

The ETF [HKG:3060] closed up 2.6 percent at HKD70.08 (USD9) with a turnover of HKD1.7 million (USD217,812) and a market capitalization of HKD67.2 million (USD8.6 million).

“CICC HKAM’s new carbon product had high turnover on the first day of listing and the price stayed stable, demonstrating strong demand for it in the market,” the report said, citing a futures trader in Beijing. “It gives traders of bulk commodities more carbon-trading approaches and with the improvement of emissions trading, the turnover will still go up,” he added.

Energy-saving enterprises will soon be able to sell carbon emission amounts as a profitable sideline as the trading of carbon emission rights is approaching, an executive at Ping'an Futures said. US electric carmaker Tesla, for example, gains quite a lot of credit because it sells its excess emissions limit to other car manufacturers which cannot meet the standards.

Innovations in the futures of carbon emission rights and new-energy metals should be promoted, Fang Xinghai, vice chairman of the China Securities Regulatory Commission, said last December. New types of listed products should be developed according to industrial demand, he added.

Although China’s futures market of carbon emission rights is just beginning, the potential is huge, industry insiders said. In the future, the country’s eco-friendly enterprises will benefit thanks to the carbon emissions trading market.

Editor: Kim Taylor