WT/TPR/S/208Trade Policy Review Page 102
Neither Switzerland not Liechtenstein produce fossil fuel. Therefore, net imports accounted for some 82% of Switzerland's energy consumption in 2007.15 The major sources of Switzerland's total primary energy consumption in 2007 were: fossil fuels (45.2%), nuclear power (25.2%), hydro-power (11.5%), natural gas (9.7%), and others, including firewood, waste combustion, coal, and solar and wind power (8.4%). Energy imports are tariff free.
Liechtenstein's total energy consumption was 1,307 GWh in 2007, of which some 92% was imported.16 Natural gas is the most important source of energy, with a share of 29% in total production, followed by electricity (29%), and fuel oil (13%). Domestic energy production is mainly through various hydro-electric power stations, although the contribution of solar power has been increasing. The Energy Commission is the regulatory agency in the subsector. The authorities' objective is to increase the share of renewable energies to 10% by 2013, through subsidies for improved insulation and sun-collectors, and tighter energy standards in construction.
(ii) Oil products
In 2007, Switzerland imported oil products for US$8,629 million, of which 29% was crude oil. Switzerland has two crude oil refining plants. The retail market in Switzerland and Liechtenstein is dominated by seven private companies; prices for petroleum products are market-determined. There are no restrictions for engaging in the importation of oil, provided the importer satisfies the stockholding obligation as set out in the Federal Law on national economic supply (RS 531).
Switzerland and Liechtenstein apply the same duties and taxes on energy. Crude petroleum enters the customs union tariff-free; VAT is collected at the standard rate of 7.6%. VAT revenues on oil products (fuels and combustibles) totalled Sw F 780 million in 2007. In addition, various other duties and taxes apply to specific petroleum products. The mineral oil tax (Sw F 3,048 million of revenues) is levied on all oil products and natural gas. With a view to reducing CO2 emissions, bio-fuels fulfilling certain ecological and social conditions have been partially or fully exempt from the mineral oil tax since July 2008. In addition, a surtax on mineral oils is levied on transport fuels only (Sw F 2,039 million). Together, the specific consumption taxes on petroleum products accounted for almost 9% of federal revenue in 2007. Tax rebates are granted to agricultural and concessionary public transport.
According to the International Energy Agency (IEA), heating oil and gasoline prices in Switzerland are the among the lowest in Europe. This, coupled with the depreciation of the Swiss franc against the euro in recent years, has accentuated fuel tourism.17
(iii) Natural gas
Natural gas sales were 31,500 GWh in 2006, up from less than 29,000 GWh in 2002. As no natural gas has been produced in Switzerland since 1994, the entire consumption is imported. Imports are duty free. Swissgas, which is mainly controlled by municipally-owned regional distribution companies, accounts for some 75% of total natural gas imports into Switzerland. The natural gas market is mostly under the de facto monopoly of cantons and municipalities. Even though both the Pipeline Law and the Competition Law provide for third-party access, the lack of market entrants prevents consumers from changing suppliers. The authorities ascribe this to the small size of the Swiss market and the absence of large industrial customers.
15 Swiss Federal Office for Energy (2008).
16 Amt für Volkswirtschaft (2008).
17 International Energy Agency (2007a).