16 Oct 2018

Carbon credit investment fund to bet against rising fuel and power prices

6:34 pm on 16 October 2018

New Zealand's first carbon credit investment fund is being planned for ordinary investors and the stock market.


Money Photo: 123RF

Salt Funds Management spent years creating an investment fund for carbon credits which greenhouse gas emitters, such as power and fuel companies, buy to offset their emissions.

The managing director of Salt Funds, Paul Harrison, said the cost of carbon in New Zealand was expected to increase - possibly five-fold from $25 to $125 a tonne - as the Paris Accord 2030 target neared.

Investors and consumers could use the fund to offset the increasing cost of carbon, which would likely be passed on in higher fuel and power bills, he said.

"In terms of offsetting the potential for the carbon price to go up. It's going to give people the ability to hedge out the potential for that," Mr Harrison said.

The carbon fund would invest in New Zealand and international carbon credits, which could cost about $40 a tonne in some countries, he said.

The minimum initial investment in the fund would be $5000.

The fund is labelled as high risk and needs approval from the Financial Markets Authority before it can be listed on the NZX main board and sold to the public.