Social housing net zero standard: consultation

1. Introduction

1.1 Outline

This consultation seeks views on a new Social Housing Net Zero Standard (SHNZS). You can access and respond to this consultation online via Citizen Space. For information about the Scottish Government consultation process see Annex A below.

1.2 Background

1.2.1 The Scottish Social Housing Charter sets out that social landlords must make sure that when homes are allocated they “meet the Scottish Housing Quality Standard (SHQS), and any other building quality standard in place throughout the tenancy, and also meet the relevant Energy Efficiency and Zero Emission Heat Standard.”^[1] The new SHNZS will be the relevant zero emission heat standard for the purposes of the Charter.

1.2.2 The first standard for energy efficiency in social housing in Scotland was included in the Scottish Housing Quality Standard in 2004. The SHQS set out a minimum standard for specific housing elements, such as insulation, boiler efficiency and the presence of a central heating system. Less than half of social housing met this minimum standard when it was introduced^[2]. By 2015, however, the independent Scottish Housing Regulator reported that over 90% of social homes met SHQS^[3].

1.2.3 The Energy Efficiency Standard for Social Housing (EESSH) was launched in March 2014, and aimed to encourage social landlords to help remove poor energy efficiency as a driver of fuel poverty and contribute to achieving the Scottish Government’s climate change emissions reductions targets^[4]. EESSH replaced the energy efficiency elements of SHQS.

1.2.4 The first EESSH milestone required social landlords to meet an energy efficiency rating equivalent to Energy Performance Certificate (EPC) Band C and D (Energy Efficiency rating) by 2020.

1.2.5 EESSH was reviewed in 2018-19 and set a new milestone for 2032. This was known as EESSH2 and required that all social housing meet, or could be treated as meeting, EPC band B, or be as energy efficient as practically possible, by the end of December 2032 and within the limits of cost, technology and necessary consent. It also stated that no social housing below EPC Band D should be re-let from December 2025, subject to temporary specified exemptions ^[5].

1.2.6 The Scottish Housing Regulator reports that 88% of homes in the sector met the first milestone of the Energy Efficiency Standard for Social Housing^[6]. Latest figures show that 56% of homes in the social homes sector were rated Energy Performance Certificate (EPC) C^[7].

1.2.7 The Climate Change (Scotland) Act 2009, as amended in 2020, sets a statutory target to reach net zero carbon emissions by 2045^[8]. The Scottish Government committed in its 2021 Heat in Buildings Strategy^[9] to reviewing EESSH2 in 2023 with a view to aligning it with Scotland’s net zero targets. The independently chaired ZEST group recommended that the EESSH2 review be accelerated to bring it into line with net zero and provide clarity for social landlords ^[10].

1.2.8 The review of EESSH2 also takes account of the Scottish Government’s proposals for the reform of Energy Performance Certificates ^[11], as well as the consultation on proposals for a Heat in Buildings Bill and the recommendations of the Scottish Parliament Climate Change Committee^[12]. A summary of the proposals for domestic buildings other than social housing is set out in Annex B.

1.2.9 The EESSH2 Review Group began work in September 2022. The group’s remit^[13] was to propose a new target for reducing climate change emissions from social housing which is aligned with Scotland’s 2045 net zero target and which ensures a just transition so that people are not left behind^[14].

1.2.10 To help achieve the 2045 net zero target, social housing will need to use ‘zero direct emissions heating systems’ to provide heat and hot water (and which this consultation document will refer to from here as ‘clean heating systems’). These systems – such as heat pumps and heat networks – don’t produce any greenhouse gas emissions at the point of use. Modern, efficient electric storage heaters can also perform the same role, as can wet electric heating^[15], and other direct electric heating technologies.

1.2.11 In contrast, heating systems which burn fossil fuels like gas, oil and liquid petroleum gas (LPG) boilers are ‘direct emissions heating systems’ because they do produce greenhouse gas emissions when we use them. (We will call these ‘polluting heating systems’ throughout this consultation document).

1.3 Purpose and Objectives of this Consultation

1.3.1 This consultation seeks views on the proposals for a new SHNZS to replace EESSH2.

1.3.2 The Scottish Government will commission an independent analysis of the responses to this consultation to help inform its decision making. The EESSH2 Review Group will also be asked to consider the design of the new SHNZS which is arrived at following this consultation.

1.3.3 When a final decision has been reached and the new SHNZS is published, the Scottish Housing Regulator will engage with social landlords on the Charter indicators which will be needed for reporting performance against the target. The Scottish Government will also publish guidance for landlords on how to comply with the SHNZS.

1.3.4 In order to avoid the cost and disruption of future retrofit of affordable homes, we will be accelerating^[16] the introduction of clean heating in all new build and conversion projects delivered by councils and RSLs through the Affordable Housing Supply Programme over the coming months.

1.3.5 This consultation document is structured as follows:

• Section 2 sets out the principles of a new SHNZS, and what is intended to be achieved by the new standard.
• Section 3 outlines the proposals of the new SHNZS. This includes feedback from stakeholders and working groups which helped form the proposals within the consultation.
• Section 4 outlines how the proposals apply to mixed tenure housing
• Section 5 outlines how the proposals apply to Gypsy/Traveller sites
• Section 6 outlines the cost and funding associated with the proposals
• Section 7 outlines the timetable for the new SHNZS