On 18 June 2023 the Swiss electorate approved the Climate Protection and Innovation Act (CPA). The act was accepted as counterproposal to the popular Glacier Initiative and is set to take effect on 1 January 2025. The CPA mandates that Switzerland should achieve net-zero emissions by 2050 in the building, transport, and industrial sectors. To achieve this objective, the CPA provides that the Swiss State will offer funding to companies that develop and utilise innovative technologies. The specific details of these funding programmes and incentives are outlined in the Climate Protection Ordinance (CPO), whose consultations have just ended, on 1 May 2024.

This blog focuses on the funding available to companies pursuing innovative technologies and briefly discusses the eligibility criteria, explores the projects that meet the qualifications for funding, and outlines the process to become eligible for funding.

Is your company eligible for funding?

The CPA provides subsidies for companies developing innovative technologies and processes that reduce greenhouse gas (GHG) emissions or contribute to negative emissions. Examples of such innovations include: carbon capture and storage (CCS); carbon capture, utilization, and storage (CC(U)S); bioenergy with carbon capture and storage (BECCS), and numerous others.
Companies that have already developed or are currently in the process of designing a net-zero roadmap can apply for funding to overcome significant challenges preventing them from meeting their net zero targets. The total support allocated for innovative technologies amounts to CHF 1.2 billion and will be available from now until 2030. The roadmaps, covering a Scope 1 and 2 net-zero target for 2050, need to be updated every 5 years and entail GHG balance analyses, emission reduction pathways, and action plans emphasising fossil fuel avoidance and novel technologies. It is important to note that external emissions reduction projects or procurement of certificates cannot be considered as reduction measures. Additionally, sector-specific roadmaps for small to medium-sized enterprises (SMEs) are encouraged.

Which of your company’s projects are eligible for funding?

 Eligibility for funding is contingent upon the development phase of the project. Funding opportunities primarily focus on measures/projects in phases 5 and 6, as illustrated in the figure below, which aim to reduce emissions directly or indirectly.

Phase 4 measures continue to receive support through the Swiss Federal Office of Energy's (SFOE) “Pilot and Demonstration programme”. Expected reductions vary based on the development phase, ranging from 100 tCO2eq for phase 4 measures to 10,000 tCO2eq for storage measures.

What is the available funding for companies?

The funding allocated for negative emissions technologies will cover up to 50% (and in special cases, up to 70%) of investment or operating costs over a maximum of 7 years. This funding includes at most the additional costs of the new technology compared to conventional technologies (e.g. the higher cost of a high-temperature heat pump compared to the replacement costs for an old natural gas boiler). For entirely novel technologies, the total investment costs are considered as additional expenditure (i.e., the funding would cover up to 70% of the total investment costs).

What are the requirements to obtain funding?

To apply for funding, the abovementioned roadmaps have to be finalised and match the required criteria as per Article 5 of the CPO. Applications are evaluated by the Federal Office for the Environment (FOEN) twice a year, with funding guaranteed until 2030. The evaluation process prioritises effectiveness, innovation, and potential future revenue when evaluating eligibility for these funding opportunities. In addition, topic-specific calls for proposals can be included by the SFOE.

Opportunities for a wide range of companies

The Climate Protection and Innovation Act creates opportunities for many industries. The financial incentives available can be applied for whether you are a startup in the carbon removal or avoidance value chain trying to scale your technology or in the hard-to-abate sector endeavouring to minimise emissions.
Deloitte is here to keep you informed, help you build your roadmaps, and assist with applications. Stay tuned for more information and guidance.

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