Climate Action

EU and Switzerland sign agreement to link emissions trading systems

23/11/2017

The EU and Switzerland today signed an agreement to link their emissions trading systems. The link will allow participants in the EU's Emissions Trading System (EU ETS) to use allowances from the Swiss system for compliance, and vice versa. This is the first agreement of this kind for the EU and between two Parties to the Paris Agreement on climate change.

The EU ETS is the largest cap-and-trade system in the world and the cornerstone of the EU climate policy. Linking compatible emissions trading systems with each other is a long-term goal for the EU, as it expands opportunities for cutting emissions and thereby reduces the cost of fighting climate change.

After several years of negotiations, the EU and Switzerland agreed in 2016 the criteria and arrangements for linking their systems. Following today's signature, both sides will now start preparing for implementation.

Commissioner for Climate Action and Energy Miguel Arias Cañete said: "This is a very important step in reinforcing cooperation between the EU and Switzerland on climate policies. By creating a broader carbon market together, we are demonstrating our commitment to meeting our objectives under the Paris Agreement. At a moment where we see important developments on carbon pricing in other parts of the world – for example with China finalising its own emissions trading system – the EU continues to demonstrate leadership. With the political agreement on the revision of the EU ETS also agreed between Member States, we are sending a strong signal to the rest of the world."

Negotiations between the Commission and Switzerland opened in 2010. A linking agreement was initialled in January 2016, but the signature and conclusion of the agreement were put on hold following the Swiss referendum. Following high-level contacts and a change in Swiss legislation, a meeting between Commission President Jean-Claude Juncker and Swiss President Doris Leuthard in April (see press conference and SPEECH/17/897) opened the path for today's signature, which took place during a visit of President Juncker in Berne.

The ratification of the agreement will require the approval of the Council and Parliament, which is expected in early 2018. When parties are technically ready to connect the two systems, they will formally deposit their instruments of ratification. The agreement will enter into force at the start of the following year.

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