Switzerland Consults On Linking With EU Emissions System

by Ulrika Lomas, Tax-News.com, Brussels

26 March 2019

The Swiss Federal Council is consulting on proposed changes to the CO2 Ordinance, which would link the Swiss and EU emissions trading systems.

The Federal Council said that linking the two schemes will enable companies in the Swiss ETS to trade in the larger and more liquid EU emissions market and to benefit from the same competition conditions as EU companies.

An agreement to link the systems was signed in November 2017. The Swiss Parliament approved the agreement on March 22, 2019. For the changes to be implemented, Switzerland's CO2 Ordinance must be amended.

The linking agreement is scheduled to enter into force on January 1, 2020. Emissions from civil aviation and fossil power plants will be included in the Swiss ETS, as is already the case in the EU. The scheme will cover domestic flights and flights from Switzerland to other countries in the European Economic Area.

The EU's ETS operates in 31 countries – the EU's member states, plus Iceland, Liechtenstein, and Norway. A single, EU-wide cap applies, and auctioning is the default method for allocating allowances. The Swiss ETS is also based on the cap-and-trade principle.

The consultation will close on July 2, 2019.

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