A new CO2 bill aims to reduce emissions by half by 2030

In June, Swiss voters rejected the CO2 law. The Federal Council is now launching consultations on a new bill. The Government is sticking to its climate policy goals but dispensing with controversial instruments.

Swiss voters rejected the CO2 law at the ballot box in June. Meanwhile, the Federal Council has presented the basic parametres of a new bill and decided to extend the duration of the existing temporary measures. "In so doing, the Federal Council is saving the important target agreements model. The business community welcomes the thrust of the agreed parametres which incorporate the existing CO2 levy," said Economiesuisse, the Swiss business umbrella organisation, commenting the decision. However, the new bill must allow for new approaches and avoid prohibitions.

The Federal Council stands by its climate policy objectives

The Federal Council is looking to establish as broad a base as possible for its future climate policy. However, it stands by its climate policy objectives. Switzerland must reduce its emissions by half by 2030 compared with 1990 levels. Nevertheless, the Federal Council will dispense with the instruments that were largely responsible for the “no” vote at the ballot box. It emerges from the analysis of the results of the referendum on the revision of the CO2 Act that voters’ concerns about rising costs, and a possible increase in the price of petrol in particular, were in good part accountable for the negative vote. The existing CO2 Act provides that the Federal Council must submit reduction target proposals, and supplementary measures therefore, in good time to Parliament for the period after 2020. The Federal Council has therefore instructed DETEC to draft a consultation bill for the end of the year which takes due account of the referendum results and is capable of creating the broadest possible base for future climate policy. The bill should focus on measures facilitating the reduction of CO2 emissions in everyday life and supporting the ongoing efforts in all economic sectors.

Parametres of the revision

The Federal Council has adopted a number of key parameters to guide future work:

  1. The Federal Council wishes to maintain the objective of reducing emissions by 50% by 2030 and to build on the existing CO2 Act. It underscores that technological progress operating in conjunction with sectoral dynamics make this possible. The steering effects of the existing CO2 levy would be supplemented through effective incentives and targeted encouragement.
  2. The bill would make do without any new levies. DETEC is considering temporary adjustments in the earmarking of the CO2 levy in the event additional resources are required for the building sector.
  3. The proceeds from individual climate policy instruments should “in principle” inure to the sectors from which they originate.
  4. The bill should create various financial incentives to avoid malinvestments and promote ongoing development projects, for example in the area of hydrogen drives. Anyone looking to buy a hydrogen-powered lorry today needs to know how long alternative drive systems will remain exempt from the heavy goods vehicle tax. By introducing a temporary statutory exemption, the new bill will create legal certainty for the industry.
  5. Additional support measures are also foreseen for the building sector, mobility, and public transport.
  6. The target agreements model will be expanded. Companies would be able to self-exempt from the CO2 levy if they commit to reducing their emissions in return. Exemptions are currently restricted to individual sectors.
  7. Based on developments in the EU, a blending quota for sustainable fuels would be introduced for the aviation industry, with financial support or incentives under consideration.


Business expresses satisfaction

Commenting on the new parametres, Economiesuisse points out that it is still not entirely clear what the expected impact would be nor how they would be structured in practice. However, the fact that the bill is explicitly to focus on measures supporting the ongoing efforts in all economic sectors is positive. “For the Swiss economy and Swiss companies, this is an opportunity,” says Economiesuisse. It is important that both domestic and foreign compensation remain possible. Switzerland has concluded several bilateral agreements that lay the groundstone for compensation projects abroad. Economiesuisse welcomes the fact that the bill is explicitly linked to measures in the energy sector, especially since climate policy and energy policy go hand in hand.

Measures in the energy sector accompany climate efforts

The Government's climate protection efforts go hand in hand with targeted measures in the energy sector. In June, the Federal Council approved a dispatch on the Federal Act on a Secure Electricity Supply from Renewable Energy Sources. The Federal Council is thereby seeking to expand Switzerland’s domestic renewable power generation while strengthening security of supply.