Template:IETA Master Agreement Excess Emissions Penalty overview
“Excess Emissions Penalty” has the meaning given to it in the Directive.
“EEP Amount” means an amount (expressed as an amount per Allowance) that the Receiving Party determines, acting in good faith and using commercially reasonable procedures, to be its total losses and costs which result from the Delivering Party’s failure to deliver the Shortfall to the extent that those losses and costs are not reflected elsewhere in the definition of Receiving Party’s Replacement Cost and to the extent that they relate to:
- (a) any Excess Emissions Penalty which the Receiving Party must pay to a Relevant Authority in accordance with the terms of the Scheme; or
- (b) if this sub-paragraph (b) is specified in Schedule 2 (Elections) as applying, any amount which the Receiving Party must pay to a third party in respect of any such penalty payable to any other party (including a Relevant Authority) by that third party as a result of the Delivering Party’s failure to deliver the Shortfall.
“EEP Status” means whether or not the Parties have elected in Schedule 2 (‘‘Elections’’) (or the Confirmation for the relevant Transaction) that Excess Emissions Penalty applies to the relevant Period Traded Allowances.
- 12.1(c) Subject to Clause 12.1(d) (Failure to Transfer), if as a result of the Delivering Party’s failure to make a Transfer (in whole or in part) the Receiving Party becomes liable to pay any EEP Amount, then the Receiving Party shall provide to the Delivering Party, upon its reasonable request, evidence to the reasonable satisfaction of the Delivering Party:
- (i) that the Receiving Party has incurred an EEP Amount consequent on the Delivering Party’s failure to make a Transfer (in whole or in part);
- (ii) the extent to which the requirement for the Receiving Party to pay any EEP Amount results from the Delivering Party’s failure to make such Transfer; and
- (iii) that the Receiving Party could not have used Allowances to which it had legal and beneficial interest in any Holding Account(s) in any Registry in order to avoid or reduce its liability to pay any EEP Amount which it claims from the Delivering Party as part of the Receiving Party’s Replacement Cost.
- (i) that the Receiving Party has incurred an EEP Amount consequent on the Delivering Party’s failure to make a Transfer (in whole or in part);