Heat in Buildings Bill consultation: strategic environmental assessment

5. Environmental Baseline

5.1 Introduction

5.1.1 Schedule 3 of the 2005 Act requires that the following be identified when undertaking an SEA:

• Relevant aspects of the current state of the environment and its likely evolution without implementation of the plan or programme.
• Environmental characteristics of areas likely to be affected.
• Relevant existing environmental problems.
• Relevant environmental protection objectives at the international, European or national level.

5.1.2 This section sets out a high level summary of the key environmental issues relevant to the consultation and its proposals. This is followed by a summary of how the environment is likely to evolve in the absence of proposals contained in this consultation.

5.2 Climatic Factors

5.2.1 The global climate is changing. Since the 1880s, human activity has led to a significant increase in atmospheric greenhouse gas emissions and global warming. This has resulted in an increase in the average temperature of the atmosphere and oceans, a reduction in snow and ice cover, and sea-level rise. The average temperature over the most recent decade (2009-2018) has been on average 0.3 °C warmer than the 1981-2010 average and 0.9 °C warmer than the 1961-1990 average. All the top ten warmest years for the UK, in the series from 1884, have occurred since 2002. Total rainfall from extremely wet days (days exceeding the 99th percentile of the 1961-1990 rainfall) increased by around 17% in the decade (2008-2017)3, for the UK overall. However, changes are largest for Scotland.^[30]

5.2.2 In general, climate change projections suggest observed climate trends will continue to intensify in the future, including:

• an increase in both summer and winter average temperatures across both low and high emission scenarios;
• drier summers and wetter winters;
• an increase in the intensity of rainfall; and
• increased risk of flooding, drought, and extreme weather events.^[31]

5.2.3 A special report by the Intergovernmental Panel on Climate Change (IPCC), published in October 2018 (Global Warming of 1.5 ^oC), predicts that the impacts and costs of global warming of 1.5^oC above pre-industrial levels will be far greater than expected, and consequently much worse at 2^oC^[32]. Further, the IPCC also reported that 1.5^oC could be reached in as little as 11 years, and almost certainly within 20 years without major reductions in CO₂ emissions. Climate change trends such as increased risk of flooding can negatively impact energy infrastructure.

5.2.4 In 2021, the total greenhouse gas emissions (GHG) emissions in Scotland were estimated to be 41.6 million tonnes of carbon dioxide equivalent (MtCO₂e), down 49.2% from 1990, but up 2.4% from 2020. The main contributors to this increase between 2020 and 2021 were increased emissions in Domestic Transport (+1.1 MtCO₂e) following the impact of the COVID lockdown in 2020, and residential (+0.4 MtCO₂e) sectors. Emissions reductions were seen in Energy (-0.5 MtCO₂e), Business (-0.2 MtCO₂e) and International Aviation and Shipping (-0.1 MtCO₂e) sectors. All remaining sectors showed relatively modest increases in the latest year.^[33]

5.2.5 Between 1990 and 2021, there was a 49.2 per cent reduction in estimated emissions, a 40.3 MtCO₂e decrease. The most significant contributors to this overall reduction were:

• Reduction in Energy Supply emissions (such as power stations) (-16.8 MtCO₂e; 77.6 per cent reduction)
• ‘Land Use, Land Use Change And Forestry’ (LULUCF) reducing its net emissions over the period, reducing by 5.7 MtCO₂e since 1990.
• Reduction in Waste Management emissions (such as Landfill) (-5.0 MtCO₂e; a 76.2 per cent reduction)
• Reduction in Business emissions (-4.2 MtCO₂e; a 35.3 per cent reduction)
• Reduction in Domestic transport emissions (-2.6 MtCO₂e; a 19.3 per cent reduction).

5.2.6 All other sectors have demonstrated a reduction in emissions since 1990.

5.2.7 Climate change can also give rise to indirect impacts arising from mitigation and adaptation measures. For example energy efficiency and heat decarbonisation of Scotland’s homes and buildings contributes to meeting statutory climate change targets, the primary purpose of the consultation in question in this assessment. However, individual technologies can have negative impacts such as localised visual effects, changes in landscape and land use, and impacts on biodiversity, water and air quality, amongst others.

5.2.8 Climate change has itself also been identified as a primary pressure on many of the SEA topic areas including soil, water, biodiversity, cultural heritage and the historic environment^[34].

Climatic Factors : Summary and Key Issues

• Observed climate change trends are likely to intensify in the future – wetter winters and drier summers with an increase in the frequency of extreme weather events and climate change can negatively impact energy infrastructure – e.g. through flooding.
• Key issues for climate change include greenhouse gas emissions from a range of sources, with energy supply and use of homes and buildings contributing to emissions.
• Climate change can also give rise to indirect effects arising from mitigation and adaptation measures.
• Climate change has also been identified as a primary pressure on many of the SEA topic areas

5.3 Population and human health

5.3.1 Scotland has a population of over 5.47 million people, and the majority of its population (91%) lives in 2.3% of its total land area^[35]. There is significant variation between highly urbanised areas in the Central Belt and rural and island areas. Almost all of Glasgow City and Dundee City’s population lived in a settlement (99.8% in both). In contrast, less than a third of Na h-Eileanan Siar’s population lived in a settlement (29.4%)^[36]. The total is projected to rise slightly to a peak of 5.48 million by 2028, and then fall to 5.39 by 2045^[37].

5.3.2 Population and economic growth has increased energy demand globally^[38]. In Scotland, from a 2005-2007 baseline, energy consumption dropped by 13.1% in 2018. More recently it has increased – in 2018 it was up by 2% on 2015^[39].

5.3.3 Life expectancy has generally been improving in Scotland over the last 40 years. In the last 10 years improvements have stalled and most recently have started to reverse (mainly due to Covid). Since 1981, life expectancy has increased to 76.6 years and 80.8 years for males and females respectively^[40]. However, life expectancy in Scotland remains the lowest in western Europe^[41].

5.3.4 The Scottish Index of Multiple Deprivation (SIMD), which identifies small concentrations of multiple deprivation across all of Scotland, shows that the 20% most deprived data zones in Scotland are located predominantly in urban areas, including Glasgow, Dundee, and Edinburgh^[42].

5.3.5 The buildings and buildings construction sectors combined are responsible for 30% of total global final energy consumption and 27% of total energy sector emissions^[43]. In Scotland, around 80% of homes^[44] and approximately 30% of non- domestic buildings^[45] use mains gas for heating. Non-domestic mains gas accounts for a greater proportion of energy use in this sector. Gas supplied via the mains gas network is predominantly natural gas, a fossil fuel composed mainly of methane. Challenging weather, poor energy efficiency and reduced heating options (especially in rural areas) can contribute to making fuel bills unaffordable, resulting in fuel poverty.^[46]

5.3.6 Fuel poverty is affected by levels of household income, the price of fuel required for space and water heating, the energy efficiency of housing and the use of fuel in households. In 2021 an estimated 19.65% (around 495,000 households) of all households were in fuel poverty, a reduction from 2019 when 24.6% were in this category. 9.5% (241,000 households) were living in extreme fuel poverty, a reduction from 12.4% (or 311,000 households) in 2019. The figure is continuing to fall with 11.3% (279,000 households) in 2018 and a decrease from the peak of 16% (384,000 households) in 2013. The median fuel poverty gap (adjusted for 2015 prices) for fuel poor households in 2021 (£690) is slightly lower than in 2019 (£700) but higher than in 2018 (£610) and similar to the median gap in 2012 to 2017. Between 2018 and 2019, rates of fuel poverty increased in remote rural areas (from 33% to 43%), increasing the gap when comparing overall urban (24%) to overall rural areas (29%). In 2021 rates of fuel poverty in remote rural areas had fallen to 21%. In 2021 levels of extreme fuel poverty were higher in rural areas (15%) compared to urban areas (9%). This reflects the high proportion of rural households which use electricity and other fuel types (such as solid mineral fuels) as their primary fuel type and the associated increase in fuel prices for these fuel types. Levels of fuel poverty among households using electricity as their primary heating fuel have remained the highest, at 41% (a reduction from 43% in 2019), compared to households using gas (16%), oil (23%) and other fuel types (22%) as their primary heating fuel in 2021.^[47]

5.3.7 Work to eradicate fuel poverty is linked to the Scottish Government’s work to improve housing standards, and this has been considered as part of the Fuel Poverty (Target, Definition and Strategy) (Scotland) Act^[48]and the Fuel Poverty Strategy for Scotland 2021^[49].

5.3.8 Flooding can have significant environmental impacts and can also affect people, communities and businesses. When floods occur they disrupt day-to-day lives and their impacts can be long lasting. Climate change is expected to increase the risk of flooding, and it also brings additional risks to human health posed by changes to air quality and rising temperatures.^[50]

5.3.9 The potential impacts of climate change on population and human health will not be evenly spread. For example, pockets of dense urban development will be more at risk from surface water flooding and summer heat stress. In addition the effects to human health form climate change may have the greatest impact on vulnerable people. Negative health impacts are likely to be disproportionately severe in areas of high deprivation because of the reduced ability of individuals and communities in these areas to prepare, respond and recover.^[51]

Population and Human Health: Summary and Key Issues

• Scotland’s population is growing and Scotland has experienced a small increase in heat demand in recent years.
• Heat in buildings accounts for approximately a fifth of Scotland’s GHG emissions.
• Challenging weather, poor energy efficiency and reduced heating options (especially in rural areas) can make fuel bills unaffordable, resulting in fuel poverty.
• The potential impacts of climate change on population and human health will not be evenly spread. ( e.g. negative health impacts are likely to be disproportionately severe in area of high deprivation).

5.4 Air

5.4.1 Air quality is affected by pollutants released into the atmosphere through human activity as well as from natural sources. In Scotland all priority air pollutants were lower in 2021 than in 2005. The greatest rate of decline is observed in the trend for SO2 emissions, principally due to the reduction in coal use within the economy, with more modest declines observable for CO, NOX, Hg, Pb, VOCs, NH3, PM_2.5, PM₁₀ and B[a]p. Emissions from Hg initially increased between 2005 and 2007 before decreasing due to the trend in emissions from power stations^[52]. Despite this, in certain areas, poor air quality continues to negatively affect human health and the environment.

5.4.2 In regard to the domestic environment, since 2005 there has been an increase in emissions from the domestic sector due to an increase in popularity of open fires and wood burning stoves. Approximately 38% of UK primary particulate matter emissions come from burning wood and coal in domestic open fires and solid fuel stoves. This compares with industrial combustion (16%) and road transport (12%)^[53].

5.4.3 Air pollution can contribute to a number of health problems and climate change may exacerbate these issues and alter current patterns and concentrations of air pollution. For example, air pollution can lead to and exacerbate existing health problems such as respiratory conditions, and lead to reduced life expectancy^[54].

5.4.4 Where air standards are not being met, local authorities in Scotland have set up Air Quality Management Areas (AQMAs) to help reduce pollution. In July 2021 there were 36 AQMAs across Scotland which were established primarily as a result of road traffic emissions. Between 1990 and 2015 there have been reductions in emissions across all pollutants including ammonia (10%), PM₁₀ (63%), NMVOC (66%), nitrogen oxides (71%), carbon monoxide (83%), sulphur dioxide (92%) and lead (99%). The majority of these are declared in urban areas and primarily as a result of traffic emissions.^[55]

5.4.5 Key issues for air include emissions from a number of sectors leading to air pollution, with air quality contributing to a number of health problems. Air quality and GHG emissions are intrinsically linked as they both arise from broadly the same sources. Measures that seek to reduce emissions from buildings such as from improved energy efficiency and heat decarbonisation, have the potential to broadly contribute to improved air quality.

Air: Summary and Key Issues

• While air quality has improved significantly, poor air quality in certain areas continues to affect human health and the environment
• Air pollution can contribute to a number of health problems and climate change may exacerbate these issues and alter current patterns and concentrations.
• Key issues for air include emissions from a number of sectors leading to air pollution with air quality and GHG emissions intrinsically linked as they both arise from broadly the same sources.
• Measures that seek to reduce emissions from buildings such as from improved energy efficiency and heat decarbonisation , have the potential to broadly contribute to improved air quality

5.5 Material assets

Energy, development and infrastructure

5.5.1 In 2021, heat made up approximately half of Scotland’s energy consumption (50.6%) with transport (24.8%) and electricity generation (22%) the other major sectors consuming energy^[56] . Of energy consumed for heat, 57% is used by the non-domestic sector and the remaining 43% by the domestic sector^[57]. Energy consumption in the domestic sector has decreased by 19.0% since 2005-07, and in the non-domestic sector has decreased by 24.0% from the baseline.

5.5.2 The vast majority of the electricity that Scotland generates is from low carbon sources (87.8%), which has changed rapidly since 2010 when about half of Scotland’s generation came from fuels.^[58] In the 12 months ending March 2023, 83.6% of the electricity that Scotland consumed came from low carbon sources^[59]

5.5.3 There have been significant changes to the electricity generation mix in recent years with the vast majority of the electricity that Scotland generated from low carbon sources. Most recently however, electricity generation from fossil fuels increased from 10.2% in 2017, compared to 48.4% in 2010. In 2019, useful renewable heat generated in Scotland was equivalent to 6.5% of the fuel consumed for non-electrical heat demand, an increase from 6.2% in 2018 and from 0.9% in 2008^[60].

5.5.4 Infrastructure will play a key role in ensuring security of supply and decarbonising our energy systems in the most cost effective, affordable way. Energy storage is likely to be an increasingly important part of the transition to delivering clean, affordable and secure supplies of energy^[61].

5.5.5 Support for energy efficiency and heat decarbonisation as a means to deliver emission reductions from Scotland’s homes and buildings is likely to require new or expanded infrastructure at a range of scales.

Land Use

5.5.6 Key land uses in Scotland include agriculture and forestry, covering approximately 80% of Scotland’s land mass^{[62], [63]}.

5.5.7 Intensive land management practices, such as the use of high levels of fertilisers and pesticides, is one of the key pressures on land with a shift toward intensification having the possibility to lead to negative impacts across a number of topics including biodiversity^[64] and soil^[65].

5.5.8 In the context of heat decarbonisation and energy efficiency in the current built stock, effects will depend on the scale of technology deployment and type of technology used.

Material Assets : Summary and Key Issues

• Today, heat is responsible for approximately half of Scotland’s energy use and buildings/infrastructure will be an important underpinning for heat decarbonisation.
• Key issues for material assets include those associated with development and infrastructure and pressure on land use.
• Any changes in land use required to meet climate change targets could also have environmental effects.

5.6 Cultural and historic heritage

5.6.1 Scotland’s many and varied historical sites are unique and irreplaceable. These sites and features are regarded as making a valuable contribution to our quality of life, cultural identity, education and economy. While these assets are distributed widely throughout Scotland, there are clusters of sites in and around our settlements and also around our coastlines.

5.6.2 Some parts of Scotland’s historic environment are protected through a process of designation. The process aims to identify parts of the historic environment for their significance and enhance their protection. As of 2016, it is estimated that around 5-10% of the historic environment is designated^[66].

5.6.3 Designated assets currently include World Heritage Sites, listed buildings, scheduled monuments, conservation areas and Historic Marine Protected Areas. However, whilst most of the historic environment is undesignated (90-95%), these known but undesignated assets provide important contextual information which helps us better understand designated sites. Scotland’s historic environment resonates internationally and nationally, as well as being culturally important to local communities.

5.6.4 Development is a key pressure on the historic environment and cultural heritage, both directly in terms of damage to known and unknown features, and the potential for impacts on setting. Other known pressures include changing land use and land management, such as through the installation of infrastructure such as pipelines; as well as pressure from tourism/visitors, and climate change^[67]. An example of these pressures is development associated with the installation and operation of fabric first energy efficiency measures, technologies such as heat pumps as well as any land management change associated with bioenergy. Climate change related impacts include damage to masonry, risk of dampness, condensation and fungal growth, vegetation growth, and accelerated decay. Historic landscapes and sites within the coastal zone are particularly vulnerable and this and these threats are likely to grow in the future, given the future predictions of the likely effects of global warming and climate change for the remainder of this century. Action to mitigate and adapt to the effects of climate change are also likely to have a significant effect.

Cultural Heritage: Summary and Key Issues

• Scotland’s many and varied historical sites are unique and irreplaceable.
• Development is a key pressure on the historic environment and cultural heritage, both directly in terms of damage to known and unknown features, and possible impacts on setting.

5.7 Likely evolution of the environment without implementation of the proposals contained in the consultation

5.7.1 The proposals contained within the consultation are intended to drive forward improved energy efficiency and implement zero direct emissions heating across all built stock in order to contribute to statutory climate change targets.

5.7.2 The proposals are intended to support the acceleration of GHG emissions reductions associated with Scotland’s homes and buildings in line with ambitious climate change targets. In the absence of the proposals heat decarbonisation of homes and buildings might continue along observed trends meaning that decarbonising heat will take longer and will not be in line with the required pathway for reducing emissions in buildings as set out in the Update to the Climate Change Plan.