Emissions trading system for aircraft operators

Since the Agreement between Switzerland and the EU on the linking of the emissions trading systems (ETS) came into force in 2020, flights within Switzerland and from Switzerland to the European Economic Area (EEA) have also been subject to the Swiss ETS. Aircraft operators must surrender emission allowances in the amount of their CO2 emissions. Aviation has been included in the EU’s ETS since 2012.

A maximum quantity of emission allowances available in the emissions trading system ('cap') is determined based on aircraft operators' transport performance (measured in tonne-kilometres) in 2018. This maximum will be reduced by 2.2% each year starting in 2021 (linear reduction factor).

Each aircraft operator is allocated free emissions allowances on the basis of a benchmark and that operator's transport performance in 2018. 15 percent of the cap is auctioned off and a set volume of emission allowances are retained as a reserve for new or fast-growing operators. Emission allowances are freely tradable ('trade') and can be surrendered to the competent authority to cover the CO2 emissions caused, or sold to other ETS participants.

Participation in the Swiss ETS

Aircraft operators that carry out domestic flights in Switzerland or flights from Switzerland to the European Economic Area (EEA) are obliged to participate. Flights from the EEA to Switzerland are covered by the EU ETS. In line with arrangements in the EU, exemptions for special flights (e.g. military, rescue or research flights) and thresholds apply in the Swiss ETS. The thresholds are 10,000 t of CO2 per year or 243 flights in each of three consecutive four-month periods for commercial aircraft operators and 1,000 t of CO2 per year for non-commercial aircraft operators. If the aircraft operator has obligations under the EU ETS, these thresholds do not apply.

Free-of-charge allocation

For every aircraft operator, the FOEN calculates the annual quantity of free emission allowances based on that operator's transport performance in 2018, taking into account the linear reduction factor. The same benchmark and reduction factor apply as in the EU.

If an aircraft operator does not carry out any ETS-relevant flights in a particular year and thus is not required to surrender any emission allowances, it must return the emission allowances allocated free of charge which it received for the year in question.

Auctions

The FOEN regularly auctions off emission allowances via the Swiss Emissions Trading Registry (EHR). Those entitled to take part in these auctions include aircraft operators participating in the Swiss and EU ETSs and other companies from the EEA admitted to bid in auctions in the EU. Anyone wishing to take part in a Swiss EHR auction must have an account with the Swiss EHR. Detailed information about the auctions can be found in the fact sheet on auctions and in the General Auction Terms and Conditions on the following website:

Emissions Trading Registry

The dates, auction volumes, maximum and minimum bid quantities of the next auction and the results of the auctions already carried out are published in the EHR:

Swiss Emissions Trading Registry

Reporting and obligation to surrender emission allowances

By 31 March each year, aircraft operators must report on their CO2 emissions for the previous year to the competent authority in the administering state (see 'One-stop shop'). They then have until 30 April to surrender sufficient emission allowances to cover these CO2 emissions. This is done in the emissions trading registry of the competent authority. Aircraft operators administered by Switzerland surrender their allowances/certificates in the Swiss EHR, while operators administered by a foreign authority do so in the Union Registry.

Should recognition of European emission allowances in the Swiss ETS be temporarily suspended in accordance with the agreement with the EU, aircraft operators for whom it is not, as a result, economically viable to meet their obligations under the ETS can submit an application for assessment as a case of hardship.

One-stop shop

In line with the 'one-stop shop' philosophy, aircraft operators who have obligations under both the Swiss and EU ETSs are only administered by one state. The competent authority in that state is responsible for all tasks related to the administration of the operator under both ETSs. This includes taking receipt of the annual emission reports, determining whether the operator has met its commitments and enforcing the operator's obligations.