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CARBON ETF

Like stocks, investors can buy and sell Exchange-Traded Funds (ETFs) whenever the market is open. Often investing in carbon credits through ETFs offers a simple and diverse way to enter this expanding market.

We’ve covered some of the top ETFs for 2025 in the carbon credit market and how they are supporting sustainable investments.

1. iShares Global Clean Energy ETF (ICLN): Ethical Investing with Sustainability

The iShares Global Clean Energy ETF (ICLN) is a part of BlackRock and a top-performing ETF. It focuses on renewable energy companies like solar, wind, and other sustainable technologies. It’s a great option for investors wanting to capitalize on clean energy stocks worldwide.

Essentially, this fund tracks an index of stocks in the global clean energy sector. One important attribute of this ETF is its strict sustainability rules. It excludes companies involved in weapons, tobacco, coal, oil sands, and Arctic drilling. These exclusions ensure the fund supports ethical and sustainable investing.

ICLN currently manages assets worth $5-6 billion. By 2025, its value could reach $8-10 billion.  

iShares Global Clean Energy ETF ICLNsource: NASDAQ

Top Holdings Portfolio

Among its top holdings are First Solar Inc., a major solar panel manufacturer; Iberdrola SA, Enphase Energy Inc., Vestas Wind Systems, and Ørsted. These companies contribute significantly to ICLN’s diversified and growth-oriented portfolio.

2. Invesco Solar ETF (TAN): A Focus on Solar Energy Growth

The Invesco Solar ETF, known as TAN, manages assets valued between $3–4 billion and has a projected valuation of $6–8 billion by 2025.

This fund focuses on solar energy companies, such as manufacturers, installers, and technology providers. As a result, TAN is an excellent option for those looking to invest in solar power.

Index Alignment and Key Holdings

TAN is based on the MAC Global Solar Energy Index. It invests 90% of its assets in securities, American depositary receipts (ADRs), and global depositary receipts (GDRs) listed in the index.

The index includes solar energy companies and adjusts returns for taxes on non-resident investors. Both the fund and index are rebalanced quarterly to stay aligned with market changes.

Its top holdings include Enphase Energy, First Solar, Sunrun, Nextracker, Class A, GCL Technology Holdings Ltd., and Encavis AG.

TAN Invesco Solar ETF source: NASDAQ

3. First Trust Global Wind Energy ETF (FAN): A Wind Energy Investment

The First Trust Global Wind Energy ETF, known as FAN, currently manages assets worth $2–3 billion, with an expected valuation of $5–7 billion by 2025.

Notably, this ETF is for the wind energy sector. It’s prospective for those managing wind farms, producing wind power, or making wind energy equipment. However, companies must have a market cap of at least $100 million, a daily trading volume of $500,000, and a free float of 25% to join the index.

FAN benefits from the global growth of wind power and strong government support for renewables. Its focused strategy and diverse portfolio make it attractive for wind energy investors. However, like any investment, returns are not guaranteed.

Comprehensive and Diversified Portfolio

FAN has a global portfolio of 52 wind energy companies worldwide. It includes “Pure Play” firms with 50% or more revenue from wind energy and “Diversified” firms partially in the sector. The index gives 60% weight to Pure Play and 40% to Diversified companies. Top holdings include Orsted, Vestas, EDP Renováveis, Northland Power, Siemens Energy, and GE Vernova.

First Trust Global Wind Energy ETF source: NASDAQ

4. SPDR S&P Kensho Clean Power ETF (CNRG): A Clean Energy Investment

The SPDR S&P Kensho Clean Power ETF (CNRG) currently has assets worth $1–2 billion, with a projected value of $4–6 billion by 2025. It is managed by State Street’s Investment Solutions Group and is built for long-term growth.

With its focus on innovation and the clean energy sector, this ETF is a great option for those wanting to invest in the future of renewable energy.

CNRG tracks the S&P Kensho Clean Power Index, which uses AI to find companies leading in clean energy. The index includes firms in solar, wind, geothermal, and hydroelectric power. It also covers energy storage and other emerging technologies. This way it offers a diverse portfolio of companies advancing low-emission power solutions.

Key Holdings and Diversified Portfolios

CNRG’s portfolio includes innovative companies like Eos Energy Enterprises, Shoals Technologies Group, Plug Power, and Array Technologies. It also features Constellation Energy, Nextracker, GE Vernova, and Bloom Energy. These holdings highlight the fund’s focus on emerging technologies and their potential in the growing renewable energy market.

4. SPDR S&P Kensho Clean Power ETF (CNRG)

source: NASDAQ

5. Global X Lithium & Battery Tech ETF (LIT): Powering the Future

The Global X Lithium & Battery Tech ETF (LIT) gives investors access to the booming electrification, lithium, and battery technology sector. Their assets have a $4–5 billion valuation and are projected to reach $8–10 billion by 2025. The ongoing global demand for lithium and supply constraints make this ETF a promising investment in this sector.

Additionally, LIT tracks the Solactive Global Lithium Index, which follows top companies in lithium exploration, mining, and battery production. Although no financial instruments track lithium prices directly, the ETF offers indirect exposure by investing in key firms in the lithium supply chain.

Top Holdings Portfolio

LIT’s portfolio includes top companies in lithium and battery technology like Albemarle Corp, Tesla Inc, and Ganfeng Lithium. Other key holdings are Panasonic Holdings, CATL, and Tianqi Lithium.

Global X Lithium & Battery Tech ETF (LIT)

source: NASDAQ

Quick Check: 5 Reasons to Choose ETFs over Individual Stocks

Often, ETFs are a better option than buying individual stocks, providing more stability and less risk. Find out why…

  1. ETFs combine various assets, helping spread out risks and reduce volatility in the carbon market.
  2. They offer more stability compared to individual stocks, providing a balanced way to invest.
  3. ETFs reduce risk by pooling multiple investments, offering a smoother experience for investors.
  4. They usually have lower costs and fees than managing individual stocks. This saves investors money.
  5. ETFs simplify investing in the carbon credit market, allowing exposure without requiring deep expertise.

The post Top 5 Carbon ETFs for Sustainable Investing in 2025 appeared first on Carbon Credits.

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Carbon Footprint

The Strategic Case for Nature-Based Carbon Investments

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Nature-based carbon investments deserve consideration when they address a specific business dependency and produce outcomes you can measure. Imagine Moonbucks, a global coffee roaster planning next season’s espresso blend. It is considering natural Grade 4 coffee from Jimma, in southwestern Oromia, Ethiopia. Its sourcing decisions affect the roasting schedule and the cash tied up in coffee purchases. Moonbucks needs to understand which measures could protect that supply, what they would cost and how it would judge the results.

1. Define the sourcing problem before choosing a project

Moonbucks needs a dependable component for its espresso blend. Its procurement team wants continuity of volume and an agreed cup profile. Replacing a shipment at short notice could require new sample approval and changes to the blend, and given the schedules for cultivation, processing, and freight delivery, is practically impossible. Moonbucks needs to get this right, and its initial concern is inconsistent deliveries. It commissions an assessment of the supplying farms and post-harvest chain. The questions cover land condition, harvest availability and whether drying or storage problems are affecting saleable lots.

This distinction changes the investment brief. A tree-planting proposal cannot be assumed to fix drying problems. Better storage cannot restore eroded land. The team must establish which problem exists before selecting the response.

CCC’s guide to finding nature-based solutions in your supply chain explains where to look. Here, the next task is to turn a broad concern into a testable proposal.

2. Develop nature-based carbon investments around the actual supply chain

The assessment would trace Moonbucks’ purchases back through the exporter and supplying producer groups. Which farms supply the contracted lots? Who controls land-management decisions? How long does the buyer expect to maintain the purchasing relationship?

Furthermore, Jimma natural Grade 4 cannot be treated as interchangeable with every Ethiopian coffee. Moonbucks would need to test any substitute against its own blend and quality requirements.

Suppose Moonbucks’ assessment identifies an opportunity to maintain shade trees and restore vegetation along exposed streambanks. The IPCC describes agroforestry as a way to store carbon in vegetation and soil, with potential benefits for erosion control and water quality.1 Moonbucks would need local advice on species, growing conditions and maintenance before deciding how these measures fit its sourcing plan.

The proposal now has a defined sourcing connection and a candidate intervention. The next steps are to test its effect on production, assess carbon eligibility and build the financial case.

3. Compare the proposal with other ways to protect supply

WBCSD’s Nature-based Solutions Blueprint recommends comparing nature-based options with other responses across their benefits and costs.2 For Moonbucks, that means evaluating the landscape proposal alongside drying improvements, storage controls and alternative sourcing arrangements.

The product’s natural-process designation matters. Moonbucks should examine the drying and dry-milling chain alongside land conditions. Its team would check storage practices, contamination risks and incoming-lot quality to see whether problems arise before or after the coffee leaves the farms.

The revised proposal might combine land stewardship with separate post-harvest controls. Each component needs its own purpose and budget. A sustainability label should not obscure which activity is expected to solve which problem.

The project develops as the evidence improves. Its scope should follow the diagnosis rather than preserve the first idea unchanged.

4. Establish what the carbon outcome could count toward

Moonbucks’ sustainability team now tests the proposed carbon case separately from the sourcing case. Is the objective a measurable change in Moonbucks’ value-chain emissions, verified credits for separate voluntary use, or distinct outcomes under carefully defined arrangements?

Scope 3 covers value-chain emissions. A purchasing relationship alone does not prove that a farm intervention can be included in Moonbucks’ inventory. The team needs an applicable accounting method, defensible boundaries and evidence supporting attribution.

SBTi’s FLAG Guidance (forest, land and agriculture), version 1.2, says purchased credits used as offsets cannot meet near-term FLAG or energy and industry targets. Eligible land-based removals are subject to accounting requirements.3 Moonbucks needs to test its proposal against those rules before including an outcome in its targets.

For Moonbucks’ Jimma proposal, maintaining existing trees and establishing new vegetation could involve different carbon questions. Specialists must examine the baseline and additionality, meaning what changes because the project proceeds. They must also assess measurement and the risk that stored carbon is lost. CCC’s MRV and additionality article introduces those tests.

Until that work is complete, Moonbucks should not budget an assumed Scope 3 reduction or credit-sale receipt. Direct emissions reductions remain the priority.

5. Build a financial case that survives weaker assumptions

Moonbucks’ finance team would now build a multi-year budget. UNEP’s State of Finance for Nature 2023 compares current finance with the investment needed to meet climate, biodiversity and land-restoration goals.4 The company would cost its proposed activities, farmer participation and ongoing monitoring. Verification, where required, is a separate expense. Maintenance and responsibility for replacing failed plantings must remain visible after the initial establishment budget ends.

Operational benefits need equally careful treatment. If fewer rejected lots reduce emergency purchasing, count that saving once. Do not add “supply resilience” as another financial benefit when it represents the same avoided cost.

Moonbucks should compare a base case with slower benefits, higher implementation costs and no carbon revenue. It should also distinguish production outcomes from quality and shipment outcomes. A single good harvest would not prove that the landscape intervention caused better delivery performance.

A project can remain worth funding even when its carbon case needs more work. That decision must rest on the operational evidence and the company’s objectives, without unsupported environmental claims.

6. Fund a pilot with a clear expansion decision

Moonbucks’ first approval would fund a bounded pilot, rather than commit the entire sourcing program. Before spending, Moonbucks would agree on participating farms, responsibilities and the evidence needed at review.

Its scorecard could track farmer participation, implementation costs and plant survival, alongside accepted coffee volumes and lot-quality results. Carbon measurements would follow the selected method. Farm-level traceability must connect the intervention to the actual sourcing relationship.

Suppose Moonbucks’ review later finds that storage changes explain most quality improvements, while the land measures need longer observation. Those findings would shape the next decision: expand the proven component, adjust the landscape work or pause further spending. They would not justify crediting all improvements to tree planting.

This gives nature-based carbon investments a practical place in a multi-year strategy. Funding increases as the evidence supports it, and the project can change direction before a larger commitment.

Discuss a sourcing opportunity with CCC

Carbon Credit Capital’s nature-based supply-chain investment service uses its Dual-Value Model to examine supply-chain economics alongside potential sustainability outcomes.

Schedule a consultation to discuss your sourcing exposure and the questions to resolve before allocating capital.

Sources

  1. Intergovernmental Panel on Climate Change (IPCC), Climate Change 2022: Mitigation of Climate Change, Chapter 7, Agriculture, Forestry and Other Land Uses, section 7.4.3.3 (Agroforestry).
  2. World Business Council for Sustainable Development (WBCSD), Nature-based Solutions Blueprint, 5 June 2024.
  3. Science Based Targets initiative (SBTi), Forest, Land and Agriculture Science-Based Target-Setting Guidance, version 1.2, March 2026, section 3.1.4, pp. 37–38.
  4. United Nations Environment Programme (UNEP), State of Finance for Nature 2023, 2023.
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Carbon Footprint

How to buy plastic credits, and what to check before you do

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A plastic credit funds the collection of plastic waste in places where no formal system exists to collect it. Each credit represents a measured, independently audited quantity of plastic taken out of the environment or returned to use, tracked on a public registry.

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Carbon Footprint

EU carbon credit claims after 27 September 2026

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EU carbon credit claims changed on 27 September 2026, the day the Directive (EU) 2024/825 began to apply across the European Union. The change is narrow. It changes how a company can talk about the credits it buys. A product can no longer be called neutral on the strength of compensation alone; however, every specific, evidenced statement about what a company measured, reduced, and funded stays fully available.

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