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L 314/68 E N O f f i c i a l J o u r n a l o f t h e E u r o p e a n Union 29.9.2020
ACTS ADOPTED BY BODIES CREATED BY
INTERNATIONAL AGREEMENTS
DECISION No 2/2019 OF THE JOINT COMMITTEE ESTABLISHED BY THE AGREEMENT
BETWEEN THE EUROPEAN UNION AND THE SWISS CONFEDERATION ON THE LINKING OF
THEIR GREENHOUSE GAS EMISSIONS TRADING SYSTEMS
of 5 December 2019
amending Annexes I and II to the Agreement between the European Union and the Swiss
Confederation on the linking of their greenhouse gas emissions trading systems [2020/1359]
THE JOINT COMMITTEE,
Having regard to the Agreement between the European Union and the Swiss Confederation on the linking of their
greenhouse gas emissions trading systems(1) (hereinafter ‘the Agreement’), and in particular Article 13(2) thereof,
Whereas:
(1) Articles 11 to 13 of the Agreement have been provisionally applied since its signature on 23 November 2017.
(2) Article 13(2) of the Agreement provides that the Joint Committee may amend the Annexes to the Agreement.
(3) The Annex to this Decision contains amendments to Annexes I and II to the Agreement, which update relevant
aspects of the original Annexes I and II that were agreed in 2015. It also provides for a provisional solution to
operationalise the link between the EU ETS and the ETS of Switzerland.
(4) In accordance with section B of Annex I to the Agreement, the Union should, pursuant to Article 25a of Directive
2003/87/EC of the European Parliament and of the Council(2), as amended by Directive (EU) 2018/410 of the
European Parliament and of the Council(3), exclude incoming flights from aerodromes situated in the territory of
Switzerland from the scope of the EU ETS. This does not affect the coverage of aircraft operators by the EU ETS,
which is based on Annex I to Directive 2003/87/EC which provides that the category of activities to which Directive
2003/87/EC applies includes all flights that arrive at, or depart from, an aerodrome situated in the territory of a
Member State.
(5) Annex I to the Agreement should be reviewed in accordance with Article 13(7) of the Agreement with a view to
maintaining the current compatibility of the EU ETS and the ETS of Switzerland for the trading period 2021-2030.
It should be ensured that the revision of Annex I to the Agreement, as a minimum, preserves the integrity of the
respective domestic emission reduction commitments of the Union and Switzerland and the integrity and orderly
functioning of their carbon markets. Carbon leakage and distortion of competition between linked systems are to be
avoided,
(1) OJ L 322, 7.12.2017, p. 3.
(2) Directive 2003/87/EC of the European Parliament and of the Council of 13 October 2003 establishing a scheme for greenhouse gas
emission allowance trading within the Union and amending Council Directive 96/61/EC (OJ L 275, 25.10.2003, p. 32).
(3) Directive (EU) 2018/410 of the European Parliament and of the Council of 14 March 2018 amending Directive 2003/87/EC to
enhance cost-effective emission reductions and low-carbon investments, and Decision (EU) 2015/1814 (OJ L 76, 19.3.2018, p. 3).29.9.2020 E N O f f i c i a l J o u r n a l o f t h e E u r o p e a n Union L 314/69
HAS ADOPTED THIS DECISION:
Article 1
Annexes I and II to the Agreement are replaced by the text appearing in Annexes I and II in the Annex to this Decision.
Article 2
This Decision shall enter into force on the date of entry into force of the Agreement.
Done at Brussels, 5 December 2019.
For the Joint Committee
Secretary for the European Union The Chair Secretary for Switzerland
Maja-Alexandra DITTEL Marc CHARDONNENS Caroline BAUMANNL 314/70 E N O f f i c i a l J o u r n a l o f t h e E u r o p e a n Union 29.9.2020
ANNEX
‘ANNEX I
ESSENTIAL CRITERIA
A. Essential criteria for stationary installations
This section shall be reviewed in accordance with Article 13(7) of this Agreement with a view to maintaining the
current compatibility of the EU ETS and the ETS of Switzerland for the trading period 2021-2030, as proposed by the
Swiss government. The Joint Committee shall ensure that the revision of this section, as a minimum, preserves the
integrity of the respective domestic emission reduction commitments of the parties and the integrity and orderly
functioning of their carbon markets. Carbon leakage and distortion of competition between linked systems shall be
avoided.
Essential criteria In the EU ETS In the ETS of Switzerland
1. Mandatory nature of the Participation in the ETS shall be manda Participation in the ETS shall be manda
participation in the ETS tory for the installations carrying out tory for the installations carrying out the
the activities and emitting the green activities and emitting the GHG listed
house gases (“GHG”) listed below. below.
2. The ETS shall cover at least — Annex I to Directive 2003/87/EC, — Article 40(1) of, and Annex 6 to, the
the activities set out in: as in force on the date of entry into force CO Ordinance,
2
of this Agreement. as in force on the date of entry into force
of this Agreement.
3. The ETS shall cover at least — Annex II to Directive 2003/87/EC, — Article 1(1) of the CO Ordinance,
2
the GHGs set out in: as in force on the date of entry into force as in force on the date of entry into force
of this Agreement. of this Agreement.
4. A cap shall be set for the — Articles 9 and 9a of Directive — Article 18(1) and (2) of the CO Act
2
ETS, which is at least as 2003/87/EC, — Article 45(1) of the CO Ordinance,
2
stringent as the one in: as in force on the date of entry into force as in force on the date of entry into force
of this Agreement. of this Agreement.
The linear reduction factor of 1,74 % per The linear reduction factor is 1,74 % per
year will increase to 2,2 % per year as year up to 2020.
from 2021, and will apply to all sectors
in accordance with Directive (EU)
2018/410, as in force on the date
of entry into force of this Agreement.
5. Market stability mechanism In 2015, the EU introduced the Market — Article 19(5) of the CO Act
2
Stability Reserve (Decision (EU) — Article 48 of the CO Ordinance,
2
2015/1814), the operation of which as in force on the date of entry into force
was reinforced by Directive (EU) of this Agreement.
2018/410. The Swiss legislation provides for the pos
sibility to reduce auction volumes where
there is a significant increase of allowan
ces on the market for economic reasons.
The Parties shall cooperate with a view to
developing an appropriate contribution
to market stability.
6. The level of market over — Directive 2014/65/EU of the — Federal Act on the Swiss Financial
sight of the ETS shall be at European Parliament and of the Market Supervisory Authority
least as stringent as the ones Council of 15 May 2014 on markets of 22 June 2007
in: in financial instruments and amend — Federal Act on Financial Market Infra
ing Directive 2002/92/EC and structures and Market Conduct in
Directive 2011/61/EU (MIFID II) Securities and Derivatives Trading
of 19 June 201529.9.2020 E N O f f i c i a l J o u r n a l o f t h e E u r o p e a n Union L 314/71
Essential criteria In the EU ETS In the ETS of Switzerland
— Regulation (EU) No 600/2014 — Federal Act on Financial Institutions
of the European Parliament and of 15 June 2018
of the Council of 15 May 2014 on — Federal Act on Combating Money
markets in financial instruments Laundering and Terrorist Financing
and amending Regulation (EU) of 10 October 1997,
No 648/2012 (MIFIR) as in force on the date of the entry into
— Regulation (EU) No 596/2014 force of this Agreement.
of the European Parliament and Swiss financial market regulation does
of the Council of 16 April 2014 not define the legal nature of emission
on market abuse (market abuse reg allowances. In particular, emission allow
ulation) and repealing Directive ances are not qualified as securities in the
2003/6/EC of the European Parlia Financial Markets Infrastructure Act and
ment and of the Council and Com therefore are not tradeable on regulated
mission Directives 2003/124/EC, trading venues. Because emission allow
2003/125/EC and 2004/72/EC ances do not qualify as securities, Swiss
(MAR) securities regulation does not apply to
— Directive 2014/57/EU of the OTC emission allowances trading on sec
European Parliament and of the ondary markets.
Council of 16 April 2014 on crim
inal sanctions for market abuse
(market abuse directive) (CS-MAD)
— Directive (EU) 2015/849 of the Derivative contracts qualify as securities
European Parliament and of the according to the Financial Markets Infra
Council of 20 May 2015 on the pre structure Act. This also includes deriva
vention of the use of the financial tives that have emission allowances as
system for the purposes of money their underlying instrument. OTC traded
laundering or terrorist financing, derivatives on emission allowances be
amending Regulation (EU) tween non-financial as well as financial
No 648/2012 of the European counterparties is covered by the provi
Parliament and of the Council, and sions in the Financial Market Infrastruc
repealing Directive 2005/60/EC ture Act.
of the European Parliament and
of the Council and Commission
Directive 2006/70/EC (AMLD),
as in force on the date of the entry into
force of this Agreement.
7. Cooperation regarding The Parties shall establish appropriate cooperation arrangements regarding market
market oversight oversight. Those cooperation arrangements shall concern the exchange of
information and the enforcement of obligations arising under their respective
market oversight regime. The Parties shall inform the Joint Committee about any
such arrangements.
8. The qualitative limits for in — Articles 11a and 11b of Directive — Articles 5 and 6 of the CO Act
2
ternational credits shall be 2003/87/EC — Article 4 and Article 4a(1) of, and
at least as stringent as those — Commission Regulation (EU) Annex 2 to, the CO Ordinance,
2
set out in: No 550/2011 of 7 June 2011 on as in force on the date of entry into force
determining, pursuant to Directive of this Agreement.
2003/87/EC of the European Parlia
ment and of the Council, certain
restrictions applicable to the use of
international credits from projects
involving industrial gases
— Article 58 of Commission Regulation
(EU) No 389/2013 of 2 May 2013 on
establishing a Union Registry pur
suant to Directive2003/87/EC of the
European Parliament and of the
Council, Decisions No 280/2004/ECL 314/72 E N O f f i c i a l J o u r n a l o f t h e E u r o p e a n Union 29.9.2020
Essential criteria In the EU ETS In the ETS of Switzerland
and No 406/2009/EC of the
European Parliament and the Council
and repealing Commission Regula
tions (EU) No 920/2010 and (EU)
No 1193/2011,
as in force on the date of entry into force
of this Agreement.
9. The quantitative limits for — Article 11a of Directive — Article 16(2) of the CO Act
2
international credits shall 2003/87/EC — Article 55b of the CO Ordinance,
2
be at least as stringent as — Commission Regulation (EU) as in force on the date of entry into force
those set out in: No 389/2013 of 2 May 2013 estab of this Agreement.
lishing a Union Registry pursuant to These provisions only provide for the use
Directive 2003/87/EC of the of international credits up to 2020.
European Parliament and of the
Council, Decisions No 280/2004/EC
and No 406/2009/EC of the
European Parliament and of the
Council and repealing Commission
Regulations (EU) No 920/2010 and
(EU) No 1193/2011
— Commission Regulation (EU)
No 1123/2013 of 8 November
2013 on determining international
credit entitlements pursuant to
Directive 2003/87/EC of the
European Parliament and of the
Council,
as in force on the date of entry into force
of this Agreement.
No entitlements to use international
credits are provided for in Union law
from 2021 onwards.
10. Free allocation shall be cal — Articles 10, 10a, 10b and 10c of — Article 18(3) and Article 19(2) to (6)
culated on the basis of Directive 2003/87/EC of the CO Act
2
benchmarks and adjust — Commission Decision 2011/278/EU — Article 45(2) and Articles 46, 46a,
ment factors. A maximum of 27 April 2011 determining transi 46b, 46c and 48 of, and Annex 9 to,
of five percent of the quan tional Union-wide rules for harmo the CO Ordinance,
2
tity of allowances over the nised free allocation of emission as in force on the date of entry into force
period from 2013 to 2020 allowances pursuant to Article 10a of this Agreement.
shall be set aside for new of Directive 2003/87/EC of the Free allocations do not exceed the levels
entrants. Allowances which European Parliament and of the of allocations given to installations in the
are not allocated free of Council EU ETS.
charge shall be auctioned
or invalidated. To this end,
the ETS shall meet at least: — Commission Decision 2013/448/EU
of 5 September 2013 concerning
national implementation measures
for the transitional free allocation of
greenhouse gas emission allowances
in accordance with Article 11(3) of
Directive 2003/87/EC of the
European Parliament and of the
Council
— Commission Decision (EU)
2017/126 of 24 January 2017
amending Decision 2013/448/EU
as regards the establishment of a
uniform cross-sectoral correction29.9.2020 E N O f f i c i a l J o u r n a l o f t h e E u r o p e a n Union L 314/73
Essential criteria In the EU ETS In the ETS of Switzerland
factor in accordance with Arti
cle 10a of Directive 2003/87/EC of
the European Parliament and of the
Council
(Calculations for the determination of
the cross-sectoral correction factor in
the EU ETS from 2013 to 2020)
— Commission Decision 2014/746/EU
of 27 October 2014 determining,
pursuant to Directive 2003/87/EC
of the European Parliament and of
the Council, a list of sectors and sub
sectors which are deemed to be
exposed to a significant risk of car
bon leakage, for the period 2015 to
2019
— Directive (EU) 2018/410 of the
European Parliament and of the
Council of 14 March 2018 amend
ing Directive 2003/87/EC to
enhance cost-effective emission
reductions and low-carbon invest
ments
(Carbon leakage list for the period
2015-2020)
— Commission Delegated Regulation
(EU) 2019/331 of 19 December
2018 determining transitional
Union-wide rules for harmonised
free allocation of emission allowan
ces pursuant to Article 10a of Direc
tive 2003/87/EC of the European
Parliament and of the Council
— Commission Delegated Decision
(EU) 2019/708 of 15 February
2019 supplementing Directive
2003/87/EC of the European Parlia
ment and of the Council concerning
the determination of sectors and
subsectors deemed at risk of carbon
leakage for the period 2021 to 2030
— any cross-sectoral correction factor
in the EU ETS in 2015-2020 or
2026-2030,
as in force on the date of entry into force
of this Agreement.
11. The ETS shall provide for — Article 16 of Directive 2003/87/EC, — Article 21 of the CO Act
2
penalties in the same cir as in force on the date of entry into force — Article 56 of the CO Ordinance,
2
cumstances and of the same of this Agreement. as in force on the date of entry into force
magnitude as those set out of this Agreement.
in:L 314/74 E N O f f i c i a l J o u r n a l o f t h e E u r o p e a n Union 29.9.2020
Essential criteria In the EU ETS In the ETS of Switzerland
12. Monitoring and reporting — Article 14 of, and Annex IV to, — Article 20 of the CO Act
2
in the ETS shall at least be Directive 2003/87/EC — Articles 50 to 53 of, and Annexes 16
as stringent as in: — Commission Regulation (EU) and 17 to, the CO Ordinance,
2
No 601/2012 of 21 June 2012 on as in force on the date of entry into force
the monitoring and reporting of of this Agreement.
greenhouse gas emissions pursuant
to Directive 2003/87/EC of the
European Parliament and of the
Council
— Commission Implementing Regula
tion (EU) 2018/2066 of 19 December
2018 on the monitoring and report
ing of greenhouse gas emissions pur
suant to Directive 2003/87/EC of the
European Parliament and of the
Council and amending Commission
Regulation (EU) No 601/2012,
as in force on the date of entry into force
of this Agreement.
13. Verification and accredita — Article 15 of, and Annex V to, — Articles 51 to 54 of the CO Ordi
2
tion in the ETS shall at least Directive 2003/87/EC nance,
be as stringent as in: — Commission Regulation (EU) as in force on the date of entry into force
No 600/2012 of 21 June 2012 on of this Agreement.
the verification of greenhouse gas
emission reports and tonne-kilo
metre reports and the accreditation
of verifiers pursuant to Directive
2003/87/EC of the European Parlia
ment and of the Council
— Commission Implementing Regula
tion (EU) 2018/2067 of 19 December
2018 on the verification of data and
on the accreditation of verifiers pur
suant to Directive 2003/87/EC of the
European Parliament and of the
Council,
as in force on the date of entry into force
of this Agreement.
B. Essential criteria for aviation
Essential criteria For the EU For Switzerland
1. Mandatory nature of the Participation in the ETS shall be manda Participation in the ETS shall be manda
participation in the ETS tory for aviation activities in accordance tory for aviation activities in accordance
with the criteria listed below. with the criteria listed below.
2. Coverage of aviation activ — Directive 2003/87/EC, as amended 1. Scope of coverage
ities and GHG and by Regulation (EU) 2017/2392 of Flights which arrive at, or depart from, an
attribution of flights and the European Parliament and of aerodrome situated in the territory of
their respective emissions the Council of 13 December 2017 Switzerland, except flights which depart
according to the departing to temporarily derogate enforce from an aerodrome situated in the terri
flight principle as set out in: ment in respect of flights to and tory of the EEA.
from countries with whom an Any temporary derogations as regards the
agreement pursuant to Article 25 scope of the ETS, such as derogations in
of Directive 2003/87/EC has not the sense of Article 28a of Directive
been reached29.9.2020 E N O f f i c i a l J o u r n a l o f t h e E u r o p e a n Union L 314/75
Essential criteria For the EU For Switzerland
— Articles 17, 29, 35 and 56 of, and 2003/87/EC, may apply with regard to
Annex VII to, Commission Regula the ETS of Switzerland in accordance with
tion (EU) No 389/2013 of 2 May those introduced in the EU ETS. Only CO
2
2013 establishing a Union Registry emissions shall be covered for aviation
pursuant to Directive 2003/87/EC of activities.
the European Parliament and of the
Council, Decisions No 280/2004/EC
and No 406/2009/EC of the
European Parliament and of the
Council and repealing Commission
Regulations (EU) No 920/2010 and
(EU) No 1193/2011,
as in force on the date of the entry into
force of this Agreement.
As from 1 January 2020, flights from an 2. Limitations of coverage
aerodrome situated in the territory of General coverage mentioned in point 1
the European Economic Area (“EEA”) shall not include:
to aerodromes situated in the territory 1. Flights performed exclusively for the
of Switzerland shall be covered by the transport on an official mission of a
EU ETS, while flights from aerodromes reigning monarch and his/her im
situated in the territory of Switzerland mediate family, heads of State, heads
to aerodromes situated in the territory of Government and Government
of the EEA shall be excluded from the EU ministers, where this is substantiated
ETS, pursuant to Article 25a of Directive by an appropriate status indicator in
2003/87/EC. the flight plan.
2. Military, customs and police flights.
3. Flights related to search and rescue,
fire-fighting flights, humanitarian
flights and emergency medical service
flights.
4. Flights performed exclusively under
visual flight rules as defined in Annex
2 to the Convention on International
Civil Aviation of 7 December 1944.
5. Flights terminating at the aerodrome
from which the aircraft has taken off
and during which no planned inter
mediate landing has been made.
6. Training flights performed exclusively
in order to acquire or maintain a li
cence, or a rating in the case of cockpit
flight crew where this is substantiated
by an appropriate remark in the flight
plan, provided that the flight does not
serve for the transport of passengers
and/or cargo or for the positioning or
ferrying of the aircraft.
7. Flights performed exclusively for the
purpose of scientific research.
8. Flights performed exclusively for the
purpose of checking, testing or certi
fying aircraft or airborne or ground-
based equipment.L 314/76 E N O f f i c i a l J o u r n a l o f t h e E u r o p e a n Union 29.9.2020
Essential criteria For the EU For Switzerland
9. Flights performed by aircraft with a
certified maximum take-off mass of
less than 5 700 kilograms.
10. Flights of commercial aircraft opera
tors with total annual emissions low
er than 10 000 tonnes on flights
covered by the ETS of Switzerland
or fewer than 243 flights per period
for three consecutive four-month
periods within the scope of the ETS
of Switzerland, if the operators are
not covered by the EU ETS.
11. Flights of non-commercial aircraft
operators covered by the ETS of
Switzerland with total annual emis
sions lower than 1 000 tonnes in
accordance with the respective dero
gation applied in the EU ETS, if the
operators are not covered by the EU
ETS.
These limitations of coverage are pro
vided for in:
— Article 16a of the CO Act
2
— Article 46d and Article 55(2) of, and
Annex 13 to, the CO Ordinance,
2
as in force on the date of entry into force
of this Agreement.
3. Exchange of relevant data The two parties shall cooperate regarding the application of the limitations of
regarding the application coverage in the ETS of Switzerland and the EU ETS for commercial and non-
of the limitations of cover commercial operators in accordance with this Annex. In particular, both parties
age of aviation activities shall ensure the timely transfer of all relevant data to enable correct identification
of the flights and aircraft operators that are covered by the ETS of Switzerland and
the EU ETS.
4. Cap (total quantity of allow Article 3c of Directive 2003/87/EC, The cap shall reflect a similar level of
ances to be allocated to air as in force on the date of entry into force stringency as the one in the EU ETS, in
craft operators) of this Agreement. particular with regard to the reduction
Article 3c of Directive 2003/87/EC percentage rate between years and trading
initially allocated allowances as follows: periods. The allowances in the cap shall
— 15 % auctioned be allocated as follows:
— 3 % set aside in a special reserve — 15 % shall be auctioned
— 82 % allocated free of charge. — 3 % shall be set aside in a special
Allocations were amended by Regula reserve
tion (EU) No 421/2014 whereby the — 82 % shall be allocated free of charge.
allocation of free allowances was This allocation may be reviewed in accor
reduced in proportion to the reduction dance with Articles 6 and 7 of this Agree
of the surrender obligation (Article 28a ment.
(2) of Directive 2003/87/EC). Regula
tion (EU) 2017/2392, as in force on
the date of entry into force of this Agree
ment, has extended this approach until
2023, and applies the 2,2 % linear
reduction factor from 1 January 2021.29.9.2020 E N O f f i c i a l J o u r n a l o f t h e E u r o p e a n Union L 314/77
Essential criteria For the EU For Switzerland
Up to 2020, the quantity of allowances
within the cap shall be calculated bottom-
up on the basis of the allowances to be
allocated free of charge in accordance
with the cap distribution as mentioned
above. Any temporary derogations as re
gards the scope of the ETS shall require
the corresponding proportional adjust
ments to the amounts to be allocated.
As of 2021, the quantity of allowances
within the cap shall be determined by
the cap in 2020, taking into account a
possible reduction percentage rate in ac
cordance with the EU ETS.
This is provided for in:
— Article 18 of the CO Act
2
— Article 46e of, and Annex 15 to, the
CO Ordinance,
2
as in force of the date of the entry into
force of this Agreement.
5. Allocation of allowances for — Article 3d and Article 28a(3) of Swiss emission allowances to be auc
aviation through auction Directive 2003/87/EC, tioned shall be auctioned by the Swiss
ing of allowances as in force on the date of the entry into competent authority. Switzerland is en
force of this Agreement. titled to the revenues generated from the
auctioning of Swiss allowances.
This is provided for in:
— Article 19a(2) and (4) of the CO Act
2
— Article 48 of, and Annex 15 to, the
CO Ordinance,
2
as in force of the date of the entry into
force of this Agreement.
6. Special reserve for certain — Article 3f of Directive 2003/87/EC, Allowances shall be set aside in a special
aircraft operators as in force on the date of the entry into reserve for new entrants and fast growers,
force of this Agreement. except that up to 2020, given that the
reference year for the acquisition of data
for Swiss aviation activities shall be 2018,
Switzerland will not have a special reserve.
This special reserve is provided for in:
— Article 18(3) of the CO Act
2
— Article 46e of, and Annex 15 to, the
CO Ordinance,
2
as in force of the date of the entry into
force of this Agreement.
7. Benchmark for free alloca — Article 3e of Directive 2003/87/EC, The benchmark shall be no higher than
tion of allowances to air as in force on the date of the entry into the one in the EU ETS.
craft operators force of this Agreement. Up to 2020, the annual benchmark shall
The annual benchmark is be 0,000642186914222035 allowances
0,000642186914222035 allowances per tonne-kilometre.
per tonne-kilometre. This benchmark is provided for in:
— Article 46f(1) and (2) of, and Annex
15 to, the CO Ordinance,
2
as in force of the date of the entry into
force of this Agreement.L 314/78 E N O f f i c i a l J o u r n a l o f t h e E u r o p e a n Union 29.9.2020
Essential criteria For the EU For Switzerland
8. Free allocation of emission — Article 3e of Directive 2003/87/EC, The number of emission allowances allo
allowances for aircraft op as in force on the date of the entry into cated free of charge to aircraft operators is
erators force of this Agreement. calculated by multiplying its reported
Adjustments shall be made pursuant to tonne-kilometre data performed in the
Article 25a of Directive 2003/87/EC, to reference year by the applicable bench
the issuance of allowances in propor mark.
tion to the corresponding reporting This free allocation is provided for in:
and surrendering obligations resulting — Article 19a(3) and (4) of the CO Act
2
from the actual coverage under the EU — Article 46f(1) and (2) of, and Annex
ETS of flights between the EEA and 15 to, the CO Ordinance,
2
Switzerland. as in force on the date of entry into force
of this Agreement.
9. The qualitative limits for in — Articles 11a and 11b of Directive — Articles 5 and 6 of the CO Act
2
ternational credits shall be 2003/87/EC — Article 4 and Article 4a(1) of, and
at least as stringent as those — Commission Regulation (EU) Annex 2 to, the CO Ordinance,
2
set out in: No 389/2013 of 2 May 2013 estab as in force on the date of entry into force
lishing a Union Registry pursuant to of this Agreement.
Directive 2003/87/EC of the
European Parliament and of the
Council, Decisions No 280/2004/EC
and No 406/2009/EC of the
European Parliament and of the
Council and repealing Commission
Regulations (EU) No 920/2010 and
(EU) No 1193/2011,
as in force on the date of entry into force
of this Agreement.
10. Quantitative limits for the — Article 11a of Directive The use of international credits shall be
use of international credits 2003/87/EC 1,5 % of verified emissions up to 2020.
— Commission Regulation (EU) This is provided for in:
No 389/2013 of 2 May 2013 estab — Article 55d of the CO Ordinance,
2
lishing a Union Registry pursuant to as in force on the date of entry into force
Directive 2003/87/EC of the of this Agreement.
European Parliament and of the
Council, Decisions No 280/2004/EC
and No 406/2009/EC of the
European Parliament and of the
Council and repealing Commission
Regulations (EU) No 920/2010 and
(EU) No 1193/2011
— Commission Regulation (EU)
No 1123/2013 of 8 November
2013 on determining international
credit entitlements pursuant to
Directive 2003/87/EC of the
European Parliament and of the
Council,
as in force on the date of entry into force
of this Agreement.
11. Acquisition of tonne-kilo — Article 3e of Directive 2003/87/EC, Without prejudice to the provision below,
metre data for reference as in force on the date of entry into force the acquisition of tonne-kilometre data
year of this Agreement. shall be done at the same time and using
the same approach as the acquisition of
tonne-kilometre data for the EU ETS.
Up to 2020 and in accordance with the
Ordinance on the Acquisition of Tonne-
Kilometre Data and the Preparation of29.9.2020 E N O f f i c i a l J o u r n a l o f t h e E u r o p e a n Union L 314/79
Essential criteria For the EU For Switzerland
Monitoring Plans relating to Distances
covered by Aircraft, as in force on the date
of entry into force of this Agreement, the
reference year for the acquisition of data
for Swiss aviation activities shall be 2018.
This is provided for in:
— Article 19a(3) and (4) of the CO Act
2
— the Ordinance on the Acquisition of
Tonne-Kilometre Data and the Pre
paration of Monitoring Plans relating
to Distances covered by Aircraft,
as in force on the date of entry into force
of this Agreement.
12. Monitoring and reporting — Article 14 of, and Annex IV to, Monitoring and reporting provisions
Directive 2003/87/EC shall reflect the same level of stringency
— Commission Regulation (EU) as in the EU ETS.
No 601/2012 of 21 June 2012 on This is provided for in:
the monitoring and reporting of — Article 20 of the CO Act
2
greenhouse gas emissions pursuant — Articles 50 to 52 of, and Annexes 16
to Directive 2003/87/EC of the and 17 to, the CO Ordinance,
2
European Parliament and of the as in force on the date of entry into force
Council of this Agreement.
— Commission Implementing Regula
tion (EU) 2018/2066 of 19 December
2018 on the monitoring and report
ing of greenhouse gas emissions pur
suant to Directive 2003/87/EC of the
European Parliament and of the
Council and amending Commission
Regulation (EU) No 601/2012
— Commission Delegated Regulation
(EU) 2019/1603 of 18 July 2019
supplementing Directive 2003/87/EC
of the European Parliament and of the
Council as regards measures adopted
by the International Civil Aviation
Organisation for the monitoring,
reporting and verification of aviation
emissions for the purpose of imple
menting a global market-based
measure,
as in force on the date of the entry into
force of this Agreement.
13. Verification and accredita — Article 15 of, and Annex V to, Verification and accreditation provisions
tion Directive 2003/87/EC shall reflect the same level of stringency as
— Commission Regulation (EU) in the EU ETS.
No 600/2012 of 21 June 2012 on This is provided for in:
the verification of greenhouse gas — Article 52(4) and (5) of, and Annex 18
emission reports and tonne-kilometre to, the CO Ordinance,
2
reports and the accreditation as in force on the date of entry into force
of verifiers pursuant to Directive of this Agreement.
2003/87/EC of the European Parlia
ment and of the CouncilL 314/80 E N O f f i c i a l J o u r n a l o f t h e E u r o p e a n Union 29.9.2020
Essential criteria For the EU For Switzerland
— Commission Implementing Regula
tion (EU) 2018/2067 of 19 December
2018 on the verification of data and
on the accreditation of verifiers pur
suant to Directive 2003/87/EC of the
European Parliament and of the
Council,
as in force on the date of the entry into
force of this Agreement.
14. Administration The criteria laid down in Article 18a In accordance with the CO Ordinance, as
2
of Directive 2003/87/EC shall apply. To in force on the date of entry into force of
this effect and pursuant to Article 25a of this Agreement, Switzerland shall be re
Directive 2003/87/EC, Switzerland shall sponsible for the administration of air
be considered as an Administering Mem craft operators:
ber State as regards the attribution of the — with a valid operating licence granted
administration of aircraft operators to by Switzerland, or
Switzerland and EU (EEA) Member States. — with the greatest estimated attributed
aviation emissions in Switzerland un
der the linked ETS.
Pursuant to Article 25a of Directive Swiss competent authorities shall be re
2003/87/EC, the competent authorities sponsible for all the tasks related to the
of the EU (EEA) Member States shall be administration of aircraft operators at
responsible for all the tasks related to the tributed to Switzerland, including the
administration of aircraft operators tasks relating to the EU ETS (e.g. the re
attributed to them, including the tasks ception of verified emission reports cov
relating to the ETS of Switzerland (e.g. ering both EU and Swiss aviation activ
the reception of verified emission ities, the allocation, issuance and transfer
reports covering both EU and Swiss of allowances, compliance and enforce
aviation activities, the allocation, issu ment).
ance and transfer of allowances, compli The Swiss competent authorities shall
ance and enforcement). agree bilaterally with the European Com
The European Commission shall agree mission on handing over the relevant
bilaterally with the Swiss competent documentation and information.
authorities on handing over the relevant
documentation and information.
In particular, the European Commission In particular, the Swiss competent autho
shall ensure the transfer to aircraft rities shall transfer to aircraft operators
operators administered by Switzerland administered by the EU (EEA) Member
of the amount of free allocation of EU States of the amount of free allocation
allowances. of Swiss allowances.
In case of a bilateral agreement regarding This is provided for in:
the administration of flights operating in — Article 39(1bis) of the CO Act
2
relation to the EuroAirport Basel- — Article 46d of, and Annex 14 to, the
Mulhouse-Freiburg not involving any CO Ordinance,
2
amendment to Directive 2003/87/EC, as in force on the date of entry into force
the European Commission shall, as of this Agreement.
appropriate, facilitate the implementa
tion of such agreement, provided that
this does not result in double counting.
15. Surrendering When assessing compliance of aircraft When assessing compliance of aircraft
operators on the basis of the amount of operators on the basis of the amount of
surrendered allowances, the competent surrendered allowances, the competent
authorities of the EU (EEA) Member authorities of Switzerland shall first ac29.9.2020 E N O f f i c i a l J o u r n a l o f t h e E u r o p e a n Union L 314/81
Essential criteria For the EU For Switzerland
States shall first account for emissions count for emissions covered by the EU
covered by the ETS of Switzerland and ETS and use the remaining amount of
use the remaining amount of surren surrendered allowances to account for
dered allowances to account for emis emissions covered by the ETS of Switzer
sions covered by the EU ETS. land.
16. Legal enforcement Parties shall enforce the provisions of their respective ETS in relation to aircraft
operators that do not fulfil the obligations in the respective ETS, regardless of
whether the operator is administered by an EU (EEA) competent authority or by a
Swiss competent authority, in case enforcement by the authority administering the
operator requires additional action.
17. Administrative attribution Pursuant to Article 25a of Directive 2003/87/EC, the aircraft operator’s list
of aircraft operators published by the European Commission, in accordance with Article 18a(3) of
Directive 2003/87/EC, shall specify the administering State, including Switzerland,
for each aircraft operator.
Aircraft operators attributed to Switzerland for the first time after the entry into
force of this Agreement shall be administered by Switzerland after 30 April of the
year of attribution and before 1 August of the year of attribution.
The two parties shall cooperate on sharing relevant documentation and
information.
The attribution of an aircraft operator shall not affect the coverage of that aircraft
operator by the respective ETS (i.e. an operator covered by the EU ETS that is
administered by the Swiss competent authority shall have the same level of
obligations under the EU ETS alongside its coverage under the ETS of Switzerland,
and vice versa).
18. Modalities for implementa Any further modalities needed for the organisation of the work and cooperation
tion within the one-stop shop for aviation account holders shall be developed and
adopted by the Joint Committee after signature of this Agreement, in accordance
with Articles 12, 13 and 22 of this Agreement. These modalities shall apply from
the date that this Agreement applies.
19. Assistance from Eurocon For the aviation part of this Agreement, the European Commission shall include
trol Switzerland within the mandate given to Eurocontrol in relation to the EU ETS.
C. Essential Criteria for Registries
The ETS of each Party shall include a registry and a transaction log, which shall meet the following essential criteria in
relation to security mechanisms and procedures and in relation to the opening and management of accounts:
Essential Criteria in relation to Security Mechanisms and Procedures
The registries and the transaction logs shall protect the confidentiality, the integrity, the availability and the authenticity
of the data stored in the system. To this end, the following security mechanisms shall be implemented by the Parties:
Essential Criteria
To access accounts, a two-factor authentication mechanism for all users accessing the account is required.
A transaction signature mechanism is required for both initiation and approval of transactions. The confirmation code
shall be sent out-of-band to the users.
Any of the following operations shall be initiated by one person and approved by another person (4-eye principle):
— all operations undertaken by an administrator, unless justified exceptions as defined in the LTS apply
— all transfers of units unless justified by an alternative measure providing the same level of security.L 314/82 E N O f f i c i a l J o u r n a l o f t h e E u r o p e a n Union 29.9.2020
A system of notifications that alert the users when operations are performed involving their accounts and holdings shall
be in place.
A minimum of 24-hour delay applies between the initiation of a transfer and its execution to all the users to receive
information and stop any suspected illegitimate transfer.
The Swiss administrator and the Union central administrator shall take steps to inform users of their responsibilities
with regard to the security of their systems (e.g. PC, network) and with regard to handling data/navigating on the
internet.
As regards allowances, emissions for the year 2020 may only be covered by allowances issued in the period 2013-2020.
Essential Criteria in relation to the Opening and Management of Accounts
Essential Criteria
Opening of an Operator Account/Operator Holding Account
The application by the operator or competent authority to request the opening of an operator account/operator holding
account shall be addressed to the national administrator (Federal Office of the Environment, FOEN, for Switzerland). The
application shall contain sufficient information to identify the ETS installation and an appropriate installation ID.
Opening of an Aircraft Operator Account/Aircraft Operator Holding Account
Each aircraft operator covered by the ETS of Switzerland and/or the EU ETS shall have one aircraft operator
account/aircraft operator holding account. For aircraft operators administered by the Swiss competent authority such
an account shall be held in the Swiss registry. The application by the aircraft operator or an authorised representative of
the aircraft operator shall be addressed to the national administrator (FOEN for Switzerland) within 30 working days
from the approval of the monitoring plan of the aircraft operator or its transferral from an EU (EEA) Member State to
the Swiss authorities. The application shall contain the unique aircraft code(s) of the aircraft operated by the applicant
which fall under the ETS of Switzerland and/or the EU ETS.
Opening of a Personal Account/Person Holding Account
The application to request the opening of a personal account/person holding account shall be addressed to the national
administrator (FOEN for Switzerland). It shall include sufficient information to identify the account holder/applicant,
and it shall include at least:
— for a natural person: proof of ID and contact details
— for a legal person:
— copy of the commercial register, or
— the instruments establishing the legal entity and a document proving the registration of the legal entity
— criminal records of the natural person or for a legal person of its directors
Authorised/Account representatives
Each account shall have at least one authorised/account representative who is nominated by the prospective account
holder. The authorised/account representatives shall initiate transactions and other processes on behalf of the account
holder. When nominating the authorised/account representative, the following information about the authorised/account
representative shall be transmitted:
— name and contact details
— document supporting ID
— criminal record.
Checking of documents
Any copy of a document submitted as evidence for the opening of a personal account/person holding account or the
nomination of an authorised/account representative must be certified as a true copy. Regarding documents issued
outside the State requesting a copy, the copy must be legalised. The date of the certification and, where relevant, of the
legalisation must not be more than three months prior to the date of the application.
Refusal to open or update an account or to nominate an authorised/account representative29.9.2020 E N O f f i c i a l J o u r n a l o f t h e E u r o p e a n Union L 314/83
A national administrator (FOEN for Switzerland) may refuse to open or to update an account or to nominate an
authorised/account representative, provided that the refusal is reasonable and justifiable. The refusal shall be justified
on at least one of the following grounds:
— the information and documents provided are incomplete, out-of-date or otherwise inaccurate, or false
— the prospective representative is under investigation or has been convicted in the preceding five years for fraud
involving allowances or Kyoto units, money laundering, terrorist financing or other serious crimes for which the
account may be an instrument
— grounds set out in national or Union law.
Regular review of account information
The account holders shall immediately report any change to the account or user data to the national administrator
(FOEN for Switzerland), supported by information as required by the national administrator who is responsible for the
approval of the update of the information in a timely manner.
At least once every three years, the national administrator shall review whether the information related to an account
remains complete, up-to-date, accurate and true, and shall request that the account holder notify any changes as
appropriate.
Suspension of Access to Account
Where any provision under Article 3 of this Agreement relating to registries is contravened or an investigation
concerning a possible contravention of those provisions is pending, access to accounts may be suspended.
Confidentiality and disclosure of information
Information, including the holdings of all accounts, all transactions made, the unique unit identification code of the
allowances and the unique numeric value of the unit serial number of the Kyoto units held or affected by a transaction,
held in the EUTL or the SSTL, the Union Registry, the Swiss registry and any other Kyoto Protocol registry shall be
considered confidential.
Such confidential information may be provided to relevant public entities upon their request if such requests pursue a
legitimate objective and are justified, necessary and proportionate for the purposes of investigation, detection,
prosecution, tax administration, enforcement, auditing and financial supervision to prevent and combat fraud, money
laundering, terrorism financing, other serious crime, market manipulation or other breaches of Union or national law
of an EEA Member State or Switzerland, and to ensure the good functioning of the EU ETS and the ETS of Switzerland.
D. Essential Criteria for Auctioning Platforms and Auction Activities
Entities conducting auctions of allowances in the ETS of the Parties shall meet the following essential criteria and shall
conduct the auctions accordingly:
Essential Criteria
1. The entity conducting the auction shall be selected through a process which ensures transparency,
proportionality, equal treatment, non-discrimination and competition between different potential auction
platforms on the basis of Union or national procurement law.
2. The entity conducting the auction shall be authorised for this activity and shall provide the necessary safeguards in
the conduct of their operations; those safeguards include, among others, arrangements to identify and manage the
potential adverse consequences of any conflict of interest, to identify and manage risks to which the market is
exposed, to have transparent and non-discretionary rules and procedures for fair and orderly auctioning and
sufficient financial resources to facilitate the orderly functioning.
3. Access to the auctions shall be subject to minimum requirements as regards adequate customer diligence checks
to ensure that participants do not undermine the operation of the auctions.L 314/84 E N O f f i c i a l J o u r n a l o f t h e E u r o p e a n Union 29.9.2020
4. The auction process shall be predictable, in particular as regards the timing and sequencing of sales and the
estimated volumes to be made available. The main elements of the auctioning method, including the schedule,
dates and estimated volumes of sales, shall be published on the website of the entity conducting the auction at
least one month before the start of the auction. Any significant adjustment shall be announced as early as
practicable in advance as well.
5. The auctioning of allowances shall be performed with the objective of minimising any impact on the ETS of each
Party. The entity in charge of auctioning shall ensure that the auction clearing prices do not deviate significantly
from the relevant price for allowances in the secondary market over the auctioning period, a situation which
would indicate a deficiency of the auctions. The methodology determining the deviation referred to in the
previous sentence should be notified to the competent authorities exercising market oversight functions.
6. All non-confidential information pertinent to the auctions, including all legislation, guidance and forms, shall be
published in an open and transparent manner. The results of each auction conducted shall be published as soon as
is reasonably practicable and include the relevant non-confidential information. Reports on the results of the
auctions shall be published at least annually.
7. The auctioning of allowances shall be subject to adequate rules and procedures to mitigate the risk of anti-
competitive behaviour, market abuse, money-laundering and terrorist financing in auctions. Such rules and
procedures shall be, to the extent possible, not less stringent than those applicable to financial markets in the
respective legal regimes of the Parties. In particular, the entity conducting the auction shall be responsible for
putting in place measures, procedures and processes ensuring the integrity of the auctions. It shall also monitor
the behaviour of market participants and notify the competent public authorities in the event of anti-competitive
behaviour, market abuse, money laundering or terrorist financing.
8. The entity conducting the auctions and the auctioning of allowances shall be subject to adequate supervision by
competent authorities. Designated competent authorities shall have necessary legal competences and technical
arrangements to supervise:
— the organisation and conduct of operators of auction platforms
— the organisation and conduct of professional intermediaries acting on behalf of clients
— the behaviour and transactions of market participants, in order to prevent insider dealing and market
manipulation
— the transactions of market participants, in order to prevent money laundering and terrorist financing.
To the extent possible, the supervision shall not be less stringent than the supervision on financial markets in the
respective legal regimes of the Parties.
Switzerland shall endeavour to make use of a private entity for the auctioning of its allowances, in accordance with
public procurement rules.
Until such an entity is contracted, and provided that the number of allowances to be auctioned in a year is below a fixed
threshold, Switzerland may continue to use the current arrangements for auctioning, namely the auctions operated by
the FOEN, under the following conditions:
1. The threshold shall be 1 000 000 allowances, including allowances to be auctioned for aviation activities.
2. The essential criteria 1 to 8 shall apply, with the exception of criteria 1 and 2, while the last sentence of criterion 5,
and criteria 7 and 8 only apply to the FOEN to the extent possible.
The essential criterion 3 shall apply, together with the following provision: admission to bid in auctions of Swiss
allowances under the arrangements for auctioning which were in place at the time this Agreement was signed, shall be
guaranteed for all entities in the EEA which are admitted to bid in auctions in the Union.
Switzerland may mandate entities conducting the auction which are located in the EEA.29.9.2020 E N O f f i c i a l J o u r n a l o f t h e E u r o p e a n Union L 314/85
ANNEX II
LINKING TECHNICAL STANDARDS
To operationalise the link between the EU ETS and the ETS of Switzerland, a provisional solution shall be in place by May
2020 or as soon as possible thereafter. Parties shall cooperate to replace the provisional solution with a permanent registry
link as soon as possible.
The Linking Technical Standards (LTS) shall specify:
— the architecture of the communication link
— the security of data transfer
— the list of functions (transactions, reconciliation …)
— the definition of the web services
— the data logging requirements
— the operational arrangements (call desk, support)
— the communication activation plan and the testing procedure
— the security testing procedure.
The LTS shall specify that the administrators are to take all reasonable steps to ensure that the SSTL, the EUTL and the link
are operational 24 hours a day and 7 days a week, and that any interruptions to the operation of the SSTL, the EUTL and the
link are to be kept to the minimum.
The LTS shall specify that the communications between the SSTL and the EUTL consist of secure exchanges of webservices
messages based on the following technologies(1)1:
— web services using Simple Object Access Protocol (SOAP) or equivalent
— hardware-based Virtual Private Network (VPN)
— XML (Extensible Markup Language)
— digital signature, and
— network time protocols.
The LTS shall set out additional security requirements for the Swiss registry, the SSTL, the Union registry and the EUTL and
shall be documented in a “security management plan”. In particular, the LTS shall specify that:
— if there is a suspicion that the security of the Swiss registry, the SSTL, the Union registry or the EUTL has been
compromised, both Parties shall immediately inform each other and suspend the link between the SSTL and the EUTL
— in the event of a security breach, the Parties shall commit to immediately share the information with each other. To the
extent that the technical details are available, a report describing the incident (date, cause, impact, remedies) shall be
shared between the Swiss registry administrator and the Union central administrator within 24 hours after the security
breach.
The security testing procedure set out in the LTS shall be completed before the communication link between the SSTL and
the EUTL is established, and whenever a new version or release of the SSTL or the EUTL is required.
The LTS shall provide two testing environments in addition to the production environment: a developer testing
environment and an acceptance environment.
(1) Those technologies are currently used for establishing a connection between the Union Registry and the International Transaction Log
as well as between the Swiss Registry and the International Transaction Log.L 314/86 E N O f f i c i a l J o u r n a l o f t h e E u r o p e a n Union 29.9.2020
The Parties shall provide evidence through the Swiss registry administrator and the Union central administrator that an
independent security assessment of their systems has been performed in the previous 12 months in accordance with the
security requirements set out in the LTS. Security testing and in particular penetration testing shall be performed on all
new major releases of the software in accordance with the security requirements set out in the LTS. The penetration testing
shall not be performed by the software developer or by a subcontractor of the software developer.’