Switzerland and the European Union (EU) operate separate emissions trading schemes. The EU scheme (EU ETS) includes approximately 12,000 companies with around 2 billion tonnes of CO2, while the Swiss ETS involves approximately 50 firms with around 6 million tonnes of CO2.

Switzerland would like to link both systems and create one CO2 market. To achieve this, emission allowances would need to be mutually recognized in a bilateral agreement. The provisions of the revised CO2 Act, which came into force on 1 January 2013, are in large part compatible with the EU ETS.

Switzerland believes that environmental policy and the economy would be benefitted by linking the two systems:

• in a larger market, there is greater potential to reduce emissions at a lower cost
• a larger and more established market is more liquid and leads to stable prices
• Switzerland's small market hinders trade and price formation
• European and Swiss emission allowances would equally fulfil the statutory requirements
• Swiss companies could operate in the same emissions market as their business partners in the EU
• greater flexibility for companies to meet their CO2 targets thanks to access to the EU market

The EU is also interested in linking its ETS with the Swiss ETS. Aviation is also being discussed in the negotiations.