Social housing net zero standard: consultation

Ministerial Foreword

I am delighted to publish the Scottish Government’s consultation on a Social Housing Net Zero Standard that will replace the second Energy Efficiency Standard for Social Housing (EESSH2).

I confirmed in our publication last year of the Scottish Government’s response to the Zero Emissions Social Housing Taskforce (ZEST) report that we would accelerate our review of EESSH2. This was to establish a new standard that matches our net zero ambition, and to provide much needed clarity for social landlords to guide retrofit and investment planning.

This review has been taken forward with representatives and tenants of the Scottish social rented sector, and has been considering both energy efficiency upgrades and the need to deploy clean heating systems. I am very grateful for the work, time and support generously given by the members of our EESSH2 review group.

We are also publishing this consultation at around the same time as a related consultation on proposals for a Heat in Buildings Bill, which sets out similar requirements for the rest of Scotland’s homes and buildings.

The Scottish Government wants all of our homes to be warmer, greener and more efficient, and is committed to ensuring that everyone in Scotland, no matter their financial situation, has access to good quality housing that they can afford to heat.

The social housing sector has been leading the way on energy efficiency in recent years. We intend to continue working in partnership to ensure that the sector understands its role in the transition to net zero and is equipped to make that happen.

Eighty-eight per cent of homes in the social rented sector now meet the requirements of the first Energy Efficiency Standard for Social Housing (EESSH1), broadly equivalent to EPC Band C or D. Continuing these efforts will be critical in the fight against fuel poverty, but we need to do more to meet our ambitious climate targets and to ensure that Scottish homes are fit for future generations.

There are approximately 600,000 homes in the Scottish social housing sector, with 500,000 gas boilers which will need to be changed by 2045 to clean heating systems such as heat pumps and heat networks. Social housing therefore has a significant contribution to make to meeting Scotland's climate change targets.

However, we recognise that current energy prices, especially electricity prices, might make the transition to clean heating difficult. The cost of living crisis and unprecedented surges in energy prices underline the challenge facing us. That cost of living crisis stems in large part from an over-reliance on fossil fuels, and so the changes we will all need to make to adopt clean heating systems are necessary to reduce those cost pressures in the longer term, as well as to reduce emissions.

But we are also determined to protect people from unacceptable short term costs, and to achieve our goal to reduce emissions at the same as supporting people facing wider financial pressures. These changes will help make our energy more affordable and secure, while eliminating energy efficiency as a driver of fuel poverty.

The Scottish Government has called repeatedly upon the UK Government to urgently fulfil its commitment to publish proposals designed to rebalance gas and electricity prices, and which will make climate friendly heating systems cost less to run than polluting heating systems.

There have also been calls from both industry and the third sector, as well as from the Scottish Government, for the introduction of a social tariff for energy consumers as a way of protecting those who are most in need of support. This could act as a form of transitional protection for social tenants during the switch to clean heating.

The Scottish Government believes that a social tariff mechanism is needed urgently to provide a much needed safety net for vulnerable consumers. The mechanism should be funded through taxing significant windfall gains rather than passing the cost on to taxpayers.

We are committed to the principle that meeting our climate change targets should be a just transition, and that the burden does not fall unfairly on those least able to pay. We have committed at least £1.8 billion over this parliament to support this transition and to scale up the deployment of clean heat and energy efficiency measures in buildings across Scotland. This investment will remain a priority, though specific amounts of grant funding available will depend on annual budget decisions. This process will be done in the usual manner. References in this document are to the existing funding offers available and may change in future.

We are engaging with local authorities and registered social landlords (RSLs) on the support needed for the social housing sector. This includes the £200 million Social Housing Net Zero Heat Fund, which has been designed to support and accelerate the delivery of energy efficiency measures and clean heating systems in social housing. We have also established the Green Heat Finance Taskforce to explore ways of encouraging a greater flow of private sector investment in energy efficiency and clean heating, and which has recently published its first report.

I would like to thank the social housing sector for its continued leadership on energy efficiency, and positive engagement with the review of EESSH2. I look forward to continued cooperation, and of course to hearing your views on the proposals in this consultation for a new Social Housing Net Zero Standard.