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

5. Fuel supply

5.1 As part of the planned update to the Energy Strategy, and supported by the proposed new National Public Energy Agency, formalise the planning process, governance framework and timeline for decisions on infrastructure for the conversion to hydrogen of the gas transmission and distribution networks. Alongside this, identify priority candidate areas for hydrogen conversion and areas which are unlikely to be suitable to hydrogen conversion (such that electrification and alternatives can be prioritised), ensuring consistency with least-regret forward views on demand for hydrogen within Scotland and across the rest of the UK.

Timing: Q4 2022

Primary responsibility: Scottish Government

Scottish Government response: partially accept

Our policies are aligned with the execution of this action; however, we can only recommend partial acceptance of this action as regulation of the gas network is a reserved competence for the UK Government.

As such, we will continue to work with the Gas Network Operators and the UK Government to explore opportunities for increasing the blend of hydrogen in the gas network. We also continue to urge the UK Government and regulator to expedite changes to regulation to facilitate greater levels of gas blending.

As committed in our Heat in Building Strategy and our Hydrogen Action Plan, we will continue to work with the gas network sector and the UK Government to explore opportunities for blending hydrogen in the gas network. We continue to keep under review the benefits and cost-effectiveness of increased hydrogen blending at GB-level, including in terms of the wider energy system and supply chains.

We are actively exploring where in Scotland hydrogen might ultimately be most appropriate for heating homes and buildings and we are using this evolving understanding to guide our approach. We will set out more detail on the pathways to decarbonised gas and options for hydrogen in the net zero transition in our Energy Strategy and Just Transition Plan

Additionally, as committed in our Hydrogen Action Plan, we are currently undertaking a strategic review working with stakeholders, including network companies, local authority and delivery partners, to identify regions and areas most likely to have access to hydrogen in the future, and considered high-potential areas for the use of hydrogen for heat in Scotland.

5.2 Together with UK Government, review existing – and, if necessary, develop new – schemes that support the sustainable production of biomass feedstocks and conversion of bioenergy in a way consistent with Net Zero. This should include dates beyond which new facilities should be built with CCS, and dates for when CCS will need to be retrofitted to biofuel facilities already in operation.

Timing: 2023

Primary responsibility: Joint with the UK Government

Scottish Government response: partially accept

Bioenergy Action Plan

The Scottish Government's aim is to see bioenergy used where it has the greatest value in reducing emissions. We are currently working to review the availability of sustainable biomass and the most appropriate use of these finite resources across the whole energy system in Scotland. We intend to publish a Bioenergy Action Plan in 2023 and are engaging with UK Government as they develop their Biomass Strategy this year.

Planting Sustainable Biomass Feedstock's

The forthcoming Scottish Agriculture Bill will set out the framework for increased conditionality of farm payments, to ensure more farmers are supported and encouraged to improve efficiency and environmental practices. Future support will incentivise climate mitigation and adaptation actions to increase the resilience of Scotland's agriculture sector and domestic food supply. We will support a transition away from extractive agriculture, to sustainable, regenerative agriculture that supports biodiversity, reduces emissions and sequesters carbon. We will support biomass crops where appropriate.

Conversion of Bioenergy in a way that is consistent with Net Zero

We see a limited role for bioenergy in heating, in line with advice from the UK's Climate Change Committee. We recognise that there may be a small number of buildings for which bioenergy, in particular bio heating oil, bio LPG and biomass, may represent the only practicable option for heat decarbonisation and so could be considered for exemptions from zero emissions requirements.

By 2030, we would like at least 20% of the volume of the gas in the GB gas grid to be alternatives to natural gas. Biomethane currently contributes 716 GWh to the Scottish grid but could increase to around 1.4 TWh. Conversions of Bioenergy in a way that is consistent with Net Zero will require CCS technology. The Scottish Government does not hold all the necessary legislative and regulatory levers needed to stand up a CCS cluster alone, UK Government support including access to BEIS business revenue support, underwriting of liabilities and access to an economic licence is essential to providing the certainty and support required to accelerate CCS in Scotland. Given the criticality of CCS the Scottish Government has already engaged with the UK Government to press for greater clarity and to work collaboratively with them to find solutions to accelerate the development of the Scottish Cluster and the deployment of CCS in Scotland, and will continue to do so.

The UK Government has committed to supporting four CCS clusters in the UK by 2030 at the latest. However, it has yet to set out the timetable for the Track-2 of its cluster sequencing process, through which it will announce the remaining two CCS clusters to be progressed with UK Government support. Until this clarity is forthcoming the Scottish Government is not able to identify a cut-off point and determine the need to plan for emissions reductions without the technology. The Scottish Government continues to press for greater and immediate clarity on the Track-2 timetable to give this much needed clarity and certainty.