Parliament has approved a deal to link Switzerland’s greenhouse gas emissions’ trading system to that of the European Union. Polluting companies will have a wider choice of carbon credits to offset their emissions.
On Thursday, the Senate followed the House of Representatives in voting to ratify an agreement that was approved by the government in 2017. Negotiations between Swiss and EU officials to align their systems began in 2011. By joining forces, the most polluting category of Swiss companies will be able to access a larger market and benefit from the same conditions as their European counterparts.
In Switzerland, 54 companies in sectors like cement, chemicals, pharmaceuticals, refineries, paper, heating or steel are linked to the Swiss emissions trading system. In Europe, there are around 11,000 firms that offset their emissions under the EU scheme.
In Switzerland, companies have the right to emit a certain amount of carbon dioxide (CO2) into the atmosphere for free. Those that reduce their CO2 emissions and do not use all their quota can sell them to others.
Companies that do not participate in the emissions trading scheme are subject to a CO2 tax. However, the tax can be refunded if they undertake to reduce their emissions. This possibility is open to all companies whose annual CO2 tax bill exceeds CHF15,000 ($14,900).
The coupling of the Swiss and EU emission trading systems will enter into force in 2020. It is part of the changes associated with the revision of the Swiss CO2 law. The agreement is for an indefinite duration and can be terminated with six months’ notice by both parties.