Climate and Economic Policy Disaster: auto-schweiz Criticizes Decision Against Flexibility in CO2 Emissions Regulation

On Tuesday, the Committee for Environment, Spatial Planning, and Energy (UREK-N) withdrew its initiative to introduce flexibility in CO2 emission regulations for the years 2025 to 2027. Consequently, it has declined to align the CO2 law with the European Union (EU). The EU has granted manufacturers a three-year transition period to achieve CO2 targets without questioning the target values.

"The narrow majority in the committee knowingly accepts economic disruptions in the Swiss automotive sector, threatening jobs, apprenticeships, and investments. Such unrealistic policies are irresponsible, especially considering the strained economic situation and the challenging circumstances in the Swiss automotive industry," states Peter Grünenfelder, President of the Association.

Thomas Rücker, Director of auto-schweiz, criticizes: "We fully supported the objectives of this committee initiative and are deeply disappointed that the existential concerns of import companies and especially their trading partners were ignored by the committee. The committee's assessment that sanction payments of around 125 million francs are 'bearable' misreads the economic reality of the Swiss automotive industry and their financial concerns due to the low overall market and regulation-driven insufficient demand for electric vehicles."

The new car market is at its lowest level in over 25 years, excluding pandemic effects, margins are under significant pressure, and numerous companies face declining volumes and rising costs. Sanctions of this magnitude deprive the sector of urgently needed funds for investments, innovations, and maintaining employment. Contrary to the portrayal in the committee's press release, this decision affects not only large importers but also garages and SMEs throughout Switzerland, as well as car buyers.

The industry did everything possible last year to meet CO2 emission targets. Rücker says: "The resulting so-called avoidance costs are extraordinarily high and exceed the direct sanction costs." Avoidance costs include measures like reducing advertising expenses, devaluation of widely available demonstration vehicles, the disproportionate devaluation of used cars due to weak demand, high inventory levels of plug-in vehicles, and expenses for emissions trading. The association expects its member companies, covering around 95% of the Swiss import market, and trading partners to undertake additional measures to reduce operating costs and further reduce the dealer network.

While Switzerland stubbornly adheres to its rigid sanction regime, burdening the domestic car import industry with sanctions annually, the rest of Europe is trying to avoid sanction consequences. Additionally, the heavily burdened automotive industry is supported to strengthen demand and competitiveness there. In Switzerland, a retroactively and mid-year adjusted CO2 regulation was introduced in recent months, and from January 1, 2024, a 4% automobile tax on electric vehicles has been implemented. This continued erosion of the framework conditions makes climate goals increasingly distant due to this unique approach. Switzerland has now slipped to 13th place in Europe in the ramp-up of electromobility and has the oldest vehicle fleet in Swiss history.

To mitigate these economic and ecological disruptions, an immediate waiver of the 4% automobile tax and a more market-realistic framework is urgently needed. auto-schweiz will continue its efforts for better conditions even after the UREK-N's negative decision.

Press contact:
Frank Keidel
Media spokesperson
T 076 399 69 06
frank.keidel@auto.swiss

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