Template:Nutshell EUA Annex (d)(ii)(1)

(d)(ii)(1) Failure to Deliver by Delivering Party
If the failure to deliver occurs other than following Receiving Party’s failure to observe the Requirements under the Scheme, an Illegality, a Settlement Disruption Event, a Suspension Event or Abandonment of Scheme, the Payment Date will be postponed and Receiving Party may by notice require Delivering Party to remedy the failure and:

(A) Failure to Deliver Remedied: If Delivering Party remedies the failure by the Final Delivery Date:

(X) when determining the Payment Date, the Delivery Date will be the date of actual delivery:

(i) Allowance Forward Transactions: Receiving Party must pay Delivering Party the Allowance Purchase Price multiplied by the Number of Allowances on the Payment Date

(ii) Allowance Option Transactions: Receiving Party must pay Delivering Party the Allowance Strike Price multiplied by the number of Allowances to be Delivered on the Payment Date; and

(Y) Delivering Party must pay Receiving Party on the Payment Date (determined as above) interest on the number of Allowances due but not delivered on the Delivery Date multiplied by the Allowance Purchase Price (for an Allowance Forward Transaction) or the Allowance Strike Price (for an Allowance Option Transaction) from the original Delivery Date to the actual delivery date at the Default Rate.

(B) Failure to Deliver Not Remedied: If the failure is not so remedied:

(X) Excess Emissions Penalty applies: If “Excess Emissions Penalty” does not apply, or if it does, but the Delivery Date does not fall within the specified EEP Risk Period, Receiving Party may by notice terminate the parties’ obligations under “Physical Settlement” and Delivering Party must pay Receiving Party Receiving Party’s Replacement Cost (if positive) on the next Business Day, adjusted for any amounts already previously paid by Receiving Party to Delivering Party (other than Premium on an Allowance Option Transaction) under the EU Emissions Allowance Transaction; or

(Y) Excess Emissions Penalty applies: If “Excess Emissions Penalty” applies and the Delivery Date falls within any specified EEP Risk Period, Receiving Party may by notice terminate the parties’ obligations under “Physical Settlement” and Delivering Party must pay Receiving Party Receiving Party’s Replacement Cost (if positive, and where it applies) on the Business Day following the day on which Receiving Party can effect a Buy-In, or the first Business Day following the day on which Receiving Party is can purchase Allowances, adjusted to take into account any amount previously paid (other than any Premium on an Allowance Option Transaction); or

(Z) Failure to Deliver (Alternative Method): If “Failure to Deliver (Alternative Method)” applies:

(aa) Delivering Party must pay Receiving Party, on the next Business Day, Receiving Party’s Replacement Cost (if positive), adjusted to take into account any amount previously paid (other than any Premium on an Allowance Option Transaction), and upon payment, Delivering Party’s delivery obligation will be fully discharged; and

(bb) if “Excess Emissions Penalty” applies Delivering Party must pay Receiving Party any amount determined under Failure to Deliver (Alternative Method) – EEP Applicable.