Exemption from the CO2 levy subject to a reduction commitment: step by step

Installation operators 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. The installation operators must submit an application for exemption from the levy to the FOEN.

CO2 Act for the period after 2024:

In the spring session 2024, Parliament approved the revision of the CO2 Act for the period after 2024. This forms the basis for the reduction commitments (exemption from the CO2 levy) for the years 2025 to 2040. Subject to a possible referendum, the consultation on the CO2 Ordinance will take place in summer 2024.

CO2 Act

Operators of installations with a total rated thermal input of more than 20 MW or an-other activity according to Annex 6 of the currently valid CO2 Ordinance are generally obliged to participate in the Emissions Trading Scheme (ETS).

The most important points step by step:

1. Can I get my installations exempted?
2. What are the system limits for exemption from the levy?
3. With which model can I get my installations exempted?
4. How is an application for exemption from the levy or an extension of the deadline submitted?
5. How is the decision made by the FOEN?

CO2-Abgabebefreiung ohne Emissionshandel

This publication does not exist in English. It is available in other languages. 2019

1. Can I get my installations exempted?

To be able to take on a reduction commitment and be exempted from the levy, the installation operator must:

be engaged in an activity referred to in Annex 7 of the CO2 Ordinance;
have at least 60 percent of its greenhouse gas emissions caused by this activity;
account for more than 100 tonnes CO2eq emissions in one of the preceding two years.

Installation operators that were committed to reduction in the years 2013-2023 and ended their reduction commitment can’t be exempted from the CO2- Levy in the years 2022-2024.

Annex 7 Activities that qualify for participation in the ETS or for exemption from the levy subject to a reduction obligation: CO2 Ordinance

2. What are the system limits for exemption from the levy?

The system limits of the reduction commitment are defined by the installation operator's geographical perimeter and the relevant greenhouse gas emissions.

The perimeter is comprised of one or more fixed installations that are operated at the same closed production site. Several installation operators can take on a common commitment.

The following greenhouse gas emissions are included in the commitment:

CO2 emissions from the combustion of standard fossil fuels and fossil waste fuels;
geogenic CO2 process emissions;
fossil CO2 process emissions, e.g., from the production of steel;
N2O emissions, e.g., from the production of nitric acid;
Perfluorocarbons from the production of primary aluminium.

3. With which model can I get my installations exempted from 2024?

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

Emissions target set individually: An emissions target determines the amount of greenhouse gas emissions in tonnes CO2eq that the installation operator may emit during the second commitment period. The emissions target is calculated from the starting point of the installations’ actual greenhouse gas emissions using a linear reduction course to the end point. The reduction course is based on an economically viable reduction potential which is systematically derived from a proposed target.

Measures target for small installations: Operators of small installations may apply for a measures target. The benchmark is emissions of no more than 1,500 tonnes CO2eq per year. The absolute measures target in tonnes CO2eq includes a list of economically viable measures that must be implemented. The installations’ reduction potential is to be systematically derived as the basis for the list of measures in a proposed target.

4. How is an application for exemption from the levy or an extension of the deadline submitted?

An installation operator that wants to be exempted from the CO2 levy must submit to the FOEN an application for exemption from the levy or an extension of the deadline through the CORE System, in each case before the expiration of the deadline. Upon request, the FOEN generally grants an extension of 8 months to submit the proposed target. For an exemption from the levy starting 01.01.2024 the application has to be submitted by 01.09.2023. The deadline to submit the proposed target is extended until 30.04.2024.

The application can be submitted here: www.core.admin.ch

The application for exemption from the levy includes:

administrative data and geographic perimeter;
emission data and production indicators;
choice of model;
proposed target;
a monitoring plan for installations that have other relevant emissions in addition to the CO2 emissions from the combustion of standard fossil fuels.

Installation operators can obtain support for establishing the proposed targets. The Confederation has transferred this cost-based enforcement support to the following organisations:

Cleantech Agentur Schweiz act
Energie-Agentur der Wirtschaft EnAW

5. How is the decision made by the FOEN?

The FOEN examines the application and decides about the exemption from the levy and the emissions target – or the measures target in the case of operators with small installations – by ruling.