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Deutsche Bank AG v. Total Global Steel Ltd. - judgment

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Deutsche Bank (DB) sued Total Global Steel (TGS) for breach of contract for the sale of Certified Emissions Reductions (CERs), instruments created under the Kyoto Protocol to measure and limit greenhouse gas emissions under the European Union Emissions Trading System (EUETS).  The CERs DB purchased from TGS had previously been “surrendered,” or used to demonstrate compliance with emissions limitation commitments. DB claimed that the CERs they acquired were valueless. TGS accepted that they had supplied surrendered CERs, but denied that they were in breach of contract as they disputed that they were obliged to deliver CERS that could be used under the EUETS for determining compliance with commitments. TGS claimed: (1) that the CERs were not valueless; and (2) that DB did not mitigate their loss by moving the CERs out of their account which was subject to the EUETS before EU regulations prevented them from doing so (therefore preventing them from selling or disposing of the CERs thereafter). 

The Court ordered TGS to pay damages to DB, since the European Commission had announced in January 2010 a check that prevented surrendered CERs from being used for compliance purposes; this check rendered the CERs purchased by DB worthless and the Court held that the contract included a term that the instruments should be used for determining compliance with emissions commitments pursuant to and in accordance with the EUETS. They also held that the wording should be interpreted with an interpretation that “makes business sense and would accord with the reasonable expectations of those buying and selling such instruments on the spot market”.

Deutsche Bank AG v. Total Global Steel Ltd.

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An aim to achieve a quantifiable outcome within a given time-frame, set by an institution such as a national government.

Policy instruments are techniques or tools used by governing authorities to promote certain policies in order to achieve predetermined goals. Put simply, instruments are how a government tries to achieve its goals, with this taxonomy being focused on national policy instruments.

Risk is the potential for adverse consequences resulting from the dynamic interplay between (climate-related) hazards, exposure, and vulnerability of affected human or ecological systems.

Groups  of people who are adversely affected by climate change or the response to it

A set of principles, processes, and practices that build economic and political power to shift from an extractive economy to a regenerative economy.

Renewable energy means all forms of energy produced from renewable sources in a sustainable manner.

Fossil fuel is a generic term for non-renewable energy sources such as coal, fossil gas, and oil (including crude oil, and petroleum products), that can be used for electricity and heat generation. Fossil fuels are hydrocarbons formed from pressurised and heated organic material buried over millions of years.

Molecules in the atmosphere that play a key role in the greenhouse effect by trapping heat radiating from Earth’s surface.

Area of the economy in which actors engage in identical or related activities.

In human systems, the process of adjustment to actual or expected climate change and its effects, in order to moderate harm, increase resilience or exploit beneficial opportunities. In natural systems, the process of adjustment to actual climate change and its effects; human intervention may facilitate adjustment to expected climate change and its effects.

The management and allocation of funds, assets and investments to meet various objectives

A long-lived, colourless gas, chiefly emitted from fossil fuel combustion, deforestation and cement production.

This sector involves the wholesale and retail selling of goods.

Any compulsory, unrequited payment to the government levied on corporations or individuals. This can be for environmental reasons, such as introducing a Carbon tax to set a price that emitters must pay for the greenhouse gases they emit.

A target to reduce the prevalence of a greenhouse gas over a specific time frame

Tradable permits are market-based tools that grant permission for specific activities, frequently used to regulate emissions. These permits can be issued within a trading system to manage environmental impacts.

Either money or something of monetary value is transferred between two or more organisations, people or countries.

Electrical energy generated from mechanical devices driven by flowing fresh water.

Activities that involve planning, designing and building infrastructure, residential, and commercial structures.

This sector includes firms and individuals offering specialised expertise in fields such as law, accounting, consulting, science and engineering.

A ban is a legal action that prevents the sale or supply of a product or service, or that recalls a product from the market. Examples are bans on SF6, greenwashing, fossil fuel advertisement or single-use plastics.

This sector provides communication services, software development, and IT solutions.

The activities of industries involved in the production, distribution, and sale of energy, including electricity, gas, and renewables.

This sector creates and distributes information and entertainment through television, radio, print, and digital platforms.

Activities that relate to the production of goods and services from forests.

The release of heat-trapping gases, primarily from human activities such as burning fossil fuels, agriculture and industry.

The processes through which enterprises can identify, prevent, mitigate and account for how they address their actual and potential adverse impacts. Due diligence is the idea that reasonable precautions should be taken to avoid causing harm to people, the environment, or society. It also involves identifying and mitigating risks before they occur.

Fossil gas, commonly known as natural gas, is a fossil fuel consisting chiefly of methane with smaller amounts of other hydrocarbons and trace gases, found in underground deposits.

Deutsche Bank AG v. Total Global Steel Ltd. - judgment

Target

Policy instrument

Renewable energy

Fossil fuel

Greenhouse gas

Economic sector

Finance