The CO2 tax on fossil fuels is an incentive fee that supplements voluntary and other CO2-related measures. Its purpose is to reduce the use of fossil fuels and thus lower CO2 emissions.

The CO2 tax has been levied since 1 January 2008 on fossil fuels (heating oil, natural gas, coal, petroleum coke and other fossil combustibles) that are used to generate heat, produce electricity in thermal plants or operate combined heat and power (CHP) plants.

The CO2 levy is a key instrument for achieving statutory CO2 emissions targets. In making fossil fuels more expensive, it creates an incentive to use them more economically and choose more carbon-neutral or low carbon energy sources.

Two thirds of the revenue from the levy is redistributed annually to the population and the economy regardless of the amount of energy consumed. One third (max. CHF 450 million) is invested in the buildings programme to promote CO2-effective measures such as energy-efficient renovations or renewable energies. Another CHF 25 million goes into to the technology fund.

Operators of greenhouse gas-intensive installations can be exempted from the CO2 levy if they commit to reducing their emissions. Operators of large greenhouse gas-intensive installations must participate in the emissions trading scheme and are also exempted from the CO2 levy.

Imposition

The CO2 levy is imposed on all fossil thermal fuels (e.g. heating oil, natural gas). From 2022 it will be set at CHF 120 per tonne of CO2. The CO2 levy is indicated on invoices for purchases of thermal fuels.

The FOCBS represented by the Federal Office for Customs and Border Security (FOCBS), is responsible for enforcement of the CO2 Ordinance, with the exception of the provisions on tax exemption and tax revenue distribution, for which the Federal Office for the Environment is responsible. In particular, the FOCBS is charged with levying and reimbursing the CO2 tax.

Redistribution

Around two thirds of the revenue from the CO2 levy is redistributed to the population and the economy. Those who consume less benefit from this.

Exemption

Operators of greenhouse gas-intensive installations can be exempted from the CO2 levy if they commit to reducing their greenhouse gas emissions. Operators of large greenhouse gas-intensive installations participate in the emissions trading scheme and are also exempted from the CO2 levy.

Refund

Anyone who purchases fossil thermal fuels automatically pays the CO2 levy. Businesses exempted from the levy can request a refund from the Federal Customs Administration FCA.