New Build Heat Standard (amended) 2024: business and regulatory impact assessment

7. Impact on business

7.1 New Deal for Business

21. Businesses and representatives from across the stove and chimneysweep industries were engaged extensively throughout the process of the review. This included a ministerial roundtable with industry representatives where they had the opportunity to put their concerns regarding the NBHS directly to the Minister for Climate Action.

22. Relevant businesses and other interest groups also attended a series of workshops run by Scottish Government officials, to discuss in detail the set of options presented. Attendees also had the opportunity to share further thoughts and evidence to a shared mailbox. These contributions have been gathered and analysed to inform the options analysis in all of the Impact Assessments.

23. The overall impact on new non-domestic buildings, and also the building and development industry, were considered as part of the original BRIA prepared for the New Build Heat Standard. As the review has focussed on expanding permitted fuels, rather than limiting or changing the proposals in any other significant manner, we don’t anticipate the outcome of the review to alter those impacts.

7.2 Bioenergy

24. Overall, the impact on businesses in this sector through pursuing a combination of Options 2 and 3 was viewed positively. During stakeholder workshops, one discussion focussed on what the alternative option would be for managed forestry thinnings if they were not allowed to be used for heat. Stakeholders referred to evidence from Forest Research, which states that:

“The advantage of producing fuel from forestry material is that it is not dependent on timber quality. This has the potential to provide a market for material from forestry thinning and other trees with either low diameter or poor form. Thinning is an essential tool in effective woodland management to produce higher grade timber for premium markets. A growing market for poor quality timber could allow the forestry industry to manage a much greater area of woodland; this would increase the number of rural jobs in addition to developing the environmental and social benefits associated with woodland management.”^[3]

25. Stakeholders were also of the view that allowing biomass systems for heat could help support the business case for local, community projects such as a community woodland. Further, one stakeholder highlighted a pioneering off-grid development, which uses on-site fuel sources from thinnings and wood fall. They suggested that permitting the use of bioenergy for heat businesses similar to this would therefore be positive.

26. At the Stove and Chimney Industry^[4] Ministerial Roundtable, a stove industry representative stated that the existing NBHS (as introduced on 1 April 2024) was already having a negative impact on business – due to both the Standard itself and a perceived future restriction on the use of woodburning stoves in existing buildings. It was reported that there had been 6 redundancies and 3 jobs under review among members. Additionally, Stove Industry Association (SIA) members reported an impact on subcontractors, a reduction in equipment hire, and a significant sales income reduction. However, it would be hard to determine whether all or any of these suggested impacts were entirely due to the introduction of the NBHS (on 1 April 2024). These concerns were reiterated via a membership survey conducted by the SIA.

7.3 Peat

27. There is a single business in Scotland, Northern Peat & Moss Limited, producing peat for both the whisky industry and for sale as briquettes for fuel. Northern Peat & Moss Ltd produce between 3,000 – 4,000 tonnes annually to be sold as heating fuel. However, those cutting their own peat locally and according to their turbary rights through crofting law are not known to be reliant on this source of peat.

28. Given that it is very difficult to estimate the number of new build properties which may use peat for heating, it is therefore difficult to estimate what impact this could have on Northern Peat & Moss Limited. A separate consultation on ending the sale of peat in Scotland gathered views, including from those who indicated they cut their own peat and while this provides some insights on these practices, it did not provide an estimate for the amount of peat cut.^[5]