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CORRECTED-Switzerland threatens 40 pct carbon tax rise if targets not met
July 14, 2014 / 4:17 PM / 3 years ago

CORRECTED-Switzerland threatens 40 pct carbon tax rise if targets not met

(Corrects to show announcement refers to emissions across entire power sector, not just under emissions trading system)

July 14 (Reuters) - Switzerland threatened on Monday to raise its tax on greenhouse gas output from the energy sector by 40 percent if companies do not meet government-imposed emissions reduction targets this year.

The Swiss environment ministry said the tax would jump to 84 francs ($94.25) per tonne of carbon dioxide (CO2) in 2016, from 60 francs currently, if power-related emissions are reduced by less than 22 percent below 1990 levels by the end of this year.

A cut of between 22 and 24 percent would equate to the tax rising 20 percent to 72 francs/tonne, while a reduction of more than 24 percent will maintain the 60-franc level, the Federal Office for the Environment (FOEN) said on its website.

The threat came as the country announced that emissions from power and heating plants fell by 1.7 percent last year to 19.3 percent below 1990 levels.

That means the Swiss power sector needs to slash its CO2 emissions by an additional 2.7 percent below 1990 levels this year for the tax not to increase in 2016.

Smaller emitters can opt out of paying the tax by participating in the country’s carbon market, while large emitters were forced to join the emissions trading system in 2013.

Carbon permits in the illiquid and opaque trading scheme, which fetched more than 40 francs each in a May auction, are amongst the world’s most expensive.

Meanwhile, Switzerland’s emissions from the transport fuel sector, which are not subject to the carbon tax, fell by 0.4 percent last year to 12.4 percent above 1990 levels despite a rise in vehicular traffic, FOEN added. ($1 = 0.8912 Swiss francs) (Reporting by Michael Szabo in London; Editing by Susan Fenton)

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