Programme for Government 2021 to 2022

Chapter 3: A Net Zero Nation

To help end Scotland's contribution to climate change, restore nature and enhance our climate resilience, in a just and fair way, within the next 12 months we will:

• Support a world‑changing agreement at COP26 – having already published an indicative Nationally Determined Contribution, setting out how Scotland will become a net zero nation by 2045.
• Increase funding for home energy and green heating systems installations; provide £50 million for Warmer Homes Scotland to support those in fuel poverty through the heat transition; and investing £30 million in green heating and energy efficiency projects in social housing.
• Implement the first Just Transition Plan, for the energy sector, alongside a refreshed Energy Strategy.
• Invest £240 million in an Energy Transition Programme – funding industry to play a leading role in the development and deployment of new, low carbon technologies, and support the development of hydrogen and carbon capture and storage.
• Work with the Bus Decarbonisation Taskforce to shape the journey to a greener, more efficient public sector bus fleet – backed by £50 million this year through the new Scottish Zero Emission Bus Challenge Fund.
• Publish a new biodiversity strategy underpinned by a 5 year delivery plan, including changes in the way we use and manage land and our approach to protecting habitats and ecosystems.
• Provide £22 million for the restoration of degraded peatlands in 2021‑22 as part of our £250 million commitment to restore 250,000 hectares by 2030, and £150 million to accelerate progress towards our commitment for 18,000 hectares of tree planting a year by 2024.
• Legislate to end the supply and manufacture of the single use plastic items most commonly found littered.

Our natural environment is our greatest national asset, and vital to our health, wellbeing and economy. The need for urgent, transformative action to tackle the global crises of climate change and ecological decline is clear. Scotland was one of the first countries in the world to declare a global climate emergency, with world leading targets to end our contribution to climate change by 2045. We are already over halfway there, and ahead of the rest of the UK – but despite strong progress, we know that there is a significant challenge ahead to become a net zero nation.

We will redouble our efforts to get on track to meet our emissions targets in a fair and just way that leaves no one behind. Building on our updated Climate Change Plan, published in December 2020, which includes nearly 150 policies to accelerate progress and provide a clear and credible pathway to meeting targets out to 2032, we will deliver an ambitious package of measures to decarbonise the way we heat our homes and buildings, our manufacturing, and agriculture. We will revolutionise transport, making it greener and more efficient. We will take significant steps to protect and restore nature, to help foster greater resilience, and secure the wellbeing of our people and our planet. And we will accelerate progress to meet our ambitious waste reduction, recycling, and climate change targets – enabling Scotland to be a zero waste nation. And, in parallel to reducing emissions, we will ensure adaptation to the impacts of climate change which are now a reality.

Demonstrating a credible pathway to achieving the interim 2030 target and beyond, we will set out the process to deliver a draft of the next Climate Change Plan for consideration in the first half of this parliamentary session.

A just transition to net zero

At the heart of our efforts will be a defining mission for a just transition to net zero – leaving no person, industry or community behind. We will support the transformation of industries, helping businesses to adapt and innovate, and working with communities to make them cleaner, safer and more accessible. And we will realise the collective benefits of ending Scotland's contribution to climate change, and helping tackle child and fuel poverty, by protecting existing jobs and creating new ones, with fair work principles embedded.

The Scottish Government established the independent Just Transition Commission (JTC) in 2019, to provide advice on how to apply just transition principles in Scotland. Earlier this year, the Commission published its final advice, A National Mission for a fairer, greener Scotland, with 24 headline recommendations. We will implement those recommendations across this Parliament, and will retain a JTC to advise on their delivery. We have now published our initial response to the JTC, including actions against each of the 24 headline recommendations:

Our response to the JTC also set out our approach to Just Transition Plans, which will be developed for sectors and regions across Scotland, and support delivery of the National Strategy for Economic Transformation. We have just published the draft Just Transition Planning Framework as part of that response which commits to co‑designing each plan to ensure those impacted will have a voice in how they are developed. This Framework also confirms that the first Just Transition Plan will be for the energy sector as part of the refreshed Energy Strategy, with detail on the scheduling of further plans to follow.

Headline JTC recommendation

Just Transition plans for high‑emitting industrial sectors of the Scottish economy and include clear milestones out to 2045

Scottish Government initial response

We have published a National Just Transition Planning Framework and will engage widely on this in the year ahead. We will work with industry, workforce and local communities to consult on the best way to develop and implement sectoral Just Transition Plans. We have committed to publishing our first Just Transition Plan as part of the forthcoming Scottish Energy Strategy, in addition to announcing a ten‑year £500 million just transition fund for the North East and Moray. Our National Strategy for Economic Transformation will represent a coherent Green Industrial Strategy for Scotland, supported by the Just Transition Plans for industry. To support businesses, we will consult on applying conditionality to public funding, including a requirement for annual public disclosure on how climate change will affect large businesses, and the role of Just Transition Plans.

Headline JTC recommendation

Establish a Just Transition Plan for Scotland's land and agriculture and include clear milestones out to 2045

Scottish Government initial response

We have published a draft Transition Planning Framework and will engage widely on this in the year ahead. We will continue to work with stakeholders to set out a Just Transition Plan for land and agriculture in time for the post‑common agricultural policy (CAP) subsidy regime.

Headline JTC recommendation

Ensure sufficiently developed roadmaps exist for the net zero transition in Scotland, including for key technology options

Scottish Government initial response

We have committed to produce roadmaps for key technologies and to incorporate existing roadmaps as we develop Just Transition Plans. The first of these, our Hydrogen Action Plan, will be published later in the coming year setting out how we plan to grow this technology in Scotland. We will actively explore opportunities for developing new and emerging net zero technologies and sectors, including those rooted in natural capital and our environmental investments.

Headline JTC recommendation

The public sector must be more prescriptive and strategic in its use of funding streams to build strong and resilient local supply chains

Scottish Government initial response

We will continue to build on our Supply Chains Development Programme, developing a single strategic method for aligning low‑carbon funding to deliver maximum economic benefit for supply chains in Scotland. We will commission the Scottish Science Advisory Council to better understand how research and innovation, including from our world‑class universities, can help us build competitive advantage in key industries of the future, not least those that take full advantage of net zero technologies and innovation.

Headline JTC recommendation

All levers should be used to achieve increased local content and more competitive Scottish offshore wind projects

Scottish Government initial response

We will use the current ScotWind leasing round to secure new opportunities for the Scottish supply chain, by holding successful developers to account on the commitments made in their supply chain development statements. To support this, we commissioned the Scottish Offshore Wind Council to undertake an independent Strategic Investment Analysis to guide our activities and help Scottish firms invest and develop competitive advantage.

Headline JTC recommendation

All public funding for climate action should be conditional on Fair Work terms

Scottish Government initial response

We are consulting in the autumn on the vision for Scotland becoming a Fair Work Nation, including our ambitions for a just transition to net zero. Furthermore we will apply criteria on Real Living Wage and channels for effective workers' voice by summer 2022, and consider how the conditions can be applied to non‑departmental public bodies (NDPBs). We will introduce Fair Work standards as a condition to public sector heat and energy efficiency contracts. We will consult with the Fair Work Convention regarding development of a monitoring framework for just transition ahead of the next Climate Change Plan.

Headline JTC recommendation

Lay the groundwork for a flexible skills and education system that can meet the needs of net zero while addressing existing inequality in the labour market

Scottish Government initial response

The Implementation Plan for the Climate Emergency Skills Action Plan (CESAP) outlines an ambitious, cohesive approach to green skills and green jobs. We will refresh our internationally‑recognised Learning for Sustainability Action Plan in partnership with campaigners. This cross‑curricular entitlement for all learners aims to ensure a whole school approach to the climate emergency. As part of our STEM strategy we are working across all sectors of education to change perceptions about STEM and challenge assumptions about who does what job in relation to gender and wider inequalities.

Headline JTC recommendation

Create a skills guarantee for workers in carbon‑intensive sectors

Scottish Government initial response

We will design and implement a skills guarantee for workers in carbon‑intensive sectors and deliver this as part of the Green Jobs Workforce Academy. We will continue to support the Energy Skills Alliance and press for the issue of skills transferability between energy sub‑sectors to be resolved.

Headline JTC recommendation

Support small and medium sized enterprises to invest in their workforces

Scottish Government initial response

We will pilot and evaluate new models of apprenticeship in sectors central to the transition, to help address barriers faced by SMEs. We will also build a 'toolkit' to help small/micro businesses develop the skills and knowledge they need for net zero. Collectively, this will inform our understanding of the challenges SMEs face and inform future action and funding.

Headline JTC recommendation

Equip farmers and land managers with the skills, training, and advice they need

Scottish Government initial response

In our first 100 days, we launched a full and comprehensive review of land based learning. The aim is to increase opportunities for more people, particularly more women, to gain qualifications, training and employment in the land‑based and aquaculture sectors.

Headline JTC recommendation

Conclude the Local Governance Review at the earliest possible date

Scottish Government initial response

We will conclude the Local Governance Review and introduce a Local Democracy Bill within this Parliament. The next phases of the review will provide communities with opportunities to pinpoint the powers and resources they need to help tackle climate change.

Headline JTC recommendation

Implement Green Participatory Budgeting with agreed target levels of funding

Scottish Government initial response

We will explore the use of Participatory Budgeting in 2021‑22 as part of our wider support for community‑led climate action. We will also identify opportunities at COP26 to develop the concept of Participatory Budgeting for climate action – both in Scotland and abroad – and identify opportunities to develop programmes specifically involving schools and young people. We will work with local authorities to embed climate principles into wider participatory budgeting initiatives, building on the agreement between the Scottish Government and COSLA that at least 1% of council budgets will be subject to Participatory Budgeting by 2021‑22.

Headline JTC recommendation

Launch a call to action for engagement with Regional Land Use Partnerships

Scottish Government initial response

Regional Land Use Partnerships pilots have been established during 2021 across five areas of Scotland. If the pilots can demonstrate that they meet expectations relating to national outcomes on the environment and climate change, and show that they have taken a democratic, local approach, we will develop plans for a second phase from 2023 building on learning from the five pilots. In areas where Regional Land Use Partnerships have been established, we will launch a call for action to ensure broad membership and participation, and commit to learning from the partnerships to optimise our approach going forwards.

Headline JTC recommendation

Apply the lessons learned from Scotland's Climate Assembly across the development of all policies for tackling climate change

Scottish Government initial response

We will continue to consider the range of mechanisms such as citizens' assemblies, climate conversations and other community climate initiatives, to help inform and support the development of Just Transition plans and build on the legacy of Scotland's Climate Assembly.

Headline JTC recommendation

Empower and resource Local Authorities to deliver a just and green recovery

Scottish Government initial response

We will establish an Energy Agency focused on energy efficiency and the heat transition. We will seek new opportunities to prioritise local and organic produce in public sector menus while bringing forward the Good Food Nation Bill this year which will place duties on Ministers and certain public authorities. We recently published a draft local food strategy for public consultation and will further develop this in support of our vision for healthy, sustainable and local food.

Headline JTC recommendation

A new "sustainable Scottish" brand should be created to support Scottish agriculture that delivers climate action and to empower consumers to choose sustainably produced food and drink

Scottish Government initial response

We will lead work in collaboration with key partners, particularly Scotland Food and Drink, to design and implement a new brand promoting sustainably produced food and drink from Scotland. In the immediate term, we have commissioned Scottish Agriculture Organisation Society (SAOS) to undertake market research to establish demand for a new brand, and possible options.

Headline JTC recommendation

Scottish Government, Local Authorities and Developers must commit to creating communities that embed low‑carbon lifestyles, while improving our health and wellbeing

Scottish Government initial response

Subject to Parliamentary approval, we will introduce free bus travel to young people aged under 22 who are resident in Scotland, and commission a Fair Fares Review to ensure a sustainable and integrated approach to transport fares. The upcoming National Planning Framework 4 (NPF4) will define 20‑minute neighbourhoods, setting out priorities on planning our places with a new emphasis on living locally, giving life to the Place Principle, supporting public health and wellbeing, reducing inequality, and strengthening community resilience to the impacts of climate change. We will lay a draft of NPF4 in the Scottish Parliament this autumn for scrutiny and carry out extensive public consultation on it. We will support planners with spatial data, research and tools to work collaboratively in delivering 20‑minute neighbourhood principles. We will continue to promote the Place Standard Tool for community engagement in placemaking, including spreading learning from our climate lens Place Standard to help inform the roll out of 20‑minute neighbourhoods across Scotland. Once approved and adopted, NPF4 will have development plan status, meaning its policies have a stronger role in informing day to day decision making in planning.

Headline JTC recommendation

A statutory public interest test should be developed for any changes in land ownership over a certain threshold

Scottish Government initial response

We will develop and implement plans for a statutory public interest test as part of the forthcoming Land Reform Bill, scheduled for this parliamentary term.

Headline JTC recommendation

Decisive action must be taken to ensure that all consumers are able to benefit from the energy market innovation providing new ways of buying and selling electricity

Scottish Government initial response

We will ask Consumer Scotland to consider tracking the impact of decarbonisation on households as part of their workplan for 2022‑23, with the Energy Consumers Commission taking this forward in the interim. Our forthcoming Energy Strategy will consider methods of increasing participation in the energy market.

Headline JTC recommendation

Any additional costs for consumers associated with emissions reduction must be linked to ability to pay

Scottish Government initial response

We will publish guiding principles to underpin our commitment that no one is left behind in the heat transition, which will include the effective design and targeting of our fuel poverty and heat in buildings programmes. We will commission further analysis to consider the distributional impacts of decarbonising our homes and buildings, including quantifying the scale of impact and looking at options available to Scottish Government to mitigate these impacts.

Headline JTC recommendation

The power of public sector pension funds and business support funding must be directed towards ensuring companies align with the just transition to net zero

Scottish Government initial response

We will launch a consultation on climate risk reporting and ESG standards for local authority pension funds, in line with the Task Force on Climate‑related Financial Disclosures (TCFD). We will consider possible guidelines for voluntary financial disclosures about climate risk for Local Government Pension Fund Investments and continue to engage with Scotland's financial sector regarding how they can support our net zero transition. We will convene a group to develop new standards of corporate governance, and explore the possibility of these being used as a precondition for Government funding.

Headline JTC recommendation

New methods for funding the transition should be developed that mobilise finance towards local projects

Scottish Government initial response

We will explore the potential for local climate bonds, that raise capital while allowing citizens to invest in our transition to net zero. In setting the missions for the Scottish National Investment Bank we have directed the Bank to support a just transition to net zero, using its programme of investments to help rebalance our economy towards sustainable technology and industries of the future.

Headline JTC recommendation

Develop a position on the role of a carbon border tax to mitigate against the threat of offshoring emissions and jobs

Scottish Government initial response

We have set out our approach to carbon pricing as part of our response to the Just Transition Commission. Maintaining the competitiveness of Scotland's businesses and preventing the offshoring of jobs are key components of this approach. Through our role in the jointly‑administered UK Emissions Trading Scheme, we will ensure that the Free Allocation system continues to appropriately protect Scottish industries from the risk of carbon leakage. We have also commissioned research to better understand the impacts and potential benefits of carbon border adjustment mechanisms and will publish a position in the year ahead.

Headline JTC recommendation

We must move beyond GDP as the only measure of national progress. For a just transition to be at the heart of Scotland's response to climate change, the Scottish Government must champion frameworks that prioritise wellbeing

Scottish Government initial response

We will further develop the use of our National Performance Framework through the upcoming review of National Outcomes and through consultation on a Wellbeing and Sustainable Development Bill. We will publish the National Strategy for Economic Transformation in autumn this year, with the just transition to net zero and maximising economic, social and environmental wellbeing embedded as key themes. To monitor how we are performing as a wellbeing economy we will also develop and publish a Wellbeing Economy Monitor.

The advice and recommendations of external experts continues to play a key role in how we develop and implement policies to end Scotland's contribution to climate change in a just and fair way. Alongside the advice from the independent Just Transition Commission, we welcome the Climate Emergency Response Group (CERG)'s recent report on immediate actions to tackle the climate emergency. Across the group's report, and this programme, there is a shared priority to focus on delivery, and moving beyond target‑setting. We will work constructively with CERG and other external stakeholders as we progress our journey to net zero.

As part of a just transition, we recognise that unlimited extraction of fossil fuels is incompatible with our climate obligations. Countries around the world, including the UK, cannot continue with unlimited recovery of hydrocarbons if the aims of the Paris Agreement are to be met. We are clear that new oil and gas licences should be assessed against a robust Climate Compatibility Check Point, and existing licences, pre‑field development, should also be reassessed.

At the same time, the oil and gas sector has a critical role to play – not just in the economic and employment benefits it brings, locally and nationally, but in the leading part the industry, infrastructure, workforce and supply chain can play in securing a just transition. To support that, we will take forward a ten‑year £500 million Just Transition Fund for the North East and Moray, supporting and accelerating the transition of the region, and its role as one of Scotland's centres of excellence for the transition to a net zero economy.

Global leadership for a global emergency

In just over two months, the eyes of the world will be on Scotland, as Glasgow hosts COP26. It represents the world's best chance – and possibly one of our last chances – to limit global warming to meet the Paris Agreement target and prevent warming of more than 1.5 degrees in the longer term. Scotland will grasp the opportunity to show leadership to help secure that.

Within its first 100 days, the Scottish Government has published an indicative Nationally Determined Contribution, outlining Scotland's contribution to the goals of the Paris Agreement: it is understood that we are the first government that is not a formal party to the Agreement ever to do so. We will now establish Scotland's first statutory Nitrogen Balance Sheet. The First Minister also appointed 14 leading experts from around the world to her Environmental Council – co‑chaired by the First Minister and Professor Sir Ian Boyd, former Chief Scientific Adviser to the UK Government on Environment, Food and Rural Affairs – to advise the Government on international best practice and keep us at the forefront of tackling the climate emergency and ecological decline. The Council will report to coincide with COP26, and continue to advise Ministers directly over this Parliament. We will also work with the UK Climate Change Committee to set up a new office in Scotland, increasing its capacity to offer bespoke analysis and advice specific to the Scottish context, to guide us as we progress towards our emissions reduction targets.

To ensure the necessary collective response to our ambitions, the Scottish Government has launched a new campaign, #LetsDoNetZero, to run throughout this Parliament. It highlights the benefits a net zero society will bring for our economy, health, and environment, and the transformation required across all sectors of our economy and society. It features a domestic campaign, to provide information and resources to support the steps we can all take to reduce emissions, and an international campaign to demonstrate our global leadership.

In ending Scotland's contribution to climate change, we recognise we have a moral responsibility to support other countries to secure their own positive future. While the poor and the vulnerable have done the least to contribute to the climate emergency, they are being affected first and most severely by it. Starting next year, we will double the Climate Justice Fund to £6 million per year, providing £24 million across this Parliament. This funding will scale up projects helping vulnerable communities become more resilient to climate change, empower them to be at the forefront of tackling social injustices, and deliver outcomes in support of the Sustainable Development Goals. By summer 2022, we will also establish a new Global Renewable Centre, working with our international development partner countries to exchange knowledge and research in renewable technologies.

A green transport revolution

There are significant opportunities to be had in our moves towards a green, sustainable and active transport system, with climate action and reducing inequality as core priorities of National Transport Strategy (NTS) 2, helping to deliver inclusive economic prosperity and improving health and wellbeing. Investing in greener and more efficient transport will secure the necessary emissions reduction and enable technological adaptation, boosting business and industry. It is also at the heart of our wider ambitions to create connected communities and deliver 20‑minute neighbourhoods.

We will take forward an ambitious programme to deliver NTS2 and decarbonise the public transport network. In our first 100 days, the Scottish Government has convened the Bus Decarbonisation Taskforce to co‑design a pathway to a greener and more efficient public‑service bus fleet and launched the first phase of the Scottish Zero Emission Bus Challenge Fund (ScotZEB), worth £50 million. Our public transport system is further supported by over £500 million of long term investment in bus priority infrastructure, tackling the impacts of congestion, making journey times shorter and services more reliable, and encouraging people to leave their cars at home.

We will continue a significant programme of investment to ensure we maintain, improve and decarbonise Scotland's rail network, backed by £5 billion over this Parliament, and drive forward our commitment to decarbonise passenger rail services by 2035, ensuring the rail fleet is greener and that our communities are more connected. This includes the East Kilbride Enhancement, with the electrification of the existing route to Glasgow; decarbonisation of Barrhead services, enabling electric trains between Barrhead and Glasgow; and Borders Line Decarbonisation and Fife Circle Decarbonisation by 2024, with the removal of diesel‑powered units.

We are supporting the development of innovative new hydrogen train technology, where electrification or battery technology is not appropriate. We will showcase our first hydrogen‑powered train at Bo'ness Heritage Railway this November, coinciding with COP26, followed by a demonstration of its live running during March 2022 before working towards the first hydrogen passenger service by the end of 2025.

To ensure the public sector plays its part, and to support public sector fleet investment in alternatives to petrol and diesel, we are also providing a range of low and zero carbon transport initiatives with £287 million investment through to 2025‑26 from our Future Transport Fund. We will ensure that 30% of state‑owned ferries are low emission by 2032. In the coming year we will begin scoping how we might use hybrid and low carbon energy sources in the public sector marine fleet as part of our vessel replacement programme. We will also continue our drive to phase out the sale of new petrol and diesel cars by 2030, and build our Electric Vehicle capacity and infrastructure.

Decarbonising Scotland

Energy and industry must be at the forefront of our progress towards net zero – securing the necessary emissions reductions, while driving investment and innovation in new technologies across the supply chain and, in turn, creating new, good and green jobs. To help drive that innovation and transition forward, the Scottish Government is investing £2 billion across 2021‑22 to 2025‑26 in large‑scale, low carbon infrastructure.

Part of that funding will help to deliver our commitment to invest at least £1.8 billion over this Parliament to make homes and buildings greener and easier to heat. This includes a minimum of £465 million to support those least able to pay for home energy improvements, and £400 million for large scale heat decarbonisation projects. We have kick started this investment in 2021‑22, with increased funding across a range of programmes, including:

• Increasing the budget for our Home Energy Scotland Loan and Cashback Scheme to £21 million. This enables homeowners to apply for up to £7,500 in cashback if they take out a loan to install green heating systems, such as a heat pump, as well as up to £6,000 towards eligible energy efficiency measures.
• Increasing funding for local authority energy efficiency and green heating schemes to £64 million.
• Providing an additional £18 million for our Warmer Homes Scotland programme targeted at those in fuel poverty, taking the total budget to £50 million this year.
• Launching a second £30 million call for green heating and energy efficiency projects in social housing through the 'Social Housing Net Zero Heat Fund', and committing to keep the fund open with up to £100 million available over the course of this Parliament.

In order to maximise uptake of our range of home energy and efficiency schemes, we will deliver a public communication programme to raise awareness of the support and advice available, and encourage home upgrades.

Decarbonising heat is essential for reaching net zero, and – done right – tackling inequality, removing poor energy efficiency as a driver of fuel poverty. We are committed to decarbonising the heating of at least 1 million homes, and the equivalent of 50,000 non‑domestic buildings, by 2030 – moving them to low or zero emissions systems, and using our Supply Chains Development Programme to maximise the economic opportunities from this transition. To deliver that ambition and maintain progress towards our statutory emission reduction targets, zero emissions heat installations must scale up to provide a total of at least 124,000 systems installed between 2021 and 2026 – we will continue to adapt our delivery programmes to ensure that they contribute towards this ambition. We will also develop and agree through consultation a series of phased targets, starting in 2024, with the most difficult buildings like hospitals being decarbonised by 2038, and for all publicly‑owned buildings to meet zero emission heating requirements, with a backstop of 2038.

This sits alongside ambitious new targets in the Heat Networks (Scotland) Act for supply from heat networks reaching 6TWh by 2030. Over the coming year we will consult on, and lay in Parliament, a Heat Networks Delivery Plan setting out how we will meet these targets.

To harness the potential of decarbonisation at scale, and provide leadership, we will create a National Public Energy Agency. We will work to have a virtual agency established within the coming year and a dedicated physical agency by September 2025, with a remit to accelerate transformational change in how we heat and use energy in homes and buildings, aid public understanding and awareness, and coordinate delivery of investment. Fair Work First criteria will be part of the evaluation criteria for any future heat contracts.

As set out in our Hydrogen Policy Statement in 2020, to support our ambitions for energy, decarbonisation and a Just Transition, we want Scotland to become a leading hydrogen nation – producing reliable, competitive, sustainable hydrogen. In the first year of this parliamentary term, we will publish a five year Hydrogen Action Plan, setting out the actions we will take to support Scottish supply chain activity and drive the development of a low‑cost hydrogen capability to meet an initial ambition of generating 5GW of renewable and low‑carbon hydrogen by 2030. This will be backed by £100 million investment to capitalise on success and innovation so far, support supply chain activity, and kick‑start the accelerated growth of the hydrogen economy in Scotland. We will continue to support SGN's H100 Fife project which will bring renewable hydrogen fuel into 300 homes in Levenmouth in 2022, and offers a possible blueprint for a zero‑carbon future for heating and cooking in many of our homes.

Decarbonising our industrial sector in a just and fair way will help the sector to grow and compete in the economy of the future, capturing new export and investment opportunities and sustaining and creating jobs and wealth. During this Parliament, we are investing £60 million to support this. Through the £26 million Low Carbon Manufacturing Challenge Fund we are funding a CivTech Challenge this year to help manufacturing businesses decarbonise, while building resilience and strengthening competitive advantage, and we are working with Scottish Enterprise to develop a fund for projects supporting manufacturers move towards low carbon markets. The £34 million Scottish Industrial Energy Transformation Fund has already begun to offer grants, spread across sites around the country and a range of industrial sectors, enabling direct action to reduce carbon or save energy.

We will work with the construction sector to implement a Construction Recovery Plan which will build a more sustainable, diverse and innovative sector with a highly skilled workforce, encourage the development of local supply chains, improve resilience and promote the use of sustainable materials. The built environment accounts for 40% of carbon emissions, so supporting the construction sector as it develops and uses sustainable materials is essential to achieving our net zero ambition.

The oil and gas sector can, and must, play a positive role in our energy transition. While many of the levers remain reserved to the UK Government, the Scottish Government is clear that any support we provide is conditional on the sector using its knowledge, experience and supply chains to secure a sustainable future. We will undertake a programme of work and analysis to better understand our energy requirements as we transition to net zero and how this aligns with Scotland's climate change targets. Reporting by the end of 2022, this work will supplement a wide range of evidence that will be considered to take an informed policy decision on the contribution of North Sea production to the global climate emergency and to Scotland's economy, security and wellbeing.

We are taking forward an Energy Transition Scotland programme, including the £62 million Energy Transition Fund (ETF) which is in its first year of operation and already funding key transition projects – such as the Global Underwater Hub, the Energy Transition Zone, the Aberdeen Hydrogen Hub, and the Net Zero Technology Transition Programme. These projects will help ensure Scotland's energy sector plays a leading role in the development and deployment of new, low carbon projects. The £180 million Emerging Energy Technologies Fund will also support the development of hydrogen and carbon capture and storage. We are committed to supporting these technologies as part of the energy transition. However, any strategy for their deployment must enable decarbonisation at pace and cannot be used to justify unsustainable levels of fossil fuel extraction or impede Scotland's just transition to net zero.

Scotland leads the way in new forms of clean energy, with almost 100% of our gross electricity consumption coming from renewable sources in 2020; but we will go further. By 2030, our aim is to generate 50% of Scotland's overall energy consumption from renewable sources, and by 2050 to have decarbonised our energy system almost completely. We will consult on a revised Energy Strategy, to provide a whole systems view of how the sector will adapt to meet Scotland's emissions reduction targets, with a focus on the necessary roadmap to secure those ambitions. As part of this, we will introduce a strengthened framework to support the growth of the marine renewables and offshore wind sectors, balanced against the potential impacts on marine biodiversity.

Development of renewable energy presents an immense opportunity for Scotland to lead by example – showing how a clean energy future is possible at home, and as a net exporter of renewable energy, attracting further investment and ensuring our progress to net zero is environmentally and economically beneficial. The first round of offshore seabed leasing, ScotWind, closed in July 2021. This could generate up to £860 million in revenue for Scotland, 10GW of wind power, and billions of investment over the next 20 years. Successful bidders will be announced in early 2022 and further regular leasing rounds planned in forthcoming years. We will also invest some of the lease income in actions which tackle the twin crises of biodiversity and climate change, creating a legacy for the future.

We will ensure NPF4 actively enables renewable energy, supporting repowering of existing wind farms and expansion of the grid. All renewable energy projects over 50MW will be designated as a national development – balanced against protection of our biodiversity and natural environment. We will ensure no onshore wind developments in National Parks and National Scenic Areas are supported, and the sensitivity of other nationally important designated sites is respected. Subject to fuller assessment, development in all other areas will be supported in principle unless impacts are unacceptable. We recognise that some developments are more controversial than others and in 2022 will report on any changes required to marine planning and licensing processes, to ensure that our regulatory approach is efficient, effective and sufficiently resourced – allowing non‑controversial consents to be granted quickly, while protecting the value of marine natural capital.

Subject to consultation, we are committed to securing between 8 and 12GW of installed onshore wind by 2030, furthering our ambitions for up to 11GW of offshore wind. Within the Scottish Government's first 100 days, we worked with the Scottish Offshore Wind Energy Council to publish a Scottish Offshore Wind Strategic Investment Assessment, setting out how we can secure the greatest utilisation of the domestic supply chain, and attract inward investment to capitalise on our natural resources. We will quickly consider the recommendations of this report, and take forward a coordinated and targeted response. We will also consult on and publish a new Onshore Wind Policy Statement in 2022, setting out the vital role that this technology will play in delivering our net zero commitment.

We will also support Carbon Neutral Islands, including pilots for islands to run on 100% renewable energy, create circular economies, and explore more sustainable transport options. We will work with at least 3 islands over this Parliament to enable them to become fully carbon neutral by 2040, as forerunners to a net zero Scotland by 2045.

Protecting and restoring nature for generations to come

We know that significant and urgent action is needed to restore the health and vitality of the natural systems that sustain us. Scotland's Environment Strategy sets out our vision to protect and restore Scotland's natural environment and to live within the planet's sustainable limits. Our natural and marine economy will be vital to securing a net zero future – with nature based solutions accounting for around 30% of the emissions reductions needed – but in turn we must ensure it is protected and enhanced.

Within a year of the UN Biodiversity Conference (COP15) in October 2021, we will publish a new biodiversity strategy followed by an underpinning 5 year delivery plan, which will help guide the way we use and manage land and our approach to protecting habitats and ecosystems. Following this, we will aim to introduce a Natural Environment Bill in Year 3 of this Parliament, to:

• Put in place key legislative changes to restore and protect nature, including, but not restricted to, targets for nature restoration that cover land and sea, and an effective, statutory, target‑setting monitoring, enforcing and reporting framework.
• Those targets will be based on an overarching goal of preventing any further extinctions of wildlife and halting declines by 2030, and making significant progress in restoring Scotland's natural environment by 2045, and will include outcome targets that accommodate species abundance, distribution and extinction risk, and habitat quality and extent.
• Cover key actions to deliver our targets, including our agreement to protect 30% of Scotland's land and seas by 2030, and highly protect 10%.

We will also ensure a review of environmental justice, and the case for an environmental court, is undertaken during this parliamentary session – commencing by spring 2023.

To support a transformative approach to protecting and restoring Scotland's biodiversity, the Scottish Government will invest at least £500 million in the natural economy over the course of this Parliament, including:

• £100 million to increase forestry planting, £30 million to expand Scotland's national forests and land, and £20 million to increase nursery stocks. Within the Government's first 100 days we have met our target of 12,000 hectares of woodland creation in 2020‑21, and will accelerate towards 18,000 hectares a year by 2024‑25, and increase the annual native woodland creation target to 4,000 hectares.
• Increase Forestry Land Scotland's capacity to grow the public forest through the acquisition of land, particularly in National and Regional Parks, with increased capital funding.
• Support our commitment to provide £250 million over 10 years to restore 250,000 hectares of degraded peatlands by 2030 – with £22 million for the restoration of degraded peatlands in 2021‑22. We will help crofting communities play a role through restoration of common grazing land, and we will take forward work to develop and consult on a ban on the sale of peat related gardening products as part of our commitment to phase out the use of peat in horticulture.
• Support the restoration and expansion of Scotland's rainforests, and establish a National Register of Ancient Woodlands, working with owners and agencies to maintain and protect them.
• Ensure that every Local Authority area will have a Nature Network of new, locally driven projects which aim to improve ecological connectivity across Scotland.
• Multi‑year funding for the Nature Restoration Fund, making an important contribution to meeting our targets and restoring Scotland's terrestrial and marine environment.

We will also explore a number of mechanisms to ensure we create and restore woodlands, including increasing easily accessible, sustainably managed woodlands, in urban or peri‑urban areas; pilot landscape‑scale natural regeneration projects; and, support public sector bodies to increase tree cover on land they own and manage, including exploring if further legislative changes are required to strengthen such duties on public bodies. We will ensure funding within a post‑CAP system is ring‑fenced for tree planting, orchard creation, and woodland regeneration, as well as support for the development of rural businesses linked with forestry.

To further support progressive development, address the climate emergency in the way we use our land, and improve public and community wellbeing, we will designate at least one new National Park by the end of this Parliament, provided relevant legal conditions can be met, making funding available to support these ambitions. We will also increase funding to improve visitor facilities, safety measures and access opportunities, including in regional parks.

Alongside our natural economy, a clear opportunity for recovery and renewal in Scotland lies in our marine areas. Six times the size of Scotland's land mass, our rich marine natural capital has the potential to help drive Scotland's green recovery while contributing to often fragile local communities. In the coming year, we will develop a Blue Economy Strategy and subsequent delivery plan to support a green recovery and just transition, with sustainable growth of the blue economy underpinned by environmental protection. Scotland has played a pioneering role in marine planning and we will continue to develop a plan‑led approach, ensuring a clear and coherent approach to managing the multiple uses of the sea and a robust framework for decision‑making.

We will also take forward a step change in marine protection – ensuring that our seas are clean, healthy, safe, productive and diverse, and managed to meet the long term needs of nature and people – which will make Scotland an international leader in this area. We will deliver fisheries management measures for existing Marine Protected Areas (MPAs) where these are not already in place, as well as key coastal biodiversity locations outside of these sites, by March 2024 at the latest; starting this year, add to the existing MPA network by designating a world‑leading suite of Highly Protected Marine Areas (HPMAs) covering at least 10% of our seas, providing additional environmental protection over and above the existing MPA network by establishing sites which will provide protection from all extractive, destructive or depositional activities while allowing other activities at non‑damaging levels; and, take specific, evidence‑based measures to protect the inshore seabed in areas outwith MPAs and HPMAs, and consult on applying a cap to fishing activity in inshore waters that will limit activity to current levels and set a ceiling from which activities that disrupt the seabed can be reduced in the light of evidence as it becomes available.

A Circular Economy for a Zero‑Waste Nation

While Scotland has already made significant strides in reducing emissions from waste, we will accelerate progress to meet our ambitious waste reduction, recycling and climate change targets. This year, as well as making our first investments from the £70 million Recycling Improvement Fund, we will work in collaboration with industry, local government and environmental groups to develop a route map to achieving our targets to 2025 and beyond, and consider the role of incineration and fiscal incentives, such as a waste tax. We will also explore the use of Scotland's devolved tax powers over Landfill Tax to ensure they are consistent with our emissions reduction targets.

To ensure the necessary legislation is in place, we will bring forward a Circular Economy Bill, later in this parliamentary session, helping facilitate the development of an economy which reduces demand for raw materials, designs products to last as long as possible and encourages reuse, repair and recycling.

To tackle one of the single greatest causes of waste – our throwaway culture – and ensure a more environmentally friendly and cleaner Scotland, we will introduce a ban on the single‑use plastic items most commonly found littered on European beaches. Regulations will be introduced before the end of this year to end the supply and manufacture in Scotland of certain single use items, with limited exceptions where absolutely necessary, for example to ensure the new rules do not disadvantage disabled people.

Textile waste makes up just 4% of household waste but 31% of the carbon impacts. In the first half of 2022, we will also introduce a new £2 million Textile Innovation Fund, to support businesses working in this sector to address issues associated with textile waste and throwaway culture.

We remain committed to introducing the UK's first national Deposit Return Scheme. This will increase the amount and quality of drinks container material being recycled, reduce litter, offer benefits to industry and the public, and reduce emissions equivalent to taking 85,000 cars off our roads. Good progress is being made in getting ready for the scheme, but inevitably the pandemic and EU‑Exit has had an impact on the readiness of all partners. Earlier this year, the Scottish Government commissioned an independent review of a feasible 'go‑live' date, considering that alongside wider feedback from stakeholders. We will shortly provide an update to Parliament and businesses.

All of these efforts will ensure we reduce the amount of waste that makes it to landfill – already at its lowest since records began, with Scotland exceeding the EU target to reduce the quantity of biodegradable municipal waste going to landfill. We will shortly launch a review into the role that incineration plays in our waste hierarchy to ensure alignment with our emissions reduction targets.