Past developments

Emissions



Switzerland is planning to include aviation in its existing emissions trading scheme (ETS) and to link the Swiss and EU ETS. The intention is to allow the two systems to recognise each other's emission allowances mutually through a bilateral agreement, which was signed on November 23 2017. Ratification must be agreed by both the EU and Swiss Parliaments. The agreement would take effect at the start of the year that follows ratification.

Past developments

The Ordinance on the Acquisition and Reporting of Tonne-Kilometre Data Relating to Distances Covered by Aircraft entered into force on July 1 2017 (for further information please see "Major steps taken towards linking Swiss and EU emissions trading systems"). The ordinance is designed to match the cap-and-trade principle of the EU ETS.

In line with the European Union's stop-the-clock decision, the ordinance applies to domestic flights and flights between Switzerland and the European Economic Area (EEA) only (ie, all EU member states plus Norway, Iceland and Liechtenstein). Special provisions cover Basel-Mulhouse airport, which is located on French soil but jointly operated by Switzerland and France. The ordinance does not apply to flights to and from third countries (ie, states that are not members of the EEA).

Emissions

Under the ordinance, aircraft operators are required to monitor and report their emissions and surrender allowances against those emissions. Operators receive tradeable allowances covering a certain level of emissions from their flights per year.

The ordinance requires operators to submit a monitoring plan to the Swiss Federal Office for the Environment and collect tonne-kilometre data in 2018, unless certain exemptions apply.

Approximately 120 operators are affected by the Swiss ETS, most of which are already included in the EU ETS. However, the procedure will be new for some operators.

Once the link between the EU and Swiss ETS is operational, prices for emission allowances should converge.

The aviation industry should play its part in combatting climate change; however, the inclusion of international aviation in the Swiss ETS, as well as in the EU ETS, is problematic. Since many airlines operate globally they should be subject to a single, global market-based measure to address carbon dioxide emissions only. Having a single measure would reduce complexity and lessen the risk of market distortions that could result from a patchwork of national and regional schemes.

The 191 member states of the International Civil Aviation Organisation, including Switzerland, adopted a global carbon offsetting scheme for international aviation (CORSIA) in October 2016. Under CORSIA, aircraft operators must purchase offsets for the increase in total emissions from civil aviation above 2020 levels. The implementation of CORSIA from January 1 2021 should obviate the need for both the Swiss and EU ETS to be applied to international aviation emissions.

For further information on this topic please contact Andreas Fankhauser at Baumgartner Mächler by telephone (+41 44 215 4477) or email (afa@bmlaw.ch). The Baumgartner Mächler website can be accessed at www.bmlaw.ch.