Premium - Emissions Annex Provision

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EU Emissions Allowance Transaction Annex to the 2005 ISDA Commodity Definitions

A Jolly Contrarian owner’s manual™

Premium in a Nutshell

The JC’s Nutshell summary of this term has moved uptown to the subscription-only ninja tier. For the cost of ½ a weekly 🍺 you can get it here. Sign up at Substack.

Premium in all its glory

Premium: Means, in respect of an EU Emissions Allowance Transaction which is an Allowance Option Transaction, the amount specified or otherwise determined as provided in the related Confirmation. If a Premium per Allowance is specified in the related Confirmation, the Premium shall be the product of the Premium per Allowance, the Number of Options and the Option Entitlement.


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

Resources and Navigation

Index: Click to expand:

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 “Premium” in the 2021 ISDA Interest Rate Derivatives Definitions (and its predecessor the 2006 ISDA Definitions) finds expression elsewhere in the ISDA extended universe in the 2002 ISDA Equity Derivatives Definitions (Para 2.4(b), and in the ISDA Emissions Annex (Premium) and, no doubt, in other places too.



A workaday definition that captures the option premium you pay to buy an option.

Once paid, you have no further obligations under the Transaction, just the right — confitional on the option being in the money — to be paid on exercise. This can make matters interesting should your swap dealer decide um alberne kerle zu spielen with the flawed asset provisions in your ISDA — though, newsflash: it won’t, as long as its risk team retains possession of their deliberative faculties — but that won’t stop the negotiation community obsessing about how to cater for the contingency that they do not.

Alert: premium content

For bookish types, there is a lengthy disquisition about it in the premium section of our article on Section 2(a)(iii).

Premium content

Here the free bit runs out. Subscribers click 👉 here. New readers sign up 👉 here and, for ½ a weekly 🍺 go full ninja about all these juicy topics 👇
  • The JC’s famous Nutshell summary of this clause
Template:M premium EUA Annex Premium

See also