Allowances to be Delivered - Emissions Annex Provision

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EU Emissions Allowance Transaction Annex to the 2005 ISDA Commodity Definitions

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Allowances to be Delivered in a Nutshell

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Allowances to be Delivered in all its glory

Allowances to be Delivered: Means, in respect of an EU Emissions Allowance Transaction that is:
(1) an Allowance Forward Transaction, a number of Allowances equal to the Number of Allowances; or
(2) an Allowance Option Transaction and in respect of an Exercise Date, a number of Allowances equal to the number of Options exercised or deemed exercised on that Exercise Date multiplied by the Option Entitlement.


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)



See also Number of Allowances, in this Annex, and Contract Quantity in the EFET Allowances Appendix and PTA Quantity in the IETA Master Agreement.



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.

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See also


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