Delivering net zero for Scotland's buildings - Heat in Buildings Bill: consultation

2. The Heat in Buildings Standard – covering heating and energy efficiency

2.1 There are two ways to reduce emissions within a building. The first is to reduce our demand for heating and hot water – this can be achieved by installing energy efficiency measures like insulation and better draught proofing. These measures keep the heat in our buildings for longer, so that we need less energy to keep them at a healthy, comfortable temperature.

2.2 However, while improved insulation is beneficial and effective, it will not by itself remove emissions from heating our buildings – and it’s the removal of these emissions which will be essential for Scotland to achieve its climate change targets^[3].

2.3 Achieving this will depend instead on our using ‘zero direct emissions heating systems’ to heat our homes and provide us with hot water (and which this consultation document will refer to from here as ‘clean heating systems’ for the sake of simplicity).

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^[4], and other direct electric heating technologies.

2.4 In contrast, heating systems which burn fossil fuels like gas boilers, oil boilers and liquid petroleum gas (LPG) boilers are ‘direct emissions heating systems’^[5] because they do produce greenhouse gas emissions when we use them. (Again, for ease, we will call these ‘polluting heating systems’ throughout this consultation document)^[6].

2.5 To help reach net zero, then, all of our homes, workplaces and other buildings will have to move from polluting heating to clean heating. We also want all homes to reach a good standard of energy efficiency, where possible, as this will keep energy bills down, help tackle fuel poverty and enable clean heating systems to run efficiently.

2.6 This is why we are proposing to introduce a draft Bill containing the powers to create a new ‘Heat in Buildings Standard’. The draft Bill and Standard will:

In all buildings (including non-domestic premises):

• Prohibit the use of polluting heating from 2045.

In owner occupied homes:

• Require such homes to meet a minimum energy efficiency standard by the end of 2033.

In private rented homes:

• Require landlords to meet a minimum energy efficiency standard by the end of 2028.

2.7 Introducing these requirements will help Scotland to reach net zero, and provide clarity about the changes which will be needed to our homes and workplaces in the long-term. They will also give installers and manufacturers confidence that there will be demand for clean heating systems and energy efficiency products, allowing them to scale-up and create employment and other economic opportunities across the country.

2.8 We estimate that around 89% of homes and 49% of non-domestic premises are using polluting heating at present, while around 55% of homes do not meet what is considered a good level of energy efficiency^[7].

2.9 The majority of us, then, are likely to be affected by these new standards, so it is important that we all understand what will be required of us and by when. The remainder of this Chapter provides more information on how a prohibition on polluting heating, and the requirement to meet a minimum energy efficiency standard, would work in practice.

Prohibition on polluting heating after 2045

2.10 A prohibition on polluting heating would ban the use of systems like gas boilers, oil boilers or LPG to heat or provide hot water in our homes or non-domestic premises. This ban will apply after 2045, in line with what we set out in our 2021 Heat in Buildings Strategy and our legal targets.

2.11 In practice, this would mean that homes and non-domestic buildings will instead need to use clean heating systems such as heat pumps, electric storage heaters or heat networks. This is not a complete list of the systems available – you may wish to read recent research into the types of heating that are likely to be in line with the proposed new laws^[8].

2.12 The clean heating system that a building should move to will be a choice for the owner, with the systems suitable for their buildings varying depending on a range of factors like the size, construction and how the building is used.

2.13 We will encourage heat network connections where appropriate, as these will depend on many within a local community connecting. Chapter 4 provides more information on how we plan to encourage connections to heat networks.

2.14 Meanwhile, we know that those living in rural areas and on islands face particular challenges – for example, as well as the generally higher costs in these areas, storms in recent years have left people without heating when electricity supplies have been interrupted.

2.15 The clean heat systems that are most likely to be adopted – heat pumps, modern efficient storage heaters and heat networks – are no more vulnerable to loss of electrical power than gas, oil and bioenergy systems which also require an electrical connection. We are already talking about these issues with Scotland’s electricity network companies, and will continue to do so.

2.16 However, to be sure that we are protecting the welfare of people and that they have a clear and practical way of meeting the Heat in Buildings Standard we intend to take the following steps:

The prohibition on polluting heating will only apply to the main heating system(s)^[9] of a property.

We intend to give extra time in the period to the 2045 backstop to those already using bioenergy to meet the clean heat requirement of the Heat in Buildings Standard .

We are also considering extra time for those homes and businesses which are moving from polluting heating, but which have no clean heating solutions available to them. This extra time could apply until cleaner alternative fuel or technology options become available.

We are considering developing an assessment tool which would help building owners understand which types of clean heating system are most suitable for their building, and also show cases where these would not be suitable until alternative clean fuel options become available. This will ensure that any interventions ensure achieving the best outcome for traditional buildings, among other building types.

2.17 We think that applying the prohibition on the use of polluting heating to main heating systems only will ensure that heating in the vast majority of homes is decarbonised, while ensuring Scotland’s rural communities are properly protected from the impacts of disruption from storms and grid failures. This approach will allow the types of heating systems most used as emergency back-ups – for example portable systems like bottled gas heaters – to continue to be used for this purpose, providing further resilience in the communities that require them.

2.18 We recognise that as a renewable, and potentially net zero, energy source bioenergy may represent the best option to help decarbonise some homes for which clean heating systems are not suitable. We also want to ensure that owners who have taken the proactive step of installing renewable bioenergy systems are fairly treated. This is why, in addition to permitting extra time for those currently using bioenergy to meet the clean heat element of the Standard, we are seeking views on whether a more flexible approach to the use of bioenergy under future regulations is needed. We would need to balance this flexibility with the need to protect and ensure the supply of bioenergy in other sectors of the economy that also rely on bioenergy to remove emissions.

2.19 We don’t propose to apply this legislation and prohibition to other systems, such as gas cookers or to portable heaters which might be used in emergencies^[10].

Requirement to meet a minimum energy efficiency standard

2.20 A good standard of energy efficiency means that we use less energy, which in turn is the first step to help reduce greenhouse gas emissions, save on our energy bills and reduce fuel poverty. A good standard of energy efficiency also helps clean heating systems like heat pumps to work more effectively, and reduces the strain on the electricity network.

2.21 In order to improve the energy efficiency performance of Scotland’s housing stock, we are proposing that a minimum energy efficiency standard – described in more detail on the following page – should be met:

• by private landlords before the end of 2028; and
• by owner occupiers (and owners of all other private homes^[11]) before the end of 2033.

2.22 We proposed the earlier date for private landlords to meet the minimum energy efficiency standard in our 2021 Heat in Buildings Strategy and in our statutory 2021 Fuel Poverty Strategy^[12] because we want to see tenants have warmer homes that are easier and less expensive to heat as part of our obligation to address fuel poverty. We believe that establishing this standard in this way protects and is very much in the interests of tenants, while also enhancing the quality of the asset for the landlord.

2.23 We are aware of the important role privately rented homes play as part of Scotland’s housing stock, and the wider pressures on this sector. We previously consulted on our intention to regulate energy efficiency within the private rented sector in 2019, but did not introduce regulations at that time due to the impact of Covid-19^[13]. We will continue to engage with the sector on our proposals, taking account of the wider environment in which it operates.

Setting the minimum energy efficiency standard

2.24 We want our homes to achieve as good a level of energy efficiency as possible. We also want to ensure that home owners can improve the energy efficiency of their homes in a way that is simple and affordable.

2.25 This is why we propose to set a minimum energy efficiency standard that can be met by installing a straightforward list of measures.

This list of measures would be developed to prioritise those that could have most impact for homes with the lowest amount of cost and disruption. Any home owner who had installed these measures – or as many of them as are feasible for the type of home they live in – would be considered to have reached a good level of energy efficiency and meet the new standard.

We think that this list could be^[14]:

• 270 mm loft insulation;
• cavity wall insulation (CWI);
• draught-proofing;
• heating controls;
• 80 mm hot water cylinder insulation;
• Suspended floor insulation^[15].

2.26 This is an initial list of measures which we think would ensure that a majority of Scottish homes could achieve a good level of fabric energy efficiency. Research suggests that installing these measures across all of Scotland’s homes would see a clear majority reach a good level of energy efficiency^{[16], [17]}. It does not include more expensive or potentially disruptive measures such as solid wall insulation. We would welcome views on this initial list and propose to undertake more detailed consultation on the proposed list of specific measures ahead of introducing any regulations to set the minimum energy efficiency standard.

2.27 Meeting the new standard in this way would be our preferred approach, and we think that the straightforward nature of a clear list of measures means that the majority of owners would prefer this too. We would nevertheless welcome views on any alternative approaches to setting the standard.

2.28 We recognise that some people may have already undertaken work to improve the way their property uses energy or may wish to make their own decisions on which measures are best for their home. Therefore, alongside this straightforward list of measures, we propose an alternative option of meeting the standard based on the result of an EPC assessment^[18]. We have recently consulted on the addition of a new fabric efficiency metric to EPCs, which could be used to show that a property meets a good level of energy efficiency.

2.29 Evidence including invoices or photographs could be used to show that a property has installed all of the measures (or as many as are feasible) for it to meet the standard. However, an Energy Performance Certificate will also include all the information that is required to show that an owner has met the standard.

Meeting the minimum energy efficiency standard in different property types

2.30 While many homes will have to make no improvements to meet the standard (because they have already installed the energy efficiency measures included on the proposed List of Measures) many of those that do will only need to install one or two measures. As set out above, we propose that any home owner who has installed the List of Measures – or as many of them as are feasible for the type of home they live in – would be considered to have reached a good level of energy efficiency and meet the new standard.

2.31 There will, however, be some properties for which most or all of the measures on this list are not relevant (such as those with solid rather than cavity walls). We, therefore, would welcome views on whether properties in these circumstances should be required to meet an equivalent standard. For example, whether additional, or different, measures should be required on the list for these properties (including those which are potentially more costly or disruptive such as solid walls). Should certain properties be required to install additional or different measures they could also be given additional time (beyond the proposed 2028 and 2033 backstop dates) to do so.

2.32 Alternatively, homes that have installed all of the measures that are relevant to their property type, irrespective of whether this means few or no measures are actually installed, could simply be considered to have met the standard.

2.33 We know that some homes will have specific characteristics which might affect their ability to meet the standard. For example, traditional properties, which make up a significant proportion of Scotland’s homes and buildings, may have different requirements based on their construction type, location or status (e.g. listed buildings). We are working with partners, including Historic Environment Scotland, to find the best solutions for these buildings while being sympathetic to their character and features^[19].

2.34 Owner occupied homes that have ended their use of polluting heating by 2033 will not be required to meet the minimum energy efficiency standard as they will have already removed all direct emissions associated with the building. This means that if a home is heated using a heat pump, electric storage heaters or a heat network by 2033, then the owners will not be required to meet the minimum energy efficiency standard. However, while it may not be a legal requirement there will still be very strong incentives for home owners to invest in energy efficiency.

2.35 Private rented properties would still be required to meet the minimum energy efficiency standard, however, even if a clean heating system had already been installed. This would be on the grounds that most tenants don’t have the power to improve the energy efficiency of their rented homes.

2.36 We do not propose to prohibit the sale of properties which do not meet the minimum energy standard by, or after, the backstop dates. This avoids any risk that people are stuck in their homes when they may need to move urgently (for example, for work or for safety reasons). However, properties in the private rented sector which don’t meet the energy efficiency standard by the end of 2028 would not be allowed to be leased to a new tenant (should the existing tenant leave).

2.37 We are not proposing to set a minimum energy efficiency standard for non-domestic buildings. This is due to the extreme variety of size, construction, operating hours, business activity etc. in Scotland’s non-domestic premises, and which would make it impractical to set a minimum energy efficiency standard that is effective across the country. Again, however, the move to clean heating systems will also, we believe, drive energy efficiency investment.

2.38 While we are also not pr oposing to apply this Heat in Buildings Standard to the social rented sector, the sector will still be on the same pathway. Social housing accounts for nearly a quarter of Scotland’s homes, and the sector has made significant progress on retrofitting in response to the Energy Efficiency Standard for Social Housing (EESSH) which has been in place for many years.

Zero Carbon Buildings Minister @patrickharvie visited @QueensCrossHa’s Woodside Flats regeneration and retrofit project in Glasgow. He heard how ultra-low energy ‘Passivhaus’ principles were used to both decarbonise heating and address fuel poverty

2.39 We are currently reviewing this Standard to ensure that it is consistent with our net zero targets, and which will ensure that our social housing stock is meeting the same standards and making the same transition as the rest of Scotland’s homes. A consultation on the proposals emerging from this review are now published, and will complete in 2024.

2.40 The revised Standard for social landlords will be incorporated into the Scottish Social Housing Charter. Landlords’ performance against this Standard must be published and will be monitored by the independent Scottish Housing Regulator. Our view is that these safeguards mean that regulation by statutory instrument is not required in the social rented sector.

Questions on Chapter 2 - The Heat in Buildings Standard

Q1. To what extent do you support our proposal to prohibit the use of polluting heating systems in all buildings after 2045?

Strongly support

Somewhat support

Neither support nor oppose

Somewhat oppose

Strongly oppose

Don’t know

Please include any additional comments below.

Q2. To what extent do you agree that we should introduce a minimum energy efficiency standard to be met by private sector landlords by the end of 2028 (even if they are already using clean heating)?

Strongly support

Somewhat support

Neither support nor oppose

Somewhat oppose

Strongly oppose

Don’t know

Please include any additional comments below.

Q3. To what extent do you agree that we should introduce a minimum energy efficiency standard to be met in owner occupied homes (which still have a polluting heating system) by the end of 2033?

Strongly support

Somewhat support

Neither support nor oppose

Somewhat oppose

Strongly oppose

Don’t know

Please include any additional comments below.

Q4. Do you agree with our proposal to set a minimum energy efficiency standard that can be met by either installing a straightforward list of measures, or showing a good level of energy efficiency based on a reformed EPC fabric efficiency metric?

Strongly support

Somewhat support

Neither support nor oppose

Somewhat oppose

Strongly oppose

Don’t know

Please include any additional comments below.

Q5. What is your view on the initial proposed list of measures to meet the minimum energy efficiency standard?

Strongly support

Somewhat support

Neither support nor oppose

Somewhat oppose

Strongly oppose

Don’t know

Please include any additional comments below.

Q6. Do you think that properties for which most or all of the measures on the initial proposed list are not relevant should be required to meet an equivalent minimum energy efficiency standard?

a. No – these properties should be considered compliant once they have installed all the measures that are appropriate for their building type, even if this is few or no measures.

b. Yes – they should be required to meet the standard and additional measures should be included on the list (such as solid wall insulation, solid floor insulation and flat roof insulation), and they should be required to install all of these where feasible.

c. Yes – they should be required to meet the standard and additional measures should be included on the list (such as solid wall insulation, solid floor insulation and flat roof insulation), but they should only be required to install some of these where feasible and cost effective.

d. Yes – they should be required to meet the standard and additional measures should be included on the list (such as solid wall insulation, solid floor insulation and flat roof insulation), but they should only be required to install some of these where feasible, and they should be allowed additional time to do so.

Please include any additional comments below.

Q7. Do you think that an alternative approach to setting the minimum energy efficiency standard is required?

Yes

No

Don't know

Please include any additional comments below.

Q8. Do you agree that the use of bioenergy should continue to be permitted in certain circumstances?

a. No, it should be prohibited in all cases.

b. Yes, it should be permitted for those buildings already using it.

c. Yes, it should be permitted for those buildings who have no other clean heating system available.

d. Yes, it should be permitted for those buildings already using it and for those buildings who have no other clean heating system available.

e. Yes, it should be used in wider circumstances (please describe these).

Please include any additional comments below.