Exemption from the CO2 levy

Exemption for operators of greenhouse gas-intensive installations

Operators of greenhouse gas-intensive installations can be exempted from the CO2 levy if they commit to a reduction in their greenhouse gas emissions in return. Operators of large greenhouse gas-intensive installations that participate in the emissions trading scheme are also exempted from the CO2 levy.

The CO2 Act distinguishes among the following categories of installations that intensively produce CO2:

  • Small and medium-sized installations 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 (reduction commitment).
  • Medium-sized installations with an installed capacity of between 10 and 20 MW that are engaged in an activity listed in Annex 7 of the CO2 Ordinance and can voluntarily participate in the Swiss emissions trading scheme (ETS).
  • Larger installations that carry out an activity referred to in Annex 6 of the CO2 Ordinance and are required to participate in the Swiss emissions trading scheme (ETS). As a rule these are installations with an installed total rated thermal input of 20 MW and more.

Exemption without participating in the emissions trading scheme (reduction commitment)

Operators of greenhouse gas-intensive installations 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 (reduction commitment). The relevant sectors of the economy are referred to in Annex 7 of the CO2 Ordinance.

The Confederation exempts an installation operator upon request. In return the installation operator commits to reducing its greenhouse gas emissions without interruption. Only at the end of the commitment period will it be conclusively determined whether the target is met. This gives the operator with a reduction commitment 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, an installation operator 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 operator's own reduction commitment.

According to each individual situation, various exemption models are available to installation operators:

Emissions target

All installation operators 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 installation operator may emit during the commitment period. The emissions target is calculated from the starting point along a linear reduction course to the end point.

For installation operators that were already exempted from the CO2 levy in the first commitment period (2008-2012) and whose exemption continued without interruption, the emissions 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 installation operators 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 - derived on the basis of an economically viable reduction potential.

In the case of both an emissions target with a simplified determination of the reduction course and an emissions target with an individual reduction course, operators with reduction commitments 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 installations

Installation operators with emissions of no more than 1,500 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. In determining whether the target has been reached, the only relevant factor is whether the measures have been implemented.

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.

Further information

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Last modification 04.05.2020

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