Securing a green recovery on a path to net zero: climate change plan 2018–2032 - update

Executive Summary

This document updates the 2018 Climate Change Plan. Since that Plan we have set new ambitious targets to end our contribution to climate change by 2045. We have committed to reduce emissions by 75% by 2030 (compared with 1990) and to net zero by 2045. COVID-19 does not change our ambitions. As Scotland emerges from COVID-19 we have a chance to rebuild our economy in a way that delivers a greener, fairer and more equal society. This Plan sets out our approach to delivering a green recovery, and sets out a pathway to deliver our world leading climate change targets^[1]. In line with the 2018 plan, the focus is on the period up to 2032.

You will see from what we have set out here that our approach must be iterative, we must learn by doing. No-one currently has all the answers on how we deliver the transition over the next 25 years or how emerging technologies can be deployed efficiently at scale. Many of the solutions rely on further technological innovation, market development and wider take up and adoption as well as action by others. By monitoring, evaluating, updating and adapting this plan over the coming decade we can be on track to meeting our ambitious targets and capturing the opportunities of the transition. This iterative approach will prepare the ground for the next statutory Climate Change Plan, which is to be completed by early 2025.

Green Recovery

It is essential that our recovery from the pandemic responds to the climate emergency, and puts us on a pathway to deliver our statutory climate change targets and a just transition to net zero, by ensuring our actions in the immediate term are in line with our long-term goals. The Scottish Government has been clear in its commitment to securing a just and green recovery, which prioritises economic, social and environmental wellbeing, and responds to the twin challenges of the climate emergency and biodiversity loss.

In developing our understanding of what a green recovery will mean for Scotland, we have listened to stakeholders from across academia, industry, business, trade unions and environmental organisations and other experts including the Climate Change Committee, Just Transition Commission, Advisory Group on Economic Recovery, Scottish Parliament, Climate Emergency Response Group, Scottish Science Advisory Council and the Sustainable Renewal Advisory Group.

Delivering a green recovery is at the heart of the 2020-2021 Programme for Government. Part 1 of this Update sets out the progress that is being made in delivering these commitments and the further actions we will take to secure a green recovery from the COVID-19 pandemic. Our response is framed around the following key themes which have consistently been highlighted by stakeholders as priorities:

• Recognising the role that both public and private investment must play in delivering the transition to net zero. The Programme for Government committed the first tranche of the £2 billion Low Carbon Fund and this update sets out a number of additional investments being made by Government as well as opportunities to leverage in investment from others. The second tranche will deliver:
  • £180 million for an Emerging Energy Technologies Fund, supporting the development of hydrogen and providing impetus to the development of Negative Emissions Technologies (NETs);
  • £120 million for Zero Emission Buses, driving forward a fully decarbonised future for Scotland’s bus fleet and support the Scottish supply chain;
  • £50 million to transform Vacant and Derelict Land, ensuring that this land is utilised for maximum environmental and community benefit
  • £50 million to create Active Freeways, providing a sustainable link between our towns, cities and some of our most beloved national landmarks.
• These investments will be critical in laying the foundations for our transition to net-zero.
• At the centre of our approach is a commitment to increase the number of good, green jobs, and to enable people to access these jobs through training and reskilling. To further align the skills system with the demand resulting from a green recovery and the transition to net zero, the Climate Emergency Skills Action Plan has been published alongside this update.
• The COVID-19 pandemic has proven the importance of embedding resilience and security into our society and economy. Adaptation and resilience are key components of our green recovery. The Programme for Government committed to investing an extra £150 million for flood risk management over the next 5 years and £12 million in coastal change adaptation.
• We know the impacts of COVID-19 on people’s lives and livelihoods have been enormously difficult. In their advice the CCC recommended that actions to maintain positive behaviours in the long term are prioritised and our update sets out the policy measures to embed behaviour change in each of the sectors. Our new Draft Public Engagement Strategy, published alongside this update sets out how we will continue to engage with citizens in developing and implementing climate policy that has widespread support and encourages action.
• We are also committed to delivering a place-based approach to our green recovery working closely with those communities and organisations that need change, are undergoing change or affected by change. Our ongoing planning system reforms will aim to reduce process and procedures so that planning can focus more on places and people and evolving concepts such as 20 minute neighbourhoods will prioritise quality of life and health as well as our net zero ambitions.

The green recovery and transition to net zero present considerable economic opportunities for Scotland. By capitalising on Scotland’s strengths in energy, natural capital, innovation and our skilled workforce and universities, we can set Scotland at the forefront of growing global markets. The recent Inward Investment Plan identified Energy Transition and Decarbonisation of Transport as two areas of competitive strengths in Scotland as well as strengths in Digital, Health, Space and Food and Drink which will all contribute to a thriving net zero economy in the future.

Scotland is already harnessing our considerable strengths and expertise in offshore energy to drive our energy transition and develop and deploy new technologies in hydrogen production and use and in Carbon Capture and Storage. This is driving a revolution in our transport system, with new hydrogen bus fleets on the streets of Aberdeen.

Scotland’s natural capital is one of our greatest assets and is central to our future net zero economy, developing thriving rural economies based around woodland creation, peatland restoration and biodiversity as well as sustainable tourism, food and drink and energy.

Our Coordinated Approach

The policies and actions in this update to the 2018 Climate Change Plan are set out on a sector-by-sector basis. However, achieving our climate change targets will require us to align and deliver these policies in a joined-up way. This means that some of our policies will involve two or more sectors (for example, the development of renewable energy will support decarbonisation across the whole energy system, including electricity, transport, industry and buildings or land use relates to agriculture, forestry and bioenergy crops), and also means integrating climate change action into all of the decisions we make across government.

For this reason, we have dedicated Part 2 of this update to our ‘Coordinated Approach’ to meeting our emissions reduction targets. This section looks at how we take a cross-cutting, systems based approach that harnesses opportunities for inclusive jobs, growth and well-being.

A coordinated approach is fundamental to delivering a just transition, given that the transition will transform all parts of our society and economy. Fairness will be at the heart of our climate action, ensuring that individuals and communities are not left behind. Collectively, we must plan and prepare, so that that these transformational changes are harnessed to tackle inequalities, provide good jobs, improve our environment and support a thriving, wellbeing economy. In this update we present a range of policies that will boost social and economic opportunities and, in particular, underpin the importance of equity, engagement and planning. For example:

• improvements for bus priority infrastructure will improve connectivity for people in lower socio-economic groups; and
• investment in heat and energy efficiency creates jobs and includes explicit support for those least able to pay.

We are committed to taking a Whole System Energy Approach, encouraging joined-up and collaborative thinking across sectors, particularly with regards to emerging technologies related to hydrogen, bioenergy and Negative Emissions Technologies. The Scottish Government also recognises the vital importance of innovation in meeting our climate change targets, and this Plan update includes details of our actions to date and plans for the future to support world-leading innovators in Scotland. In 2017 we published Scotland’s first Energy Strategy in alignment with the 2018 Plan. This championed a whole system view of energy as one of its three core principles, along with an ‘inclusive energy transition’ and ‘a smarter local energy model’. We will update our energy strategy in 2021 to lay out a coordinated vision for the whole energy system. This will be based on our best understanding of the technologies and options available today, and focused on delivering our economy-wide emissions reduction targets and just transition and wellbeing economy outcomes.

Another area where a coordinated approach is essential is on land use. Not only is our land the cornerstone of our society and bedrock of Scotland’s natural capital, but it has many uses. We have a finite amount of land and are making increasing demands upon it. Our upcoming third Land Use Strategy will set out how the various aspects of land use and actions of the Scottish Government come together to deliver on our overarching sustainable land use vision. The Coordinated Approach section also includes details of our approach to a circular economy in Scotland, and our commitment to a Wellbeing Economy. We also have an excellent opportunity to embed emissions reduction and climate change adaptation into Scotland’s long term development strategy through the National Planning Framework 4.

Policies and Proposals: a sector approach

This update includes policies and proposals for each sector that build on those contained in the 2018 Plan. We have also added an eighth sector for this update: Negative Emissions Technologies (NETs).

The key policies which underpin this progress are set out below, as well as in Part 3, and in full at Annex A.

Electricity

In Electricity, the Climate Change Plan update announces further policies to continue the rapid growth in renewable generation over the past twenty years, moving from a low to a zero carbon electricity system, with the potential for NETs to deliver negative emissions. In our Energy Strategy Update, to be published in 2021, we will set out in detail the role that electricity generation will have in the wider energy system. We will continue to review our energy consenting processes, making further improvements and efficiencies where possible, and we will deliver the actions from our Offshore Wind Policy Statement published in October which supports the development of between 8 and 11 GW of offshore wind capacity by 2030.

We will review and publish an updated Electricity Generation Policy statement by 2022 reflecting the contribution that renewable electricity generation is likely to have to achieving our Net Zero target in line with the CCC recommendation to do so. We will continue our efforts to ensure a sustainable security of electricity supply, and in 2021 we will launch a call for evidence and views on technologies including energy storage, smart grid technologies and technologies to deliver sustainable security of supply.

There are a number of important actions that affect a number of sectors, including electricity.

We will also take forward actions to develop the role of hydrogen in our energy system. We will build on the outputs of the Hydrogen Assessment project and publish a Hydrogen Policy statement this month, and then a Hydrogen Action Plan in 2021.

We know that bioenergy will be important in helping us deliver negative emissions, and a key challenge for the early 2020s is to understand the extent to which bioenergy should be used in each of our sectors. In early 2021 we will publish a Bioenergy Update and will establish an Expert Working Group to consider and identify the most appropriate and sustainable use of bioenergy resources within Scotland. We will publish a Bioenergy Action Plan in 2023.

Buildings

In Buildings, we know that around 50% of homes and non-domestic buildings will need to convert to a low or zero carbon heating system by 2030. We will set out a clear, long term vision and policy direction for heat in buildings in the forthcoming Heat in Buildings Strategy. Our approach will be framed around 3 key areas: regulatory change, delivering significant investment and supporting supply chain growth. In this Plan update we’ve confirmed our New Build Zero Emissions from Heat Standard will be introduced from 2024 by which point all new builds will have to have zero emissions heating systems. We are seeking evidence on the impact of introducing these requirements earlier than 2024 if feasible. We have also set out a clear approach to developing a long term regulatory framework, within the limits of our competence, for decarbonising heat in buildings and ensuring a good level of energy efficiency.

We will stimulate adoption of zero emissions heating systems and pursue expanded investment in zero emissions heating by developing innovative solutions to leverage private capital. We will bring forward the review of the existing Energy Efficient Standard for Social Housing to conclude in 2023. As announced in the Programme for Government, we will invest £1.6 billion in heat and energy efficiency over the next Parliament, using this to leverage in UK Government and private finance to see, as a minimum, the rate of zero emissions heat installations in new and existing homes and buildings double every year out to 2025.

Transport

In transport we set out ambitious actions which are aligned with our new National Transport Strategy. There is a key focus on technological advances, but equally on measures to encourage mode-shift and significant societal changes. This update commits to reduce car kilometres by 20% by 2030, a truly world-leading aspiration, and we are not aware of any other country that has committed to such an ambitious transformation. Once the pandemic has moved to a phase to allow more certainty regarding future travel demand we will produce a route-map to meet the reduction. Alongside that we will phase out the need for new petrol and diesel cars and vans by 2030 (bringing this ambition forward from the 2018 plan by 2 years), We will work with public bodies to lead the way by phasing out the need for new petrol and diesel light commercial vehicles by 2025.

We will continue to work to establish a Zero Emission Heavy Duty Vehicle programme with Scottish Enterprise to support innovation in the Scottish supply chain for HGVs and we will engage with industry to understand how changing technologies and innovations in logistics can help reduce carbon emissions. On aviation, we will decarbonise scheduled flights within Scotland by 2040 and will work with the sector to encourage sustainable growth post COVID-19. As announced in our Programme for Government we will aim to create the world’s first zero emission aviation region in partnership with Highlands and Islands Airports.

On public transport, Scotland’s rail services will be decarbonised by 2035 and we will work with the newly formed Bus Decarbonisation Taskforce, comprised of leaders from the bus, energy and finance sectors, to ensure that the majority of new buses purchased from 2024 are zero-emission (brought forward from 2032). On active travel, as announced in the Programme for Government we will support transformational active travel projects with a £500 million investment over 5 years for active travel infrastructure, access to bikes and behaviour change schemes.

Industry

In industry, we know that emissions need to continue to decline significantly whilst ensuring Scottish industry competes on a level playing field and remains globally sustainable. We also know that Scottish industry has much to gain from being at the forefront of the transition to net zero. In this Climate Change Plan update we commit to taking a properly sequenced and strategic approach to Scotland’s industrial sector, creating opportunities for Scottish industries and supply chains to expand exports into global markets. Many industrial decarbonisation powers lie with the UK Government and we will continue to press the UK Government to implement the jointly developed UK ETS and agree a link to the EU ETS to enable a smooth transition for industry. Carbon capture and storage (CCS) is essential to reach net zero emissions.

We are announcing a new Emerging Energy Technologies Fund of £180 million that will support the development of hydrogen and CCS, which will add new impetus to the development of NETs, and we will work with our agencies to develop a £5 million Carbon Capture and Utilisation Challenge Fund to boost early stage work and technologies in this area. In these challenging economic conditions, we will continue to develop the conditions for private sector investment by supporting innovation throughout the industry sector: the Scottish Industrial Energy Transformation Fund commits £34 million for projects at industrial sites for energy efficiency or deeper decarbonisation and the £26 million Low Carbon Manufacturing Challenge Fund will support innovation in low carbon technology, processes and infrastructure. We are investing £100 million to help businesses create new, green jobs via the Green Jobs Fund.

Waste

In waste, Scotland’s progress in reducing emissions in the waste and resources sector over the past 20 years has been striking, but we know there is still progress to be made. We will continue to embed circular economy principles in to the wider green recovery and take steps to reduce food waste through the Food Waste Reduction Action Plan delivering against our ambitious target to reduce food waste by one third by 2025 (against a 2013 baseline). We are committed to ending landfilling of biodegradable municipal waste by 2025 and recycling 70% of all waste by 2025. We will develop a route map to outline how we will deliver our waste and recycling targets in a way that maximises carbon saving potential, and are investing £70 million to make the right option the easy option for household recycling. We are currently consulting on banning a number of single use plastic items and will continue to work with the UK Government and other devolved administrations on reforms to the packaging extended producer responsibility regime. We will introduce measures to encourage people to shift toward reusable products and encourage more sustainable consumption. We will work with partners to develop a post 2025 route map to identify how the waste and resources sector will contribute towards Scotland’s journey towards net zero in the period to 2030 and beyond.

Land use, land use change and forestry

Our landscape and natural environment is one of our greatest national assets and has a vital role to play in meeting our ambitious climate change targets. Through significant increases in forestry and widespread peatland restoration in particular, we can reduce greenhouse gases and other pollutants and increase the levels of carbon dioxide being absorbed and locked up in timber products. We will continue to expand forest cover in Scotland, building on the success of creating 22,000 hectares of new woodlands in the last two years. We will increase new woodland creation from the current target level of 12,000 hectares annually in 2020/21 up to 18,000 hectares in 2024/25. Scottish Forestry and Forestry and Land Scotland will work with investors, carbon buyers, landowners and market intermediaries to increase private investment in new woodlands in order to increase the woodland carbon market by at least 50% by 2025. As of March 2020 over 25,000 hectares of peatland have been put on the road to restoration, and earlier this year we announced a £250 million ten-year funding package to support the restoration of 250,000 hectares of degraded peat by 2030. To deliver on the 2032 emissions reduction envelope annual peatland restoration needs to be far higher than the current 20,000 hectare annual target and we will work closely with delivery partners, land owners, managers, farmers and crofters to continue to encourage more restoration of peatland, both traditional bog but also land that offers the highest emission savings per hectare.

Agriculture

In agriculture, we know that we must continue to produce high quality food, but also deliver high environmental standards and emissions reductions. How we use our land will evolve as we respond to climate change with more woodland, restored peatland as well as potential increase in land for growing biomass. We also know it is important that our soils and grasslands are managed appropriately, and that technology is deployed as innovatively as possible to reduce emissions. The Update provides a route map for agricultural transformation, having started in 2020 and working in partnership through farmer led groups, with the introduction of environmental conditionality, piloting new mechanisms of support and enhancing advice for farmers, crofters and land managers to meet Scotland’s goal of having food production of world leading sustainability. We will ensure that rural support enables, encourages and where appropriate requires the shift to low carbon sustainable farming. We will scale up the Agricultural Transformation Programme across all policies, including to enable farmers and crofters to purchase equipment that should assist in reducing emissions and support practice change. We will explore options for land-use change to optimise uses beyond traditional farming and food production to multi-faceted land use including forestry, peatland restoration and management and for biomass production, including provision of advice for farmers and crofters who wish to step back from agricultural businesses by providing an opportunity to consider alternative land-uses or alternative agricultural uses.

Negative emissions technologies (NETs)

We know that NETs will play an important role in emissions reductions during the 2030s and 40s; this has become clear from the detailed modelling and evidence building that we have undertaken to identify pathways to meet our net zero and our interim targets. While this update lays out the scale of the contribution required, we need further work to establish the way in which those emissions might be spread across the sectors to meet our annual targets in the early 2030s. While there are opportunities in several sectors, establishing the most effective and efficient way to use NETs will need a focus on developing technologies, identifying options, and the early stage development of potential projects. This update includes urgent measures in this area, designed to ensure that concrete proposals are brought forward in the next few years. By the time of our next Climate Change Plan, we will be in a position to reallocate negative emissions to specific sectors.

Route Map to 2032

2020

£500 million investment in active travel projects over five years, £500 million to improve bus priority infrastructure
and £9 million Scottish Ultra Low Emission Bus Fund.

£62 million Energy Transition Fund and £34 million Scottish Industrial Energy Transformation Fund (SIETF) launched. Hydrogen Policy Statement published.

£1.6 billion Heat in Buildings fund announced, to be invested over the next Parliament; £6.9m support for H100 hydrogen for domestic heat demonstration; and initiation of Heat pumps cashback schemes.

2021

Legislation to restrict supply of specified single use plastic items comes into force. Consultation launches on a charge on single
use disposable beverage cups and legislation to increase the carrier bag minimum charge from 5p to 10p.

£70 million fund to improve local authority recycling collection infrastructure established.

Environmental conditionality introduced to extend requirements to all farmers and crofters to undertake environmental actions.

Energy Strategy Update published.

Hydrogen Action Plan published.

Low Carbon Manufacturing Challenge Fund launched.

At least 20,000 ha of peatland restored annually.

First tranche of funding available from the £180 million Emerging Energy Technologies Fund.

£120 million over the next five years for Zero Emission Buses.

2022

Updated Electricity Generation Policy Statement reviewed and published.

Carbon Capture and Utilisation Challenge Fund initiated, concluding in 2024.

Implementation of Deposit Return Scheme (DRS) for single use drinks containers.

Subject to the passage of the Heat Networks (Scotland) Bill, district and communal heating systems become regulated.

2023

Regional Land Use Frameworks developed.

Bioenergy Action Plan published.

Local Heat and Energy Efficiency Strategies launched across all local authorities.

2024

18,000 Ha of new woodlands created annually.

New Build Zero Emissions from Heat Standard.

Acorn Project Development begins, concluding with Direct Air Capture and Storage operating from St Fergus Gas Plant in 2026.

Our pathway to 2032: what our policies mean in practice

By 2032, our energy system will be in the midst of a major transformation, integrating new ways of producing, transporting and using energy with existing technologies. This transformation will be planned and developed through a systems-led approach, ensuring that decisions take account of the benefits across all of the energy sectors as well as the economic and social benefits they create for everyone in Scotland. By 2032, we will generate at least the equivalent of 50% of our energy across heat, transport and electricity demand from renewable sources. Scotland will have benefitted from the development of new, pioneering infrastructure such as that used for CCUS, hydrogen and green hydrogen production. The process of developing this world leading, sustainable energy system will have created secure and well paid jobs, and supported sustainable economic growth across all regions of Scotland.

Our electricity system will have deepened its transformation for the better, with over 100% of Scotland’s electricity demand being met by renewable sources. More and more households, vehicles, businesses and industrial processes will be powered by renewable electricity, combined with green hydrogen production. There will also be a substantial increase in renewable generation, particularly through new offshore and onshore wind capacity. Innovation and new technologies will help ensure and maintain the resilience of our electricity systems, and local electricity generation will be commonplace. The costs and benefits of the growth in our electricity demand and systems will be shared fairly across all members of society, with vulnerable groups and fuel poor households protected at every stage.

We will ensure a just and managed transition for Scotland’s industrial sector, and by 2032 Scotland’s industrial sites will be highly competitive, embracing sustainable growth and low carbon technologies. The necessary infrastructure will be in place to enable the deployment of Carbon Capture, Utilisation and Storage (CCUS),and the production and utilisation of hydrogen. With these evolving technologies will come significant opportunities for investment and employment, as well as sustainable industrial innovation. Decarbonising, diversifying and expanding our industry into a range of low carbon markets, such as technology and sustainable manufacturing, will also mean that we attract financial investment and talent from all over the globe. We will manage this transition to ensure that Scottish businesses and industries benefit from these opportunities, and our Climate Emergency Skills Action Plan will support reskilling and retraining skilled workers so that they can access new, good quality jobs that become available.

We will also deliver a step-change in our transport system and how we consider the need to travel. By 2032, there will be no need to buy a new petrol or diesel car, and almost all of our passenger railways will be decarbonised. Our innovative and well-connected public transport network will mean more individuals choosing sustainable transport as their first choice. We will have reduced the kilometres driven by car by 20%, complemented by our commitment to develop a Work Local Programme, supporting flexible, remote and local working to drive the establishment of walkable and liveable 20 minute neighbourhoods. Our £500 million investment in active travel will have transformed the way we move around, ensuring accessibility to bikes and e-bikes, and delivering high-quality walking, wheeling and cycling infrastructure.

We will feel the benefits of climate change action in our homes, and by 2032 our homes will be better insulated, have lower demand for heat, and will be more energy efficient. The benefits of our landmark investment of £1.6 billion in zero emissions heating will be widely felt, both in our homes and workplaces, and will have levered in the private investment required for roll out across Scotland. We will have made considerable progress to remove poor energy efficiency as a driver of fuel poverty, and we will be continuing to work in close partnership with energy retailers to ensure a good deal for consumers. Delivering a just transition will be at the heart of all of these decisions, and we will seek to ensure that decarbonisation does not disadvantage those already struggling to heat their home.

By 2032, the natural environment and landscapes around us will have undergone significant restoration, with a sustainable land use system that prioritises nature and biodiversity. 21% of our land will be covered by forest, following increased funding of £150 million as well as our target of planting 18,000 hectares per year by 2024/25. We will also have restored over 250,000 hectares of peatland with £250 million of investment over 10 years, protecting this significant carbon store, and restoring wetland habitats. The prioritisation of these “nature-based solutions” and restoration projects will deliver multiple benefits, not only in terms of carbon sequestration, but also enhanced biodiversity, improved air and water quality, and landscapes and ecosystems that are more resilient to climate change.

Meanwhile, the agricultural sector will have supported these changes in land use, through the use of appropriate land for afforestation, including further integration of woodlands on farms, and peatland, while continuing the important role of food production. Farmers and crofters will continue to be supported for their key roles of producing high quality food and environmental stewardship while meeting conditionality for delivery of high environmental standards for emissions reduction and biodiversity. They will be adopting all available low-emission technologies and practices, supported by the introduction of new approaches, alongside environmental conditionality. Through partnership working between government and industry, for example through the work of the farmer-led groups and realigned and enhanced advice, agricultural businesses will have the skills and tools they need to produce food more sustainably, while adopting new technologies and innovative approaches.

By 2032 we will have transformed our relationship with waste and consumption in Scotland, meaning we’ll be well on the way towards a fully circular economy. Consequently, our economy will be designed to reduce, reuse, and repair materials and to recycle our waste more than ever. By 2025, we will have reduced the percentage of our waste going to landfill to 5%, and 70% of our waste will be recycled. Pending consultation, it’s likely that we will have introduced charges for single use items such as disposable cups, as well as a ban on problematic single-use items.

Finally, by 2032 Scotland will benefit from Negative Emission Technologies (NETs) underpinned by developing carbon capture, transport and storage infrastructure. These world leading projects will deliver clean energy while removing emissions from our atmosphere. A well-developed evidence base will have been combined with learning from trial and demonstration projects which came online during the 2020s to ensure that we are focusing on the most suitable applications and locations for NETs.

Throughout all of these transformations, the Scottish Government’s priority will be to ensure that the costs of the transition are distributed fairly and that our economy is benefiting from opportunities for the creation of highly skilled and secure jobs. Our approach will be led by science and the people and places who are already helping us to generate new and innovative ideas. This place-based and “learning by doing” approach, recommended by the Sustainable Renewal Advisory Group, will ensure that people and communities are involved in the transition and the benefits are shared by all as part of a just transition.

Our vision for 2045

The Scottish Government’s vision for 2045 is one of a society that prioritises the environment and the wellbeing of its people^[2]. Crucially, we will have reached net zero in a way that is fair and just to all and involves people and communities so everyone can benefit from the widespread, positive changes we will have experienced. These include changes to how we live, work and travel, our energy system, industries, natural environment, our agriculture sector and how we use and process materials. Significant technological advancements, building on current pilot projects, such as negative emissions technologies, zero emissions heat and zero emission vehicles will undoubtedly have helped to accelerate our transition to net zero and for Scotland to benefit from the economic opportunities that these developments bring, including jobs and trade.

It’s clear that the impact of our measures will go further than ending our contribution to climate change, with widespread benefits for our citizens, economy and natural environment. A sustainable economy will be built upon innovative green jobs, providing reliable, and skilled, employment for many. Nature and biodiversity will also have benefitted significantly from our transition, with nature-based solutions helping to restore and protect our ecosystems. Our places and communities will support the wellbeing and healthier lifestyles for people, while driving regional inclusive and sustainable economic growth. Changes to how we heat our homes and how we travel, for example, will have helped to improve wellbeing and tackle fuel poverty alongside wider equalities issues as part of a just transition.

Scotland will continue to be seen as a world leader in climate change mitigation and our low carbon technologies, processes and services mean we’ll have been able to attract skills and investment from all over the globe, and create new export and trade opportunities. Even when we’ve reached net zero, our part in tackling the climate emergency will by no means be over. We will continue to work with other countries, share our practices and drive emissions reduction at a global scale.

Working Together

The transformation of Scotland’s society and economy to net zero emissions can by no means be delivered by Government alone. It will require a national effort across all sectors - public, private and third – and from communities and individuals across Scotland. We must therefore ensure that our transition to net zero is collaborative and delivered in partnership.

Each of the sector chapters in Part 3 set out in detail how we will work with the public sector, individuals, businesses, industry, the UK Government and other countries as we pursue net zero emissions by 2045.

Leadership in the public sector

Scotland’s public sector bodies have a strong leadership role in delivering the transition to net zero. Strengthened legislation requires public bodies to report on their targets for achieving zero direct emissions and reducing indirect emissions, and to report how spending aligns with emissions reduction.

COSLA recognises the climate and biodiversity crisis and all 32 of Scotland’s local authorities signed Scotland’s Climate Change Declaration in 2007. Between 2005 and 2018 end-user CO2 emissions fell by 35% across all 32 local authorities in Scotland. The NHS in Scotland has cut buildings’ emissions by over 60% since 1990 and committed to net zero by 2045. Some public bodies have cut emissions by up to 50%, with Scottish Water and Zero Waste Scotland launching new net zero transition plans in 2020.

The Scottish Government has pledged at least £95 million to decarbonise the public sector estate and will implement a Net Zero Carbon Standard for new public buildings. We are working to decarbonise the public sector car fleet by 2025. We are mobilising the £12.6 billion of public sector procurement and collaborating across the public sector on tools and guidance to support the green recovery and our wider climate and circular economy ambitions.

We are committed to mobilising the £12.6 billion spent through public procurement to support our net zero ambition and have established the Climate and Procurement Forum to coordinate the procurement effort across the public sector, building on the existing sustainable procurement duties placed on public bodies through the Procurement Reform (Scotland) Act 2014. We have targeted programmes underway to underpin traction on a green recovery and wider climate and circular economy ambitions. This includes collaborating at national and sectoral levels to maximise collective purchasing power, for example to decarbonise buildings and vehicles, and we are also engaging with local leaders as key enablers, ensuring early procurement involvement in projects and working with public procurers to build climate change capability across the procurement community.

Engaging individuals

Public buy-in and behaviour change is key to climate action. CCC research estimates that more than 60% of emissions reductions to meet net zero will need to come from societal change. The 2019 Scottish Household Survey figures indicated that 68% of the Scottish public believe that climate change is an immediate and urgent problem; a steady increase since first inclusion in 2013. In our most recent research, reaching out to a representative sample of 1000 people in October 2020, we found that this figure had further increased to 79%^[3]. This concern will need to be transformed into societal action if we are to achieve our goal to end Scotland’s contribution to climate change in a generation.

To help achieve this, we will have developed our ‘Net Zero Nation: a Draft Public Engagement Strategy for Climate Change’, which has been published alongside this update for public consultation. It sets out our vision and guiding principles for future engagement, while detailing how we will communicate our climate change policies, enable participation in policy design and encourage action. It complements the actions set out in this document that individuals and Scottish households need to take for each sector.

Working with business and industry

We recognise the leadership role that many businesses are already playing and the action they are taking to reduce carbon emissions. Businesses from all sectors and in all parts of Scotland have an integral role to play in the transition. They can join government in investing in skills, infrastructure and innovation to deliver the growth and employment opportunities that a just transition to net zero offers.

An example of this is the Grangemouth Future Industry Board, which will provide a forum that brings together key decision makers across the Scottish Government, Scottish Enterprise and Falkirk Council, with a focus on Scotland’s key manufacturing cluster. It will strengthen alignment and co-ordinate activity to ensure the significant opportunities for low carbon economic growth are maximised at Grangemouth. The board will focus on specific and agreed work streams that will inform and shape efforts to unlock potential investment and identify policy levers that can support sustainable growth at Grangemouth, with decarbonisation, longevity, competitiveness and just transition at the heart of the board’s efforts.

The move to a net zero economy provides an opportunity to build thriving, competitive Scottish businesses and supply chains and associated employment. Our investment in transformational projects such as the Michelin Scotland Innovation Parc and the National Manufacturing Institute Scotland will support this. Furthermore, the Green Jobs Fund will provide £50 million through our enterprise agencies to help businesses which provide sustainable and/or low carbon products and services to develop, grow and create jobs; and a further £50 million to support businesses and supply chains across sectors to take advantage of public and private investment in low carbon infrastructure.

The Scottish Government will support businesses to set ambitious science-based emissions reduction targets and develop strategic, net zero transition plans to meet these targets. A number of Scottish Businesses are already doing this, for example Scottish Water has set a target for net zero emissions by 2040 by transforming the way they operate and invest, and have set out a route map for how they will achieve this. By Spring 2021, we will have worked with stakeholders across the business community to systematically map business needs in relation to transition planning. This is a an opportunity to demonstrate Scottish private sector ambition and action in the run-up to COP26. We will showcase the best of what Scottish businesses are doing to deliver a just transition alongside opportunities to attract investment to Scotland and promote exports.

Our Net Zero Transition Managers Programme will facilitate new managerial roles into Energy Intensive Industries, tasked with recommending decarbonisation options. We will encourage businesses to take advantage of Scottish Government support to invest in energy efficiency measures and onsite renewable generation. We will support businesses and industry to promote a circular economy and tackle waste across their supply chains, for example by using the circular Economy Investment Fund to stimulate innovation. Support for retraining, upskilling and recruiting employees will be progressed through the Climate Emergency Skills Action Plan and the Fair Work agenda. National Planning Framework 4 will help to identify where new development can be delivered, ensuring that we make best use of our assets and opportunities to support net zero targets and maximise opportunities to draw in private finance. This update covers a number of examples of what Scottish business and industry are doing to promote a shift to net zero within their own organisations.

Working with Green Finance and Investors

Private finance is vital to securing the level of investment required to reach net zero. The transition will in turn create a wealth of opportunities across the Scottish economy. Enhancing Scotland’s position as a destination for green investment will be crucial to achieving our targets and capitalising on these opportunities. We will work with institutions like City Of London Corporation and the Green Finance Institute to understand these markets, and with private sector stakeholders to understand and reduce the barriers to further investment. We will also work with regulators at the UK level to ensure that our financial system is resilient to the economic challenges that we face from a changing climate, increasing financial stability and investment in the green economy while protecting businesses and savers.

The Scottish National Investment Bank has been set a principle mission to support a just transition to net zero and will act as a catalyst in de-risking both technology and early stage roll-outs and crowd in investment. The Green Investment Portfolio, launched in September 2020, identifies low carbon investment opportunities to attract private capital and is built to expand, taking in both private sector-led opportunities around technology, industrial sites and energy generation, as well as public sector led projects around heat networks, electrification of transport, and the use of hydrogen where coordination is needed around supply, demand and regulation. The Scottish Government’s Inward Investment Strategy, published in October this year, is aimed at attracting investment from overseas and other parts of the UK and has renewable energy and low carbon transport as priority areas. Our Capital Investment Plan, due in spring 2021, will take a systematic approach to turning our sectoral ambitions into investable projects that can attract finance and deliver net zero living across Scotland.

We are working directly with investors to understand and address barriers to key net zero markets, such as natural capital and biodiversity and will explore and adopt innovative financing approaches to mobilise more private capital into Scotland’s net zero transition.

Working with the UK Government

As highlighted by the Committee on Climate Change in their 2020 progress report, UK Government action, in parallel to the decisions of the Scottish Government, is essential if Scotland is to meet its targets. The UK Government holds a number of key powers that will be vital to our net zero transition, including fiscal and pricing elements of emissions trading, decisions on the future of the gas grid, investment in electricity network infrastructure, regulation on energy networks, vehicle standards and regulation of renewable energy investment.

This Plan update sets out our specific requests of the UK Government on a sector-by-sector basis, emphasising the need for still more increased ambition and support as we work towards a green future, particularly as we recover from the COVID-19 pandemic. These asks include:

• reform the Contract for Difference mechanism to deliver specific support for wave and tidal generation and investment and jobs in domestic energy businesses;
• accelerate the development of negative emissions technologies, carbon capture and storage, and hydrogen as essential components of our energy system;
• accelerate demonstration of the technological solutions to cutting emissions from our homes and buildings, and in particular set out clear timescales for taking strategic decisions about the future scale and pace of decarbonisation of the gas network to support delivery of our targets for heat in buildings;
• update energy regulation by giving Ofgem a statutory objective to support the delivery of net zero and interim statutory greenhouse gas emissions targets and address the imbalance in pricing for electricity and gas to better incentivise the deployment of zero emissions heating technologies;
• commit to a UK Emissions Trading Scheme common framework post-Brexit (which would respect the devolution settlement) and rule out implementing a reserved Carbon Emissions Tax over which devolved administrations would have no say; and
• review options on fuel duty and vehicle excise duty to help reduce unsustainable travel.

International action and collaboration

We are facing a global climate emergency, which affects us all. This plan is being published in the midst of a global pandemic. These challenges highlight the enormous importance of international cooperation; Scotland is determined to play its part. Through the COVID-19 crisis, Scotland has collaborated with international partners, using our networks to secure insights into best practice in reducing transmission and the other harms caused by the virus. We will build on this internationally networked approach and work collectively to keep Scotland open, connected and able to make a positive contribution internationally. This is true for both the COVID-19 effort and for climate change.

In 2021, the UK will host the UN Climate Conference, COP26 in Glasgow. Just as COP21 led to the landmark Paris Agreement, this important international event must be a milestone in delivering increased collaboration and action needed for a global transition to net zero in a way that is fair and just. The Scottish Government is committed to working closely with the Glasgow City Council, the UK Government, the European Union, UNFCCC and all other partners to deliver a safe, successful and inclusive summit.

We want to showcase the world-leading work we are doing in Scotland, both by the Scottish Government through, for example, our emissions reduction ambition, our renewable energy delivery and expertise, our knowledge and experience of afforestation and peatland restoration, and our scientific strengths and innovation expertise on nature based solutions; but also the innovation and expertise that exists in our academic institutions, industry and business, communities and people. We also want to work with and learn from others. We do not have all the answers but are committed to being an integral part of the global solution.

The Under2Coalition

The First Minister was recently voted as European co-chair of the Under2 Coalition, a group of more than 220 governments representing over 1.3 billion people and 43% of the global economy. We will use our position as co-chair to:

• mobilise action ahead of COP26;
• work to imbed inclusivity at the heart of the coalition, ensuring that that those who are least responsible for the global climate emergency, but are being first and most severely affected by it, are represented and heard;
• and pursue and develop the green recovery agenda with our partners.

We will build on the work to date with the Coalition which includes:

• the peer-learning Industry Transition Platform (ITP), which aims to support participating governments to develop effective policies and strategies to achieve deep emissions cuts in traditionally heavy-emitting industries;
• funding for the Future Fund, which fosters knowledge exchange through secondments between developing and developed regions;
• and taking a leading role in the ZEV Community, a platform for inter-governmental peer learning on zero emission vehicles.

Relations with the EU

The people of Scotland voted decisively to remain within the European Union and Scottish Ministers continue to believe that EU membership is the best option for Scotland. At the time of writing, despite ongoing negotiations, No Deal remains a real possibility. Even if a deal is secured, the UK Government’s approach means it will be a very basic “low deal”. The impact on the opportunity to collaborate with other nations and EU programs, such as Horizon 2020, makes it all the more challenging to achieve our shared objectives.

The Scottish Government is committed to maintaining or enhancing environmental standards in Scotland, and to seeking to keep pace with EU Directives and Regulations as far as possible. The Scottish Government’s Continuity Bill contains measures to bring EU environmental principles into Scots Law as the “guiding principles on the environment”. This will ensure that these principles continue to inform the development of our environmental law and standards. The Bill will also establish an environmental governance body, Environmental Standards Scotland, to secure full and effective implementation of environmental law.

In a crucial year for the Paris Agreement, heading into COP 26 in Glasgow in November 2021, Scotland’s voice is more important than ever and we remain committed to collaboration with the EU institutions and at Member State level, across all the sectors covered by this plan and in line with the EU Green Deal. Indeed we also believe it is vital that the UK Government facilitates close collaboration and cooperation with the EU and Member States at every level. Scotland continues to be a committed, open, global actor, as evidenced by our European Co-Chair position on the Under 2 Coalition. This is not only about Scotland’s position in Europe, it is also about our ability to work with our friends and neighbours to achieve the targets and policies set out below.

Monitoring framework

This Plan update includes a refresh of the monitoring framework from the 2018 Plan, with a revised set of policy outcome indicators to reflect the new and boosted underlying policies and, where possible, to improve the quality and robustness of the indicators themselves. This updated monitoring framework will form the basis of statutory annual reporting on progress to delivering the Plan, at a sector by sector level, to the Scottish Parliament from May 2021 onwards.