AEU Allowance - Emissions Annex Provision

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EU Emissions Allowance Transaction Annex to the 2005 ISDA Commodity Definitions

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AEU Allowance in a Nutshell

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AEU Allowance in all its glory

AEUA or AEU Allowance: Means an “allowance” as defined in the Directive and which is issued under Chapter II thereof.


See our natty emissions comparison table between the IETA, EFET and ISDA versions of emissions trading docs

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Pro tip: for tons of information about EU ETS and EU financial services regulation see Michał Głowacki’s magnificent website.

Emissions trading documentation
ISDA: EU AnatomyEU Wikitext EU Nutshell (premium) • UK AnatomyUK Wikitext (to be merged into EU Anatomy)
IETA: IETA Master AgreementIETA WikitextIETA Nutshell (premium)
EFET: EFET Allowances AppendixEFET Allowances WikitextEFET Nutshell (premium)



Too long, didn’t read: “A” is for Aviation, and an AEUA — known to all but ISDA Ninjas as an “EUAA” — is a specific Aviation EU Allowance and trades separately, and at a different price, to normal EU Allowances.



Okay so this is really cool. This is where the JC, dare we say it ourselves, really comes into its own. We have spent the last 45 minutes trying to work out what the hell an AEUA is, and how it differs to a normal EUA, being the Allowance issued under the regular EU ETS. ISDA’s crack drafting squad™, in its inimitable, gnomic style, has elected to define it not by explaining what that extra “A” stands for, but rather explained where it is defined: in Chapter II. Those who trundle off to the EU ETS regulation to see will be disappointed to discover there appears to be no Chapter II, or indeed any Chapters at all: European directives divide themselves into Articles, and Parts, not chapters.

At this point you will blame yourself, curse your own lack of facility with Boolean syntax, and double down on your Google search. This is not likely to help. You will continue to cycle round the same unenlightening sites, including an infuriating LawInsider page which appears to be some half-witted AI project to regurgitate text without any context whatsoever. What you have to do is ask someone in the industry who knows.

When you do this it transpires there are normal EU Allowances, and aviation EU allowances, known to participants not as AEUAs, but as “EUAAs”. Google these and — alongside plaintive charitable sites like the European Union Agency for Asylum — you will quick;ly find references to the aviation allowances, futures in them, auction sites for them, and the trail of breadcrumbs may lead you eventually to the mythical Chapter II which is there, after all, only it just won’t make itself known to you unless you google the magic keyword, in this case “aviation”. then you will — may — find the latest version of the EU ETS legislation here.

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See also