Switzerland has a mechanism that automatically increases taxes on fossil fuels if emission reduction targets are not met. And the small reduction in emissions in 2020 is not enough to avoid triggering a CO2 tax rise in 2022.
Data published this week by the Federal Office for the Environment (FOEN) confirms the slow progress in reducing emissions in Switzerland. Emissions from heating oil and gas did not fall enough in 2020 to avoid triggering a rise in the tax. The target is a reduction of 33% from the level in 1990. However, by the end of 2020 emissions were down by only 31% on their level in 1990 and only 1 percentage point lower than in 2019.
As a result, the tax on the emissions associated with these products will rise from CHF 96 to CHF 120 per tonne of CO2 emitted under a mechanism that came into force in 2008. The rise will occur in 2022.
The funds raised by the tax are paid out evenly to the population via rebates on health insurance premiums and to companies based on their payroll. Around a third of the total goes to cantonal governments to spend on programmes aimed at reducing building related emissions. Last year, CHF 87 was rebated back to every resident of Switzerland.