DOSSIER: Switzerland Emissions Trading Scheme

Published 15:00 on January 1, 2016  /  Last updated at 16:22 on March 24, 2017  /  Dossiers  /  No Comments

This dossier gives an overview of the Swiss scheme including details on its use of international credits, associated carbon tax and offsetting and its process for linking with the EU ETS. It also features a summary of key elements by the International Carbon Action Partnership (ICAP).

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Summary (ICAP)

ICAPlogoSummary 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.

 

General information:

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. .

Background information:

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 5.63 MtCO2e (2013), 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:

52.6 MtCO2e (11%) (2013)

 

Liable entities:

55 (2015)

(defined at the installation level)

Sector Coverage:

Downstream: Industry;

Gas coverage:

CO2, NO2, CH4, HFCs, NF3, SF6 and PFCs

Allocation:

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).

 

Phases & Compliance periods:

Trading 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.

Temporal flexibility:

Banking is allowed (within a compliance period as well as from one compliance period to the next).

Provisions for price management:

NA

Linking:

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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