CO2 Act - Exemption from the CO₂ levy: Reduction obligation

With the start of the Swiss Emissions Trading Scheme (ETS) and the CO2 levy in 2008, the possibility for exemption was introduced. The scheme is linked to voluntary agreements to reduce emissions under the pre-existing CO2 Law. Companies covered by voluntary agreements can convert these agreements into legally binding CO2 emissions targets, allowing them to be exempted from the CO2 levy. Where non-compliance occurs, the CO2 levy is paid retroactively for each tonne of CO2 exceeding the reduction obligation.
 
 Switzerland introduced a CO2 tax on fossil fuels used in stationary sources in 2008. The levy covers around 40% of the country’s greenhouse gas emissions, primarily in the heating and process fuel sectors (fossil fuel for electricity generation – mainly small CHP and district heating – amounting to 1.2% of total generation). Two-thirds of Switzerland’s carbon tax revenues are returned to households and businesses through reductions in health insurance charges and social security payments.