On December 9, the European Union (EU) and Switzerland announced the finalization of the “Agreement between the European Union and the Swiss Confederation on the Linking of their Greenhouse Gas Emissions Trading Systems” (the Linking Agreement).

The Linking Agreement was signed in November 2017 and was an agreement in principle to link the Emissions Trading Systems (ETSs) of the two countries. The Linking Agreement was subject to a number of requirements in Annexes I and II to ensure that the two schemes were compatible. These requirements were finalised in a meeting on December 5.

The outcome of this Linking Agreement is that from January 1, 2020 allowances from both systems can be used for compliance to compensate for emissions occurring in either system. It is the first such agreement, but in its press release the EU explains that it see “significant benefits to linking carbon markets” and that “with linked carbon markets we can bring carbon prices in different countries closer together”.

The press release is here and FAQs are available here and here.