Exemption from the CO2 levy for operators of fossil fuel-based combined heat and power plants

The first of package of measures under the Energy Strategy 2050 was adopted by referendum on 21 May 2017. Thus, a partial revision of the CO2 Act also came into force on 1 January 2018 concerning the exemption of combined heat and power plants (CHP plants) from the CO2 levy.

Exemption criteria

Operators of fossil fuel-based CHP plants may be exempted from the CO2 levy for fossil combustible fuels that they use for electricity production. This rule applies to plants with a rated thermal input of 0.5 to 20 MW, whereby the upper limit is determined by required participation in the emissions trading scheme (ETS). A plant corresponds to a site. As a rule, it is a district heating station in which one or more CHP units are found. The minimum rated thermal input of 0.5 MW also applies to a plant that consists of several units.

CO2 levy refund

Operators of CHP plants can be refunded the CO2 levy on fossil combustible fuels that were used for electricity production. The CO2 levy must be paid for the proportion of fossil combustible fuels used to produce heat.
Installation operators may keep only 40 percent of the refunded amount if they invest this amount in effective measures to increase energy efficiency. There are no further conditions to meet for the remaining 60 percent of the refund.
Operators of CHP plants must apply annually to the FOEN for the refund by 30 June of the following year. The refund is paid retroactively for 12 months.

Measures to increase energy efficiency

The measures to increase energy efficiency must be carried out in the plants themselves or in plants that acquire electricity or heat directly from the CHP plant. Double counting is not permitted; the benefit of the measures may not be claimed by third parties, such as, for example, operators of compensation projects, cantons or communes. To prevent double counting, the measures may also not be financed in plants with reduction commitments or plants participating in the ETS. The investments must ultimately increase energy efficiency; for instance, replacement equipment purchases may not be counted toward the fulfilment of the investment requirement.

Non-fulfilment of the reduction requirement and the investment requirement

If a CHP plant operator does not fulfil its investment requirement on time, the FOEN will require the operatoropt to pay back 40 percent of the refunded CO2 levy on fossil combustible fuels that were used for electricity production.

Further information

Last modification 15.01.2024

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