Executive summary
Switzerland is committed to reach net zero emissions by 2050 and reduce greenhouse gas (GHG) emissions by at least 50% by 2030 compared to 1990. To support this, the government has prepared several pieces of legislation. The long-term Federal Act on Climate Protection Goals, Innovation and Strengthening Energy Security foresees substantial subsidies for replacing fossil heating and processes. A revision to the CO2 Act for the period beyond 2025 with instruments to reach the country’s 2030 target under the Paris Agreement was being debated in parliament at the time of writing. The third piece of legislation is a revision of the 2018 Energy Act to replace the indicative targets for the expansion of renewables and per capita energy and electricity consumption with binding targets complemented with concrete measures to speed up deployment. Reaching the climate target for 2030 will require substantial efforts, especially in the building and transport sectors, which both failed to meet their 2020 sectoral emissions targets. One challenge for the government is that the domestic climate legislation is currently in a flux. A revision of the CO2 Act for the period to 2030 was rejected in referendum in 2021 and the new proposed CO2 Act is still in the legislative process. Voters have, in particular, rejected the planned substantial increase in the CO2 levy on stationary fuels. The new proposed CO2 Act shifts the focus from regulations and tax increases to incentives and foresees a notable increase in funding for measures targeting the transport and building sectors. The new proposed CO2 Act to 2030 also increases the share of emissions reductions that can happen abroad to a maximum of 40%. Energy efficiency is a key pillar of Switzerland’s strategy towards reaching its energy and climate targets for 2030 and the net zero target for 2050. Switzerland shows notable decoupling between energy consumption and economic growth. Its total final consumption per capita is substantially below the IEA average and decreased by 13% between 2011 and 2021. However, the government’s five-year monitoring report published in late 2022 concluded that the current policy measures are insufficient to reach the 2030 targets. It is, therefore, important that energy efficiency as the first fuel principle is anchored as a pillar of new energy and climate legislation.

The federal legislative power is vested in the bicameral parliament, the Federal Assembly, which is elected every four years. It consists of the National Council, representing the people, and the Council of States, representing the cantons. The executive power is held by the Federal Council, which consists of seven councillors who each serve as the head of a government department. Switzerland does not have a full-time president. Following an established order, the Federal Assembly elects one of the seven councillors every year to take up presidential duties, which are mainly representational. Swiss people have a unique direct say on political affairs and laws under the country’s direct democracy. A referendum is mandatory for any change to the Constitution and international treaties and optional for new legislation passed by parliament. A collection of 50 000 signatures within 100 days after parliament adopts a law triggers a referendum, which, if successful, invalidates the law.

Policy-making cycle in Switzerland

Two referendums are mentioned in this review: The first, on 13 June 2021, which rejected
the CO2 Act for 2021-30, which had been adopted by parliament in the second half of 2020.The second, on 18 June 2023, which aimed (unsuccessfully) to overturn the Climate Protection Act1 adopted by parliament in September 2022 (see Chapter 2). In Switzerland, 100 000 signatures are required to launch a popular initiative for a constitutional amendment. This review mentions one initiative, the so-called “Glaciers Initiative”, launched in 2019, which called for a constitutional ban on the use of fossil fuels by 2050. The government and parliament considered this to be excessive and passed the Climate Protection Act in September 2022 as a counterproposal. The promoters of the “Glaciers Initiative” withdrew their proposal but reserved the right to table it again in case the Climate Protection Act was defeated in the June 2023 referendum (see Chapter 2 and. While the Swiss political system can result in a considerable increase in the lead time of legislation, once approved, policies prove to be stable and effective. The federal government’s forward-looking policy making and effective public engagement are essential for any policy initiative.

Energy supply and demand Switzerland does not produce hydrocarbons. In 2021, the country’s energy production consisted of nuclear power (45%), hydro (28%), bioenergy and waste (25%), and only a small share of variable renewable energies (2.8%) (Figure 1.2). Domestic production covers 50% of TES and the remainder consists of imported fossil fuels. Fossil fuels account for 48% of TES, with oil accounting for 34%, nuclear for 22%, natural gas for 14% and coal 0.4%. Oil is the largest fuel in total final consumption (TFC) followed by electricity, natural gas and bioenergy. The buildings sector dominates TFC, followed by transport and industry.

Overview of energy production, supply and demand in Switzerland, 2021

Energy and climate change In August 2019, Switzerland announced its target to achieve net zero GHG emissions by 2050. In January 2021, the government further elaborated on the strategy to reach this goal within its Long-Term Climate Strategy submitted to the United Nations Framework Convention on Climate Change (UNFCCC). According to this strategy, in 2050 Switzerland would still emit around 12 million tonnes of carbon dioxide equivalent (Mt CO2-eq) per year from hard-to-abate sources. The government estimates that around 5 Mt CO2-eq of these residual emissions can be avoided through CCS. The remainder must be balanced via NETs in Switzerland (2 Mt CO2-eq) and abroad (around 5 Mt CO2-eq). In the shorter term, Switzerland has set an economy-wide target to reduce its GHG emissions by at least 50% by 2030 compared to 1990 levels through its updated first Nationally Determined Contribution (NDC). Additionally, emissions in the period 2021-30 must be reduced by at least 35% at a continuous rate.

In the third quarter of 2020, parliament adopted a revised CO2 Act to cover the period from 2021 to 2030, including new instruments to help Switzerland meet its 2030 target under the Paris Agreement. However, in June 2021, a referendum rejected the 2021-2030 CO2 Act. To avoid a legislative gap, in December 2021, parliament voted to extend the 2013- 2020 CO2 Act until the end of 2024, in anticipation that a new revision could enter into force from 2025. This new proposed CO2 Act, as proposed by the government in September 2022, would cover the period 2025-30. At the time of writing, it was still in the legislative process and potentially subject to another referendum.

Selected measures of Switzerland’s CO2 Act over time

Overview Switzerland shows a clear decoupling between economic and population growth and energy consumption. Between 2011 and 2021, Switzerland’s TFC decreased by 5% while GDP increased by 17% and the population grew by 10%. Due to the Covid-19 pandemic, GDP dropped by 3% in 2020 but rebounded by 6% in 2021, above the 2019 level. Energy intensity has decreased, both in terms of TFC per GDP (-18% from 2011 to 2021) and TFC per capita (-13% from 2011 to 2021). Electricity consumption per capita also dropped by 8% between 2011 and 2021.

Energy demand and drivers in Switzerland, 2005-2021

A 2022 study, commissioned by the SFOE, undertook an in-depth analysis about the major drivers for reducing energy demand by demand sector and fuel. The study’s key findings show that energy demand reductions and efficiency gains are primarily due to technology progress and policy interventions; fuel substitution; and, especially in the industry sector, structural factors such as a reduction in the share of energy-intensive industries in the Swiss economy.

The potential for heat supply via thermal grids using renewable heat and unused waste heat is estimated to be somewhere between 17 TWh and 22 TWh annually. Several cantons have created a legal basis so that the communes can impose a connection obligation, provided that the heat is offered at technically and economically reasonable conditions. This policy is supported by the federal government. However, the investment costs in grid expansion and the increase of renewable heat sources will increase the cost to consumers and make the connection potentially unattractive. The government is considering subsidies. One consideration is for district heat to use the capacity of the gas grids, as Switzerland plans to phase out natural gas by 2050.

Total final consumption in the buildings sector in Switzerland by source, 2005-2021

Policies and measures in the buildings sector
The cantonal energy offices, overseen by the EnDK, play an important role in implementing energy policies in the building sector, which is a cantonal remit under the Swiss Constitution. As a consequence, there is no national building code or regulations, but each of the 26 cantons sets its own requirements. The EnDK has prepared cantonal model prescriptions, the so-called MuKEn, to facilitate the adoption of more unified building regulations. However, they are not legally binding and need to be transposed into cantonal law. The EnDK regularly monitors which cantons have transposed which measures into cantonal law.

Switzerland has the tenth-highest share of renewable energy in TFEC among IEA member countries. In 2021, 27% of TFEC5 came from renewables, while the IEA average was 13% in 2021. The main renewable energy source in Switzerland is hydropower, followed by the direct use of solid biomass. TFEC of renewables has increased by 29% since 2011, mainly due to the increase of energy from solar and liquid biofuels. In 2021, the share of hydro was the second largest (14%) in TES and the third largest in electricity generation (59%) among IEA member countries. Both solar and biofuels increased steadily from 2015 to 2021, from 0.8% of TFEC to 1.7% and from 0.3% to 0.9%, respectively.

Renewable energy in total final energy consumption in Switzerland, 2005-2021

Renewable electricity In 2021, 42 TWh (67%) of the 63 TWh of total electricity generation came from renewable energy sources. In the same year, hydropower accounted for 59% of total electricity generation. Since 2010, the share of renewables in electricity generation has been increasing, despite minor fluctuations. Renewable electricity generation rose by 24% from 2011 to 2021. Electricity from hydro increased by 14%, but solar PV experienced the largest growth: it increased from just 0.17 TWh in 2011 (0.3% of total electricity generation) to 2.8 TWh in 2021, which accounted for 4.5% of total electricity generation. The increase in electricity generation from solar PV accounted for one-third of the total growth of electricity generation from renewables between 2011 and 2021.

Renewable energy in electricity generation in Switzerland, 2005-2021

Renewable electricity policies and measures Switzerland has set indicative targets for renewable electricity generation in the ES2050. The fourth monitoring report of the ES2050 from December 2021 noted that Switzerland achieved the targets for 2020, with generation from renewable energies, excluding hydro, reaching 4.7 GWh against a target of 4.4 GWh. However, the development differs per technology, with the strongest growth from solar PV. To reach the target for renewable generation (excluding hydro) of 11.4 TWh in 2035, an annual net growth of 450 GWh is required.

Since 1 January 2018, the network surcharge has been 0.023 CHF/kWh and continues to be the main funding source. It has a fixed allocation for specific technologies and support mechanisms. The grid surcharge will continue to fund the projects until 2035, though the surcharge will not be increased any further. About CHF 1.3 billion per year are collected through the network surcharge.

Allocation of network surcharge by funding mechanism in Switzerland, 2022

Knowledge management International collaboration Switzerland is very actively engaged in the IEA’s Technology Collaboration Programme (TCP) and participates in a total of 23 TCPs. Switzerland is represented at the Executive Committee level in 16.

Switzerland’s participation in IEA technology collaboration programmes

Switzerland does not participate in the Clean Energy Ministerial or Mission Innovation (MI). Switzerland had substantially increased its public budget for energy-related RD&D after deciding on the nuclear exit. Membership in MI would have required doubling the country’s energy RD&D budget, which was not considered realistic. Moreover, Switzerland does not see any added value from joining either initiative, as key learnings from the Clean Energy Ministerial and MI are shared through the IEA TCPs, which are considered better value for money. As stated above, Switzerland participates in a number of TCPs related to MI and is hence indirectly working with MI.

Relations with the European Union Although Switzerland is not part of the European Union and does not participate in the common electricity market, it is the second most connected European country, with 41 interconnections with its neighbours that account for close to 20% of cross-border capacity in Europe. This not only benefits Switzerland but contributes to European security of supply too. In 2021, total import capacity was 6 562 MW and export capacity 8 289 MW. Given its generation mix and demand pattern, Switzerland has net exports in summer and net imports in winter.

Main cross-border interconnection capacity by source in Switzerland, 2021

Supply and demand Crude oil production and trade As Switzerland does not produce any crude oil, it depends on its imports. Of the 63 thousand barrels per day (kb/d) of crude oil imported in 2022, Nigeria accounted for the largest share at 36% (22 kb/d). The United States accounted for 32% (20 kb/d), Kazakhstan for 14% (9 kb/d), Libya for 8% (5 kb/d) and Algeria for 5% (3 kb/d). Crude imports drastically dropped as a result of the closure of the Collombey refinery in 2015. Switzerland has not imported crude oil from Russia since 2017.

Switzerland’s net imports of crude oil and refinery feedstock by country, 2005-2022

Switzerland 2023 Energy Policy Review The International Energy Agency (IEA) regularly conducts in-depth peer reviews of the energy policies of its member countries. This process supports energy policy development and encourages the exchange of international best practices and experiences to help drive secure and affordable clean energy transitions. Switzerland has enshrined its 2050 net zero target in law, for the first time acknowledging the role of negative emission technologies and carbon capture and storage to address emissions from hard-to-abate sectors. Switzerland today has a low emissions electricity system, with significant production from both hydropower and nuclear. The country also shows a notable decoupling of energy consumption and economic growth.

Source:IEA