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International Emissions Trading Master Agreement released

London, 16 April 2012

The International Emissions Trading Association has published the new industry standard master agreement – IETMA – providing further momentum to the development of an efficient market. The aim is to provide a greenhouse gas emissions-specific document with concise definitions of emissions trading concepts, which is easy to use, allows adaptation to new markets and new instruments as they arise, and appeals to a broad spectrum of counterparties.

Existing standardized emissions trading documentation is solely designed for trading under the European Union Emissions Trading Scheme (EU ETS). But the world is changing. In order to meet the market need for providing trading standards that are simple and flexible at the same time, the new IETMA developed by IETA can be used in combination with multiple regional or national emissions trading systems around the world, as and when they develop.

The International Emissions Master Trading Agreement is the principal trading document in a comprehensive new system of documentation. For each region or type of certificate, sub-schedules can be added. As a first step, a sub-schedule for the EU ETS has been finalized. A Kyoto schedule is in the making. Further schedules for Australia, California and potentially other schemes will follow.

IETA announces the publication of the following documents[1]:

IETA Emissions Trading Master Agreement (IETMA)

Schedule 1 – Definitions

Schedule 2 – Elections

Schedule 4 – EU ETS System Schedule

The IETMA has been drafted along the following principles:

1. Recognition of the individuality of local Systems:

  • System or scheme neutrality of the Master Agreement
  • Avoiding imposition of EU centric approaches
  • Flexibility at Confirmation, Schedule and Master Agreement level

2. Enable parties to take ownership of the Agreement for local Systems through the ability to adapt to:

  • Multiple currencies
  • Interest rates
  • Local time zones
  • Local carbon units

3. Adaptability to a changing framework:

  • Schedule 4 - EU ETS System Schedule is designed for trading under Phase 3 of the EU ETS, and includes transitional provisions for trading in the remainder of Phase 2, and Suspension Events which anticipate the new European Union Registry infrastructure
  • Enabling Kyoto specific changes caused by regulatory flux to be addressed without impacting the remainder of the Agreement

4. Compatibility with other trading documentation:

  • Reduction of documentation basis risk
  • Consistency across the ISDA and EFET documents to facilitate greater trading
  • Changes minimised from existing ETMA

Ends --


Since its foundation in 1999, the International Emissions Trading Association has promoted carbon trading across the world by informing, lobbying and helping create the concepts and tools to make this extraordinary idea into a reality. From the start, this mission included the design of viable and reliable legal trading documents.

The documentation is the result of three years of dedicated work of a drafting sub-group of the IETA Legal Committee under leadership of the Chair Peter Zaman (Clifford Chance LLP) and Vice-Chair Felix Tse (Gazprom Marketing & Trading).

To learn more about what has changed in IETMA compared to previous trading documentation visit the IETMA FAQ page on the trading documents page