Linking the Swiss and EU emissions trading systems

Linking the Swiss emissions trading system with that of the EU is beneficial for both climate policy and the economy. An agreement to this end between Switzerland and the EU came into force on 1.1.2020, and the two emissions trading systems have since been linked.

Switzerland and the European Union (EU) operate independent emissions trading systems (ETSs). The EU ETS comprises almost 10,000 installation operators, representing emissions of around 1.3 billion tonnes of CO2 equivalent (CO2eq) per year. In addition, some 350 aircraft operators with emissions of around 60 million tonnes of CO2 per year are subject to the EU ETS. As of 2024, the EU ETS now also includes emissions from shipping.

Around 100 installation operators participate in the Swiss ETS, with emissions totalling approximately 5 million tonnes of CO2eq per year. In addition, almost 200 aircraft operators with emissions of around 1 million tonnes of CO2 per year are subject to the Swiss ETS.

The Swiss ETS has been linked to that of the EU since 2020. This is the world's first international treaty to link emissions trading systems. Swiss ETS participants can thus now benefit from European emissions trading and thereby greater flexibility with regard to meeting their CO2 targets.

Overview of the content of the Agreement

The Agreement regulates the mutual recognition of emission allowances from the two ETSs, each of which has its own legal basis. Switzerland is therefore not adopting EU law. Anyone obliged to participate in the Swiss or EU ETS can use emission allowances from both their own system and that of the other contracting party to cover the relevant greenhouse gas emissions. In addition, as a result of the linking, aviation and fossil-thermal power plants have been integrated into the Swiss ETS, in line with the system in the EU. Participants in one ETS are entitled to apply for admission to the auctions of emission allowances in the other ETS. Compatibility between the ETSs, the equal treatment of participants and system security are ensured by, among other things, 'essential criteria' laid down in the Annexes to the Agreement.

As with other agreements with the EU, a Joint Committee is established to manage the Agreement. The Joint Committee may, in particular, decide on amendments to the Annexes. The Agreement is geared towards long-term cooperation and is therefore not time-limited. However, it may be terminated at any time subject to a six-month notice period.

Implementation of the linking in Switzerland

Since the Agreement came into force in 2020, domestic and foreign aircraft operators that carry out domestic flights in Switzerland or flights from Switzerland to the European Economic Area (EEA) or the United Kingdom (UK) are obliged to participate in the Swiss ETS. Under the Agreement, flights from the EEA to Switzerland are covered by the EU ETS. Flights from the UK to Switzerland are covered by the UK ETS.

An electronic link between the Swiss Emissions Trading Registry and the European registry (Union Registry) has allowed emission allowances to be transferred between the registries since September 2020. As previously, anyone entitled under the Agreement to apply for admission to a Swiss auction and wishing to participate in such an auction will need to have an account in the Swiss Emissions Trading Registry.

Further information

Last modification 09.02.2024

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