Allowance - Emissions Annex Provision
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EU Emissions Allowance Transaction Annex to the 2005 ISDA Commodity Definitions A Jolly Contrarian owner’s manual™
Allowance in all its glory
Comparison See our natty emissions comparison table between the IETA, EFET and ISDA versions of emissions trading docs
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Overview
The definition of Allowance is more or less the same in all three emissions trading documentation regimes. Compare:
ISDA: Allowance
IETA: Allowance
EFET: Allowance
Summary
Well — not quite the same. The IETA, which in most other regards falls over itself to be more verbose, is positively terse in comparison with the ISDA and EFET Annex, never getting into the weeds of how many tonnes of carbon dioxide an allowance entitles one to emit, or anything like that. Perhaps it is future-proofing itself. Time will tell: the proof of the pudding is in, well, the future.
The EFET and the ISDA allow themselves some successor protection through their “such other type of unit as may be recognised as, valid for the purposes of meeting the requirements of applicable law” so we don’t suppose anything much turns on it. But it would be fun, one day, if it did.
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- The JC’s famous Nutshell™ summary of this clause