Energy Performance Certificate reform consultation: response

7. Legislating for EPC reform

You said

Key Findings

Key themes emerging across this question included:

• The most supported timeline, albeit by only a minority of respondents, was to align reform implementation with the launch of the Home Energy Model (formerly known as SAP 11) in 2025. This would help avoid confusion, avoid the possibility of further EPC reviews and allow time for the underlying calculation methodology to be adapted for the new ratings
• However, there were also calls for the reform implementation to take place as soon as possible. This was because of the need to reduce carbon emissions, introducing the proposed Heat in Buildings regulations and promoting growth in the electric heating sector
• A small minority of respondents suggested dates later than 2025 to allow more time to understand all the potential implications. There were concerns that the proposed timeline options were too soon
• There were calls for the implementation to be streamlined with the introduction or reform of other strategies for easier integration

We Will Do

7.1 Legislation – revised EPC Regulations

The Scottish Government can now confirm that we intend to lay revised EPC regulations during 2025, with the intention to bring them into force in 2026. This timetable will give time for the assessor market and those in the property letting and conveyancing sectors to prepare. The specific date at which regulations come into force will be dependent on the date when the new UK Home Energy Model becomes available to calculate the new EPC ratings. We are liaising closely with the UK Government which expects the Home Energy Model to be introduced as the basis for calculating EPC ratings in the second half of 2026.

Most respondents suggested that aligning the introduction of EPC reform with the move to the Home Energy Model (which was previously titled SAP11) would be preferable than introducing regulations sooner using the current RdSAP methodology. This approach minimises the impact on businesses and the public as it means they do not have to adapt to two significant changes to the EPC system at short intervals. We therefore intend to introduce the reformed EPC by using HEM as the calculation methodology, rather than RdSAP.

7.2 Technical Infrastructure to support the new EPC Regulations

We are also working with the UK Government to understand the technical requirements to adopt HEM and use it to introduce EPC reform. HEM introduces new processes required to be undertaken by the EPC Register (i.e. to run the HEM cloud calculation service – ‘Energy Calculation as a Service’ (ECaaS))^[16].

The operational arrangements for the HEM EPC assessments are yet to be established and agreed with Approved Organisations, though we intend to work to the principle set out above to share technical infrastructure with the UK Government to avoid unnecessary burden on businesses (and, ultimately, EPC costs to the public). Further detail on our proposed approach will be set out in our forthcoming, related technical consultation on how lodgement fees can be used to support the development of this technical infrastructure of the new Register and Calculation Methodology, following publication of this Government Response on EPC Reform.

7.3 Working with the UK Government and other devolved administrations

Legislation covering EPCs was introduced across the UK in 2008, in common with other member states, when the UK was a member of the EU. This legislation transposed the EU Energy Performance of Buildings Directive and was retained in UK law following EU Exit. Given that EPCs continue to be a legal requirement across the UK, and given that the assessor market operates UK-wide, and that we share common underpinning technical infrastructure (the Calculation Methodology of SAP / HEM and the Register), the governments of the four nations have agreed new governance arrangements to support our ongoing collaboration.

These arrangements will be set out in a Memorandum of Understanding which is being finalised between the governments. We recognise that whilst legislation relating to the energy performance of buildings is devolved in Scotland and Northern Ireland, there are important aspects such as competition law and consumer protection law which are reserved to the UK Government. Likewise the UK Internal Market Act contains requirements to ensure market access and prevent discrimination in the provision of goods and services or ensure equivalence when it comes to things such as qualifications.

The Scottish Government will continue to cooperate closely with the UKG and other devolved administrations in taking forward policy, legislation and market oversight of EPCs in Scotland. This includes the Scottish Government working jointly with the UK Government to consider our approach to policy making for issues such as quality assurance of EPC assessors (their skills and qualifications) across the UK, following the responses received to the UK Government’s consultation on EPC reform^[17].

7.4 EU Alignment

In addition to ensuring collaboration across the UK within the framework of the UK Internal Market Act, the Scottish Government also has a commitment to maintain alignment with EU law where it is possible and meaningful for the Scottish Government to do so.

The Scottish Government has made a commitment to maintain and advance the high standards that Scotland shares with the EU. The principal legal instrument by which the EU sets out its standards for EPCs is the Energy Performance of Buildings Directive (EPBD).

The EPBD was first adopted in 2002, introducing policies and measures needed to comply with the Kyoto Protocol. The objective of the Directive was to promote the improvement of the energy performance of buildings. This included the introduction of minimum energy performance requirements for new buildings and existing buildings over 1000 m², and the introduction of Energy Performance Certificates (EPCs) across the EU for all buildings sold, leased or newly constructed.

The EPBD has now been recast^[18] again, following proposals made by the European Commission in 2021 to ensure the third of the EU’s emissions which come from the building sector could be reduced, in line with the EU’s European Green Deal objective to ensure the EU achieves net zero emissions by 2050. It aims to contribute to the objective of reducing GHG emissions by at least 60% in the building sector by 2030 compared to 2015, and achieving a highly energy efficient, zero-emission building stock by 2050. The recast Directive was adopted in April 2024.

It focuses on increasing renovation rates across the EU – targeting the worst-performing buildings in each country, whilst allowing member states flexibility to determine which renovation measures are most appropriate to their national contexts. In line with our EPC reform plans, the recast EPBD

• updates the common framework for calculating the energy performance of buildings
• updates the requirements for independent control systems for EPCs
• aims to increase the reliability, quality, affordability and digitalisation of EPCs
• enhances data collection and sharing, to improve knowledge on the building stock and awareness on energy consumption in buildings
• introduces a new requirement for on-site audit and inspection, to verify the “validity of the input data”.

The Scottish Government is currently considering its approach to alignment across the recast Directive and aims to align with its requirements for EPCs where possible, including with the enhanced independent audit and inspection requirements.

Summary EPC Operational Infrastructure

• Clarify the purpose of the EPC as a basic source of information about buildings
• Reduce the validity period of the EPC from 10 years to five, and ensure all tenancies have a valid EPC
• Introduce a modernised Scottish EPC design and move to a web page format
• Introduce clearer data sharing provisions allowing non-personal EPC data to be shared in ways that better support organisation and industry to use it
• Update EPC Operational Framework, following finalisation of our review, to better protect consumers through higher standards of quality assurance – including exploring the introduction of enhanced auditing arrangements (such as on-site auditing and smart auditing)
• Review the fee associated with the lodgement of EPC’s, (as set out in the related technical consultation which will follow this Government Response), to ensure that they reflect current and anticipated costs of maintaining and enhancing the EPC regulatory regime
• Continue to develop proposals for the “real” data as part of a modernised EPC register. Including thorough research looking at the potential for an interactive EPC user interface
• Introduce revised Energy Performance of Building regulations in 2025, to bring reformed EPC’s into effect in 2026 (pending confirmation from UK Government that the Home Energy Model will become available in the second half of 2026)
• Continue to cooperate with the UKG and other devolved administrations in taking forward policy, legislation and market oversight of EPC’s in Scotland, overseen by a new Memorandum of Understanding
• Aim to align with the revised requirements for EPC’s under the recast EU Energy Performance of Buildings Directive, including for an independent onsite audit and inspection to verify EPC accuracy