KraneShares Lists California Carbon ETC on London Stock Exchange

The product began trading on March 26, 2026, in two currency classes: US dollar-denominated shares under the ticker KCCA LN, and GBP-hedged shares under KCCP LN.

The ETC tracks the S&P Carbon Credit CCA Index, providing exposure to California Carbon Allowance (CCA) futures. California’s cap-and-invest program, established in 2013 and extended through 2045 in September 2025, covers approximately 80 percent of the state’s greenhouse gas emissions. California ranks as the world’s fourth-largest economy by GDP.

The program operates under a declining emissions cap, which reduces the supply of allowances over time. Large emitters covered by the regulation must obtain allowances through state auctions or secondary market purchases. The California Air Resources Board administers the program and sets quarterly auctions with a minimum settlement price that increases annually by five percent plus the Consumer Price Index.

KraneShares Head of Alternative Investments Luke Oliver said: “KraneShares has been a leader in developing innovative investment solutions that give investors access to differentiated markets. We are proud to launch KCCA to UK and European investors, offering exposure to a fast-growing asset class with structural upside potential that can serve as a valuable diversifier with its uncorrelated returns in an increasingly volatile global market.”

Dr. Xiaolin Chen, Head of International at KraneShares, said: “KraneShares has been a pioneer in bringing carbon markets to investors, partnering with the index provider to create an index that would be tracked by the first global Carbon ETF on the New York Stock Exchange in 2020 in partnership with Climate Finance Partners (CLIFI) and expanding since into a full suite of carbon strategies on global exchanges. We are excited to further democratize access to the California carbon allowance market though the KCCA ETC listing for UK and European investors.”

The California carbon market features structural elements that differ from other compliance markets. The price floor mechanism at auction establishes a minimum price for allowances, with the 2026 floor set at $27.87 based on the five percent plus CPI formula applied to the 2025 floor of $25.87. Allowances can also trade on the secondary market, where prices reflect supply and demand dynamics independent of the auction floor.

Legislative action in September 2025 extended the program through 2045 and renamed it from cap-and-trade to cap-and-invest. The reauthorization maintained the existing market architecture and preserved the California Air Resources Board’s authority to implement regulations. The program previously faced expiration after 2030, creating uncertainty that affected allowance prices and auction participation.

The KraneShares California Carbon ETC carries a total expense ratio of 0.78 percent. The product expands KraneShares’ existing carbon strategy suite, which includes strategies tracking European Union Allowances, UK Allowances, and the Regional Greenhouse Gas Initiative covering the northeastern United States.

The ETCs are structured as secured, limited recourse obligations of the issuer and are not guaranteed by any entity. The GBP-hedged share class uses foreign exchange derivatives to reduce currency risk, though hedging may not be fully effective and introduces additional costs