Scottish Budget 2025 to 2026
The Scottish Budget sets out the Scottish Government’s proposed spending and tax plans for 2025 to 2026, as presented to the Scottish Parliament.
Chapter 11 Net Zero & Energy
Portfolio Responsibilities
The Net Zero and Energy Portfolio plays a critical role in supporting a just transition and creating jobs and opportunities for businesses and communities, as we tackle the twin crises of climate change and biodiversity loss. Our potential for renewable energy generation is one of our greatest environmental and economic opportunities.
The Net Zero and Energy portfolio budget will fund work to deliver on the potential of renewables, tackle climate change and protect and restore nature. The portfolio funds Environmental Standards Scotland, Scottish Environment Protection Agency, Zero Waste Scotland, NatureScot (Scottish Natural Heritage), and the Drinking Water Quality Regulator and provides loans to Scottish Water (a public corporation).
The path to net zero presents enormous economic opportunities – supporting a just transition that creates jobs, promotes private investment and brings communities with us. Capital funding of £150 million will accelerate our investment to support the offshore wind sector, underlining our commitment to invest up to £500 million over five years. We will establish a Scottish Government hub for offshore wind in the North-East to provide an additional route for industry to engage with our teams.To support our recently published Green Industrial Strategy, we will invest over £25 million in supporting the energy transition, creating jobs across the supply chain.
The budget helps provide a positive future for Grangemouth, providing £7.8 million which will help secure a long-term and sustainable future for the industrial cluster. There is also £15.9 million of funding for the Just Transition Fund for the North East and Moray that will help us support jobs, innovation and secure the highly skilled workforce of the future. We will invest over £300 million in our heat in buildings programmes, which includes supporting over 20,000 households to save up to £500 a year on their energy bills and helping make their homes more comfortable.
Our spend will also support households and communities to reduce their waste and their emissions – including £8 million of funding to our Community Energy Programme, and over £5 million supporting our Community Climate Action Hubs; alongside sponsoring projects and wider initiatives to increase awareness of necessary action to ensure a just transition and a nature-positive nation. We need to make Scotland’s economy more resilient to the damaging impacts of climate change. To support this, we will invest more than £200 million in 2025-26, either directly, or through our public bodies. £15 million of this will be invested in flood resilience activity, complementing the support provided through the Adaptation Scotland programme.
Net Zero and Energy intended contributions to the National Outcomes
Primary National Outcomes
- Economy
- Environment
Secondary National Outcomes
- International
- Communities
- Fair Work and Business
- Health
- Culture
- Human Rights
For further information on the purpose of the portfolio budget, and contributions to national outcomes (including impacts of spend on equality of outcome) please refer to the relevant portfolio annex in the published Equality and Fairer Scotland Budget Statement.
Net Zero & Energy
The prior year 2024-25 Budget comparator figures are based on the latest in-year budget numbers which were revised at the Autumn Budget Revision. The 2023-24 Scottish Budget comparator figures reflect the outturn numbers for that year.
| Level 2 | 2023-24 Outturn £m | 2024-25 ABR Budget £m | 2025-26 Budget £m |
|---|---|---|---|
| Offshore Wind Supply Chain | 3.6 | 9.7 | 162.5 |
| Energy Transitions | 28.4 | 48.1 | 54.8 |
| Energy Efficiency and Decarbonisation | 256.0 | 315.0 | 349.1 |
| Environmental Services | 194.8 | 204.4 | 204.1 |
| Environmental Standards Scotland | 2.8 | 2.9 | 3.8 |
| Climate Change | 39.4 | 40.5 | 72.9 |
| Scottish Water | 88.9 | 57.8 | 52.4 |
| Green Economy | 0.8 | – | – |
| Total Net Zero and Energy | 614.7 | 678.5 | 899.6 |
| of which | |||
| Total Fiscal Resource | 89.6 | 118.4 | 131.9 |
| of which Operating Costs* | 32.9 | 36.3 | 40.6 |
| Non-cash | 7.3 | 8.6 | 9.6 |
| Capital | 484.5 | 553.6 | 760.6 |
| Financial Transactions (FTs) | 14.4 | (2.2) | (2.5) |
| UK Funded AME | 19.0 | – | – |
Presentational Adjustments for Scottish Parliament Approval
| SEPA (NDPB Non-cash) | (5.9) | (5.0) | (7.4) |
|---|---|---|---|
| NatureScot (NDPB Non-cash) | (2.1) | (2.6) | (2.2) |
| Scottish Water loan repayments not included in Scottish Parliamentary budgets | 42.8 | 83.1 | 42.8 |
| Environmental Standards Scotland | (2.8) | (2.9) | (3.8) |
| Total Net Zero and Energy | 646.7 | 751.0 | 929.1 |
| Total Limit on Income (accruing resources) | 400.0 |
| Level 3 | 2023-24 Outturn £m | 2024-25 ABR Budget £m | 2025-26 Budget £m |
|---|---|---|---|
| Offshore Wind Supply Chain | 3.6 | 9.7 | 162.5 |
| Total Offshore Wind Supply Chain | 3.6 | 9.7 | 162.5 |
| of which | |||
| Fiscal Resource | 3.6 | 9.7 | 12.6 |
| Non-cash | – | – | – |
| Capital | – | - | 149.9 |
| FTs | – | – | – |
| UK Funded AME | – | – | – |
| Level 3 | 2023-24 Outturn £m | 2024-25 ABR Budget £m | 2025-26 Budget £m |
|---|---|---|---|
| Energy | 21.9 | 40.8 | 43.1 |
| CARES Recovery | 6.5 | 7.3 | 11.7 |
| Total Energy Transitions | 28.4 | 48.1 | 54.8 |
| of which | |||
| Fiscal Resource | 1.1 | 8.0 | 10.0 |
| Non-cash | – | – | – |
| Capital | 27.3 | 40.1 | 44.8 |
| FTs | – | – | – |
| UK Funded AME | – | – | – |
| Level 3 | 2023-24 Outturn £m | 2024-25 ABR Budget £m | 2025-26 Budget £m |
|---|---|---|---|
| Energy Efficiency and Decarbonisation | 256.0 | 315.0 | 349.1 |
| Total Energy Efficiency and Decarbonisation | 256.0 | 315.0 | 349.1 |
| of which | |||
| Fiscal Resource | 43.0 | 52.3 | 49.1 |
| Non-cash | – | – | – |
| Capital | 195.2 | 264.9 | 302.5 |
| FTs | 17.8 | (2.2) | (2.5) |
| UK Funded AME | – | – | – |
| Level 3 | 2023-24 Outturn £m | 2024-25 ABR Budget £m | 2025-26 Budget £m |
|---|---|---|---|
| Environmental Quality | 7.0 | 5.4 | 23.0 |
| Nature Restoration | 4.1 | 22.2 | 18.0 |
| Scottish Environmental Protection Agency | 69.0 | 53.8 | 55.4 |
| NatureScot | 78.5 | 78.1 | 68.2 |
| Zero Waste | 36.2 | 44.9 | 23.2 |
| Zero Waste Scotland | – | – | 16.4 |
| Total Environmental Services | 194.8 | 204.4 | 204.1 |
| of which | |||
| Fiscal Resource | 129.6 | 134.4 | 143.0 |
| Non-cash | 7.3 | 8.6 | 9.5 |
| Capital | 43.0 | 61.4 | 51.6 |
| FTs | (4.0) | – | – |
| UK Funded AME | 19.0 | – | – |
| Level 3 | 2023-24 Outturn £m | 2024-25 ABR Budget £m | 2025-26 Budget £m |
|---|---|---|---|
| Environmental Standards Scotland | 2.8 | 2.9 | 3.8 |
| Total Environmental Standards Scotland | 2.8 | 2.9 | 3.8 |
| of which | |||
| Fiscal Resource | 2.0 | 2.9 | 3.1 |
| Non-cash | – | – | 0.1 |
| Capital | 0.8 | – | 0.6 |
| FTs | – | – | – |
| UK Funded AME | – | – | – |
| Level 3 | 2023-24 Outturn £m | 2024-25 ABR Budget £m | 2025-26 Budget £m |
|---|---|---|---|
| Climate Action and Policy | 22.0 | 28.3 | 57.0 |
| Just Transition Fund | 17.4 | 12.2 | 15.9 |
| Total Climate Change | 39.4 | 40.5 | 72.9 |
| of which | |||
| Fiscal Resource | 22.0 | 28.3 | 36.8 |
| Non-cash | – | – | – |
| Capital | 16.8 | 12.2 | 36.2 |
| FTs | 0.6 | – | – |
| UK Funded AME | – | – | – |
| Level 3 | 2023-24 Outturn £m | 2024-25 ABR Budget £m | 2025-26 Budget £m |
|---|---|---|---|
| Interest on Voted Loans | (115.2) | (121.5) | (129.0) |
| Voted Loans | 195.7 | 170.0 | 170.0 |
| Hydro Nations | 2.2 | 2.0 | 4.1 |
| Drinking Water Quality Regulator | 0.4 | 0.4 | 0.5 |
| Private Water | 5.7 | 6.8 | 6.8 |
| Total Scottish Water | 88.9 | 57.8 | 52.4 |
| of which | |||
| Fiscal Resource | (111.7) | (117.2) | (122.6) |
| Non-cash | – | – | – |
| Capital | 200.6 | 175.0 | 175.0 |
| FTs | – | – | – |
| UK Funded AME | – | – | – |
| Level 3 | 2023-24 Outturn £m | 2024-25 ABR Budget £m | 2025-26 Budget £m |
|---|---|---|---|
| Green Economy | 0.8 | – | – |
| Total Green Economy | 0.8 | – | – |
| of which | |||
| Fiscal Resource | – | – | – |
| Non-cash | – | – | – |
| Capital | 0.8 | – | – |
| FTs | – | – | – |
| UK Funded AME | - | – | – |
Contact
Email: ScottishBudget@gov.scot
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