Switzerland’s bet on carbon offsets shows little payoff so far 

Carbon offsetting: can cleaning up elsewhere help clean up Switzerland’s own climate balance sheet? Illustration: Kai Reusser, Swissinfo

Switzerland has long been a poster child for global carbon offsetting. But the strategy has come into question, and the country has hit less than 1% of its 2030 targets. What does that mean for the EU, Japan, and others who followed Switzerland’s lead?

Switzerland became a pioneer in applying article 6.2 of the Paris Agreement on climate change, reached in 2015. The provision lets countries pay for projects to cut emissions beyond their borders, and then count the reductions as part of their own climate targets. For example, Switzerland financed an electric bus project in Bangkok, hoping to gain credits to apply to domestic emissions.  

Over the past decade, Bern has signed 16 such bilateral deals and committed to covering up to one-third of its 2030 climate target with foreign carbon credits, also known as ITMOs. Of the ideas proposed under these deals, the Federal Office for the Environment (FOEN) has approved six, with another 28 still under evaluation. So far, the country has reached 0.36% of its foreign offset goal of 34 million tonnes of CO2.  

“They’re trying to do good – setting up safeguards, excluding fossil fuels – but the credits they’re getting aren’t what they wanted,” says Federica Dossi from the Brussels-based non-profit group, Carbon Market Watch, about the Swiss approach. 

Illustration: Kai Reusser, Swissinfo

“The Bangkok e-bus project, for example, is one where the quality just isn’t there. And now they’re behind on their targets, with no plan B,” Dossi says.

The projects must meet strict criteria under article 6 of the Paris Agreement – including proving that emissions cuts are real, lasting, and transparent – which takes time to document and verify. Yet even when credits are secured, quality is often questionable. 

The article was designed partly in response to the shortcomings of its predecessor, the Clean Development Mechanism of the Kyoto Protocol. A 2024 studyExternal link in the scientific journal Nature, covering 2,346 projects under that mechanism, found that fewer than 16% of the credits issued represented real emissions reductions. Cookstove projects performed worst, at 11%. 

Those are not article 6 credits – but they are the project types Switzerland is buying. The Swiss NGOs Alliance Sud and Fastenaktion found the Bangkok buses would likely have been electrified by 2030 without Swiss funding, a claim the KliK Foundation, which bought the credits, calls speculation. A separate complaint against the Ghana cookstove project alleges over-crediting rather than non-additionality. 

When asked if Switzerland has a backup plan, the FOEN stated that the government will review progress toward the 2030 targets in 2027 and is actively working to develop the CO2 market under the Paris Agreement to ensure the availability of high-quality compensation projects. 

Switzerland is not alone in this approach. Norway, Singapore, and Japan have also signed bilateral agreements under the article, in which they commit to purchase hundreds of millions of credits to meet their climate targets.  

Swiss strategy faces challenges  

In May, Green Party parliamentarian Marionna Schlatter told Swiss Public Radio SRF that the offset strategy was a “complete failure”, accusing Switzerland of “stealing away from its responsibility”.  Nadine Masshardt of the left-wing Social Democrats warned that foreign certificates often reduce less CO2 than claimed.  

Christian Wasserfallen of the centre-right Radical-Liberal Democrats, a proponent of market-based solutions, also admitted the current approach was flawed.

One issue with such offset credits is that the market for them is small. Switzerland is competing with Singapore, Japan, and the EU for the same pool of credits from Ghana, Peru, and Thailand, raising concerns that rich nations are cherry-picking the easiest reductions while leaving other countries to shoulder harder cuts.  
 
Meanwhile, Switzerland’s emissions are 22.3% below 1990 levels, far short of the 50% target by 2030, suggesting that offsets are being used to avoid the harder work of decarbonisation at home. 

“Switzerland’s struggles prove that high-quality credits are structurally scarce, not just hard to find,” says Juliette de Grandpré from the NewClimate Institute in German. She adds that there will soon be few “cheap” carbon offset options left, also because the countries from which Switzerland and others buy these credits need them to meet their own emissions targets.  

“The Swiss case is really interesting because not only are they putting all their eggs in one basket – and it’s not working – but they also have insufficient measures internally to reduce their own emissions. It’s failing on both sides,” she said.

The EU’s dilemma: Flexibility or backsliding?  

Other countries taking the same approach aren’t faring better. Norway – a climate finance heavyweight – has pledged $1.56 billion (CHF1.3 billion) to buy 15 million credits by 2030 under article 6, yet has not reported any offsetsExternal link as of September 2026.  

Singapore, meanwhile, has contracted 2.2 million tonnes of creditsExternal link from Ghana, Peru, and Paraguay at a cost of roughly $60 million for delivery between 2026 and 2030, but no credits have been delivered yet. 

Illustration: Kai Reusser, Swissinfo

Japan, with 32 bilateral agreements and a credit target of $200 million, has received a small number of ITMOs – approximately 1,442 tonnes of CO2eq from Thailand and Maldives – as of its 2025 submissionExternal link to the UNFCCC. 

The struggles have led the EU to a crossroads. The bloc has agreed that international credits may cover up to 5% of its 1990 net emissions within its 2040 target. 

Given the state of offsetting, experts argue that EU countries should meet their reduction targets entirely through domestic changes, and only use offsets as a contribution to global mitigation. 

“Article 6 was meant to raise ambition. Instead, the EU is using it to lower ambition. This isn’t flexibility, it’s backsliding,” Dossi says. 

Fix the system or cut emissions at home 

Addressing the issues with carbon offsetting would mean either increasing the standards for projects – a move many countries resist – or abandoning the scheme and requiring countries to reduce emissions domestically.  

The FOEN has repeatedly insisted its article 6.2 bilateral deals and regular monitoring will meet their goals. But watchdogs remain concerned. Carbon Market Watch notes that article 6.2 does not adequately ensure carbon offsets will be of good quality, nor does it have safeguards to prevent land grabs or human rights violations, like requiring free, prior, and informed consent from indigenous peoples and local communities. And, the organisation notes, there are no significant penalties for misusing the offset program and accountability is delegated to civil society, which is underfunded.  

“If even one pillar – like permanence – is missing, the whole credit lacks integrity. You can’t have six out of seven and call it a success,” Dossi says. 

She fears that without these stricter standards, countries will avoid domestic action while also doubling down on a flawed offset system. “The world can’t afford that,” she says.

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Edited by Gabe Bullard/VDV,dos