Heat in Buildings Bill consultation: strategic environmental assessment

3. Relationship with other Plans, Programmes and Strategies (PPS)

3.1 Introduction and Policy Context

3.1.1 The consultation policy context in which the regulatory framework underpinning the Programme as a whole, as of which this proposed Bill forms one part, is complex and relies on, but not limited to, the publications listed below. These are interlinked and also rely on other PPS as they emerge.

• Climate Change (Scotland) Act 2009
• Climate Change (Emissions Reduction Targets) (Scotland) Act 2019
• Fuel Poverty (Targets, Definitions and Strategy) (Scotland) Act 2019
• Local Heat and Energy Efficiency Strategies and Heat Networks (Scotland) Act (2021)
• Heat Decarbonisation Policy Statement (2015)
• Renewable Heat Action Plan 2009
• Energy Strategy and Just Transition Plan
• Third Climate Change Plan 2018 – 2032 (2018)
• Infrastructure Investment Plan (2012)
• Climate Change Plan update (2020)
• Housing to 2040 (2012)
• Fuel Poverty Strategy (2012)
• Energy Strategy (2017)
• Energy Efficient Scotland (2018)
• Heat in Buildings Strategy (2012)
• Emerging National PPS relevant to land use and planning
• New and emerging hydrogen and bioenergy PPS

3.2 Climate and Fuel Poverty targets

Climate Change Targets

3.2.1 The proposals included in the consultation document are intended, on becoming law, to reduce the contribution of heating buildings to Scotland’s greenhouse gas emissions, to help achieve ambitious climate change targets set out in legislation.

3.2.2 The Climate Change (Scotland) Act 2009^[6] (“The 2009 Act”) (Section 61) sets out a requirement to prepare and publish a plan for the promotion of renewable heat, including a renewable heat target, and to review the plan at least every two years. A new target is now required in order to comply with the 2009 Act’s requirement and the proposals included in the Consultation are intended to contribute to this requirement.

3.2.3 The Climate Change (Emissions Reduction Targets) (Scotland) Act 2019 (“the 2019 Act”) ^[7] increases the ambition of Scotland’s targets to reduce greenhouse gas emissions, including a target for net zero greenhouse gas emissions by 2045 and interim targets for reductions of 75% and 90% by 2030 and 2040 respectively. The 2019 Act also includes a range of measures to improve transparency – for example basing progress against targets on actual emissions from all sectors of the Scottish economy. There is a continuing requirement for Scottish Ministers to lay regular “Climate Change Plans” in Parliament setting out their proposals and policies for meeting targets.

3.2.4 The provisions in the 2019 Act inform the preparation of a range of Scottish Government strategic documents, including but not limited to, an update to the Climate Change Plan. The recently published Climate Change Plan update sets out the Scottish Government’s pathway to our new and ambitious targets set by the Climate Change Act 2019, and is a key strategic document for Scotland’s green recovery. It considers the period 2019-2032 and the level of effort that is likely to be required to meet the new 2032 greenhouse gas emissions target of 78%, as set out in the 2019 Act, in addition to taking account of the future of ambition set by the introduction of a net-zero target by 2045.

Fuel Poverty Targets

3.2.5 Statutory Fuel Poverty Targets are set in the Fuel Poverty (Targets, Definition and Strategy) (Scotland) Act (2019)^[8]. The ‘2019 Act’ sets statutory targets for reducing fuel poverty, and introduces a new definition which aligns fuel poverty more closely with relative income poverty. It requires Scottish Ministers to produce a comprehensive strategy to show how they intend to meet the new targets. Statutory 2040 fuel poverty targets require that no more than 5% of households are fuel poor, and that no more than 1% are in extreme fuel poverty by 2040.

3.2.6 Work to eradicate fuel poverty is linked to the Scottish Government’s work to improve housing standards, and this has been considered as part of the 2019 Act^[9]. A Fuel Poverty Strategy was published in 2021^[10] which set out policies and proposals for national and local government and third sector partners to help make strong progress towards the established targets.

3.3 Energy efficiency and clean heating

3.3.1 Improving the energy efficiency of buildings is seen as a key driver to reducing heat demand. Scottish Ministers designated energy efficiency as a national infrastructure priority in 2015^[11] and made a long-term commitment to reduce the energy demand and decarbonise the heat supply of our residential, services and industrial sectors. This commitment was then brought forward in Scotland’s Energy Strategy^[12] and Energy Efficient Scotland^[13].

3.3.2 The Scottish Energy Strategy position statement was published in 2021^[14] which provided an overview of key priorities for short to medium term in ensuring a green economic recovery whilst remaining aligned to our net zero ambitions.

3.3.3 The subsequent Heat in Buildings Strategy^[15] drew together commitments and targets with a clear focus on buildings, setting out a vision for the future of heat in buildings across Scotland in a way which delivers on commitment, maximising economic opportunities and ensuring a just transition. It built on the ambitious Energy Efficient Scotland route map to transform energy efficiency and support the scaling up and acceleration of existing work with the aim of reducing emissions from heating our homes and buildings to levels compatible with net zero by 2045.

3.3.4 The Bute House Agreement^[16] in 2019 went on to confirm that both the Scottish Government and Scottish Green Party believe that we need to decarbonise how we heat our homes and buildings to meet the net zero pathway, and included a commitment to “phasing out the need to install new or replacement fossil fuel boilers, in off gas [areas] from 2025 and in on gas areas from 2030, subject to technological developments and decisions by the UK Government in reserved areas”.

3.3.5 This consultation brings together proposals to deliver on these commitments on energy efficiency and decarbonising heating in our homes and buildings, setting out ways in which a legislative framework might bring forward the necessary change.

3.4 Infrastructure, Planning and Land Use

3.4.1 The proposals included in the consultation, which are devised to contribute towards commitments made in the Heat in Buildings Strategy, will also influence and be influenced by a range of existing and emerging plans, programmes and strategies relating to infrastructure, planning and land use.

3.4.2 The Infrastructure Investment Plan for Scotland 2021-2022 to 2025-2026 was published on 4 February 2021. It sets out a long term vision of infrastructure in Scotland, which supports an inclusive, net zero carbon economy and includes details on over £26 billion of major projects and large programmes. One area of focus for the plan is decarbonising heat and boosting the energy efficiency of buildings.

3.4.3 The fourth National Planning Framework (NPF) was published by the Scottish Parliament on 13 February 2023^[17]. It makes clear that every decision on our future development must contribute to making Scotland a more sustainable place. It encourages low and zero carbon design and energy efficiency, development that is accessible by sustainable travel, and expansion of renewable energy generation. It makes a direct link between Local Development Plans and Local Heat and Energy Efficiency Strategies, and formalises the link between development proposals and heat networks.

3.4.4 NPF4 also makes clear that as well as building new homes to net zero standards, more will need to be done to meet the bigger challenge of upgrading the existing housing stock to reduce emissions and adapt to future climate impacts. Emissions from our homes need to be very substantially reduced – by 2030, they must fall by 68% from 2020 levels. Improved energy efficiency will be needed, by providing zero emissions heating solutions and more sustainable water management practices for existing settlements and homes.

3.5 The Scottish Government is also currently carrying out a multi-phase review of Permitted Development Rights (PDR) in Scotland. This review includes a commitment to consider the case for new or extended PDR for micro-renewables and heat networks. As such we carried out a consultation on proposals as phase 3 of the review (brought forward from phase 4 in light of the urgent need to consider). The consultation has now closed and we are analysing the responses with a view to lay amendments/new PDR early next year.

3.6 Other recent and emerging PPS and regulations of relevance

3.6.1 In addition to emerging national PPS detailed above, the development of the proposed Bill which is the subject of the consultation will also influence and be influenced by a range of emerging PPS that focus on support for heat decarbonisation and energy efficiency and the potential future role of heat technologies (such as hydrogen and bioenergy) at the national level as well as lower tier future plans and a supporting regulatory framework. These are discussed below.

3.6.2 The Housing to 2040 Strategy^[18] (2021) reinforces the commitment to ending Scotland’s commitment to climate change by 2045 in a just and fair way. Its aim is that existing homes are adapted and retrofitted to improve their energy efficiency and decarbonise their heating, ending their contribution to climate change.

3.6.3 Further, it confirms that as we move to clean heating systems in existing homes, we must take the opportunity to ensure that these installations and any works to improve the fabric of the building also serve to increase comfort and affordability for fuel poor households.

3.6.4 The Strategy also considers wider housing standards and the need to create high quality and sustainable homes for the future. It proposes a new tenure-neutral housing standard, set in law, which will set out what people are entitled to expect, and what they are expected to do, so that everybody living in Scotland can have a warm, comfortable and safe place to live. The delivery of this commitment will be an important piece of work which this consultation and its subsequent Bill must take cognisance of.

3.6.5 Local Heat and Energy Efficiency Strategies (LHEES) will be in place for all local authority areas in Scotland by the end of 2023. LHEES Strategies and Delivery Plans will provide an important platform to consider both local community and wider national infrastructure issues and their associated potential environmental effects. LHEES Strategies will set out the long term vision for decarbonising heat in buildings and improving their energy efficiency across an entire local authority area. For each local area, LHEES Strategies will draw on a consistent data driven methodology to:

• set out how each segment of the building stock needs to change to meet national objectives, including achieving zero greenhouse gas emissions in the building sector, and the removal of poor energy efficiency as a driver of fuel poverty;
• identify indicative heat decarbonisation zones, setting out the principal means for decarbonising buildings within each zone; and
• support the prioritisation of delivery.

Developing a Regulatory Framework for Zero Emissions Buildings

3.6.6 This consultation takes forward the commitments made in the Heat in Buildings Strategy to develop a new regulatory framework for clean heating and energy efficiency for Scotland. The framework, beginning with the proposed Bill, will build on our existing commitments to extend regulation for minimum energy efficiency standards to include requirements, where possible within our legal competence, to install clean heating systems by no later than 2045, with some buildings or areas being required to comply with standards earlier. This approach will complement the requirements we will put in place for new buildings to have zero emissions heating systems from 2024^[19]. Our consultation will also include proposals to require the installation of clean heating systems in our non-domestic buildings.

3.6.7 Heat networks will play an important role in the heat transition and the Heat Networks (Scotland) Act 2021^[20] provides a regulatory regime to be operational by the end of 2023 to support consenting of only renewable and low carbon heat networks. It includes a duty on local authorities to consider the designation of heat network zones. This links to the requirements now in NPF regarding heat networks discussed above.

3.7 The Guiding Principles

3.7.1 The UK Withdrawal from the European Union (Continuity) (Scotland) Act^[21] became law in January 2021. This Act provides Scottish Ministers with a discretionary power to continue to keep devolved law in line with EU law following the end of the implementation period. and ensures Scots law can remain closely aligned with EU standards.

3.7.2 The Act includes provisions for the continuity of environmental governance in domestic arrangements, and for the continuation of the effect of the EU environmental principles as the guiding principles on the environment in Scots law. During the passage of the Continuity Act, the principle of integration requirement was added as a fifth principle to complete the guiding principles on the environment.

3.7.3 Section 14 places a duty on public authorities to have due regard to the guiding principles on the environment when preparing a plan, programme or strategy requiring a SEA under the 2005 Act. These guiding principles are set out below and have been taken into account in the preparation of this Environmental Report:

• (a) the principle that protecting the environment should be integrated into the making of policies,
• (b) the precautionary principle as it relates to the environment,
• (c) the principle that preventative action should be taken to avert environmental damage,
• (d) the principle that environmental damage should as a priority be rectified at source,
• (e) the principle that the polluter should pay.

3.7.4 The consultation and its proposals are essential to the Heat in Buildings Strategy vision for all buildings to reach zero emissions by 2045, and thus has environmental protection principles at its heart. The SEA considers the potential for any likely significant environmental effects arising, both positive and negative, and where appropriate seeks to identify opportunities for avoiding or mitigating negative effects and enhancing positive effects. Further information on the assessment findings can be found in section 6 of this report.