Template:M comp disc EUA Annex Suspension Event

This a limited thing — some would say, arbitrarily limited — where regulatory/government fiat at the heart of the European Union stops the system functioning as it should, but not permanently. So, taking the Union Registry offline, an Administrator Event — but not some other regulatory driven externalities. It doesn’t include Abandonment of Scheme or an executive decision (however unlikely) that Phase 3 Allowances are no longer elibigle for surrender in Phase 4.

Would Phase 3 Allowances ever be ineligible for surrender in Phase 4? Technically yes; practically no. Article 13 of the EU ETS Directive requires Member States to issue replacement Phase 4 Allowances to those poor souls stuck with stale Phase 3 Allowances — they are generally valid for eight years from issue). The result, as the Michał Głowacki’s excellent site remarks, is

“Emission allowances will no more be replaced between periods, but will be valid indefinitely.”

Therefore elaborate provisions to provide what happens in an Option or a Forward should Phase 3 EUAs become ineligibility, (we have seen this described, oddly, as a “Fungibility Event”, are