Template:Nutshell EUA Annex (e)

(e) Defined Terms and Interpretation
Administrator Event means the suspension of a Relevant Registry’s, the EUTL’s or an LSTL’s processes under the Registries Regulation by a National Administrator or the Central Administrator:

(i) where that Relevant Registry is not operated and maintained in accordance applicable law,

(ii) for scheduled or emergency maintenance,

(iii) due to a breach of security threatening the integrity of the registries system or its back up facilities; or

(iv) upon suspension of the mutual recognition of Allowances under a Linking Agreement.

Template:Nutshell EUA Annex AEUA Allowance Template:Nutshell EUA Annex Affected Allowance Template:Nutshell EUA Annex Aircraft Operator Template:Nutshell EUA Annex Allowance Allowance Forward Transaction means a Transaction specified as such in the related Confirmation.
Allowance Option Transaction means a Transaction identified as such in the Confirmation, which will also count as an “Option Transaction” under the 2006 ISDA Definitions.
Allowances to be Delivered:

For Allowance Forward Transactions: The Number of Allowances;

For Allowance Option Transactions: For any Exercise Date the number of exercised Options x Option Entitlement.

Allowance Forward Transactions: Cost of Carry Rate x Allowance Purchase Price x N x (Cost of Carry Delay/360).

Allowance Option Transactions: Cost of Carry Rate x Allowance Strike Price x N x (Cost of Carry Delay/360).

where “N” = Number of Allowances delivered by the Delayed Delivery Date following a Suspension Event.
Cost of Carry Delay: The number of days from the scheduled Payment Date to the Delayed Payment Date.
Cost of Carry Rate: The Floating Rate that would be determined for the Calculation Period from the scheduled Payment Date to the Delayed Payment Date, were the Reset Date the last day of that Calculation Period and the Floating Rate Option “EUR-EONIA-OIS-COMPOUND”. Template:Nutshell EUA Annex Deadline Shortfall Template:Nutshell EUA Annex Delayed Delivery Date Template:Nutshell EUA Annex Delayed Payment Date Delivering Party means, for a Allowance Forward Transaction or a Call the Seller, and for a Put the Buyer.
Delivering Party’s Delivery Business Day Location will be specified in the Confirmation. If for some reason it isn’t, it will be the place specified in the Emissions Annex and, failing that, Seller’s address for notices under the Transaction and, failing that, the Delivering Party’s registered office.
Delivering Party’s Replacement Cost means for Receiving Party’s failure to accept delivery of a number of Allowances (the “DPRC Shortfall”) the following amount:

(AP + Cost of Carry - EUA_spot x DPRC Shortfall) + Default Interest

Where:

“AP” = relevant Allowance Purchase Price/Allowance Strike Price
“Cost of Carry” = Where the parties’ “Physical Settlement” obligations are terminated following a Suspension Event, the Close-out Cost of Carry Amount.
“EUA_spot” = the price per Allowance the Calculation Agent determines Delivering Party, would reasonably receive in an arm’s length spot transaction on the Final Compliance Date for the same number of equivalent Allowances to be delivered on the later of the Final Compliance Date and the normal Delivery Business Day for settlement of Allowances under such a transaction.
“DPRC Shortfall” = as defined above.
“Default Interest” = interest at the Default Rate from the Delivery Date to the termination date per Part (d)(ii)(2)(B)(Failure to Comply Not Remedied) on DPRC Shortfall x any excess of the AP over EUA_spot. Delivery Business Day means a business day in both parties’ specified delivery location.^[1]
Delivery Date: Each date so specified in the Confirmation (subject to adjustment for a Suspension Event).
Template:Nutshell EUA Annex Directive Template:Nutshell EUA Annex DPRC Shortfall EEP Amount means the amount per Allowance that Receiving Party reasonably determines, in good faith, to be its total losses (not otherwise reflected in its Receiving Party’s Replacement Cost) that result from Delivering Party’s failure to deliver the Shortfall and that relate to:

(1) Any Excess Emissions Penalty which Receiving Party incurs under the Scheme; or

(2) if “EEP Equivalent” applies, any amount that Receiving Party must pay to a third party to compensate for any such penalty that third party incurs as a result of Delivering Party’s failure to deliver the Shortfall.

(1) Between 1 May 2021 and close of business on 31 December 2022, 1 June 2024;

(2) Between 1 January 2023 and close of business on 31 December 2024, 1 June 2026;

(3) Between 1 January 2025 and close of business on 31 December 2026, 1 June 2028;

(4) Between 1 January 2027 and close of business 31 December 2028, 1 June 2030; and

(5) Between 1 January 2029 and the twenty-fifth day of the month in which the End of Phase Reconciliation Deadline is scheduled to occur, that twenty-fifth day.

(1) No Excess Emissions Penalty: If “Excess Emissions Penalty” does not apply or the Delivery Date falls outside the EEP Risk Period, then, for a failure to deliver a number of Allowances (the “RPRC Shortfall”), an amount equal to:

(A)

(I) the price (per Allowance) Calculation Agent determines that Receiving Party would pay in a reasonable arm’s length transaction on the Final Delivery Date for an equivalent number of Allowances to be delivered on the Delivery Business Day on which Allowances would be ordinarily be delivered under a spot transaction on the Final Delivery Date; less

(II) the relevant Allowance Purchase Price/Allowance Strike Price plus, where the termination under “Physical Settlement” follows a Suspension Event, the Close-out Cost of Carry Amount; multiplied by:

(B) the RPRC Shortfall; plus

(C) interest at the Default Rate from the Delivery Date to the termination date in accordance with “Failure to Deliver Not Remedied” on the product of the RPRC Shortfall and any excess of the price determined under to paragraph (1)(A)(I) over the relevant Allowance Purchase Price/Allowance Strike Price; or

(2) Excess Emissions Penalty: If “Excess Emissions Penalty” applies and Delivery Date falls within the relevant EEP Risk Period, then, for a failure to deliver a number of Allowances (the “Undelivered Allowances”), an amount equal to the sum of:

(A) either:

(I) if Receiving Party can reasonably purchase a number of Allowances for delivery between the Final Delivery Date and the Reconciliation Deadline immediately following the Delivery Date (the “Buy-In Period”), which for each such individual purchase of Allowances, in aggregate equalling the number of Undelivered Allowances:

(X)

(1) the price (per Allowance) at which Receiving Party is able so to purchase the relevant number of Allowances; less

(2)

(A) the Allowance Purchase Price or Allowance Strike Price, as applicable, for the Undelivered Allowances set out in the relevant Confirmation plus

(B) Where the termination of the parties’ obligations under “Physical Settlement” follows a Suspension Event, the Close-out Cost of Carry Amount; multiplied by:

(Y) the affected number of Allowances; plus

(Z) interest at the Default Rate from the Delivery Date to the termination date under “Failure to Deliver Not Remedied” on the product of the number of Undelivered Allowances and any excess of the determined price over the relevant Allowance Purchase Price/Allowance Strike Price; or

(II) if Receiving Party cannot reasonably purchase a number of Allowances for delivery equal to the Undelivered Allowances during the Buy-In Period:

(X) for the number of Allowances Receiving Party can Buy-In during the Buy-In Period, an amount determined under paragraph (I) above; and

(Y) for a number equal to the Undelivered Allowances minus the Allowances referred to in (II)(X) above (the “Shortfall”), the sum of:

(a)

(I) the price (per Allowance) at which Receiving Party can reasonably buy for delivery after the Reconciliation Deadline a number of equivalent Allowances equal to the Shortfall; less

(II) the relevant Allowance Purchase Price/Allowance Strike Price for the Undelivered Allowances, where the relevant termination of the parties’ obligations under “Physical Settlement” follows a Suspension Event, the Close-out Cost of Carry Amount; plus

(III) the EEP Amount; multiplied by:

(b) the Shortfall; plus

(c) interest at the Default Rate from the Delivery Date to the date Receiving Party could purchase Allowances under paragraph (II)(Y)(a)(1) on an amount equal to the the number of Undelivered Allowances and any excess of the price determined under paragraph (II)(Y)(a)(1) over the relevant Allowance Purchase Price/Allowance Strike Price; and

(B) Receiving Party’ reasonable costs as a direct result of Delivering Party’s failure to deliver the Shortfall where those costs and expenses are not reflected in paragraphs (A)(I) or (A)(II) above; or

(3) Failure to Deliver (Alternative Method): If “Failure to Deliver (Alternative Method)” applies then, for a failure to deliver a number of Allowances (“RPRC Shortfall”), an amount equal to:

(A)

(I) the price (per Allowance) the Calculation Agent determines that Receiving Party can reasonably buy a number of equivalent Allowances equal to the RPRC Shortfall for delivery on the first standard Delivery Business Day for settling transactions concluded on the Delivery Date; less

(II) the relevant specified Allowance Purchase Price/Allowance Strike Price plus, where termination of the parties’ obligations under “Physical Settlement” follows a Suspension Event, the Close-out Cost of Carry Amount; multiplied by:

(B) the RPRC Shortfall; plus

(C) interest at the Default Rate from the Delivery Date to the Final Delivery Date on the product of the relevant Allowance Purchase Price/Allowance Strike Price, and the RPRC Shortfall.

Reconciliation Deadline means 30th April in each calendar year for the preceding calendar year or such later date in prescribed by the Scheme for the surrender of Allowances.
Registries Regulation means the European regulation governing the registries used in the EU Emissions Trading Scheme.
Template:Nutshell EUA Annex Registry Registry Operation: The establishment and operation of any of:

(a) The Relevant Registry.

(b) The EUTL.

(c) The link between each Relevant Registry and the EUTL.

(d) The link between the LSTL and the EUTL.

Template:Nutshell EUA Annex Relevant Authority Relevant Registry: Means the Registry a party nominates for a particuilar EU Emissions Allowance Transaction. If it has specified multiple Specified Holding Accounts, it will identify the Relevant Registry under Part (d)(i)(2)(C).
Template:Nutshell EUA Annex RPRC Shortfall Scheme: the scheme for transferring Allowances established by the Directive and the Registries Regulation.
Seller will be specified in the Confirmation.
Template:Nutshell EUA Annex Seller Business Day Settlement Disruption Event: Something beyond the affected party’s control that, having used all reasonable efforts, it cannot overcome and which makes it impossible to perform its obligations to deliver or to accept Allowances under an EU Emissions Allowance Transaction. The following will not count as Settlement Disruption Events if they cause an inability to deliver Allowances in the affected party’s Specified Holding Account:

(a) the low or non-allocation of Allowances by any state;

(b) a Member State or Central Administrator not replacing Third Compliance Period Allowances with Fourth Compliance Period Allowances; or

(c) any party’s failure of a party to procure sufficient Allowances to meet its delivery obligations.

Something which otherwise would be a Settlement Disruption Event and a Suspension Event, will count as a Suspension Event and not a Settlement Disruption Event.
Template:Nutshell EUA Annex Shortfall Specified Compliance Period means the compliance period specified in the Confirmation.
Specified Holding Account means any Holding Accounts a party specifies in a Confirmation or, if it does not specify any, in Parts (d)(xii)(1)(A) or (2)(A) as modified by Parts (d)(xii)(1)(B) and (2)(B).
Suspension Event: any date a party cannot perform its delivery or acceptance obligations through a Relevant Registry as a result of:

(i) there being no Registry Operation; or

(ii) an Administrator Event.

Template:Nutshell EUA Annex Trade Date Third Compliance Period means the period set out in Article 16 of the Directive running from 1 January 2013 to 31 December 2020.
Unauthorised Transfer: A transfer of any Allowance from an account holder’s Holding Account to another person’s Holding Account that was not initiated by the first account holder or its authorised representatives.
Template:Nutshell EUA Annex Undelivered Allowances Union Registry means the “Community Registry” described in Article 19(1) of the Directive.
Template:Nutshell EUA Annex VAT Template:Nutshell EUA Annex VAT Amount Template:Nutshell EUA Annex VAT Invoice Template:Nutshell EUA Annex VAT Jurisdiction Template:Nutshell EUA Annex Written Confirmation

↑ Technically, the Delivering Party’s Delivery Business Day Location and the Receiving Party’s Delivery Business Day Location, but this is really too tiresome for words.

[1] Technically, the Delivering Party’s Delivery Business Day Location and the Receiving Party’s Delivery Business Day Location, but this is really too tiresome for words.

[1]