Revised CO2 Act: Consultation opened

The bill would also provide additional funding for building retrofits and climate-friendly heating systems. © Depositphotos / stockwerk-fotodesign

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 until 2024, and includes measures for the period from 2025 to 2030. The new bill continues tried and tested instruments such as the CO2 tax, according to the media release. In order to take account of the referendum in June 2021, no new levies are being introduced. Instead, the Federal Council is relying on effective incentives that are supplemented by targeted subsidies and investments.

The bill will enable the federal government to provide a total of around CHF 2.9 billion between 2025 and 2030 for the renovation of buildings and the switch to climate-friendly heating systems. Added to this are annual funds for the expansion of the charging infrastructure for electric cars, for the conversion of bus fleets in local and regional transport to electric drive or for risk coverage in the expansion of district heating networks. The bill addresses sectors that are central to climate protection, in particular buildings and mobility, it is emphasized.

Buildings: Additional funds for heating replacement

The CO2 tax, which is levied on fossil fuels such as oil and gas, will remain at 120 francs per ton of CO2, according to the statement. However, the Federal Council writes that it will now be possible to invest up to just under half of the funds from the levy in climate protection measures (adjustment of the partial earmarking limited until 2030). The other half will be distributed back to the population and the economy. As before, the funds would flow into the building program, the technology fund and the promotion of geothermal energy. The building program would support homeowners in the purchase of fossil-free heating systems such as heat pumps or in the insulation of buildings. An additional 40 million francs per year would be available until 2030 for the replacement of old oil and gas heating systems with renewable systems. The technology fund should continue to provide guarantees to innovative Swiss companies to help them obtain outside capital. In addition, the fund should cover risks associated with the expansion of district heating networks and support municipalities in the preparation of regional energy plans.

Mobility: More efficient vehicles and promotion of charging stations

With the revision, car importers will have to import more efficient vehicles. The CO2 target values for vehicles would be further reduced in line with the EU requirements. Should car importers fail to meet the targets, they would be subject to a penalty, as the Federal Council writes. This would give them an incentive to sell climate-friendly vehicles.

The sanction proceeds will be used to promote charging stations for electric cars. In total, around 210 million euros would be invested in the expansion of the charging infrastructure in Switzerland.

Furthermore, the Federal Council writes that the tax privilege for diesel buses in public transport will be lifted. The additional revenue generated by this would be invested in buses with electric or hydrogen drive in local and regional transport. Between 2025 and 2030, this would amount to a total of around 90 million francs. In addition, the federal government could support long-distance cross-border passenger rail transport, including night trains, with a maximum of 30 million Swiss francs per year until 2030.

As far as freight transport is concerned, electric and hydrogen trucks will remain exempt from the HVF until 2030 (cf. also Article here). In this way, the federal government wants to create incentives for truckers to increasingly rely on climate-friendly alternatives.

Aviation sector: Renewable aviation fuels to be 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 regulations in the EU, according to the statement. In parallel, the federal government could provide financial support to innovative companies that build pilot plants for the production of renewable synthetic aviation fuels. Around 25 to 30 million Swiss francs per year are earmarked for this purpose. With this, the Federal Council wants 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. This share could be increased to 90 percent and also include climate protection projects abroad. With the conclusion of various bilateral agreements, Switzerland has created the conditions for this. The maximum surcharge that fuel importers can demand at the pump remains unchanged at 5 centimes per liter of gasoline and diesel. Importers are to reduce CO2 emissions from fuels by 5 to 10 percent directly by putting renewable fuels on the market. This regulation should replace the temporary relief on the mineral oil tax.

Companies: CO2 tax exemption and ETS participation.

Under the revised CO2 Act, all companies will in future be able to be exempted from the CO2 tax if, in return, they enter into a commitment to reduce their fuel emissions from oil and gas and demonstrate how they can reduce them to zero in the longer term. Today, the exemption option is limited to individual industries, he said. As before, companies with very high CO2 emissions would not pay a CO2 tax. Instead, these companies would 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 (e.g. more frequent storms or periods of drought) will be looked at, according to the statement. It is up to Finma to report on the risks for Swiss financial institutions. For the SNB, it is a matter of the stability of the financial market.

Halving of emissions possible by 2030

In combination with technological progress and the dynamics in various areas, the bill ensures that Switzerland can halve its emissions by 2030. According to the Federal Council, two-thirds of the reduction will be achieved domestically, with the remainder to be achieved through climate protection projects abroad.

The consultation period will last until April 4, 2022. The bill also amends the Energy, Mineral Oil Tax, Environmental Protection, Aviation and Heavy Vehicle Fee Acts.

Draft of the Federal Law on the Reduction of CO2 Emissions (PDF, 294 kB)

Explanatory report (PDF, 552 kB)

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