Emissions trading is an economic instrument that makes it possible to reduce CO2 emissions where it costs the least to do so. Effective environment measures are applied according to economic criteria.

Large, energy-intensive companies are required to participate in emissions trading, while medium-sized companies may voluntarily participate in the emissions trading scheme (ETS).

Emission credits from Switzerland and companies that participate in emissions trading can be recorded in the National Emissions Trading Registry. The FOEN uses the registry to check whether companies meet their commitments, while the authorities use it to ensure that federal reduction targets are met.

Switzerland and the EU are negotiating the possibility of linking their emissions trading schemes (ETS). They are also negotiating measures to cap CO2 emissions caused by air traffic.

Linking the Swiss and EU CO2 emissions markets would be beneficial for both environmental policy and the economy. Negotiations on this matter are already in progress.

The flexibility mechanisms of the Kyoto Protocol enable developed countries and companies to allocate emission reductions achieved abroad to their emission reduction targets. There are three types of project-based mechanisms: Clean Development Mechanisms (CDMs), Joint Implementation (JI) and New Market Based Mechanisms (NMMs). The certificates resulting from these mechanisms can be traded.