Glossary entry

Hydrocarbons

Definitions

Option 1 (common use definition - includes fossil fuels)

Hydrocarbons means a class of organic chemical compounds predominantly consisting of hydrogen and carbon, which includes fossil fuels such as coal, crude oil and natural gas.

Option 2 (strictly scientific definition)

Hydrocarbons means an organic compound consisting entirely of hydrogen and carbon, which includes crude oil and natural gas.

Option 3 (harmonises the strict scientific definition and the common use definition by referring to fossil fuels in which hydrocarbons are found)

Hydrocarbons means organic chemical compounds consisting of hydrogen and carbon, which are found in fossil fuels such as coal, crude oil and natural gas.

Option 4 (as defined in Rory's Clause)

Hydrocarbons means principally oil, gas and coal or other fuel source derived from an organic compound made up of hydrogen and carbon.

Drafting notes

A strict chemical definition of ‘hydrocarbons’ does not specifically include coal, as coal contains elements in addition to carbon and hydrogen.

Consider whether your definition should refer to coal or other fossil fuels, as common use of the term ‘hydrocarbons’ is used interchangeably with fossil fuels.

It is worth checking national legislation in the jurisdiction that you are drafting for as it is likely that existing legislation may define various fossil fuels such as petroleum, coal and natural gas and it may be appropriate to use those definitions. In the UK the Petroleum Act 1998 defines petroleum and the Coal Industry Act 1994 defines what amounts to coal.

Application

Contracts where a party has a choice of energy use, and the use of hydrocarbons could be minimised and the use of renewable energy sources promoted. See Rory’s Clause [Net Zero Land Promotion Agreement].

Supply chain clauses, development agreements, construction contracts, public procurement agreements.