Allowance - Emissions Annex Provision

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EU Emissions Allowance Transaction Annex to the 2005 ISDA Commodity Definitions

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Allowance in a Nutshell

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Allowance in all its glory

Allowance: Means, in respect of an EU Emissions Allowance Transaction, an allowance to emit one tonne of carbon dioxide (CO2) equivalent during a specified period which is valid for meeting emissions related commitment obligations under the Scheme and which is of the specified Allowance Type and relates to the Specified Compliance Period.


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

Resources and Navigation

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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)



The definition of Allowance is more or less the same in all three emissions trading documentation regimes. Compare:
ISDA: Allowance
IETA: Allowance
EFET: Allowance



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
Template:M premium EUA Annex Allowance

See also


Template:M sa EUA Annex Allowance