The EU and Switzerland are hoping to complete negotiations to link their emissions trading schemes in the next three months, the parties said after concluding another round of talks on Thursday.

Switzerland and the 28-nation bloc said they had been able to agree on most areas, and that the outstanding issues related to the inclusion of aviation in the linked schemes, the compatibility of the two systems’ trading registries, and concerns over security.

“Since the last high-level negotiations of 19 September 2014, it has been possible to establish the basic principles for the ETS linking agreement in (these) areas,” Switzerland’s Federal Office for the Environment (FOEN) said on its website.

It added that both sides “confirmed their desire to clarify the remaining issues as quickly as possible and to initial the ETS linking agreement in the first half of 2015.”

The linking talks began in 2010 and are aimed at creating fungibility between the two schemes while minimising potential competitive distortions between Swiss and EU companies.

The two parties had hoped to link their markets by this year, but talks were temporarily put on hold by the EU last year over concerns surrounding Switzerland’s Feb. 2014 referendum over whether to limit the bloc’s citizens from immigrating to the country.

A FOEN official last year said the EU and Switzerland were now targeting a 2016 or 2017 linking start date.

The Swiss ETS, which was launched in 2008, caps the emissions of around 55 companies in the country’s industrial manufacturing sectors including cement, steel, aluminum, oil refining, paper, glass, ceramics, chemicals and pharmaceuticals, as well as electricity and heating.

Participation in the market was made mandatory for large emitters from 2013, and voluntary for medium-sized ones that have the choice of paying a carbon tax instead.

By Mike Szabo – mike@carbon-pulse.com