LCFS Master Agreement

April 2014 — Leadership for Energy Automated Processing (“LEAP”) has established a Committee to create a Master Agreement for the trading of credits under the California Low Carbon Fuel Standard Program (“LCFS Credits”). The document, tentatively titled the LEAP Master Agreement for Low Carbon Fuel Standard Credits, (the “LCFS Master Agreement”), will have a similar structure to LEAP’s previously-released RINs Master Agreement and will likely include a single-trade agreement format similar to the RINs document. The LCFS Master Agreement will also be structured to allow it to interoperate with Version 3 of the LEAP Master Agreement suite, which we anticipate to publish in the second half of 2014.

Master agreements, like those found in the LEAP Master Agreement suite, are utilized by counterparties for several reasons, including, to: (i) obtain agreement on legal, credit and operational terms; (ii) obtain transaction simplification; and (iii) facilitate the electronic matching of trades. Where one party and another party buy and sell LCFS Credits with each other regularly, it makes sense that they would want to obtain agreement on the general terms that govern their trades, like payment netting, close-out netting, governing law and dispute resolution, set off, and credit support, among other matters. Once a LEAP Master Agreement is executed, transactions become simplified because individual trade confirmations only need to include the economic terms of a trade.

The LEAP LCFS Master Agreement Committee is comprised of representatives of certain LEAP member companies who trade credits in that market. All LEAP members are welcome to join the Committee.

For more information about LEAP Membership or about our Limited Participation option, either visit our Membership Page or else contact us at info@energyleap.org.

 

LEAP’s mission is to promote efficient and reliable transaction processing within the energy trading industry. Membership in LEAP is open to energy trading, service and association entities on a nondiscriminatory basis. All members must be legal entities, not natural persons.