Swiss GO imports and exports after mid-2021 and potential implications on post-Brexit UK-situation

19 August 2020

RECS International has worked with different international and Swiss stakeholders to try to secure a technical agreement between the EU and Switzerland on the mutual recognition of GOs between the two parties, as stipulated in RED II Art. 19.11.

Article 19.11 of the recast Renewable Energy Directive (RED II) requires that Member States shall not recognize guarantees of origins issued by a third country (such as Serbia, Switzerland, post-Brexit UK etc.)except where the Union has concluded an agreement with that third country on mutual recognition of guarantees of origin issued in the Union and compatible guarantees of origin systems established in that third country, and only where there is direct import or export of energy”.

RECS International has worked with different international and Swiss stakeholders to try to secure a technical agreement between the EU and Switzerland on the mutual recognition of GOs between the two parties, as stipulated in RED II Art. 19.11. However, the EU has stated that such an agreement could only be reached after both parties have signed the EU-CH inter-institutional framework agreement – which is not yet done and politically a rather disputed subject, at least on the Swiss side.

As a result, as of the implementation into national law of the RED II in July 2021, Swiss renewable energy producers will no longer be able to sell their GOs into the EU’s Internal Market for usage in national disclosure schemes as regulated in RED II. However, the Swiss Federal Office of Energy (SFOE) has decided that Switzerland will unilaterally allow Swiss energy consumers to import GOs from the EU’s Internal Market for cancellation in Switzerland. Currently, Swiss consumers import around 16 TWh of certificates from the Internal Market, mostly from Norway – around a quarter of all certificates cancelled for Swiss consumption. This decision of the SFOE should prevent a sharp increase in the price of Swiss GOs that could be caused by a significant drop in supply.

RECS International continues to support the conclusion of the necessary agreements between the EU and Switzerland that would allow for full mutual recognition of GOs between the two parties. This case is also relevant for market participants as the UK prepares to leave the EU. In 2019-20 the UK imported 58 TWh of GOs from the EU and exported 7.5 TWh of REGOs to the EU. If this trade is lost after Brexit it could have a significant impact on certificate prices for market participants in both jurisdictions.

The official notice from the Swiss Federal Office of Energy can be found here on Energeia Plus.