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 January 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 9,000 stationary installations, representing emissions of around 1.1 billion tonnes of CO₂ equivalent (CO₂-eq) per year. In addition, some 400 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 also includes emissions from shipping.

Around 100 stationary installations participate in the Swiss ETS, with emissions totalling approximately 4 million tonnes of CO₂-eq per year. In addition, almost 200 aircraft operators with emissions of around 1.5 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 under 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 carbon targets.

What the treaty involves

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 required 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, because the systems are linked, 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 essential criteria laid down in the Annexes to the Agreement.

As with other agreements with the EU, a Joint Committee has been established to manage the Agreement. The Joint Committee may 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.

Application in Switzerland

Since the Agreement came into force in 2020, domestic and foreign aircraft operators that run domestic flights in Switzerland or flights from Switzerland to the European Economic Area (EEA) or the United Kingdom (UK) are required 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.

ETS for aircraft operators

Thanks to an electronic link between the Swiss Emissions Trading Registry and the European registry (Union Registry), since September 2020 it has been possible to transfer emission allowances between the two registries. 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.

The Swiss Emissions Trading Registry