Heat in buildings strategy - achieving net zero emissions: consultation

Ministerial Foreword

Reducing emissions from our homes and buildings is one of the most important things we can do to help end Scotland’s contribution to climate change. Over the next 24 years we will transform Scotland’s homes and workplaces so they are warmer, greener and more efficient. This draft Strategy, which updates both the Energy Efficient Scotland Route Map and the Heat Policy Statement, sets out how we will achieve that ambition.

Even as we address the damaging climate change impact of our homes and buildings, we must continue to tackle the social inequalities that are all too prevalent in our housing sector. In particular, we must redouble our efforts to end fuel poverty and the blight of unaffordable heating. There is a tension between our climate objectives and our commitment to ending fuel poverty, as many zero emissions heating systems are more costly to install and can be more expensive to run than high emissions alternatives. We are clear that this must be overcome and remain steadfast in our commitment to supporting those least able to pay in this transition, and in protecting those who are most vulnerable to any increase in costs.

Our homes and workplaces account for around 21% of Scotland’s total greenhouse gas emissions. We can and must make very significant progress towards eliminating emissions from the way we heat our buildings over the next decade and reduce them to zero by 2045. Transforming our homes and workplaces will be immensely challenging, requiring action from all of us, right across society and the economy.

Today, as well as relying on fossil fuels for warmth, we know that many of our buildings are inefficient and hard to heat. This can lead to high energy costs which can put households into fuel poverty and present unnecessary financial burdens for businesses and the public sector. As we transform our homes and workplaces we will continue to take action to improve energy efficiency as much as we can; ensure energy costs in future are affordable and that our actions continue to lift people out of fuel poverty.

Decarbonising our homes and workplaces means a fundamental shift for almost all of us. We have already made good progress on energy efficiency, with 45% of homes now achieving EPC C or better, and we now need to accelerate efforts to build on this and reduce our demand for energy. At the same time, we must rapidly scale up deployment of zero emissions heating systems, such as heat pumps and heat networks, more than doubling installations each year so that by 2030 over 1 million homes and around 50,000 non-domestic buildings are converted to use these systems. And we must do so in a manner that protects those in or at risk of fuel poverty from increased energy bills and that avoids placing a burden on those least able to pay for the transition.

These heating solutions are not new – they are widely used in other European countries and are now gaining a growing share of the market here in Scotland – but for many of us, they remain unfamiliar. As we deliver this Strategy, we will increase public engagement, building on our existing advice services and taking steps to raise awareness and understanding of these new technologies. We will work with local government to put in place Local Heat & Energy Efficiency Strategies, setting out a plan for all areas of Scotland, and work with local communities to design tailored solutions, matched to local circumstances.

The impacts of COVID-19 are profound and the challenges we face as a country to recover from it are unprecedented. The pandemic has affected every aspect of our lives, with thousands of people losing their jobs and businesses in distress; as well as a fundamental shift in how we live and work in our local communities, towns and cities. At the onset of the pandemic, we paused our heat in buildings delivery schemes and took the difficult decision to delay the introduction of minimum energy efficiency standards for privately rented homes. We took the decision to delay significant capital investment via our new Heat Transition Deal, instead focussing our efforts on developing a robust pipeline of new projects ready for capital investment in future years.

Over the next Parliament we will make available almost £1.6 billion for heat and energy efficiency projects across Scotland, helping to secure delivery against our targets, providing a much-needed stimulus to the heat and energy efficiency sector, and contributing toward a longer-term green recovery. We are seeking views as part of the consultation on this draft Strategy on how we can maximise the impact of this investment to help deliver our objectives.

We estimate that the total investment required to transform our homes and buildings is likely to be in excess of £33 billion. This cost cannot be borne by the public sector alone. We will establish a new Green Heat Finance Task Force to identify innovative solutions to maximise private sector investment, and find new ways to help individuals and organisations spread the upfront cost of investing in making their properties warmer, greener and more efficient.

This investment will generate significant opportunities for communities across Scotland. We will continue to flex our delivery programmes to support local jobs and create opportunities for young people. We will also expand our work with the supply chain, via initiatives such as our Heat Pump Sector Deal, to create new investment opportunities and create and support high value, local jobs.

To underpin and provide the certainty and assurance to secure this investment we will bring forward a framework of regulations setting clear standards for property owners across all tenures and buildings types. We will build on existing standards already in place, extending them to cover all properties and requiring action on both energy efficiency and zero emissions heating. Our consultation for a 2024 Zero Emissions Heat Standard for new buildings is a major first step.

There are no silver bullets or easy solutions to the heat in buildings challenge. We must use all the tools available to increase awareness, secure delivery and provide the certainty that individuals and the sector need to take action. This draft Strategy sets out our planned actions and further proposals to strengthen our approach. It also sets out the actions we need to see by the UK Government to bring forward strategic decisions on the future of the gas network and to reform the energy market, create fairer pricing supporting net zero, and protect consumers.

The changes needed to make our homes and buildings fit for a net zero future will touch on all our lives and are likely to require us all to take action. Therefore, it is only right that everyone in Scotland has an opportunity to shape our Heat in Buildings Strategy. We are seeking your views on this strategy: the pathway, the technologies, the means by which we will protect those in or at risk of fuel poverty, the regulatory framework, the support and delivery schemes, and actions to maximise the economic opportunities. We have posed questions throughout the document and we look forward to hearing your views. The responses to this consultation will also inform the forthcoming revision of the Fuel Poverty Strategy.

The feedback to the consultation will be considered by an incoming Scottish administration following the Scottish Parliament elections in May this year. An incoming administration should not delay in publishing a final Heat in Buildings Strategy or in considering new legislation to underpin it. In the meantime, the Scottish Government will continue to take steps to support delivery through our successful Energy Efficient Scotland delivery schemes and the Low Carbon Infrastructure Transition Programme, and continue to work with colleagues in Parliament to secure the passage of the Heat Networks (Scotland) Bill.