Delivering Party’s Replacement Cost - IETA Provision

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IETA Emissions Trading Master Agreement

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Delivering Party’s Replacement Cost in a Nutshell

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Delivering Party’s Replacement Cost in all its glory

Delivering Party’s Replacement Cost” means in respect of a failure to accept (or secure acceptance of) a Transfer of a number of Allowances pursuant to Clause 12.2 (Failure to Accept) the positive difference if any between (i) the Allowance Price multiplied by the Default Quantity, and (ii) the price the Delivering Party, acting in a commercially reasonable manner, does or would receive in an arm’s length transaction for an equivalent quantity and Validity Period of Allowances to replace the Default Quantity; plus

(a) interest on the amount calculated in accordance with paragraph (a) above for the period from (and including) the Delivery Date to (but excluding) the date of termination at the rate specified in Clause 9.5(a) (Interest); plus
(b) the amount of such reasonable costs and expenses which the Delivering Party incurs in respect of the Default Quantity (including, without limitation, broker fees, commissions and legal fees).


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

Resources and Navigation

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)

Index: Click to expand:

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



The same concept is covered, in a roundabout way, as follows in the different versions of the emissions trading documents:
ISDA: Delivering Party’s Replacement Cost
EFET: Seller’s Cover Costs
IETA: Delivering Party’s Replacement Cost

See also “Receiving Party’s Replacement Costs” (ISDA and IETA) or Buyer’s Cover Costs (EFET) for the converse position.



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  • The JC’s famous Nutshell summary of this clause

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See also


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