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Switzerland, EU To Link Emissions Trading Systems

by Ulrika Lomas, Tax-News.com, Brussels

15 November 2019


Switzerland and the EU are to link their emissions trading systems from next year, after the Swiss Federal Council approved revisions to the country's Ordinance on the Reduction of CO2 Emissions.

The amended Ordinance was approved on November 13. It will enter into force on January 1, 2020, along with the revised CO2 Act approved by Parliament in March and the November 2017 agreement with the EU on linking the respective systems. The amendments to the Ordinance were necessary for the link to be implemented.

The EU Emissions Trading System (EU 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 Swiss Federal Council said that linking the two schemes will allow companies in the Swiss ETS to trade emission allowances in the larger EU emissions market and to benefit from the same competitive conditions as EU companies.

The agreement between Switzerland and the EU regulates the mutual recognition of emissions rights from the two ETS systems, each with its own legal basis. From January 2020, emissions from civil aviation and fossil fuel power stations will be included in the Swiss ETS, as is currently the case in the EU.

TAGS: environment | tax | Iceland | aviation | Liechtenstein | Norway | environmental tax | carbon tax | Switzerland | trade | European Union (EU) | Europe

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