- Scaling Renewables and Energy Storage: Switzerland must double its energy capacity and address seasonal supply challenges to stay on track for net-zero goals.
- CHF 13 Billion Annual Investment Needed: Private capital will play a critical role in funding the transition to a low-carbon economy.
- Emerging Green Markets: Switzerland has opportunities to lead in carbon capture, low-carbon cement, and other green technologies.
Switzerland has made significant progress toward its net-zero emissions goals, achieving a 24% reduction in emissions from 1990 to 2022, while doubling the size of its economy. A new UBS white paper, “Downhill Climb”, presented at the Building Bridges Conference 2024, outlines the challenges and opportunities in maintaining this momentum.
“Significant carbon capture and storage capacity, equivalent to around a quarter of current Swiss emissions, will be required for sectors that cannot fully decarbonize,” said Michael Baldinger, UBS Chief Sustainability Officer. “This is a technological, logistical, and financial challenge, but one that offers Switzerland the opportunity to lead in new green markets.”
Related Article: Deloitte Launches Low-Carbon Solutions Page to Help Organizations Achieve Emissions Goals
Addressing Key Challenges
Switzerland’s transition to net zero requires:
- Increasing electricity generation capacity from 27 GW to over 60 GW by 2050, despite 32% of current capacity going offline by 2034.
- Scaling renewable energy, managing seasonal demand fluctuations, and expanding energy storage.
- Accelerating carbon removal technologies for sectors unable to fully decarbonize.
The upcoming shutdown of Switzerland’s nuclear reactors and rising energy demand highlight the urgency of these measures.
The Role of the Financial Sector
The Swiss Banking Association estimates that CHF 13 billion annually will be needed to achieve net-zero, about 2% of GDP. The financial sector is well-positioned to:
- Provide loans, bonds, and equity investments for capital-intensive projects.
- Innovate with blended finance solutions and public-private partnerships.
- Facilitate the scaling of new technologies through active investor engagement.
“The financial sector must guide investments and connect stakeholders with decarbonization opportunities,” the report emphasized.
Regulatory and Market Shifts
Switzerland’s transition is underpinned by evolving regulatory frameworks, including the 2025 Electricity Law, the CO2 Act, and the Climate and Innovation Act. These measures will expand climate reporting requirements from 300 to 3,500 companies, aligning Switzerland with EU regulations.
While some sectors will thrive in the transition, others face significant hurdles. Sustained investment and collaboration across industries are critical to ensure success.
Switzerland’s journey to net-zero presents a mix of challenges and opportunities. By scaling innovation, leveraging private capital, and aligning with robust regulations, the nation is poised to lead in global green markets while meeting its climate targets.
To view the full whitepaper, click here
Follow ESG News on LinkedIn