Allowances to be Delivered - Emissions Annex Provision
EU Emissions Allowance Transaction Annex to the 2005 ISDA Commodity Definitions
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Allowances to be Delivered in all its glory
See our natty emissions comparison table between the IETA, EFET and ISDA versions of emissions trading docs
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A key to part of the complexity in the Emissions Annex. Whether your Transaction is an Option or a Forward, on a settlement date one of you has to pay an amount of money, and the other has to deliver a quantity of Allowances. Options with multiple exercise dates are treated as a single unitary transaction — this figures, because American options can be partly exercised on any day, whereas Forwards settle on a single day that doesn’t adjust. So para (c) says where you have multiple settlement dates on a Forward, you just treat each one as a separate Transaction.
Nevertheless there is something to be said for tidying up the drafting in the Emissions Annex. It says “Number of Allowances or Allowances to be delivered, as the case may be” in many places, and in many ways, where it could just say, “Allowances to be Delivered” and achieve exactly the same thing.
- The JC’s famous Nutshell™ summary of this clause