Exemption from the CO2 levy
Exemption for operators of fossil fuel-based combined heat and power plants
Starting on 1 January 2018, operators of fossil fuel-based combined heat and power plants (CHP plants) may be exempted from the CO2 levy on fossil fuels that they use for electricity production. This rule applies to plants with a rated thermal input of 0.5 to 20 MW.
Exemption for greenhouse gas-intensive companies
Greenhouse gas-intensive companies can be exempted from the CO2 levy if they commit to a reduction in their greenhouse gas emissions in return. Large greenhouse gas-intensive companies that participate in the emissions trading scheme are also exempted from the CO2 levy.
The CO2 Act distinguishes among the following categories of companies that intensively produce CO2:
- Small and medium-sized companies that are engaged in an activity referred to in Annex 7 of the CO2 Ordinance and can be exempted from the CO2 levy without participating in the emissions trading scheme (non-ETS).
Exemption without participating in the emissions trading scheme (non-ETS)
Greenhouse gas-intensive companies from sectors of the economy that have a high tax burden in relation to their value, and whose international competitiveness would be greatly undermined as a result, can be exempted from the CO2 levy. In return they commit themselves to reducing their greenhouse gas emissions (non-ETS). The relevant sectors of the economy are referred to in Annex 7 of the CO2 Ordinance.
The Confederation exempts a company upon request. In return the company commits to reducing its greenhouse gas emissions without interruption by 2020. Only at the end of the commitment period, in 2021, will it be conclusively determined whether the target is met. This gives the company some flexibility to smooth out annual production fluctuations. If large, permanent changes are made during the commitment period, the Confederation may re-assess the targets.
In addition to in-house measures, a company can have foreign certificates counted to a limited extent. If this reduced the emissions more than expected, however, the Confederation may issue it attestations under certain conditions. The attestations can be sold but cannot be counted towards the company's own reduction commitment.
According to each individual situation, various exemption models are available to companies:
All companies that belong to a sector of the economy referred to in Annex 7 of the CO2 Ordinance and emit more than 100 tonnes CO2eq per year can be exempted in accordance with a simplified procedure with an emissions target. This determines the quantity of greenhouse gases that the company may emit during the commitment period. The emissions target is calculated from the starting point along a linear reduction course to the end point in the year 2020.
For companies that were already exempted from the CO2 levy in the first commitment period (2008-2012) and the exemption continued without interruption, the emission target can be calculated on the basis of a simplified determination of the reduction course. The increased efficiencies from the first commitment period are taken into account.
Only companies that apply for individual emissions target conduct a systematic analysis. The individual reduction course is - in accordance with the procedure in the first commitment period - is derived on the basis of an economically viable reduction potential.
Both, companies with the emissions target with a simplified determination of the reduction course, as well as those with the emissions target with individual reduction course, can have their unused emission allowances from the first commitment period (2008-2012) counted towards the fulfilment of their commitment in the form of a «credit» or apply for a conversion into attestations.
Measures target for small companies
Companies, the no more than 1500 tonnes CO2eq per year, can be exempted from the levy in accordance with a simplified model: instead of a reduction course economically viable measures (measures target) are determined in a standardised procedure. For reaching the target only the question of whether the measures are implemented is decisive.