Federal Council adopts dispatch on revised CO2 law

The Federal Council wants to halve greenhouse gas emissions by 2030 and achieve the 2030 climate target. To this end, it has adopted the dispatch on the revised CO2 Act for the period from 2025 to 2030.

The Federal Council has approved the dispatch on the revised CO2 Act. The bill addresses the concerns raised during the last revision and does not contain any new or higher levies. Instead, it relies on targeted incentives to steer investments into climate-friendly solutions. The focus is on measures that enable the population to reduce CO2 emissions. At the same time, the bill strengthens the Swiss energy supply and reduces Switzerland's dependence on oil and natural gas.

Greenhouse gas emissions to be halved by 2030

With the revised CO2 Act, the Federal Council aims to halve Switzerland's greenhouse gas emissions by 2030 compared to 1990. It follows on from the current CO2 Act, which Parliament has extended to 2024, and includes measures for the period from 2025 to 2030. The bill takes account of the results of the public consultation and the referendum held in June 2021. It does without new levies and instead relies on effective incentives that are supplemented by targeted subsidies and investments.

Confederation to invest around CHF 4.1 billion in climate protection by 2030

The bill will enable the federal government to invest a total of around CHF 4.1 billion in climate protection between 2025 and 2030. A large part of the investment, namely around 2.8 billion Swiss francs, is available for climate protection measures in the buildings sector. In addition, the expansion of remote heating networks will receive financial support. In the transport sector, the bill provides for funds of around CHF 800 million. These funds will be used to expand the charging infrastructure for electric cars, purchase electric buses for public transport and promote international train connections. The bill addresses sectors that are central to climate protection, in particular buildings and mobility. At the same time, the bill strengthens Switzerland's energy supply. It ensures that less oil and natural gas are consumed. This reduces Switzerland's dependence on supplies from abroad in this area.

Buildings: Additional funds for heating replacement

The CO2 tax, which is levied on fossil fuels such as oil and gas, will remain at 120 Swiss francs per ton of CO2. It will now be possible to invest up to just under half of the funds from the levy in climate protection measures. To this end, the partial appropriation  will be increased for a limited period until 2030. The population and the economy will receive the other half of the levy back.

As before, the funds for climate protection measures will flow into the Buildings Program, the Technology Fund and the promotion of geothermal energy. Biogas plants and municipalities can now also be supported in their energy planning. The Technology Fund will continue to provide guarantees to innovative Swiss companies to help them obtain outside capital and will now cover risks associated with the expansion of district heating networks.

Mobility: More efficient vehicles and promotion of charging stations

With the revision of the CO2 Act, car importers must offer more efficient models in their vehicle fleets. The CO2 target values for vehicles will be further tightened in line with the European Union's requirements. If importers fail to meet their targets, they will be subject to a penalty. This will give them an incentive to sell climate-friendly vehicles. CO2 targets will now also apply to trucks.

A lack of charging stations for electric vehicles can slow down the spread of electromobility. Therefore, their expansion is being newly promoted. In public transport, the tax privilege for diesel buses will be abolished from 2026. The additional revenue generated as a result will be invested in electric or hydrogen-powered buses. In addition, the federal government is promoting an improved range of international train connections, including night trains.

In freight transport, electric and hydrogen trucks will remain exempt from the Heavy Vehicle Fee (HVF) until 2030. This will give transport companies an incentive to rely more on climate-friendly alternatives.

Aviation sector: Renewable aviation fuels are promoted

In the aviation sector, the revised CO2 Act obliges suppliers of aviation fuels to blend renewable aviation fuels with the kerosene refueled in Switzerland. This is in line with the provisions in the EU. In parallel, the federal government can provide financial support to innovative companies that implement pilot plants for the production of renewable synthetic aviation fuels. With this, the Federal Council would like to strengthen the research and innovation location.

Fuel importers: compensation obligation and renewable fuels

Importers of gasoline and diesel must continue to offset part of the CO2 emissions of these fuels with climate measures, now with a maximum rate of up to 90%. Importers can also offset their emissions with climate protection projects abroad. Switzerland has created the conditions for this by concluding various bilateral agreements. The maximum surcharge that fuel importers can charge for this at the pump remains unchanged at 5 cents per liter of gasoline and diesel. Importers are to reduce CO2 emissions from fuels by 5% to 10% directly by placing renewable fuels on the market. At the same time, the mineral oil tax relief will be continued until 2030.

Companies: Exemption from CO2 tax and participation in ETS.

In the future, all companies will in principle be eligible for exemption from the CO2 tax if they make a commitment to reduce their greenhouse gases in return. In addition, they are to submit a plan on how they can reduce emissions from oil and gas to zero in the longer term. Today, the exemption option is limited to individual industries. As before, companies with very high CO2 emissions do not pay a CO2 tax. Instead, these companies participate in the emissions trading system, which has been linked to the EU system since 2020.

Financial market: reporting obligation on climate risks

The law requires regulators to report on the risks posed by climate change. In particular, financial risks arising from the consequences of climate change, such as more frequent storms or periods of drought, are looked at. FINMA must report on the risks to Swiss financial institutions.

Emissions to be halved by 2030

According to the Federal Office for the Environment (FOEN), the bill, in conjunction with technological progress and momentum in various areas, will ensure that Switzerland can halve its emissions by 2030. Two-thirds of the reduction is to be achieved domestically and one-third with climate protection projects abroad.