On 1 January 2020, Switzerland will be the first non-Member State to link its greenhouse gas emissions trading system with the EU emissions trading system (EU ETS) - a further step towards the creation of an international carbon market to reduce greenhouse gas emissions at the lowest cost.
From 2020 onwards, it will be possible to use the quotas from both systems to offset emissions produced in either system.
The last formalities to finalise the provisional agreement already in force were carried out on Monday 9 December, through the formal exchange of the instruments of approval or ratification between the two parties (see EUROPE 12385/20).
The news was announced, on Tuesday 10 October, by the European Commission on the opening day of the ministerial segment of the COP25 in Madrid.
“The Linking Agreement between the EU and Switzerland, which also covers the aviation sector, sends a strong signal that we can create broader and more comprehensive carbon markets with benefits to our climate and environment”, commented the Executive Vice President of the Green Deal, Frans Timmermans.
In a press release, the Commission states that linking carbon markets can produce significant benefits. “By expanding the market and increasing the availability of emission reduction opportunities, the cost-effectiveness of the linked systems can be increased and their liquidity enhanced, thus resulting in better burden sharing, more efficient emissions reductions, and decreased overall compliance costs”, the institution confirmed. And the European Green Deal “will strongly support these principles”.
The EU ETS may be linked to other emissions trading systems, provided that they are mandatory, have an absolute cap on emissions and are compatible with it.
On 10 November 2017, the EU Council authorised the signature and provisional application of the agreement in negotiations since 2010 (see EUROPE 11924/6). However, for the agreement to enter into full force, it was necessary for the Swiss system to cover aviation. (Original version in French by Aminata Niang)