Swiss Re AG · SIX:SREN
Swiss Re — Investor Presentation (May 2021)
24 slides from Swiss Re's investor presentation, May 20, 2021
Slide 1: The Swiss approach to carbon pricing
Federal Department of the Environment, Transport, Energy and Communications DETEC Federal Office for the Environment FOEN Climate Division The Swiss approach to carbon pricing Swiss Re, 20 May 2021 Andrea Burkhardt, FOEN
Slide 2: Agenda
Agenda (1) Swiss greenhouse gas emissions and targets (2) Carbon pricing instruments ❖ Levy on heating fuels ❖ Cap and trade for big emitters ❖ Aviation levies (new) ❖ Offset obligation in transport sector (3) Conclusions 2 Federal Office for the Environment FOEN
Slide 3: Greenhouse gas emissions by sector
Greenhouse gas emissions by sector (Data from 2019) Transport Buildings Industry Agriculture Waste & F-Gases 32 % 24 % 18 % 14 % 12 % 3
Slide 4: Reduction targets: milestones
Reduction targets: milestones Kyoto I Kyoto II Paris Agreement −8% −20% −50% Climate-neutrality including market only domestic inluding market emissions ≤ offset by sinks mechanism measures mechansim Decision by Federal Council (August 2019) Popular Initiative 1. CO2 Act 2. CO2 Act 3. CO2 Act «For a
Slide 5: CO2 levy
CO2 levy Klimapolitik der Schweiz 5 Bundesamt für Umwelt BAFU
Slide 6: History
History 1990: First discussions, rejected in public consultation 1999: First CO2 Act. CO2 levy as a subsidiary instrument 2004: Target missed → start of parliamentary debate on: • Fuel coverage? • Levy rate? • Adverse impacts on international competitiveness? 2008: Introduction of CO2 levy • Only on
Slide 7: CO2 levy covers 1/3 of GHG emissions
CO2 levy covers 1/3 of GHG emissions Industry Agriculture Waste & Transport Buildings F-Gases 18 % 14 % 12 % 32 % 24 % +/- fully covered +/- 40% covered 7 Federal Office for the Environment FOEN
Slide 8: CHF per tonne of CO2
Gradual increase from 12 to 96 CHF per tonne of CO2 120 max. 100 CHF per tonne of CO2 80 60 40 20 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 96 CHF = 88 EUR per tonne of CO2 8 Federal Office for the Environment FOEN
Slide 9: Intermediary targets trigger increase
Intermediary targets trigger increase 24 22 20 Mt of CO2 18 Emissions of heating fuels 16 Crosses mark thresholds for increase 14 12 10 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 9 Federal Office for the Environment FOEN
Slide 10: Revenues: 2/3 redistributed, 1/3 earmarked
Revenues: 2/3 redistributed, 1/3 earmarked CO2 levy (96 CHF/t CO2 since max. 450m CHF for buildings 2018) programme Revenues Companies Households max. 25m CHF ! for low carbon Exemption options technologies Redistribution Maximum rate: 210 CHF/t CO2 Climate Fund 10
Slide 11: Industry: exemptions
Industry: exemptions Klimapolitik der Schweiz 11 Bundesamt für Umwelt BAFU
Slide 12: Exemption for industrial sector
Exemption for industrial sector ! → 2 equivalent instruments 1. Submitted to emissions trading scheme (ETS) • Mandatory for certain industries in line with EU ETS • Optional participation for medium emitters • Around 50 companies with appr. 5 Mt CO2eq 2. Submitted to reduction obligation (non-ETS) •
Slide 13: Emission trading scheme (ETS)
Emission trading scheme (ETS) Until 2020: -1,74 % per year From 2021: -2,2 % per year «Cap»: total CO2eq Yearly reduction of «Cap» «cap-and-trade» Graphs: International Carbon Action Partnership ICAP 13
Slide 14: Linking with EU since 2020
Linking with EU since 2020 EU-ETS Single CO2 market Allocation of CH-ETS allowances Flights to and from EEA covered since 1990 Klimapolitik der Schweiz 14 Bundesamt für Umwelt BAFU
Slide 15: Aviation
Aviation Klimapolitik der Schweiz 15 Bundesamt für Umwelt BAFU
Slide 16: Levy on airline tickets
Levy on airline tickets • 30 – 120 CHF according to travel distance and class • Transit and transfer passengers excluded • Subject to levy: airlines, reduced levy for carriers blending sustainable fuels or renewing their fleet • Levy must be disclosed on tickets and offers • 51% of revenues redistri
Slide 17: General aviation levy (business jets)
General aviation levy (business jets) • 500 – 3’000 CHF per flight, for take-off weight > 5.7 t • Calculation based on take-off weight, travel distance and competitiveness of the airport • Subject to tax: aircraft owner / operator, reduced rate granted for sustainable fuels • Easy collection upon ta
Slide 18: Mechanism of CO2 and flight levies
Mechanism of CO2 and flight levies Confed. Per capita, In proportion of wages paid, via health insurance via old pension fund Climate Fund 18
Slide 19: Transport
Transport 19
Slide 20: Offset obligation for importers of fossil motor fuels
Offset obligation for importers of fossil motor fuels Share of CO2 100 % from transport max. 90% to be offset 80 % In Switzerland 60 % Abroad max. 70% 40 % 20 % min. 10% 15 / 20% 0% 2014 2017 2020 2022 /2025 → max. surcharge on fuels: 0.12 CHF/l as of 2025 (compared to max. 0.05 CHF/l so far) 20
Slide 21: Domestic offset market
Domestic offset market Offset projects Klimapolitik der Schweiz 21 Bundesamt für Umwelt BAFU
Slide 22: Conclusions
Conclusions 22
Slide 23: Key factors
Key factors 1. Subsidiarity → CO2 levy only to be introduced if other measures not effective enough 2. Transparent mechanism for gradual increase → Low initial rate to gain acceptance → Increase triggered without renewed political decision → Security of investment for targeted sectors 3. Recycling o
Slide 24: Thank you!
Danke für Ihre Aufmerksamkeit! Thank you! http://www.bafu.admin.ch/climate Federal Office for the Environment FOEN