on the position to be taken on behalf of the European Union in the Joint Committee established by the Agreement between the European Union and the Swiss Confederation on the linking of their greenhouse gas emissions trading systems regarding the adoption of its Rules of Procedure

EXPLANATORY MEMORANDUM

1.Subject matter of the proposal

This proposal concerns the decision establishing the position to be taken on the Union's behalf in the Joint Committee established by the Agreement between the European Union and the Swiss Confederation on the linking of their greenhouse gas emissions trading systems in connection with the envisaged adoption of its rules of procedure.

2.Context of the proposal

2.1.The Agreement between the European Union and the Swiss Confederation on the linking of their greenhouse gas emissions trading systems

The Agreement between the European Union and the Swiss Confederation on the linking of their greenhouse gas emissions trading systems (‘the Agreement’) aims to connect the EU Emissions Trading System (EU ETS) with the Swiss one, by allowing that allowances issued in one system can be traded and used for compliance in the other one, expanding the opportunities for climate change mitigation. The Agreement was signed on 23 November 2017. It will enter into force on the 1 January following the exchange of the instruments of ratification or approval by the Parties. However, the Agreement provides that its Articles 11 to 13 apply on a provisional basis from the date of signature of the Agreement.

2.2.The Joint Committee

The Joint Committee, established by Article 12 of the Agreement, is responsible for administering the Agreement and ensuring its implementation. It can decide to adopt new annexes to the Agreement or amend existing ones. It can also discuss amendments to the Articles of the Agreement, facilitate the exchange of views on the Parties' legislation and conduct reviews of the Agreement.

The Joint Committee is a bilateral body composed by representatives of the Parties (the EU and Switzerland). Decisions taken by the Joint Committee shall be agreed by both Parties.

2.3.The envisaged act of the Joint Committee

On 27 June 2018, during its first meeting, the Joint Committee is to adopt its rules of procedure.

The purpose of the envisaged act is to set the rules under which the Joint Committee should function and develop its tasks.

Article 12 (4) of the Agreement provides that the Joint Committee shall adopt its rules of procedure.

3.Position to be taken on the Union's behalf

The proposal determines the Union position as regards the adoption of the rules of procedure that will govern the Joint Committee. The draft rules of procedure contain standard provisions regulating the functioning of the body: its composition, chairmanship and secretarial functions, rules on the meetings to be held, agenda setting, decision making, etc. It also provides for the possibility to create working groups, in accordance with Article 12 (5) of the Agreement.

The adoption of the rules of procedure of the Joint Committee is necessary for it to start working on the preparations to implement the Agreement. This will allow undertaking the practical arrangements to make the link between the two emissions trading systems a reality.

The development of a well-functioning international carbon market through bottom-up linking of emissions trading systems is a long term policy goal of the EU and the international community, notably as a means to achieve the climate objectives of the Paris Agreement. In this respect, Article 25 of the Directive establishing the EU's Emissions Trading System (EU ETS) allows for the EU ETS to be linked with other emissions trading systems provided they are mandatory, have an absolute cap on emissions and are compatible, as it is the case with the Swiss system. For the purposes of ensuring the continued compatibility between the EU ETS and the Swiss ETS the Joint Committee should start working on its implementation.

4.Legal basis