Zero Emission Taskforce recommendation report: Scottish Government response

Ministerial Foreword

I am pleased to present the Scottish Government’s formal response to the Zero Emissions Social Housing Taskforce (ZEST) report.

The Social Housing sector has played a leading role in improving the energy efficiency of Scotland’s homes, cutting emissions and helping keep the cost of heating down. Eighty-nine per cent of homes in the social rented sector now meet the requirements of the first Energy Efficiency Standard for Social Housing (EESSH), broadly equivalent to EPC Band C or D.

However, there is more we must now do to cut emissions and transform our housing stock into zero emissions homes that are fit for the future. And we must do this while continuing to provide high quality affordable homes, protect tenants’ rights and ensuring the long-term sustainability of the social housing sector.

ZEST was tasked to consider and provide practical recommendations on what is required to achieve our ambitious climate change targets in a fair and just way. I am delighted to see that they have responded by developing equally ambitious recommendations that contribute to Scotland’s just transition to net zero.

We agree that we need to build on our “Fabric First” approach, by continuing to install energy efficiency measures. However, to achieve our targets, we also need to install zero emissions heating systems such as heat pumps and heat networks in far greater numbers. The current cost of living crisis makes this need even more urgent. Well installed and efficient zero emissions heating systems can offer households heating on par with volatile fossil fuels and when installed in combination with solar PV or battery storage can significantly reduce household bills.

We also recognise that we need to start building homes that do not require retrofit in the future. Housing to 2040, the Scottish Government’s 20-year strategy, sets out ambitious targets for the delivery of 110,000 affordable homes by 2032. It also sets out the aim for all new homes delivered by local authorities or Registered Social Landlords to be zero emissions by 2026.

We are stepping up our investment to accelerate deployment of heat and energy efficiency measures, allocating at least £1.8 billion over the course of this parliament. This includes at least £465 million to support those least able to pay, and £200 million for the Social Housing Net Zero Heat Fund which is dedicated to supporting social landlords retrofit their existing stock.

The Scottish Government is also establishing a National Public Energy Agency with a focus on heat and energy efficiency. The Agency will coordinate delivery and build public understanding and awareness of heat and energy efficiency work, inform and educate the public on the changes required, provide expert advice to national and local government, and work with public, private and third sector partners to deliver this transformative national project.

A just transition means sharing the benefits of climate action widely while ensuring the costs are distributed fairly. This means those who have the means will share some of the costs, particularly where they may benefit from lower bills directly. We will continue to support those least able to pay, but it is clear the public sector alone cannot bear the long-term cost of converting homes and buildings to 2045. As such, we have established the Green Heat Finance Taskforce to recommend ways to increase individual, community and private-sector investment into energy efficiency and zero emissions heating.

Lastly, but by no means least, we understand the need for the sector to have clarity around the second Energy Efficiency Standard for Social Housing milestone (EESSH2). I can confirm that the review of EESSH2 will be brought forward to commence this year for completion in 2023.

The review of EESSH2, which will be taken forward in partnership with the sector, will ensure that it supports the gathering pace of decarbonisation, and supports our guiding principles of a just transition that is fair to everyone and leaves no one behind. The Scottish Government will work with the social housing sector to establish a new EESSH Review Group, including a technical steering group, to advance the review and support delivery of the ZEST recommendations.

I want to thank ZEST for their hard work and dedication in submitting this report and I am pleased that they are encouraged by the steps this Government has set out.

I also commend the progress that the sector has already made and will continue to support you in leading the changes that we all need to make to achieve a net zero Scotland.