PURPOSE: to approve the conclusion, on behalf of the European Union, of the Agreement between the European Union and the Swiss Confederation on the linking of their greenhouse gas emissions trading systems.

NON-LEGISLATIVE ACT: Council Decision (EU) 2018/219 on the conclusion of the Agreement between the European Union and the Swiss Confederation on the linking of their greenhouse gas emissions trading systems.

CONTENT: the Council decided to approve, on behalf of the Union, the Agreement between the European Union and Switzerland on the linking of their greenhouse gas emissions trading systems .

The Agreement was signed on 23 November 2017, subject to its conclusion at a later date.

Linking cap and trade systems is expected to result in broader carbon pricing, increasing the availability of reduction opportunities and enhancing the cost-efficiency of emissions trading.

The development of a well-functioning international carbon market through bottom-up linking of emissions trading systems (‘ETS’) is a long term policy goal of the Union and the international community , notably as a means to achieve the climate objectives, including under the Paris Agreement on climate change.

The instrument of approval of the Union shall only be notified when Switzerland has brought into force the requisite rules extending its ETS to aviation . The Swiss ETS does not yet cover the aviation sector but Switzerland is currently working on rules to extend its ETS to this sector.

ENTRY INTO FORCE: 8.3.2018.

The European Parliament adopted by 547 votes to 50, with 56 abstentions, a legislative resolution on the draft Council decision on the conclusion of the Agreement between the European Union and the Swiss Confederation on the linking of their greenhouse gas emissions trading systems.

In line with the recommendation made by the Committee on the Environment, Public Health and Food Safety, Parliament gave its consent to the conclusion of the Agreement.

The Committee on the Environment, Public Health and Food Safety adopted the report by Christofer FJELLNER (EPP, SE) on the draft Council decision on the conclusion of the Agreement between the European Union and the Swiss Confederation on the linking of their greenhouse gas emissions trading systems.

The committee recommended that Parliament give its consent to the conclusion of the agreement.

As the explanatory statement accompanying the report pointed out, the EU Emissions Trading System (EU ETS) is the cornerstone of Europe's ambitious climate policy . Set up in 2005, it covers industrial manufacturers, electricity producers and air traffic and is the most important tool that EU has to its disposal to reduce greenhouse gas emissions in line with the 2014 European Council objective of cutting at least 40% greenhouse gas emissions to 2030 compared with 1990 levels.

The linking of the EU ETS with the Swiss Emissions Trading System (Swiss ETS) shall enable participants in one system to use units from the linked system for compliance. Thereby the market is expanded and the availability of reduction opportunities increased, which in turn enhances the effectiveness of the emissions trading and reduces cost.

The Swiss ETS is compatible with and has a similar design as the EU ETS . The same gases and industry sectors are covered and the same thresholds for inclusion applies.

Furthermore, the annual decrease in the quantity of allowances in the Swiss ETS is in line with annual decrease in the EU ETS.

The only major difference is that the Swiss ETS does not cover aviation activities, yet. Switzerland is however preparing an inclusion in its ETS of aviation that reflects the EU ETS rules.

Therefore, the linking of the EU ETS with the Swiss ETS is a first and important step to get other emitters to take their share of the responsibility and meet the long term EU policy goal of linking more emissions trading systems to EU, and effectively meet our climate objectives.

PURPOSE: to approve the conclusion, on behalf of the European Union, of the Agreement between the European Union and the Swiss Confederation on the linking of their greenhouse gas emissions trading systems.

PROPOSED ACT: Council Decision.

ROLE OF THE EUROPEAN PARLIAMENT: Council may adopt the act only if Parliament has given its consent to the act.

BACKGROUND: the development of a well-functioning international carbon market through bottom-up linking of emissions trading systems (‘ETS’) is a long term policy goal of the Union and the international community, notably as a means to achieve the climate objectives, including under the Paris Agreement on climate change.

Cap and trade systems are policy tools that cost-effectively reduce greenhouse gas emissions. Linking cap and trade systems is expected to result in broader carbon pricing, increasing the availability of reduction opportunities and enhancing the cost-efficiency of emissions trading.

The Agreement between the European Union and the Swiss Confederation on the linking of their greenhouse gas emissions trading systems was signed, subject to its conclusion at a later date.

CONTENT: the draft Council decision aims to approve, on behalf of the Union, the Agreement between the European Union and Switzerland on the linking of their greenhouse gas emission allowance trading schemes .

The Agreement sets out the key objectives and principles for linking the two emission trading schemes and establishes a joint committee, which is the main steering body of the agreement. Once the link between the EU ETS and the Swiss ETS is operational, emission allowances that originate from one system shall be eligible for compliance in the other system.

While the Swiss ETS does not yet cover aviation , Switzerland is working on rules extending its ETS to aviation. The instrument of approval of the Union shall only be notified when Switzerland has brought into force the requisite rules extending its ETS to aviation and Annex I, Part B of the Agreement is amended accordingly.

PURPOSE: to approve the conclusion, on behalf of the European Union, of the Agreement between the European Union and the Swiss Confederation on the linking of their greenhouse gas emissions trading systems.

PROPOSED ACT: Council Decision.

ROLE OF THE EUROPEAN PARLIAMENT: Council may adopt the act only if Parliament has given its consent to the act.

BACKGROUND: the development of a well-functioning international carbon market through bottom-up linking of emissions trading systems (‘ETS’) is a long term policy goal of the Union and the international community, notably as a means to achieve the climate objectives, including under the Paris Agreement on climate change.

Cap and trade systems are policy tools that cost-effectively reduce greenhouse gas emissions. Linking cap and trade systems is expected to result in broader carbon pricing, increasing the availability of reduction opportunities and enhancing the cost-efficiency of emissions trading.

The Agreement between the European Union and the Swiss Confederation on the linking of their greenhouse gas emissions trading systems was signed, subject to its conclusion at a later date.

CONTENT: the draft Council decision aims to approve, on behalf of the Union, the Agreement between the European Union and Switzerland on the linking of their greenhouse gas emission allowance trading schemes .

The Agreement sets out the key objectives and principles for linking the two emission trading schemes and establishes a joint committee, which is the main steering body of the agreement. Once the link between the EU ETS and the Swiss ETS is operational, emission allowances that originate from one system shall be eligible for compliance in the other system.

While the Swiss ETS does not yet cover aviation , Switzerland is working on rules extending its ETS to aviation. The instrument of approval of the Union shall only be notified when Switzerland has brought into force the requisite rules extending its ETS to aviation and Annex I, Part B of the Agreement is amended accordingly.

PURPOSE: to approve the conclusion, on behalf of the European Union, of an agreement between the European Union and Switzerland on the linking of their greenhouse gas emission trading schemes.

PROPOSED ACT: Council Decision.

ROLE OF THE EUROPEAN PARLIAMENT: Council may adopt the act only if Parliament has given its consent to the act.

BACKGROUND: cap and trade systems are policy tools that cost-effectively reduce greenhouse gas emissions. The European Union has been implementing its Emissions Trading Scheme (ETS-EU) for more than ten years.

The development of a well-functioning international carbon market through bottom-up linking of emissions trading systems is a long term policy goal of the EU and the international community, notably as a means to achieve climate objectives, including under the Paris Agreement.

Linking enhances the cost-efficiency of emissions trading.

The Directive establishing the EU’s Emissions Trading Scheme (EU ETS) allows for the EU ETS to be linked with other emissions trading systems provided they are mandatory, have an absolute cap on emissions and are compatible. In 2010, the Council adopted a Decision authorising the Commission to open negotiations with Switzerland for a link between the EU and the Swiss greenhouse gas emissions trading systems.

Overall, the design of the Swiss ETS is very similar to that of the EU ETS : the same gases and industry sectors are covered, with equal inclusion thresholds; definition of the liable entities at installation level; compatible allocation methodologies; similarity of quantitative and qualitative standards for international credits; same compliance periods (2013-2020).

In addition, like the EU ETS, the Swiss ETS is currently undergoing review for its next period from 2021 to 2030.

CONTENT: the Commission proposes that the Council decide to approve, on behalf of the Union, the agreement between the EU and Switzerland on the linking of their greenhouse gas emission allowance trading schemes .

In concrete terms, the agreement:

sets out the key objectives and principles for linking the two emission trading schemes and establishes a joint committee, which is the main steering body of the agreement. Once the link between the EU ETS and the Swiss ETS is operational, emission allowances that originate from one system shall be eligible for compliance in the other system; provides that the two systems may adopt more stringent provisions than the essential criteria to ensure compliance, and that systems may be subject to legislative developments without the need for substantial re-negotiation provided that the systems continue to meet the essential criteria; establishes a process for information-sharing and coordination in areas of relevance to the agreement to ensure its proper implementation; specifies that Switzerland will mirror the EU ETS aviation provisions (not yet covered by the EU ETS) in the Swiss ETS before the entry into force of the Agreement; establishes a dispute resolution mechanism; specifies that allowances not allocated for free must be auctioned in an open, transparent and non-discriminatory manner; contains a commitment by the parties to protect sensitive information.