This notice by the Federal Ministry for the Environment (FOEN) provides an overview on the rules and regulations related to CO2 emissions projects and programmes for offsetting purposes.
Regulatory Background
The CO2 Act (SR 641.71) requires producers and importers of fossil fuels to offset part of the CO2 emissions resulting from their release. To do this, they must submit attestations from offsetting projects or programmes conducted in Switzerland or abroad that meet the requirements set out in Art. 5 and 5a of the Ordinance of 30 November 2012 on the Reduction of CO2 Emissions (SR 641.711, CO2 Ordinance). Eligible projects or programmes must relate to the greenhouse gases listed in Art. 1 of the CO2 Ordinance.
Ineligible Project Types
According to Annex 2, 2a, and 3 of the CO2 Ordinance, the following project types are ineligible:
1) Switzerland
- Nuclear Energy: Projects involving the use of nuclear energy.
- Research Consulting: Research, technologies in early development stages, or information and consulting services.
- Unverified Renewable Fuels: Use of renewable fuels that do not have an assigned proof of origin in the tracking system.
- Fossil-to-Fossil Replacement: Replacing fossil energy sources with other fossil energy sources (e.g., in heating boilers, vehicles, or hybrid vehicles).
- Electric Process Heat: Using electricity as a fuel substitute for process heat (unless used in heat pumps or if the electricity is guaranteed to come from renewable sources).
- Non-Use: Projects based on the waiver of use or under-utilization of resources.
- Biochar: generally excluded, except when used as fertilizer (compliant with strict annual limits and the Fertilizer Ordinance) or construction material (if sustainable production is ensured).
- Adsorption/Absorption Technology: Using these techniques for cooling or heating (unless utilizing decentralized, sufficiently available waste heat).
2) International
Energy Industry
Nuclear Energy: Projects using nuclear energy.
Large Hydro: Hydroelectric power plants with an installed capacity of more than 20 MW.
Outdated Industry: Projects in large industrial facilities that do not correspond to the global state-of-the-art technology.
Fossil Fuels
- Investments in the use of fossil fuels for energy generation or extraction (unless it strictly improves energy efficiency without altering the fossil fuel facility).
- Projects based on avoiding the extraction of fossil energy carriers.
Nature Forestry
- Biological Sequestration: Projects for biological CO2 sequestration (e.g., planting trees).
- Geological Sequestration: Geological CO2 capture and sequestration.
- Deforestation: Projects focusing on the reduction of deforestation or forest degradation.
- Biochar: Generally excluded, except when used in construction material (ensuring sustainable production and disposal).
Waste Management
- Inactive Waste Management: Activities in the waste sector that do not involve material/energy recovery or waste reduction.
Geography Policy
- Non-LDC Countries: Projects not located in Least Developed Countries (LDC), unless they fall under specific older Kyoto Protocol exceptions (registered/achieved before 2013).
- Human Rights Ethics: Projects that violate human rights or have significant negative social or ecological impacts.
- Policy Conflicts: Projects that contradict Swiss foreign or development policy objectives.
- No Consultation: Projects where no consultation with affected stakeholder groups was carried out.
Additionality
Projects need to demonstrate their additionality. This can be done either through an economic analysis, which seeks to demonstrate that the sale of issued certificates is a key incentive mechanism, or through a technical barrier analysis, where it must be shown that technical barriers prevent project implementation and that additional revenues are needed to overcome them.
Project authorisation procedure
1) The applicant submits a detailed project description using the binding FOEN template, which includes the calculation method for emission reductions, a monitoring plan, and an economic feasibility analysis.
2) An independent, FOEN-approved Validator and Verifier (VV) examines the project description to ensure compliance with the CO2 Ordinance and issues a validation report.
3) The FOEN reviews the application and validation report to decide if the project qualifies for attestations and issues a ruling.
4) Once the project is operational, the applicant monitors data according to the approved plan and compiles it into a monitoring report for each calendar year.
5) A different VV (not the one who performed the validation) verifies the monitoring report to check data accuracy and compliance.
6) Based on the verified monitoring report, the FOEN decides on the issuance of attestations for the proven emission reductions.
Projects Abroad: These require parallel authorisation from the partner country, a Letter of Authorisation (LoA), and confirmation that the partner country has recognized the transfer to prevent double counting.
