UK ETS & Trade Agreement

The United Kingdom (UK) has withdrawn from the European Union (EU) with effect of 1 January 2021. In doing so, the UK has withdrawn from the Emissions Trading Scheme (ETS) of the European Union.

The UK has subsequently established the UK ETS, which commenced its first compliance period in May 2021.

In response, key standardised agreements used for the trade of EU UKAs (EUAs) under the ETS have been adapted to the particularities of the UK ETS, allowing for the trade of UK Allowances (UKAs). These agreements include:

  • the UKA Appendix to the EFET General Agreement on Power and the EFET General Agreement on Gas; and
  • the UKA Part to the Schedule to the ISDA Master Agreement.

These market agreements are however structured as “master agreements”, creating a framework for the parties to execute multiple individual trades on any future dates. Master agreements however generally take time to negotiate.

For parties wishing to do only one or a small number of UKA trades with another party or small volume trades, the likely effort, time, and cost spent on negotiating an EFET or ISDA may be disproportionate.

To offer a cost-effective and quick alternative to the market, CMIA and DLA Piper have jointly developed a new UKA single trade agreement:

  • This is a “one-time” agreement with the option for a single or multiple delivery dates, allowing parties to focus on commercial terms rather than on first establishing a contractual framework.
  • The Trade Agreement is based on single trade agreements commonly used in the energy markets, such as the REC Single Trade Agreement published by RECS International.
  • The provisions of the Trade Agreement are however materially aligned with the positions of EFET and ISDA for the UK ETS, therefore offering market accepted language.

DLA Piper supported the EFET Legal Committee in drafting the UKA Appendix and contributed to the alignment with ISDA on its UKA Part to the Schedule. Where appropriate, the terminology and the terms of the CMIA agreement therefore follow and reflect the aligned positions between EFET and ISDA.

To help market participants with using the CMIA single trade agreement, a further Guidance Note was developed by the Climate Markets & Investment Association (CMIA) in collaboration with the law firm DLA Piper. 

Please note that it serves as a general guide only for the purposes of assisting the users of the CMIA Trade Agreement for Single or Multiple Deliveries of UK ETS UKAs (Trade Agreement). The CMIA, the CMIA Working Groups, Representatives, DLA Piper and other Counsel involved in the development, preparation and approval of this guidance, shall not be liable or otherwise responsible for its use and any damages or losses resulting out of its use in any particular case and in whatever jurisdiction. It is the responsibility of each party wishing to use the Trade Agreement to ensure that its terms and conditions are legally binding, valid and enforceable and best serve to protect their legal interests. The Guidance Note should be read in conjunction with the Trade Agreement. This Guidance Note should not be relied on as absolute advice and does not replace legal counsel.

Guidance Note to the Trade Agreement for Single or Multiple Deliveries of the UK ETS UKAs.


CMIA Single Trade Agreement PDF Version and Word Version.

For general queries, please contact the CMIA Secretariat

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