Emissions trading system (ETS)
Emissions trading is the trading of allowances to emit a certain quantity of greenhouse gases. In the Emissions Trading System (ETS), emissions are reduced where costs are comparatively low – according to market logic.
The ETS encourages businesses to reduce greenhouse gas emissions and follows the cap-and-trade principle:
- The total number of emission allowances in the system is set by the Federal Council (i.e. a cap is set) and reduced by a certain number each year.
- Market-based trading with these allowances ensures that emissions are reduced where it is most cost-effective.
Emissions Trading System for installation operators (ETS Installations)
The Emissions Trading System (ETS) limits the emissions from the most greenhouse gas-intensive industrial installations. The absolute available quantity of emission allowances, and therefore a maximum for the emissions of all ETS participants, is defined in advance. Each ETS participant is allocated a certain number of emission allowances. If its emissions are lower than this allowed amount, it can sell surplus emission allowances; if they are higher, the participant must buy emission allowances.
Emissions Trading System for aircraft operators
Since 2020, flights within Switzerland and flights from Switzerland to the European Economic Area (EEA) and the United Kingdom (UK) have been subject to the Swiss Emissions Trading System (ETS). Aircraft operators must have enough emission allowances to cover their annual carbon emissions.
Emissions Trading Registry
Emission allowances, emission-reduction certificates and attestations from companies that participate in emissions trading and from Switzerland as a state can be recorded in the Swiss Emissions Trading Registry (EHR). The FOEN uses the EHR to check whether companies have complied with their statutory obligations and to auction off emission allowances, while also ensuring that the national reduction target is being met.
Link to EU ETS
Linking the Swiss Emissions Trading System with that of the EU is beneficial for both climate policy and the economy. An agreement to this end between Switzerland and the EU came into force on 1 January 2020, and the two emissions trading systems have since been linked.