Green light agreement for EU and Swiss emissions system10/11/17Environment
The European Council authorised the signing of an agreement between the EU and the Swiss Confederation linking their emissions trading systems (ETS).
The ETS is one of the main tools for cost-effectively reducing greenhouse gas emissions, particularly from energy-intensive industries and power plants.
The agreement will be beneficial for both the EU and the Swiss Confederation, allowing both parties to attain their emissions reduction targets, especially commitments taken under the Paris Agreement.
Linking of the two will help strengthen the functioning of the respective systems, enhance carbon pricing and ultimately create a solid international carbon market.
The EU ETS and the Swiss ETS share very similar structures and follow the same principles. The current trading period of the two systems covers 2013-2020 and incorporates a linear reduction factor to annually decrease the quantity of allowances on the market.
To ensure the effectiveness of the linked systems, the EU and Switzerland will exchange annual reports on the total amount of allowances that belong to the other party but are held in their system.
In December the council will authorise the European Commission to open negotiations with the Swiss Confederation for this agreement.
The entire agreement will enter into force on 1 January of the year following the formal exchange of instruments of ratification by both signatories.