Heat in Buildings Bill consultation: strategic environmental assessment

4. Approach to the Assessment

4.1 Purpose

4.1.1 The Scottish Government (SG) is carrying out a Strategic Environmental Assessment (SEA) of its planned consultation. SEA is a systematic method for considering the likely significant environmental effects of certain plans, programmes and strategies. SEA involves the following key stages:

• Screening – determining whether the Consultation and its proposals are likely to have significant environmental effects and whether an SEA is required;
• Scoping – establishing a method for assessment and setting out the consultation period for the Consultation;
• Environmental Assessment – assessing the emerging content of the Consultation and setting out its likely significant environmental effects in an Environmental Report to be published alongside the consultation document; and
• Post Adoption Statement – preparing and publishing a post-adoption statement.

4.1.2 This report has been prepared in accordance with the Environmental Assessment (Scotland) Act 2005 ( “the 2005 Act”) and sets out the findings of the environmental assessment stage.

4.2 SEA activities to date

4.2.1 Scoping was undertaken in November/December 2022 and a combined scoping report was submitted to the SEA gateway inviting views from the consultation authorities. This determined that an SEA was required due to the potential for significant positive effects on climatic factors, population and human health, air, cultural heritage and the historic environment, and material assets.

4.2.2 The comments received from the statutory consultation authorities have been taken into account in the preparation of the Environmental Report. It is noted that as the proposals to be included in the consultation have developed, its focus was increasingly on the setting of standards for energy efficiency and zero emissions heating for Scotland’s homes and buildings and how these might be achieved through the use of primary legislation.

4.2.3 Where the potential for localised indirect effects are identified, including on those topics scoped out of the assessment (biodiversity, flora and fauna, water, landscape and visual impacts, and soil) these will also be noted, as relevant.

Table 2. Scoping of SEA topics

• Climatic factors - ✓
• Biodiversity, flora and fauna - x
• Population and human health - ✓
• Soil - x
• Water - x
• Air - ✓
• Cultural and historic heritage - ✓
• Landscape - x
• Material assets - ✓

4.3 SEA Methodology

4.3.1 The assessment methodology has been refined from that originally identified within the scoping report, which proposed a set of assessment questions. The finalised approach has been developed to reflect the high level nature of the Consultation which will lead to a draft Bill. It also draws on findings from other relevant SEA work. Key stages in the assessment methodology are described below.

Stage 1 - Identify relevant environmental information to inform the Environmental baseline

Stage 2 - Review and collate findings of previous relevant SEA Environmental reports and summarise key findings to provide an overview of known effects

Stage 3 - Assess potential for likely environmental effects (including consideration of potential cumulative, synergistic and in-combination effects) of the Consultation’s key proposals:

1. Powers to support the growth of heat networks, primarily focused on non-domestic properties, which in turn will create a larger and more economic heat network market for all properties

2. Powers to set backstop and interim dates to prohibit the use of polluting heating systems (2038 for properties owned by public authorities; 2045 for all buildings; and use of triggers between 2025 and 2045 requiring some building owners to make the transition before 2045 (initially property purchase)

3. Powers to require home owners to meet a minimum energy efficiency requirement by 2028 for PRS and 2033 for other private homes

4. Powers to give abeyances (extra time) and exemptions to reflect individual circumstances

Stage 4 - Consider how the key proposals of the Consultation address key environmental issues identified, and make recommendations where appropriate for enhancing environmental benefits.

4.3.2 Early assessment work identified key environmental issues across the scoped in topics. A considerable amount of work has already been undertaken exploring the environmental effects of existing energy-related (including heat decarbonisation) polices and proposals. Of significance is the SEA of the Climate Change Plan Update (2020)^[22].

4.3.3 Other SEAs of relevance that have been reviewed and where relevant findings have been taken into account include the following:

• The Heat Generation Policy Statement (2015)^[23]
• The Climate Change Plan and the Energy Strategy (2017)^[24]
• Energy Efficient Scotland (2018)^[25]
• Climate Change (Emissions Targets Reduction) (Scotland) Act (2019)^[26]
• The Scottish Government’s Programme for Extending Permitted Development Rights in Scotland: A Sustainability Appraisal (2019)^[27]
• Draft Infrastructure Investment Plan (2020)^[28]
• Heat in Buildings Strategy (2021)^[29]

4.3.4 The finalised assessment takes the form of a broad narrative analysis of the overarching proposals included in the Consultation:

1. Powers to support the growth of heat networks, primarily focused on non-domestic properties, which in turn will create a larger and more economic heat network market for all properties

2. Powers to set backstop and interim dates to prohibit the use of polluting heating systems (2038 for properties owned by public authorities; 2045 for all buildings; and use of triggers requiring some building owners to make the transition before 2045 (initially property purchase)

3. Powers to require home owners to meet a minimum energy efficiency standard by 2028 for PRS and 2033 for other private homes

4. Powers to give abeyances and exemptions to reflect individual circumstances

4.3.5 Potential cumulative, synergistic and in-combination effects have also been considered as relevant, and opportunities for environmental enhancement have also been identified.

4.4 Alternatives

4.4.1 The 2005 Act requires the Environmental Report to identify, describe and evaluate the likely significant effects on the environment of reasonable alternatives to a plan, programme or strategy, taking into account its objectives and geographical scope.

Do nothing/Business as Usual

4.4.2 Do nothing/business as usual is not a reasonable alternative to the proposal to introduce a Heat in Buildings Bill because the Climate Change (Scotland) Act 2019 requires plans to be laid that set out the pathway to reaching our net zero and interim emissions reduction targets. As such, a Bill to require all homes and buildings in Scotland to transition to clean heating systems by 2045 is essential if Scotland is to reach net-zero.

Consideration of alternative energy efficiency and heat technology scenarios as a means to deliver the decarbonisation of homes and buildings in line with statutory climate change targets

4.4.3 There are different strategic technologies that are available now, or could become available in the future, to reduce emissions from space and water heating. These include electric heating options such as heat pumps and storage heaters, heat networks and potentially the use of renewable or low carbon hydrogen as a replacement for methane gas in the mains gas network.

4.4.4 The main technologies available for deployment today, which are likely to remain the main strategic options for the next ten years, are electric solutions (in particular heat pumps) and heat networks. Subject to the safety and commercial case being established we may see 100% hydrogen becoming available in parts of the gas network towards the end of the decade.

4.4.5 The consultation is technology neutral, however, based on our view that there are no reasonable alternatives at this time to a proposal which allows for a mixed or blended technology pathway as the most effective and credible means of achieving our statutory emission reduction targets.

4.4.6 Finally, future PPS are likely to set further and more specific ambitions in this context, with technology specific PPS (such as any new and emerging hydrogen and bioenergy PPS) as well as lower tier plans likely to prove significant. Where any future policies and proposals are developed, these will themselves be subject to consideration in accordance with the requirements of the Environmental Assessment (Scotland) Act.

4.5 Uncertainty and potential limitations of the assessment

4.5.1 The subject matter of this assessment means that there are a number of areas of uncertainty, some of which will only be resolved as deployment of energy efficiency measures or low and zero emissions heat technologies increases. These include:

• The precise siting and location of any new development associated with usage and deployment of identified technologies at a range of scales (such as individual appliances as well as a need for any new or upgraded infrastructure);
• The need to secure all relevant permissions and licences (such as those associated with the operation of new heat networks);
• The role that technologies could play in the longer term; and
• Relevant emerging PPS (such as national technology specific PPS and future lower tier plans).

4.5.2 Existing planning and consenting regimes and regulatory processes, allied to good working practices and monitoring, can help ensure that potential adverse effects are avoided and positive effects enhanced. Future more detailed secondary regulations which will deliver the proposals laid out in the consultation at a lower legislative level will also be the subject of future assessment in accordance with the requirements of the Environmental Assessment (Scotland) Act.