Switzerland seeks ETS compensation for its airlines

Switzerland has asked for compensation from the EU on the grounds that international flights to and from its airports are unfairly included in the emissions trading system (ETS).

Switzerland’s position is that if the compensation is not provided in cash, it could take the form of free emission allowances. But a number of solutions to the dispute are on the table and nothing has been agreed yet, ENDS understands.

Swiss and EU officials met in Zurich on Monday for a fourth round of talks on linking their respective emissions trading systems.

Switzerland is unhappy at being implicitly treated as an EU member state by being excluded from the ‘stop the clock’ derogation, ENDS understands. Countries that are part of the European Free Trade Association (EFTA) were not included.

EFTA-member Switzerland considers this to be legally unjust, particularly as member states benefit from EU ETS inclusion through revenues from auctioning emission allowances, while Switzerland does not.

Swiss airlines and industrial facilities will be included in the carbon market link with the EU, likely to begin in 2015. At present, aviation is not part of the Swiss ETS.

Negotiators are expected to agree the details of the link by the end of this year, followed by a 1-2 year ratification process.

The talks in Zurich also examined the possible impact on Switzerland of the EU-Australia ETS link, also due to begin in 2015. Switzerland may need to link its registry with Australia’s to allow Australian firms to trade Swiss allowances.

It is likely that Swiss allowances will be exactly the same as EU ones, although they may be identifiable by their serial code.

“What we are looking for is 1:1 allowances, the same value. The preference is for one denomination so there is not another unit type floating around,” a Swiss official said.

Follow-up:

Swiss statement

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