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4.86. Switzerland: Since the new Energy Law was drafted to a large extent before the period under review, its then future provisions were described extensively in the previous TPR report. However, some of its elements have been prolonged or amended. Its main elements consist of:
• Setting indicative consumption, production, and emissions targets: compared to that of 2000, energy consumption per capita should diminish by 16% in 2020 and 43% in 2035, and consumption of electricity per capita by 3% in 2020 and by 13% in 2035. The local production of electricity from renewable energies (discounting hydropower) starting from a 2015 baseline of 2,830 GWh should rise to 4,400 GWh in 2020 and 11,400 GWh in 2035;
• Creating stricter standards of energy efficiency for buildings, machines, vehicles, and other equipment; introducing new energy labels; and extending publicity campaigns and vocational training programmes on energy efficiency;
• Increasing the grid surcharge rate (paid by consumers to foster renewable energies) from CHF 0.015/kWh to CHF 0.023/kWh, including CHF 0.013/kWh for feed-in tariffs for renewables, CHF 0.002/kWh for investment aid for rooftop photovoltaic systems, CHF 0.003/kWh for support for large hydro (which is suffering from depressed European wholesale prices), CHF 0.002/kWh for reimbursement of the grid surcharge to electricity intensive industries, and CHF 0.001/kWh for renaturation of rivers;
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4.86. Switzerland: Since the new Energy Law was drafted to a large extent before the period under review, its then future provisions were described extensively in the previous TPR report. However, some of its elements have been prolonged or amended. Its main elements consist of: (...)
• Extending the so called "one off investment grants" (30% maximum of the investment compared to a "reference" installation) to new beneficiaries: photovoltaic installations of more than 30 kW, large new hydro electric power stations with a production capacity of more than 10 MW, and large-scale renewals or extensions of hydro-electric power stations, the financing of this measure being ensured by a network supplement paid by electricity consumers. These subsidies will be available until 2030 at the latest. The one-off investment grants were extended to other technologies starting 1 January 2018, since the feed-in premiums were about to phase out. According to the current law, the following renewable plants are eligible for investment grants until the end of 2030:
• Large-scale hydropower (>10 MW) plants; up to 40% of investment costs;
• Renewed and refurbished small-scale hydropower plants up to 60% of investment costs (exclusion of smallest plants <300 kW);
• Biomass (sewage gas, incineration plants, wood-fired power plants); up to 20% of investment costs;
• Photovoltaics (2 kW 50 MW); up to 30% of investment costs; and
• Contribution for "seek and find" for geothermal plants [48].
[48] As from 1 January 2023, the eligibility for investment grants will be extended to all renewable technologies until 2030. The proposal submitted by the Federal Council in June 2021 for a revision of the Energy Law provides for a further extension of investment grants until 2035.

4.87. The 2018 Federal Energy Law also instituted a specific support regime for loss making hydro power plants within a limited financial envelope, time frame (five years and financed by a network supplement paid by electricity consumers), and subject to a cap. The support is going to be phased out by the end of 2030. The support only applies if the electricity prices are too low to cover the costs. It also contained various provisions for shortening and simplifying approval procedures for new installations for the production of electricity from renewable sources. Since 1 January 2018, the use and continued expansion of renewable energy have been proclaimed to be in Switzerland's national interest.

4.88. Switzerland's initial Nationally Determined Contribution (NDC) under the Paris Agreement was a reduction of 50% of its greenhouse gas (GHG) emissions by 2030 compared to 1990 levels. The Federal Council announced the objective of climate neutrality in 2050 in August 2019. On 9 December 2020, Switzerland updated its NDC by committing to reduce GHG emissions by "at least 50%" by 2030 compared to 1990 levels and by committing to climate neutrality by 2050 [50]. This objective was to be reached by a total revision of the CO2 Law adopted by the Federal Assembly on 25 September 2020. This revised law would inter alia have provided for the possibility for the Federal Council to raise the CO2 tax and introduce a new tax on plane tickets.
[50] Switzerland submitted a further update of its NDC in December 2021. Switzerland's Intended Nationally Determined Contribution (INDC) and Clarifying Information. On climate change policy, see Federal Council (2021) Switzerland's Long-Term Climate Strategy.

4.89. Following the rejection by the Swiss population in June 2021 of this proposed revision of the CO2 Law, a partial amendment was adopted in December 2021 in order to temporarily prolong some limited and unchallenged measures of the CO2 Law and to avoid a legal void. The measures that will be prolonged for three more years (2022-24) include the maintenance of emission targets for greenhouse gases (i.e. a reduction of 20% in 2020 compared to the 1990 basis and an annual reduction of 1.5%, three quarters of these reductions being realized in the Swiss territory (as opposed to compensations made abroad)) and the obligation for fuel importers to offset CO2 emissions, in part, by investing in projects for climate protection. As before, importers will be allowed to pass on the tax up to CHF 0.05 per litre to consumers and will continue to have their tax reimbursed if they pledge to diminish their emissions by an additional 2% per year. Tax rebates on natural gas, liquid gas, and bio-fuels are also maintained until 2024.

4.90. In December 2021, the Federal Council submitted for public consultation a new comprehensive revision of the CO2 Law for the period 2025-30. This proposed revision contains the following main new measures: (i) funding for removing fossil heating systems; (ii) lowering of the emission ceilings for new cars and new trucks sold on the Swiss market to be similar to the ceilings applied by the European Union; (iii) funding for new charging infrastructure for electric vehicles; (iv) blending obligations for aviation fuel suppliers similar to the obligations applied by the European Union; (v) crediting of carbon capture and storage in the emissions trading scheme; and (vi) reporting requirements of the financial risks of climate change for the Swiss National Bank (SNB) and the financial supervisory authority. Contrary to the version of the CO2 law that was rejected in June 2021, the new draft submitted by the Federal Council in December does not provide for new taxes.

4.92. (...) Switzerland's extensive hydro pumped storage and reservoir capacity are of strategic importance to the European Union. The country is instrumental in supporting the growing share of variable renewable electricity in Europe and contributing to ensuring grid stability by offering balancing services.

4.98. In June 2021, the Federal Council adopted a dispatch on the Federal Law on a Secure Electricity Supply from Renewable Energy Sources, through which it is proposing to revise the Energy Law and the Electricity Supply Law. In submitting this bill, the Federal Council's aim is to support a transition to a sustainable and climate-friendly energy system while at the same time ensuring a high level of security of supply. The Federal Council considers that large scale electrification is needed in transport and heating if Switzerland is to meet the goals of its Energy Strategy 2050 and its Long Term Climate Strategy, which calls for a rapid and substantial increase in the use of renewables in domestic power generation. Further measures are also needed to improve grid and supply security. The proposed legislation will thus create a legal basis for greater planning certainty and incentives to invest in expanding renewable electricity production and grid integration [59].
[59] Federal Council, "Federal Act on a Secure Electricity Supply from Renewable Energy Sources".

4.99. Switzerland: Regarding the structure of the electricity market and its reform, the bill submitted by the Federal Council in June 2021 proposes to fully open the electricity market to individual consumers and households to strengthen decentralized renewable power generation and facilitate new models (such as energy communities or so-called "prosumers") and to improve the regulation of the electricity networks. It also proposes new targets regarding renewable electricity production, hydropower production, and energy consumption:
• New renewable electricity production (without hydropower): target of 17 terawatt hours (TWh) by 2035; indicative target of 39 TWh by 2050;
• Hydropower production: target of 37.4 TWh by 2035; indicative target of 38.6 TWh by 2050; and
• Energy consumption: target of -43% compared to 2000 for 2035 and -53% for 2050. Electricity consumption: target of -13% compared to 2000 for 2035 and -5% for 2050 (because of higher electricity demand in order to reach the zero emissions target, the electricity efficiency target for 2050 is by only 5% compared to 2000).

4.101. Switzerland: Aside from the changes to the regulatory and support regime for renewable energies instituted by the 2018 Energy Law and described above (Section 4.2.2.1.2.1), the main development during the review period was the launch of a significant reform of the support regime through the Federal Council's proposal on the Federal Act on a Secure Electricity Supply from Renewable Energy Sources (Section 4.2.2.1.2.2).