Response to the Climate Change Committee: progress reducing emissions – report to Parliament 2021

4. Manufacturing and construction

4.1 Continue to support innovation and demonstration of technologies for decarbonising manufacturing and construction; ensure that learning is disseminated as widely as possible within industry.

Timing: 2022

Primary responsibility: Scottish Government

Scottish Government response: accept

There are a range of Scottish Government programmes, infrastructure and funding measures designed to support such innovation/demonstration. The Making Scotland's Future Programme has low carbon and sustainably embedded in each of its 8 work streams with the ongoing ambition to align supply chains to new low carbon market opportunities and develop low carbon technologies. NMIS will be at the heart of efforts to foster low-carbon economic growth and sustainability with partners and industry.

Additionally we have also created a new £26m Low Carbon Manufacturing Challenge Fund to support innovation in low carbon technology, processes and infrastructure. This competitive fund is being co-designed and developed with Scottish Enterprise, who will also administer the Fund through their calls process. The Fund will be open to any business in the manufacturing sector and provide R&D funding for projects that result in increased product circularity, reduced waste during the manufacturing process and reduced carbon.

Michelin Scotland Innovation Parc (MSIP) is a highly targeted intervention directed specifically at the development and exploitation of Sustainable Mobility and Low Carbon Energy technologies. Its ambition is to develop next-generation mobility solutions, secure their manufacture, create an indigenous supply chain and demonstrate the innovation capacity of Scotland to address the Climate Emergency. MSIP's Skills Academy will bring skills and knowledge from Dundee and Angus college and Universities of Dundee, Abertay and St Andrew's together with industry, to deliver new skills, for new technologies. It will offer dedicated skills training to current and future employees of companies located at MSIP and across industry, through a comprehensive range of training focused on the skills needs of companies. The curriculum and delivery style of the MSIP Skills Academy will inspire new generations of engineers, technicians and operators to design and manufacture for the sustainable mobility and decarbonisation sectors.

COP26 provided a global stage for Scotland to showcase the leadership, technologies and innovation that will help on the road to achieve our target of Net Zero by 2045. MSIP demonstrated the value of public and private sectors working together collaboratively towards a common goal to ensure a just transition for businesses and the promotion of economic growth.

At COP26, the Scottish Government and Michelin announced the Net Zero Industrial Cluster Exchange (NICE). The NICE network will provide a forum to share policy, practice and learning across countries and industries. The network will provide comparative information and insights on regional/local industrial clusters and industrial transformation initiatives that seek to achieve low carbon, net zero or carbon negative processes. The aim is that this will be formally launched in Spring 2022.

Scottish Government works closely with the Construction Scotland Innovation Centre. As partners and delivery agents, CSIC is playing a key role in pursuing this agenda, and working with stakeholders right across the built environment to support recovery, innovation and modernisation of the sector. This includes delivering free low carbon construction training through the Low Carbon Learning programme funded by the National Transition Training Fund, and supporting game-changing research into the potential for using home-grown mass timber in construction through the Transforming Timber initiative.

4.2 Implement policies to enable delivery of substantial improvements in industrial energy efficiency.

Timing: 2022

Primary responsibility: Joint with UK Government

Scottish Government response: accept

In October 2018, the UK Government announced plans, as part of the Industrial Strategy, to establish an Industrial Energy Transformation Fund (IETF), providing up to £315 million until 2024. This is part of a package of support for decarbonising energy-intensive industries alongside the Industrial Clusters Mission, and Climate Change Agreements. During 2020, Scottish Ministers announced their intention to administer a separate fund, and subsequently increased the amount received as Barnett consequentials from the UKG by 30%, to make more funds available for Scottish industries.

A distinct fund allows flexibility towards the specific characteristics of Scotland's industrial base, during this particularly challenging period, to proceed on the journey towards net-zero emissions by 2045.

The £34m Scottish Industrial Energy Transformation Fund (SIETF) supports Scottish manufacturers with high energy use to transition to a low carbon future and to reduce energy costs and emissions through increased energy efficiency. Through calls for projects it provides match-funded grants to: (1) deploy technologies that improve the energy efficiency of industrial processes, and (2) carry out feasibility & FEED studies into energy efficiency or deeper decarbonisation, such as fuel switching.

The SIETF has begun to grant payments to co-invest with to a diverse range of manufacturers to reduce energy emissions through increased process efficiency. Funding to leverage more asset-based private investment, including for deeper decarbonisation through fuel switching, will continue until 2026.

Scottish Government will keep the scope of incentivisation funding under review to: increase effectiveness in supporting a pipeline of projects , to monitor performance against GHG targets; and liaise with UK Government counterparts on making the case for increased resources to support industrial energy efficiency.

4.3 Work with business to encourage and enable consumers to share, lease and use products for longer whilst discouraging 'disposable' business models.

Timing: 2022

Primary responsibility: Scottish Government

Scottish Government response: accept

While this work is, necessarily, continuous and ongoing, we aim to deliver a significant change by the end of 2023. The Scottish Government already helps to fund a new national network of community sharing libraries and repair cafes as part of a drive to reduce consumption and cut waste. Under the £310,000 reuse and repair scheme, funded jointly with Zero Waste Scotland, more resource libraries will be established across Scotland - a key recommendation of Scotland's Climate Assembly. The facilities allow people to borrow items such as high quality tools, equipment, clothes and toys rather than buying them.

In the first half of 2022, we will 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. When the fund goes live, Zero Waste Scotland will consider applications from across all sectors for projects that will reduce aspects of textile waste, contribute to Scotland's overall waste reduction targets and reduce overall consumption.

More generally, Zero Waste Scotland, which is partially funded by the Scottish Government, already undertakes work in this area How we're supporting the circular economy | Zero Waste Scotland. The Retail Strategy Getting the Right Change – retail strategy for Scotland - gov.scot (www.gov.scot) will also be relevant for achieving this aim.

We support the principles of the EU Sustainable Products Initiative which aims to make products placed on the market more sustainable. Ultimately, consumers, the environment and the climate will benefit from products that are more durable, reusable, repairable, recyclable, and energy-efficient. This is an emerging area of policy development and we recognise that many issues, such as elements of product standards and labelling and consumer protection, are reserved.

4.4 Improve the collection and reporting of industrial decarbonisation data to allow for progress to be monitored more effectively, particularly on energy and resource efficiency.

Timing: 2022

Primary responsibility: Scottish Government

Scottish Government response: partially accept

Efforts to improve the collection and reporting of industrial decarbonisation data are ongoing, and we are working with SEPA and BEIS, through the ETS and other schemes to better understand what data is available and what data can be obtained. The advice to only partially accept the recommendation is due to the fact that certain elements of industrial data on fuel use and efficiency can be considered commercially sensitive, and although it may be possible to obtain and analyse this data, there could be certain limitations as to how this data could be used and reported. This is a particular sensitivity in Scotland where it is more difficult to aggregate results by sector, due to a low number (sometimes only 1 or 2) sites per sector.

4.5 Develop policies to drive more resource-efficient construction and use of existing low-carbon materials. This should include setting out a plan for phasing in mandatory whole-life reporting followed by minimum whole-life standards for all buildings, roads and infrastructure by 2025, with differentiated targets by function, scale, and public/private construction.

Timing: 2022

Primary responsibility: Joint with UK Government

Scottish Government response: partially accept

The draft NPF4 included NPF4 Universal Policy 2 'Climate Emergency'; that policy is clear that: all development should be designed to minimise emissions over its lifecycle in line with the decarbonisation pathways set out nationally; and that development proposals for national, major and development requiring Environmental Impact Assessment should be accompanied by a whole-life assessment of greenhouse gas emissions from the development. Policy 20 'Zero Waste' is clear that all development should aim to use materials with the lowest forms of embodied emissions, that material should be suitable for reuse with minimal reprocessing, and encourages the use of previously used, sustainable, local, recycled and natural construction materials that also store carbon. Consultation on the draft NPF4 closed 31 March. We are considering all responses to the consultation, including those from the CCC and will lay a finalised NPF4 for approval by the Scottish Parliament before it is adopted by Ministers. Following its adoption, NPF4 will form part of the statutory development plan, the primary basis for decisions made through Scotland's planning system.

In terms of road works policy, the use of in-situ recycling and lower carbon materials is already encouraged under the existing framework. Current legislative reform is looking at simplifying the process of trailing lower carbon materials, and on reduced vehicle movements as part of a 'right first time' model. The monitoring and review of this area is undertaken by the Scottish Road Works Commissioner. One of these reforms, the Reinstatement Quality Plan requirement, is currently in the process of being put into secondary legislation, but was 'soft launched' as a voluntary process in January 2022. The Commissioner requires these plans to have a robust 'environmental sustainability' section to gain his approval, which is necessary to continue to undertake works in Scotland's roads.

The waste and recycling route map, due to be published in May 2022, will include a focus on construction including resource efficiency.

Scotland's Climate Assembly recommended that we take into account the whole life carbon costs and environmental impact of new homes (recommendation 7), new and existing non-residential buildings (recommendation 9) and existing homes (recommendation 11). In our response to the recommendations of the Assembly, we noted that, whilst the issue of whole life carbon costs is not currently addressed by building regulations in Scotland or, indeed, anywhere in the UK, we recognised the benefit of any action which raises awareness of the broader environmental impact of development and influences development decisions. We committed to investigate opportunities for whole life emission reporting, through building regulations or by other means and proposed to provide an update on this before the end of 2022.

4.6 Renew efforts to improve resource efficiency, recycling and waste prevention, including by:

• Bringing forward the planned circular economy package for legislating within the forthcoming Programme for Government

Timing: 2022

Primary responsibility: Scottish Government

Scottish Government response: accept

PfG already commits us to bringing forward a Circular Economy Bill. Consultation planned for May 2022, expect legislative timetable to be announced in next PfG.

• Ensuring key policies, such as Extended Producer Responsibility are on track to be in place well before 2025

Timing: 2022

Primary responsibility: Scottish Government

Scottish Government response: accept

This recommendation is vague but in line with our PfG and CCPu commitments we are developing a route map to accelerate progress to meet our 2025 waste reduction and recycling target in a way that maximises carbon savings. The consultation on our route map is due to be published in May 2022, alongside the consultation on a circular economy bill. We are working with the other UK administrations to bring in extended producer responsibility for packaging from 2024.

Our Deposit Return Scheme will be live from August 2023.

• Working with the waste sector and local authorities to set out a route-map detailing the policy and support needed to ensure the 2025 waste prevention and recycling targets(including the 70% recycling target) are delivered, and setting new ambitious targets for 2030.

Timing: 2022

Primary responsibility: Scottish Government

Scottish Government response: accept

This recommendation is in line with our PfG and CCPu commitment to develop a route map to accelerate progress to meet our 2025 waste reduction and recycling target in a way that maximises carbon savings. Work to develop the route map over 2021 included pre-consultation workshops with local government and waste sector to understand the challenges/barriers to progress, identify opportunities, harness expertise and test assumptions.

As part of the development of the route map, due consideration is being given to post-2025 measures, including targets for the period to 2030 and beyond to ensure the waste sector fully plays its part in emissions reduction.

The consultation on our route map is due to be published in May 2022, alongside the consultation on a circular economy bill.