Delivering Party’s Replacement Cost - Emissions Annex Provision

EU Emissions Allowance Transaction Annex to the 2005 ISDA Commodity Definitions A Jolly Contrarian owner’s manual™ Delivering Party’s Replacement Cost in a Nutshell™ The JC’s Nutshell™ summary of this term has moved uptown to the subscription-only ninja tier. For the cost of ½ a weekly 🍺 you can get it here. Sign up at Substack. Delivering Party’s Replacement Cost in all its glory Delivering Party’s Replacement Cost: Means in respect of a failure of Receiving Party to accept delivery of a number of Allowances (the “DPRC Shortfall”), an amount equal to: (i) (1) the Allowance Purchase Price or Allowance Strike Price, as applicable, as set out in the Confirmation for the relevant EU Emissions Allowance Transaction plus, in those circumstances in which the relevant termination of the parties’ obligations under “Physical Settlement” occurs following a Suspension Event, the Close-out Cost of Carry Amount; less (2) the price (per Allowance) Delivering Party, acting in a commercially reasonable manner, does or would, in the determination of the Calculation Agent, receive in an arm’s length transaction concluded on the Final Compliance Date for an equivalent number of Allowances of the relevant Allowance Type to be delivered on the Final Compliance Date or, if later, the Delivery Business Day on which Allowances would be delivered in accordance with prevailing market practice under a spot transaction concluded on the Final Compliance Date; multiplied by: (ii) the DPRC Shortfall; plus (iii) interest at the Default Rate for the period from (and including) the Delivery Date to (but excluding) the date of termination in accordance with Part (d)(ii)(2)(B)(Failure to Comply Not Remedied) on an amount equal to the product of the DPRC Shortfall and an amount equal to the excess, if any, of the Allowance Purchase Price or Allowance Strike Price, as applicable, over the price determined pursuant to paragraph (i)(2) above. edit Comparison See our natty emissions comparison table between the IETA, EFET and ISDA versions of emissions trading docs Resources and Navigation Index: Click ᐅ to expand: ISDA Emissions TOC EUA Annex - Premium Emissions Pro tip: for tons of information about EU ETS and EU financial services regulation see Michał Głowacki’s magnificent emissions-euets.com website. Emissions trading documentation ISDA: EU Anatomy • EU Wikitext • EU Nutshell (premium) • UK Anatomy • UK Wikitext (to be merged into EU Anatomy) IETA: IETA Master Agreement • IETA Wikitext • IETA Nutshell (premium) EFET: EFET Allowances Appendix • EFET Allowances Wikitext • EFET Nutshell (premium) Premium version of this page

Overview

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The same concept is covered, in a roundabout way, as follows in the different versions of the emissions trading documents:
ISDA: Delivering Party’s Replacement Cost
EFET: Seller’s Cover Costs
IETA: Delivering Party’s Replacement Cost

See also “Receiving Party’s Replacement Costs” (ISDA and IETA) or Buyer’s Cover Costs (EFET) for the converse position.

Summary

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• The JC’s famous Nutshell™ summary of this clause

Template:M premium EUA Annex Delivering Party’s Replacement Cost

See also

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