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This is all about the consequences should an EU Polluter not surrender the necessary {{euaprov|Emissions Allowance}}s to atone for its pollution by the annual deadline of 30 April prescribed in the {{euaprov|EU ETS}}. If your transaction does not hinge on the purchaser having EUAs in its hands by that date, then you can switch all this EEP business off. | |||
Note: the [[Excess Emissions Penalty - Emissions Annex Provision|excess emissions penalty]] falls on those operators who actually emit carbon dioxide. To the extent you are a financial, and your business is in the trading, liquidity and market making of [[EUA]]s themselves, and not offsetting real-world carbon emissions they are designed to control, then {{euaprov|EEP}}s are not likely to come high up your list of priorities. That being said, there ''is'' an indirect implication for financial-only counterparties if they [[Failure to Deliver - Emissions Annex Provision|fail to deliver]] to operators in time so operators can surrender to the authorities by the {{euaprov|Reconciliation Deadline}}, since the former’s settlement failure brings a real world penalty charge on the later. Therefore you may wish to consider the otherwise rather perplexing {{euaprov|Failure to Deliver}} language in the {{euaprov|Annex}} dealing with that contingency. | Note: the [[Excess Emissions Penalty - Emissions Annex Provision|excess emissions penalty]] falls on those operators who actually emit carbon dioxide. To the extent you are a financial, and your business is in the trading, liquidity and market making of [[EUA]]s themselves, and not offsetting real-world carbon emissions they are designed to control, then {{euaprov|EEP}}s are not likely to come high up your list of priorities. That being said, there ''is'' an indirect implication for financial-only counterparties if they [[Failure to Deliver - Emissions Annex Provision|fail to deliver]] to operators in time so operators can surrender to the authorities by the {{euaprov|Reconciliation Deadline}}, since the former’s settlement failure brings a real world penalty charge on the later. Therefore you may wish to consider the otherwise rather perplexing {{euaprov|Failure to Deliver}} language in the {{euaprov|Annex}} dealing with that contingency. | ||