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Summary provided by the secretariat of the International Carbon Action Partnership (ICAP), a multilateral forum working on carbon markets. For more information, visit ICAP’s website. Copyright © ICAP and reproduced with permission.
The Swiss ETS started in 2008 with a five-year voluntary phase as an alternative option to the CO2 levy on fossil fuels. From 2013 on, the scheme subsequently became mandatory for large, energy-intensive entities, while medium-sized entities may join voluntarily. In the 2013-2020 mandatory phase, participants in the ETS are exempt from the CO2 levy.
With the establishment of the ETS, Switzerland aims to reduce its GHG emissions by at least 20% in comparison to 1990 GHG levels by 2020 as an unconditional, domestic target. GHG emissions are to be reduced by 50% in comparison to 1990 GHG levels by 2030 to comply with the INDC Submission. .
Compliance in the Swiss ETS system is mandatory for entities of covered sectors which are captured by the inclusion threshold since 2013.
There is an absolute cap at 5.2 MtCO2e (2017), which is to be reduced annually by a constant linear reduction factor (currently 1.74%), to 4.9 MtCO2e in 2020.
Total emissions and proportion covered:
48.61 MtCO2e (11%) (2014)
(defined at the installation level)
CO2, NO2, CH4, HFCs, NF3, SF6 and PFCs
Free allocation & auctioning
Offsets and credits
International: Most categories of credits from CDM projects in LDCs are allowed. (Exclusion criteria listed in Annex 2 of the revised CO2 Ordinance).
Switzerland’s Federal Audit Office (SFAO) report (Mar. 2017): said the country should consider abandoning its ‘ineffective and oversupplied’ ETS should a link to the EU’s carbon market not materialise soon. It argued that the ETS – one of the world’s smallest by covered emissions and number of participants – was not driving GHG cuts due mainly to too many freely-allocated allowances, with the unexpected stoppage of the Tamoil refinery, the scheme’s third biggest emitter, leaving the market in surplus without the means of removing spare supply.
Phases & Compliance periods:
Voluntary phase: 2008-2012
Mandatory phase: 2013-2020
Compliance period: one calendar year as of 31 December 2013
Covered entities have time until April 30 of the following year to surrender allowances.
Banking is allowed (within a compliance period as well as from one compliance period to the next).
Provisions for price management:
In January 2016, Switzerland and the EU concluded negotiations on linking their ETSs. Through the bilateral agreement, the two systems will mutually recognize each other’s emissions allowances. Once the link is operational, prices should converge resulting in a level playing field for Swiss and EU based industry. Switzerland has identified lower cost emission reductions, enhanced liquidity, clearer price formation and price stability as expected benefits from the link.
For the agreement to enter into force, it must be signed and ratified by both sides. The timetable for this is open.
For further information, visit the ICAP ETS Map.
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