Climate Change Plan: monitoring report 2025

3. Chapter 2: Buildings

3.1 Part A – Overview of sector

The outturn emission statistics for 2022 (published in 2024) show a position of 7.7 MtCO2e.

The CCPu sets out the following three policy outcomes for this sector, the indicators for which are summarised below:

The heat supply to our homes and non-domestic buildings is very substantially decarbonised, with high penetration rates of renewable and zero emissions heating	On Track	Off Track	Too Early to Say
Number of existing domestic properties using low and zero direct emissions heating (LZDEH) systems (1.1)	-	-	X
Services sector fossil fuel heat consumption (1.2)	-	-	X
% of non-electrical heat consumption met from renewable sources (1.3)	-	-	X

Our homes and buildings are highly energy efficient, with all buildings upgraded where it is appropriate to do so, and new buildings achieving ultra-high levels of fabric efficiency.	On Track	Off Track	Too Early to Say
Energy intensity of residential buildings (kWh per household) (2.1)	X	-	-
Emissions intensity of non-domestic buildings (tCO2e per £ million Gross Value Added) (2.2)	X	-	-
% of homes with an EPC[10] (EER,[11] or equivalent) of at least C (2.3)	-	X	-
% new homes built with a calculated space heating demand of not more than 20 kWh/m2/year (2.4)	X	-	-

The heat transition is fair, leaving no-one behind and stimulates employment opportunities as part of the green recovery.	On Track	Off Track	Too Early to Say
% of households in fuel poverty (3.1)	-	X	-

Just Transition and Cross Economy Impacts

We wish to understand and report on the broader just transition and cross-economy impacts of our emissions reduction activities in addition to these sector specific policy outcomes and indicators. To do this, in this report we use data from the Office of National Statistics (ONS): Low Carbon Renewable Energy Economy (LCREE) publication. The LCREE data presented in this report is based on survey data of businesses which perform economic activities that deliver goods and services that are likely to help generate lower emissions of greenhouse gases, for example low carbon electricity, low emission vehicles and low carbon services. The LCREE indicator is narrowly defined and, while useful within its limited scope, does not give us the full picture of the impacts on workforce, employers and communities and progress towards a just transition. Over the next year, we will work to develop a more meaningful set of success outcomes and indicators aimed at tracking the impacts of our policies on a just transition to net zero, which will inform our next CCP.

Sector commentary on progress

The Scottish Government published a Heat in Buildings Strategy in October 2021 which set out our vision for decarbonising Scotland’s buildings by 2045. We remain committed to this 2045 target and continue to provide support to people to improve the energy efficiency of their buildings and move to clean heat – reducing and removing emissions from our buildings. But this needs to happen without negative impacts on fuel poverty, which has risen with high energy prices in recent years. We, therefore, need to see further action by the UK Government in reserved areas to help ensure that the transition is fair and affordable. In many of the indicators, the effects of COVID-19 continue to be felt.

The emissions reported in Part A of 7.7 MtCO2e for 2022 relate to the period just after the Heat in Buildings Strategy was first published.

Part B reports on progress against the indicators for the buildings sector, as set out in Part A. We have marked three indicators as “on track”: energy intensity of residential buildings (2.1), emissions intensity of non-domestic buildings (2.2), percentage of new homes built with a calculated space heating demand of not more than 20 kWh/m²/yr (2.4). This reflects improvements in energy intensity in residential buildings, emissions intensity in non-domestic buildings and of the standards for building fabric set by building regulations. The energy intensity of residential buildings (2.1) was marked as off-track last year but is now on track possibly due to changes such as improvements to the energy efficiency of domestic properties and continuing high energy prices, as well as a natural reduction following COVID-19.

Meanwhile, we have marked two indicators as “too early to say”: number of existing domestic properties using low and zero direct emissions heating, services sector fossil fuel heat consumption. This is because these targets/indicators are still under review, the outcome of which will depend on decisions around the passage of the Heat in Buildings Bill and the development of the next CCP.

Two indicators are currently marked as “off track”: percentage of homes with an Energy Performance Certificate (EPC) and percentage of households in fuel poverty. We set out our reasons for marking these indicators as “off track” in Part B.

Part C shows that the Scottish Government continue to make progress against the commitments in the buildings sector as set out in the CCPu.

Developments in Monitoring Arrangements Since Last Report

We continue to develop and improve our monitoring processes, as specified below.

3.2 Part B – Progress to Policy Outcome Indicators

Policy Outcome: Cross-sectoral social and economic

Indicator: Full Time Equivalent (FTE) in Low Carbon Renewable Energy Economy Indicator

On-Track Assessment (Milestones/Targets): Year-to-year change

Most Recent Data: 2022

Data Source(s): Low Carbon and Renewable Energy Estimates, Office for National Statistics (ONS)

Assessment: Too early to say

Commentary: Data for the year 2023 is due to be published later this year, following the release of this report.

In 2022, the Scottish low carbon renewable energy economy (LCREE) sectors were estimated to provide 25,700 FTE jobs. Estimates of LCREE are based on a relatively small sample of businesses and hence are subject to a wide confidence interval.

Scottish LCREE employment in 2022 is lower than in 2021 but the difference is not statistically significant, and caution should be exercised when interpreting year on year changes due to a high degree of uncertainty in estimates.

Source: Office of National Statistics (ONS) Low Carbon and Renewable Energy Economy Estimates

Policy Outcome: 1

Indicator: Number of existing domestic properties using low and zero direct emissions heating (LZDEH) systems.

On-Track Assessment (Milestones/Targets): Under review

Most Recent Data: 316,000 domestic properties use low and zero direct emissions heating (LZDEH) systems as of 2023.

Data Source(s): Supporting documents - Scottish House Condition Survey: 2023 Key Findings - gov.scot Table KA7b. Comprises households for which their primary heating fuel is (a) Electricity, (b) Communal Heating, or (c) Biomass

Assessment: Too early to say

Commentary:

In 2023, there were an estimated 316,000 households using low and zero direct emissions heating (LZDEH) systems (and which this document will refer to from here as ‘clean heating systems’^[12] for the sake of simplicity).

With these households primarily heating their homes with electricity, communal heating, or biomass. This is similar to the estimate of 319,000 households (13% of all households) from the 2022 Scottish House Condition Survey (SHCS).

The target for this indicator is under review and so progress towards the target is assessed as too early to say. This indicator will be reviewed as part of the next CCP.

Policy Outcome: 1

Indicator: Commercial^[13] sector fossil fuel heat consumption

On-Track Assessment (Milestones/Targets): Under review

Most Recent Data: Commercial sector fossil fuel heat consumption was 12,036 GWh in 2022.

Data Source(s): Scottish Energy Statistics Hub (SESH) > Energy Efficiency > Heat Consumption > Data – Non-electrical heat demand by sector (GWh). Internal analysis was conducted to remove Bioenergy & Wastes from the figure of 13,994 GWh presented on SESH.

Assessment: Too early to say

Commentary:

In 2022, commercial sector fossil fuel heat consumption was 12,036 GWh. This includes consumption of coal, manufactured fuels, petroleum products and gas. This is a 3.2% decrease compared to 2021, when commercial sector fossil fuel heat consumption was 12,434 GWh^[14]. This reduction may reflect elevated energy prices in 2022, as well as other factors such as improvements to energy efficiency, changes in economic activity and fuel switching.

The target for this indicator is under review and so progress towards the target is assessed as too early to say. As with indicator 1.1, the target will depend on the development of the next CCP. Over half of Scotland’s non-domestic buildings already use low or zero emissions sources and we remain committed to transitioning all other buildings to clean heating systems by 2045.

Policy Outcome: 1

Indicator: % of non-electrical heat consumption met from renewable sources

On-Track Assessment (Milestones/Targets): We announced recently that we intend to bring forward a revised Bill for consideration by the Scottish Parliament later in 2025 with a target for decarbonising heat by 2045. We are currently considering how this will be reflected in the revised Bill. In the meantime, we will continue to report against this indicator.

Most Recent Data: May 2025 publication

Data Source(s): Renewable Heat Dataset from Energy Saving Trust

Assessment: Too early to say

Commentary: In order to comply with existing statutory requirements, our Heat in Buildings Strategy set out a provisional target (22%) for the proportion of non-electrical heat demand in buildings supplied by renewable sources (either directly, or via a heat network). The Renewable Heat Target (RHT), as currently defined, is an important factor in monitoring Scotland’s wider 2030 renewable ambitions. However, we believe that reporting against the Heat in Buildings Monitoring and Evaluation Framework which we published in November 2023 will provide a more useful and relevant means for tracking progress against the Heat in Buildings Strategy.

Our Heat in Buildings Strategy made clear that the scope of the RHT does not include industrial heat.

However, we only provide the proportion of all non-electrical heat demand met by renewable sources below. This is because it is not possible to robustly estimate the amount of some fuels (including gas) used for industrial purposes and thus to separate these out. Neither is it always possible to determine whether renewable heat output is used for industrial purposes.

Therefore, similarly to last year we will report on the percentage of all non-electrical heat demand met by renewable sources in 2023.Please see the methodology section below for more details on how this is now estimated as of 2024.

In 2023, the percentage of non-electrical heat demand met by renewable sources was estimated at 7.9%]. The non-electrical heat demand estimated for 2023 is provisional as sub-national consumption estimates for non-gas fuels will not be available until released by the Department for Energy Security and Net Zero (DESNZ) in September 2025.

Renewable heat output in 2023 was 1.4% higher than the previous year, while estimated demand was 1.2% lower. These estimates demonstrate a continued rise in renewable heat output over the longer term, increasing by 74% since 2016. Demand for non-electrical heat has fallen in recent years and is lower than any year in the time series, which goes back to 2005.

Figure 1 presents a time series of the percentage of non-electrical heat demand met by renewable sources from 2012 to 2023. The headline percentage reported for 2023 is dependent on overall non-electrical heat demand. This continues to underline the importance of improving the energy efficiency of Scotland’s buildings in contributing to progress against this metric.

* Non-electrical heat demand data for 2023 is provisional as it is based on 2023 gas consumption and 2022 consumption for all other non-gas fuels.

Policy Outcome: 2

Indicator: Energy intensity of residential buildings (kWh per household)

On-Track Assessment (Milestones/Targets): To fall by at least 30% by 2032 (relative to 2015).

Most Recent Data: Residential energy intensity was 14,873 kWh per household in 2022

Data Source(s):

Households and Dwellings in Scotland, 2023 - National Records of Scotland (NRS)

https://assets.publishing.service.gov.uk/media/66f2c25686ba7c46c40c6eae/Subnational_total_final_consumption_2005_2022.xlsx

Assessment: On track

Commentary:

In 2022, household energy intensity was 14,873 kWh per household. This is a significant reduction from previous years, at –11% compared to 2021 and –15% compared to 2020. This reduction may be due to changes such as improvements to the energy efficiency of domestic properties and continuing high energy prices, as well as a natural reduction from 2020, when household energy intensity was high due to restrictions related to the Covid-19 pandemic.

A simple pathway to meet the 2032 target is shown below. The recorded energy intensity of households in 2022 is slightly below the target of 15,241 kWh, so is rated as on track.

Policy Outcome: 2

Indicator: Emissions intensity of non-domestic buildings CO2e per £ million Gross Value Added)

On-Track Assessment (Milestones/Targets): To fall by at least 10% by 2020, 20% by 2025, and 30% by 2032 (relative to 2015)

Most Recent Data: 20.59 tCO2e/£m GVA in 2022

Data Source(s):

Supporting documents - Scottish Greenhouse Gas Statistics 2022 - gov.scot

Supporting documents - GDP Quarterly National Accounts: 2024 Quarter 3 (July to September) - gov.scot

Assessment: On-track

Commentary:

The emissions intensity of the Services sector was 20.59 tCO2e/£m GVA in 2022, representing a decrease of 17% (4.31 tCO2e/£m GVA) compared to 2021^[15]. This is because Services emissions decreased by 8% (from 2.91 MtCO2e to 2.69 MtCO2e) and Services gross value added (GVA) increased, rising by 12% (from £116.856 billion to £130.509 billion). This represents a continuing downward trend in Services emissions intensity since 2015.

The 2018 CCP set an ambition in the Services sectors to reduce emissions intensity by 10% by 2020, 20% by 2025, and 30% by 2032, relative to a 2015 baseline of 30.2 tCO2e/£m GVA. In previous monitoring reports we committed to reviewing this indicator. This review will take place alongside a fuller review of all indicators when the next Climate Change Plan (CCP) is published, to ensure they are fit for purpose under the new plan and to avoid making successive changes to the set of indicators.

A simple pathway to meet the 2020, 2025 and 2032 targets is shown below. As the recorded emissions intensity of the Services sector in 2022 is below the target of 26.0 tCO2e/£m GVA by 5.37 tCO2e/£m GVA, progress is currently considered to be on-track. To note, the figure also plots the outturn of Services emissions in MtCO2e on the right-hand side vertical axis.

Policy Outcome: 2

Indicator: % of homes with an Energy Performance Certificate (EPC) (EER, or equivalent) of at least C

On-Track Assessment (Milestones/Targets): To reach 100% by 2033, subject to technical feasibility and cost-effectiveness

Most Recent Data: An Estimated 56% of Scottish homes were rated as EPC band C or higher under the Standard Energy Procedure (SAP) 2012 (RdSAP v 9.93) in 2023

Data Source(s): Scottish House Condition Survey (SHCS) 2023

Assessment: Off-track

Commentary:

In 2023, 56% of Scottish homes were estimated to have an EPC C rating of C or better under SAP 2012 (RdSAP v9.93), compared to 52% in 2022. The proportion of properties in the lowest EPC bands (E, F, or G) was 10%, compared to 12% in 2022.

A simple pathway to meet the 2033 target is shown below. Although there has been continued improvement in the energy efficiency of Scotland’s housing stock, as the proportion of dwellings with an EPC rating of C or better is lower than estimated in the simple pathway approach, this indicator is assessed as off track.

Policy Outcome: 2

Indicator: % new homes built with a calculated space-heating demand of not more than 20 kWh/m²/yr

On-Track Assessment (Milestones/Targets): Positive year-to-year change

Most Recent Data: Analysis of new-build domestic Energy Performance Certificates (EPCs) lodged in 2024.

Data Source(s): EPC data for Q1 to Q4 2024 lodged with the Scottish Energy Performance Certificate Register (SEPCR)

Assessment: On track

Commentary:

Without applying any moderation to remove potentially erroneous values, 2,625 records reported a space-heating demand intensity of 20 kW/m2/year or less. This represents 15.9% of new-build domestic EPCs lodged for 2024. In both absolute and relative terms, this is an increase on previous years^[16].

Distribution of space-heating demand intensity of new-build EPCs lodged in 2024 (kW/m²/year) – without potentially erroneous values removed

• Minimum: 0.00
• 1^st Quartile: 24.58
• Median: 32.95
• 3^rd Quartile: 41.07
• Maximum: 216.30

Removing the 0.5% of lodged records with the lowest space-heating demand intensity and the 0.5% with the highest space-heating demand intensity in effect removes all records with a space-heating demand intensity of less than approximately 3.0 kW/m2/year, and removes all records with a space-heating demand intensity of greater than approximately 90.1 kW/m2/year. This leaves 2,542 records (15.5%) with a space heating demand intensity of 20 kW/m2/year or less.

Distribution of space-heating demand intensity of new-build EPCs lodged in 2024 (kW/m²/year) – with potentially erroneous values removed

• Minimum: 3.02
• 1^st Quartile: 24.69
• Median: 32.95
• 3^rd Quartile: 40.98
• Maximum: 90.11

Whilst positive year-to-year change is occurring, further significant improvement in the indicator is likely linked to review and improvement to the minimum standards for building fabric set by building regulations.

Implementation of the February 2023 energy standard for new homes included improvement in the minimum levels of insulation for all new homes, improving element values by 13% to 23%. This will reduce space heating demand further and increase the percentage of new homes delivered that achieve or improve upon the indicator value.

As data to report on this indicator relies on information available on completed new homes, it is still too soon to assess the impact of the changes made in February 2023.

Policy Outcome: 3

Indicator: % of households in fuel poverty

On-Track Assessment (Milestones/Targets): 2030: no more than 15%; 2035: no more than 10%; 2045: no more than 5%

Most Recent Data: In 2023, 34% of households were estimated to be in fuel poverty, including 19.4% estimated to be in extreme fuel poverty

Data Source(s): Scottish House Condition Survey (SHCS) 2023

Assessment: Off track

Commentary:

In 2023, 861,000 households (34% of all households) were estimated to be in fuel poverty, of which 491,000 (19.4% of all households) were in extreme fuel poverty. This is higher than the 2022 estimates of 31% (780,000 households) for fuel poverty but similar for extreme fuel poverty 18.5% (465,000 households).

The main driver of fuel poverty is surges in energy prices, which the Scottish Government has limited powers to influence. These surges have resulted in a huge increase in fuel poverty in Scotland since 2020. Our Heat in Buildings programme aims to both reduce emissions and remove poor energy efficiency as a driver of fuel poverty, and we continue to make progress in improving the overall energy efficiency of our homes.

We have been urging the UK Government to introduce a social tariff which we believe can have a substantial impact in addressing fuel poverty and will continue to make the case for a mechanism of this kind.

3.3 Part C – Information on Implementation of Individual Policies

Outcome 1:The heat supply to our homes and non-domestic buildings is very substantially decarbonised, with high penetration rates of renewable and zero emissions heating

Outcome 2: Our homes and buildings are highly energy efficient, with all buildings upgraded where it is appropriate to do so, and new buildings achieving ultra-high levels of fabric efficiency

Policy: Energy Company Obligation (ECO) requires obligated energy supply companies to deliver energy efficiency measures in homes. Historically these have mainly been insulation-based measures and gas boiler replacements.

Date announced: CCP 2018

Progress on implementation since time of last report / CCPu:

While Scotland’s overall share of measures has declined compared with previous ECO schemes, Scottish households have benefitted from a higher share of clean heat and microgeneration measures. The Scottish Government continues to work with local councils, energy suppliers and other local delivery partners to support take-up of ECO finance in Scotland.

With support from the Scottish Government, 31 out of 32 Scottish councils have published an ECO4 Statement of Intent to enable local ECO flex schemes to operate. As of December 2023, Scotland has benefitted from the second highest share of ECO4 Flex referrals across Britain (7,076 measures or 17% of the GB total). We estimate that these measures helped attract around £40 million in ECO finance over the last nine months of the ECO4 scheme. This has included a higher share of heat pump and renewable installations funded by energy suppliers, particularly in rural areas such as Dumfries and Galloway.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these: Scotland has the second highest number of flex measures installed of any UK region, with around 17% respectively of all the ECO4 flex measures in Great Britain.

Timeframe and expected next steps: The ECO is a UK Government scheme that operates across GB, and decisions about its design and delivery are reserved to the UK Government. We recently wrote to the UK Government to note the inclusion of ECO finance as part of its Warm Homes Plan, reiterating our commitment to maximising the benefit of this investment alongside local and national delivery schemes in Scotland. Discussions with the UK Government also considered whether ECO finance might be more easily deployed alongside public funding in future to maximise cost-effectiveness.

Policy: Heat in Buildings Delivery Schemes:

• Area Based Schemes (ABS)
• Warmer Homes Scotland (WHS)
• Home Energy Scotland (HES) Advice and Support Service
• Home Energy Scotland Grant and Loan Scheme for zero emissions heating technologies and energy efficiency measures
• Business Energy Scotland (BES) Advice and Support Service
• Small and Medium Enterprise (SME) Loan and Cashback Scheme for zero direct emissions heating technologies and energy efficiency measures
• Social Housing Net Zero Heat Fund (SHNZF)

Date announced: 2020-21 PfG

Progress on implementation since time of last report / CCPu:

Area Based Schemes (ABS) - the programme continues to target fuel poor households living in ‘hard to treat’ properties requiring external wall or complex cavity wall insulation. We have published details of measures delivered through Area Based Schemes on the Scottish Government website. We anticipate that these have delivered significant savings upon household bills and lifetime CO2 emissions, further details can be found on our website.

Warmer Homes Scotland (WHS) - we re-launched WHS on 2 October 2023 with more funding and more help for households to receive a clean heating system. Since the scheme re-launched in October 2023 to January 2024, Warmer Homes Scotland has helped 7,425 households, and installed 22,383 heating, insulation, and renewable measures.

Home Energy Scotland Advice Service - in 2023-24, the HES network delivered 489,000 advice interactions, supported over 128,000 unique households, and recorded over 894,000 users of their website. Just under 12,000 households were referred through to the new Warmer Homes Scotland scheme and HES advisors referred or signposted 15,904 households on to providers of crisis funding for vulnerable consumers and those who needed immediate assistance.

Home Energy Scotland (HES) Grant and Loan Scheme for zero emissions heating technologies and energy efficiency measures - the HES Grant and Loan Scheme, which was launched in December 2022, has continued to deliver funding to households for clean heating systems and energy efficiency measures. We have made necessary changes to the HES Grant and Loan scheme to ensure available funds are targeted at measures which best support direct decarbonisation of heat in homes. The scheme no longer provides new funding offers for solar photovoltaics (PV) or energy storage. Eligibility of self-builders was also removed from the scheme from 1 August 2024. In 2023-24, the scheme helped to install over 2,000 energy efficiency measures and nearly 9,000 renewables/clean heat measures.

Business Energy Scotland (BES) - BES remains in high demand. We introduced measure-specific fast track energy assessments in 2023-2024 to enable more businesses to quickly access advice and financial support. BES provided in depth support to over 3500 unique SMEs in Scotland in 2023-24 related to low carbon heat and energy efficiency and recorded over 43,000 unique visits to its website. BES also completed 1,384 energy assessment reports for small and medium-sized enterprises (SME) identifying estimated annual carbon savings of 15,219 tCO₂ and annual cost savings of over £14 million.

SME Loan and Cashback scheme for zero emissions heating technologies and energy efficiency measures - the SME Loan and Cashback scheme continues to deliver funding to Scottish organisations for the implementation of energy efficiency and renewable heating technologies. From 9 May 2023, necessary changes were made to the SME Loan and Cashback scheme to target available funds at measures more closely aligned to the Heat in Buildings Strategy. As such, solar PV is no longer eligible under the scheme. In 2023-2024, the scheme supported over 250 energy efficiency measures and nearly 160 renewables/clean heat installations.

Social Housing Net Zero Heat Fund (SHNZHF) - the SHNZHF launched in August 2020 for social landlords to retrofit their existing housing stock. The fund supports both the deployment of clean heating and “fabric first” enhancements, helping landlords deliver warmer and more energy efficient homes and reducing the cost of energy that social housing tenants pay in these properties.

In 2024-25, the scheme supported over 2000 social housing properties to install energy efficiency measures and over 300 properties to install renewables and/or clean heat measures.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these:

• ABS - since 2013, the programme has supported over 125,000 households (as of March 2024). The Scottish Government has maintained our investment in ABS at £64 million as part of the 2024-2025 Budget. This is expected to help around 6,000 fuel poor households to benefit from warmer homes and reduced heating costs.
• WHS - since 2015, Warmer Homes Scotland has supported over 40,000 households to install heating and energy efficiency measures enabling them to live in warmer, healthier homes which are more affordable to heat.
• HES advice service – we have published the number of unique households supported by HES advice service, since 2019, in our annual Heat in Buildings Progress Report^[17].
• HES Grant and Loan Scheme - since April 2023, the scheme has funded the installation of over 4500 heat pumps and paid out over £54m in funding for these measures.
• BES - since launching in 2022, BES has provided energy assessment reports to over 3,000 Scottish businesses, identifying over £31 million annual cost savings.
• SME Loan and Cashback scheme - Since 2019, the scheme has helped to install over 1,300 energy efficiency measures and almost 500 renewables/clean heat measures.
• SHNZHF – since launching in 2020, the scheme has supported over 12,000 social housing properties to install energy efficiency measures and over 3,000 properties to install renewables and/or clean heat measures^[18].

Timeframe and expected next steps: N/A

Policy: Review support programmes: we will review existing Scottish Government funding schemes to ensure that they support the deployment of low and zero emissions heat. We will expand the provision of loans to the SME sector and enhance the wider energy efficiency and heat advice service and provision of tailored start-to-end support.

Date announced: 2020-21 PfG

Progress on implementation since time of last report / CCPu:

The new Warmer Homes Scotland scheme, launched on 2 October 2023, follows a whole house retrofit process and a clean heating first approach to maximise the number of households able to install clean heating where this is not detrimental to fuel poverty objectives.

As part of a refresh in 2023 to the Social Housing Net Zero Heat Fund, the intervention rate for the costs of clean heating systems was increased to 60% while energy efficiency measures will continue to be supported at 50%. We continue to assess the support provided to the social housing sector to ensure it supports the decarbonisation of its existing housing stock.

The SME Loan and Cashback Scheme introduced a Cashback grant in October 2020 to stimulate the uptake of energy efficiency and renewable heat measures in non-domestic properties. This offer enabled SMEs to apply for a 75% cashback grant of up to £10,000 towards the costs of a renewable heating system, and a further 30% cashback grant up to £10,000 for energy efficiency measures. This offer was revised in October 2022 to increase the energy efficiency cashback grant to 75% up to a maximum of £20,000.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these: N/A

Timeframe and expected next steps: N/A

Policy: Procure a new national delivery scheme, to replace the existing Warmer Homes Scotland contract, to open in 2022.

Date announced:CCPu

Progress on implementation since time of last report / CCPu:

The successor scheme for Warmer Homes Scotland was successfully procured and the new contract commenced on 2 October 2023. Since the scheme re-launched in October 2023, Warmer Homes Scotland has helped 7,425 households, and installed 22,383 heating, insulation, and renewable measures.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these: N/A

Timeframe and expected next steps: The new contract will run to 2028 with a possibility of extension to 2030. We will continue to review the effectiveness of the new scheme to ensure it is efficiently meeting its aims over this period.

Policy: Energy Efficiency Standard for Social Housing: will be met by social landlords by 2020.

Date announced: CCP 2018

Progress on implementation since time of last report / CCPu:

The Scottish Housing Regulator (SHR), who has responsibility for monitoring social landlord’s performance with the Energy Efficiency Standard for Social Housing (EESSH1), reports that 88% of social rented homes met the 2020 milestone at 31 March 2022, which was the last reporting year against the standard.

EESSH was reviewed in 2018-19 with a view to setting a new milestone for 2032, known as EESSH2. A consultation on proposals for a new Social Housing Net Zero Standard to align with net zero targets and replace EESSH2 closed on 8 March 2024. The responses have been under independent analysis, with results to be published in due course.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these: N/A

Timeframe and expected next steps: N/A

Policy: New Build Heat Standard (NBHS): requiring new buildings, applying for a building warrant from 2024 onwards, to use clean heating systems.

Date announced: 2020-21 PfG + CCPu

Progress on implementation since time of last report / CCPu: The NBHS is one of the most important steps we have taken in the past year towards decarbonising our buildings and reaching net zero in buildings. The NBHS prohibits direct emissions main heating systems in new buildings and some conversions with some exceptions. The Standard first came in force on 1 April 2024 and was subsequently amended following a review to accommodate the use of bioenergy and peat systems to tackle concerns expressed by rural and island communities, and industry. The prohibition on mains gas and oil boilers as main heating systems in new builds, as introduced in the original regulations, remains.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these: N/A

Timeframe and expected next steps: N/A

Policy: Review of energy standards within building regulations. The review investigates the potential for further, significant improvement on 2015 standards and how building standards can support other carbon and energy policy outcomes, including our decarbonisation of heat agenda.

Date announced: CCP 2018

Progress on implementation since time of last report / CCPu: The review commenced in 2020, and its outcomes were published in June 2022. We have published revised standards and guidance applicable to new construction from 1 February 2023, which set more challenging energy and emission targets for new development and enable early adoption/response to the components of the 2024 New Build Heat Standard. Review completed.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these: The revised standards and guidance from 1 February 2023 are expected to improve outcomes reported under indicator 2.4 – ‘% new homes built with a calculated space heating demand of not more than 20 kWh/m²/yr’ from 2024 onward.

Timeframe and expected next steps: In response to a Members Bill proposal, a Ministerial commitment to Parliament on further review of standards to deliver ‘a Scottish equivalent to Passivhaus’ was made in December 2022. This including laying of enabling regulations within two years. This review is underway, with a Stage 1 consultation concluded and amending regulations laid in December 2024. A Stage 2 consultation on the detail of proposed changes is scheduled for summer 2025, with the intent of completing and publishing the outcome of the review in the first half of 2026. It is also the intent to implement changes in early 2028.

Policy: Heat in Buildings regulation: Put in place regulation to increase uptake of zero emissions heating systems and improve energy efficiency standards across owner occupied and private rented homes to come into force from 2025.

Date announced: Heat in Buildings Strategy

Progress on implementation since time of last report / CCPu: We consulted on proposals for a Heat in Buildings Bill from 28 November 2023 to 8 March 2024. The consultation received over 1,600 responses. The Minister for Climate Action recently confirmed our intention to introduce a revised Heat in Buildings Bill in Year 5 of this Parliamentary session. The Bill will create a target for decarbonising heating systems by 2045, and send a strong signal to homeowners, landlords and other building owners on the need to prepare for change. The Bill will also include powers to introduce minimum energy efficiency standards in the owner occupied and non-domestic sectors in the future. The development of regulations to introduce a minimum energy efficiency standard (MEES) in the private rented sector (PRS) will be implemented under existing powers in the Energy Act 2011.These changes are designed to avoid exacerbating fuel poverty as we make the essential transition to clean heat.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these: N/A

Timeframe and expected next steps: N/A

Policy: Low Carbon Infrastructure Transition Programme (LCITP) - supports investment in decarbonisation of business and the public sector.

Date announced: 2020-21 PfG

Progress on implementation since time of last report / CCPu: The LCITP is now closed to applications (as of April 2022) but is supporting projects that are currently under construction that will deliver significant carbon savings including strategically important low carbon heat networks.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these: N/A

Timeframe and expected next steps: N/A

Policy: Expanded £1.6 billion Heat in Buildings capital funding over the next parliament building on the Low Carbon Infrastructure Transition Programme (LCITP) and existing energy efficiency and zero emissions heat support programmes.

Date announced: 2020-21 PfG

Progress on implementation since time of last report / CCPu: We have allocated £1.6bn through our Heat in Buildings schemes this Parliamentary Session.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these: N/A

Timeframe and expected next steps: Capital funding allocations will be subject to future budget decisions.

Policy: Non-Domestic Public Sector Energy Efficiency (NDEE) Framework: a four-year framework which first launched in March 2016, designed to support public and third sector organisations to procure Energy Efficiency retrofit work. NDEE Project Support Unit (PSU) accelerates the number of projects and delivery timescales of public sector energy efficiency projects using the NDEE Framework and supports our wider ambitions around energy demand reduction.

Date announced: CCP 2018

Progress on implementation since time of last report / CCPu: The previous iteration of these frameworks ended on 31 March 2024. Since then, we have been working on procuring a new framework and project support unit.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these: N/A

Timeframe and expected next steps: We are currently working on a project programme for the NDEE framework and PSU. Estimated launch dates have yet to be agreed.

Policy: The Renewable Heat Incentive (RHI) - a GB-wide scheme created by the UK Government (with the agreement of the Scottish Government). UK Government is extending both the domestic and non-domestic RHI out to 2022.

Date announced: August 2020

Progress on implementation since time of last report / CCPu:

1,136.9 MW of accredited capacity under the non-domestic RHI (NDRHI) between November 2011 and March 2024.¹

1,829 GWh of heat had been paid for between April 2014 and March 2024 under the domestic RHI scheme in Scotland.²

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these: N/A

Timeframe and expected next steps: The domestic RHI closed from 31 March 2022. The non-domestic RHI scheme in Great Britain closed to all new applications for accreditation on 31 March 2021, with some applicants able to apply up to 31 March 2023 under particular circumstances.

Policy: UK Green Gas Support Scheme – a GB-wide Green Gas Scheme is planned to come into force in 2022, stimulating biomethane injection into the gas grid

Date announced: UK Government announcement.

Progress on implementation since time of last report / CCPu: The UK Government’s Green Gas Support Scheme (GGSS) provides tariff-based support for plants producing biomethane via anaerobic digestion which is injected into the gas grid. The scheme is funded by the Green Gas Levy which is applied to all licenced fossil fuel gas suppliers. It follows the non-domestic RHI after it closed. The GGSS opened on 30 November 2021 and is open for applications until 31 March 2028, following UK Government consultation on a mid-scheme review.

To follow the GGSS, a holistic policy framework will be needed to ensure the wider benefits of biomethane production are realised and that the industry can meet its potential. In February 2024, UKG issued a call for evidence (CfE) to inform post-GGSS policy development, assess the barriers to growth in the sector, and the options available to address them. It is currently considering the responses received from the CfE and developing policy options on a future framework.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these: N/A

Timeframe and expected next steps: N/A

Policy: UK Clean Heat Grant - a GB-wide Clean Heat Grant is planned to come into force in 2022, supporting uptake of heat pumps (and limited biomass boilers) via upfront grants.

Date announced: UK Government announcement

Progress on implementation since time of last report / CCPu: The UK Government launched the Boiler Upgrade Scheme, (formerly the Clean Heat Grant) in April 2022. The Boiler Upgrade Scheme (BUS) provides upfront capital grants to support the installation of heat pumps and biomass boilers in homes and non-domestic buildings in England and Wales. The UK Government announced an additional £30 million of funding for the Boiler Upgrade Scheme this financial year (2024-25) and committed to almost doubling the budget to £295 million for next year (2025-26). The Scottish Government opted out of the Boiler Upgrade Scheme in favour of boosting our existing programmes.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these: Statistics for the scheme published monthly

Timeframe and expected next steps: N/A

Policy: Support for Heat Networks: continue providing funding towards the capital costs of heat networks through Scotland’s Heat Network Fund, which offers £300m in grant funding until 2026, and through low interest loans offered by the District Heating Loan Fund.

Date announced: Originally: CCP 2018, updated 2023

Progress on implementation since time of last report / CCPu: Scotland’s Heat Network Fund continues to be open to support the establishment and expansion of district and communal heating systems utilising clean heat sources. Together with the funding awarded under the Low Carbon Infrastructure Transition Programme, £29.3 million (as of May 2025) has been awarded to heat network projects since the CCP was published in March 2021.

Following a review of our support for heat networks and the financial position of projects in development, the District Heating Loan Fund closed to new applications in 2024. This is to help prioritise capital budgets for awarding grants through Scotland’s Heat Network Fund to help deliver strategically important heat networks with funding gaps.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these: N/A

Timeframe and expected next steps: We expect demand for Scotland’s Heat Network Fund to increase due to the activity of the Heat Network Support Unit and growth of the heat network market.

Policy: Implement the provisions of the Heat Networks (Scotland) Act 2021 to create a strong regulatory framework to support delivery in 2024.

Date announced: 2020-21 PfG

Progress on implementation since time of last report / CCPu: We last published a review of the Heat Network Delivery Plan in March 2024. This report provided a further update on progress towards meeting the provisions of the Act and other supporting policies.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these: The Heat Networks (Heat Network Zone and Building Assessment Reports) (Scotland) Regulations have been introduced alongside guidance and proformas. These regulations have introduced duties on local authorities to identify areas particularly suitable for the development of heat networks and for those responsible for public sector buildings to provide data on their energy use and current heating systems. To date, approximately 500 Building Assessment Reports have been received.

Timeframe and expected next steps: Work continues on the development of the heat network licensing and consenting regime. Ofgem has been appointed as the Scottish licensing authority, and we are working to. Ofgem have now raised concerns about their ability to assess applications against these criteria, due to the specialist expertise that they may require and that building this capability would lead to increased fees being charged to applicants, which would be passed onto consumers in turn. The Scottish Government has been preparing a public consultation on licensing with a view to introducing the necessary regulations later in 2025. However, we must now carefully consider Ofgem’s concerns, as it is important that any regulations can become operational in practice.

We will provide a further update on progress through a review of the Heat Network Delivery Plan by March 2026. We will review the 2035 and, if appropriate, other heat network targets once more evidence is available. The 2021 Act allows Ministers to modify these targets, if appropriate.

Policy: Continue supporting the development of heat network projects in Scotland through the Heat Network Support Unit, which is a collaboration between organisations offering advice, guidance, and funding to heat networks projects in the pre-capital stages of development.

Date announced: Maintained

Progress on implementation since time of last report / CCPu: The Scottish Government launched its Heat Network Support Unit (HNSU) in 2022 to support prospective heat network projects in the pre-capital development stages. It is a partnership between the Scottish Government, Zero Waste Scotland and Scottish Futures Trust and acts as the successor to the Heat Network Partnership.

Since September 2022, the HNSU has supported 39 projects across Scotland.

The HNSU recently launched the 2025 District Heating Mentoring Programme where, in collaboration with the UK government, we are bringing both Scottish and English local authority participants together for the first time, to form a GB-wide scheme. 20 Scottish local authorities are taking part in this year’s scheme.

In November 2023, the HNSU launched its Strategic Heat Network Support for local authorities. This support includes both funding and advise to help local authorities build on their Local Heat and Energy Efficiency Strategies (LHEES) to develop their approach to establishing district heating networks in their areas. Seven local authorities are currently in receipt of Strategic Heat Network Support.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these: N/A

Timeframe and expected next steps: The HNSU will continue to support projects in the financial year 2025-26.

Policy: Net Zero Carbon Public Sector Buildings Standard will be introduced in 2021 and progressively rolled out across the public sector, as announced in the Programme for Government 2019.

Date announced: 2020-21 PfG + CCPu

Progress on implementation since time of last report / CCPu: The original Standard Document Suite was launched in 2021 to address new buildings and major refurbishment. In August 2023, the scope of the Standard was extended to include the transition of existing buildings. As such, documents in this suite will be progressively re-released to reflect this update.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these: N/A

Timeframe and expected next steps: We intend to review the Standard every five years from 2025 to account for relevant developments.

Policy: Local Heat and Energy Efficiency Strategies (LHEES) will be in place by the end of 2023, setting out preferred heat solutions zones, guiding building owner decision making about replacement heating systems, and forming the basis for local delivery plans targeting heat and energy efficiency investment.

Date announced: 2020-21 Programme for Government (PFG) + CCPu

Progress on implementation since time of last report / CCPu: The Scottish Parliament passed legislation in April 2022 requiring all local authorities to publish a Local Heat and Energy Efficiency Strategy and Delivery Plan by the end of 2023 and update them on a five-year basis. The Scottish Government published guidance regarding what is required to fulfil this duty in October 2022. At the time of publication, 30 of the 32 local authorities have published their LHEES,

The published LHEES provide an evidence base for what interventions are needed to decarbonise Scotland’s buildings and tackle poor energy efficiency as a driver of fuel poverty, as well as importantly, where these buildings are located.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these: The statutory deadline for publishing LHEES sits with the local authorities themselves.

Timeframe and expected next steps: We are working to align Scottish Government delivery programmes with the emerging LHEES Delivery Plans. For example, our Heat Network Support Unit is working with local authorities to take the indicative heat network zones identified through LHEES and develop them into projects through feasibility and business case support.

Policy: Assessment of Energy Performance and Emissions Regulations (Non-Domestic Buildings) - The Assessment of Energy Performance of Non-domestic Buildings (Scotland) Regulations 2016 require assessment of the energy performance and emissions of larger non-domestic buildings (those over 1,000 m²). A review programmed for 2021 will investigate and consult upon amended scope of standards and more challenging improvement targets to create a viable pathway for all existing non-domestic buildings to deliver the level of energy demand and emissions reductions needed.

Date announced: CCP 2018

Progress on implementation since time of last report / CCPu: Our consultation on proposals for a Heat in Buildings Bill set out a proposed regulatory framework to decarbonise non-domestic buildings. The Minister for Climate Action recently confirmed our intention to introduce a revised Heat in Buildings Bill in Year 5 of this Parliamentary session. This Bill will include a target for decarbonising heating systems by 2045, sending a strong signal to building owners on the need to prepare for change. It will also include provisions to boost heat network development by developing requirements for large, non-domestic premises, including powers to require public sector buildings to connect to district heating when available. It will also include powers to set minimum energy efficiency standards for non-domestic properties.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these: N/A

Timeframe and expected next steps: A revised Heat in Buildings Bill will be introduced in Year 5 of this Parliamentary session.

Policy: Support for community low and zero emissions heat projects through CARES.

Date announced: CCPu

Progress on implementation since time of last report / CCPu: CARES continues to support communities across Scotland to participate in, and benefit from, the energy transition by providing advice and funding to communities looking to develop renewable energy, heat decarbonisation and energy efficiency projects. Heat decarbonisation has been a key focus of the current CARES contract and will remain an important part of the new contract which started in April 2025.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these: Strategic policy direction is provided to the contract delivery body through the Scottish Government’s contract manager to ensure CARES is aligned with Scottish Government objectives, with feedback on progress monitored through regular engagement and reporting commitments.

Since its inception CARES has advised over 1200 organisations and provided over £67 million in funding to communities throughout Scotland, supporting over 960 projects.

Timeframe and expected next steps: The current CARES contract runs from April 2021 – March 2025. Following the successful completion of a public procurement exercise, a consortium led by Energy Saving Trust have been awarded the contract to deliver CARES from 2025-2029.

The Scottish Government has announced a total of £9 million in CARES funding for 25/26, which includes £4.5 million to decarbonise community owned buildings, supporting a whole building retrofit approach covering energy efficiency measures, zero emissions heating and small-scale generation.

Policy: Salix financing facility to support investment in non-domestic buildings retrofit.

Date announced: CCP 2018

Progress on implementation since time of last report / CCPu: Scotland’s Public Sector Heat Decarbonisation Fund launched in October 2023 and is delivered by Salix on behalf of the Scottish Government. The funding scheme is designed specifically for local authorities, universities, and arms-length external organisation to progress ‘whole building’ approached projects that decarbonise heating systems and improve the energy performance of buildings. The Scottish Government approved funding for 15 applications in 2024/25, totalling more than £20 million of capital investment. It provided grant funding for the financial year 2023-24 to public sector organisations, including local authorities, universities, and arm's length external organisations (ALEOs), to install heat decarbonisation and energy efficiency measures. The scheme has so far helped to install 55 energy efficiency measures and nearly 20 other renewables/clean heat measures in these organisations’ buildings.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these: N/A

Timeframe and expected next steps: Phase 2 of this funding scheme was launched on 26^th March 2025 for projects that will complete in 2025/2026. The application portal will open between April and May with grant offer letters expected to be issued no later than August.

Policy: Work with social landlords to bring forward the review of the existing

Energy Efficiency Standard for Social Housing (EESSH2) with a view to strengthening and realigning the standard with net zero requirements.

Date announced:CCPu

Progress on implementation since time of last report / CCPu: The Scottish Government has been working with a stakeholder review group, since September 2022, on a review of EESSH2. Following this, we consulted on proposals for a new Social Housing Net Zero Standard) to replace the Energy Efficiency Standard for Social Housing (EESSH2). The proposals in the Social Housing Net Zero Standard consultation were co-developed with stakeholders as part of the review of EESSH2. We have analysed the responses and will be re-engaging with the stakeholder group on next steps during the first quarter of 2025.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these: N/A

Timeframe and expected next steps: N/A

Policy: Work with our partners, including the UK Government, local authorities, and utility providers to determine the best approach to heat decarbonisation for buildings currently heated by natural gas.

Date announced: CCPu

Progress on implementation since time of last report / CCPu: Work is underway to develop an understanding of the decarbonisation options for buildings currently using gas. Local authorities have published Local Heat and Energy Efficiency Strategies (LHEES) which set out the long-term plan for decarbonising heat in buildings and improving their energy efficiency across their local authority area. LHEES will identify strategic heat decarbonisation zones and set out the principal measures for reducing buildings emissions within each zone.

We will continue to work collaboratively on areas of common ground with the UK Government. However, action by the UKG in reserved areas remains critical to help ensure that the transition is fair and affordable. The key areas are:

• Action to rebalance gas and electricity prices to incentivise the installation of clean heating systems in a way that alleviates fuel poverty and the cost-of-living crisis.
• A decision on the future of the gas grid, which will have significant implications for any decisions we may make in the future regarding regulating building owners.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these: As of April 2025, 30 of 32 local authorities have published their LHEES.

Timeframe and expected next steps: We are in regular discussion with those local authorities yet to publish their Strategies and expect all to have published their final LHEES by the end of June 2025.

Policy: Review the system of building assessments and reports on energy performance and heat to ensure a system that is fit for purpose in meeting net zero emissions objectives for heat in buildings.

Date announced: CCPu

Progress on implementation since time of last report / CCPu: In Summer 2023 we consulted on revised proposals for Energy Performance Certificate (EPC) reform, building on feedback from previous consultations. The Scottish Government published its response to this consultation in January 2025^[19]. The Government Response confirmed that we will lay new EPC regulations in Autumn 2025. Subject to Parliamentary approval, the new regulations, new EPC rating system and redesigned certificates are expected to be brought into force during 2026. Our reforms mean that EPCs will be redesigned with a new rating system to give consumers a clearer picture of their home’s energy performance and to link better with the drive to cut emissions from homes and buildings. The new rating system will give clearer information on the fabric energy efficiency of a property; the emissions, efficiency and running costs of its heating system; and the cost of energy to run the home. This responds directly to advice from the Climate Change Commitee (CCC)^[20] on how to improve the information contained on EPCs. The validity of EPCs will also be reduced from ten to five years to ensure consumers have more up-to-date information.

Progress on implementation since time of last report / CCPu: Subject to Parliamentary approval, the new regulations, new EPC rating system and redesigned certificates are expected to be brought into force during 2026.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these: N/A

Timeframe and expected next steps: N/A

Policy: Work with stakeholders to further understand and support the application and use of low and zero emissions heating within designated historic environment assets and traditional buildings.

Date announced: CCPu

Progress on implementation since time of last report / CCPu:

The Scottish Government continues to work closely with Historic Environment Scotland, and key stakeholders across the wider historic environment sector, to develop and refine policy on improving the energy efficiency of our traditional and protected buildings and transitioning them to clean heating systems.

We continue to be guided by the final report of the independent Tenements Short Life Working Group, which was convened by Scottish Ministers to provide options on the best approach to decarbonise Scotland tenement buildings. The recommendations of this Working Group served to inform the approach we took in proposing exemptions and flexibility for complex-to-decarbonise buildings as part of our consultation into proposals for a Heat in Buildings Bill.

We have also published research, commissioned by Scottish Government through ClimateXChange, examining the suitability of different clean heating options for challenging building types, including traditional and protected buildings, tenements and flats, and properties in rural areas. We are considering the findings of this research.

Scottish Ministers continue to press the UK Government to remove/reduce VAT on the retrofit of existing buildings. This would bring retrofit projects into line with new build projects which are zero-rated for VAT; an important step in encouraging the uptake of energy efficiency improvements in our traditionally built homes and buildings.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these: N/A

Timeframe and expected next steps: Our consultation on proposals for a Heat in Buildings Bill sought views on how best to ensure that complex-to-decarbonise buildings are afforded the flexibility required under any future regulation. The Minister for Climate Action recently confirmed our intention to introduce a revised Heat in Buildings Bill in Year 5 of this Parliamentary session. We will ensure that any regulations we bring forward will provide suitable flexibility to account for circumstances where certain types of buildings are more challenging to decarbonise, such as traditional and protected properties.

Policy: Develop and introduce future regulation for non-domestic buildings and launch a consultation on these proposals.

Date announced:CCPu

Progress on implementation since time of last report / CCPu: Our proposed regulatory approach for non-domestic buildings was included within the consultation on proposals for a Heat in Buildings Bill. The Minister for Climate Action recently confirmed our intention to introduce a revised Heat in Buildings Bill in Year 5 of this Parliamentary session. This Bill will include a target for decarbonising heating systems by 2045, sending a strong signal to building owners on the need to prepare for change. It will also include provisions to boost heat network development by developing requirements for large, non-domestic premises, including powers to require public sector buildings to connect to district heating when available. It will also include powers to set minimum energy efficiency standards for non-domestic properties.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these: N/A

Timeframe and expected next steps: N/A

Policy: Undertake work to identify the capacity and output of renewable electricity generation required in Scotland to support the projected rollout of heat pumps.

Date announced:CCPu

Progress on implementation since time of last report / CCPu: As part of the research that we have commissioned into the energy transition in Scotland, we have assessed potential ranges of energy demand and generation, including for electricity, out to 2045 under three future energy scenarios[17]. These scenarios have informed the roadmap included in the draft Energy Strategy and Just Transition Plan and further assessments are underway as part of the next CCP.

These scenarios suggest that if current renewables deployment ambitions are met, Scotland will continue to be a net exporter of electricity to the rest of Great Britain (GB), even after accounting for increased demand from electrification (including from heat pumps) across Scotland. This is further evidenced by the National Energy System Operator (NESO) Future Energy Scenarios^[21], which explores decarbonisation pathways for the GB energy system and also suggests that even under high electrification scenarios, Scotland will continue to be a net exporter of electricity due to the significant increases in renewable electricity generation capacity that are projected.

We will continue to update our assessments.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these: N/A

Timeframe and expected next steps: ongoing

Policy: Consider whether to extend Permitted Development Rights (PDR) for zero-emission heat networks (HNs) and micro-renewable technologies.

Date announced:CCPu

Progress on implementation since time of last report / CCPu: We are carrying out a multi-phase review of permitted development rights (PDR) in Scotland. Phase 3 of the review focussed on new and extended PDR for domestic and non-domestic renewable energy equipment. The measures brought forward streamline the planning process for various low carbon technologies and alteration/replacement windows by removing the need to apply for planning permission to install them. Legislation came into force on 24 May 2024. Draft PDR for heat networks has been prepared and are being considered by heads of planning.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these: Work is in part dependent on progress with the wider legislative framework on heat networks. in terms of uptake of PDR, this is difficult to monitor as the Scottish Government do not collect information from planning authorities on numbers of planning applications for specific development. As PDR remove the need for a planning application and therefore do not necessarily get notified to the relevant planning authority, data on impacts is not available.

Timeframe and expected next steps: We are continuing to explore delivery of improvements via (i) exemption from heat network consenting, and (ii) inclusion in the scope of PDR, if more appropriate. We will know more about our plans to take this forward following our consultation on consenting proposals, which is planned over Summer.

Policy: Undertake work to better understand the impact on electricity networks of projected heat pump deployment. Work with the Distribution Network Operators through the Heat Electrification Partnership to build an evidence base to inform business planning. Work with industry and networks to understand need for heat pumps systems to be smart enabled and identify options to integrate smart systems into our delivery programmes; and to explore how innovation can help to improve the consumer experience.

Date announced:CCPu

Progress on implementation since time of last report / CCPu:

The Scottish Government established the Local Electricity Network Coordination Group (LENCG). The purpose of the group is to identify and address issues that can prevent or frustrate connections of heat and transport low carbon technologies including heat pumps and electric vehicle chargers to local electricity networks. It brings together representatives from the heat and transport industries to enable transparency between industry stakeholders and DNOs by facilitating communication and allowing for the identification and progression of solutions to any issues raised.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these: N/A

Timeframe and expected next steps: Heat and Transport subgroups have also been formed with the LENCG currently under review to align with the group’s Terms of Reference which requires a review on the requirement of the group to be undertaken after 18 months.

Policy: Support heat networks through: Introducing a Non-Domestic Rates Relief for renewable and low carbon heat networks until 2023-24.

Date announced: CCPu

Progress on implementation since time of last report / CCPu: We carried out a review of rates relief for district heat networks during 2023.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these: The 2024-25 Budget announced that the 90% District Heating Relief for district heat networks that use a heat source generated from renewables would be extended until 31 March 2027. In addition, the relief was expanded to include not only new district heat networks, but all district heating networks, where at least 80 % of the thermal energy generated derives from renewable generation It was agreed at that time, that this relief would be kept under review, with a view to possibly extending it later and advice will be provided to Ministers in due course.

Timeframe and expected next steps: A review of rates relief regulations for district heating networks will take place in 2026-27.

Policy: Through National Planning Framework 4 (NPF4), ensure that local development plans take account of where a Heat Network Zone has been identified.

Date announced: CCPu

Progress on implementation since time of last report / CCPu: As set out in previous reports, NPF4 (adopted in February 2023) sets out that Local Development Plans (LDP) should consider the area’s Local Heat & Energy Efficiency Strategy (LHEES). The spatial strategy should consider areas of heat network potential and any designated Heat Network Zones.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these: N/A

Timeframe and expected next steps: Complete

Policy: Explore how local tax powers could be used to incentivise or encourage the retrofit of buildings, and commission further analysis to identify potential options.

Date announced:CCPu

Progress on implementation since time of last report / CCPu: We will continue to explore options to incentivise buildings retrofit / transition to clean heat using local tax powers. This includes under the new deal for business non-domestic rates sub-group consideration of, amongst other things, how non-domestic rates levers support Scotland’s transition to net zero.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these: N/A

Timeframe and expected next steps: Policy options will be considered in light of the findings and any recommendations from these considerations. Decisions on non-domestic rates, including any reliefs, are generally made in the context of the Scottish Budget in line with other government priorities.

Policy: Design future delivery programmes to ensure significantly accelerated retrofit of buildings, with new programmes to be in place from 2025.

Date announced:CCPu

Progress on implementation since time of last report / CCPu: Our delivery programmes will continue to evolve to meet the scale of change required and align with any regulations we introduce.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these: N/A

Timeframe and expected next steps: N/A

Outcome 3: Our gas network supplies an increasing proportion of green gas (hydrogen and biomethane) and is made ready for a fully decarbonised gas future.

Policy: Hydrogen for heat demonstrator – providing £6.9 million support for SGN’s H100 hydrogen for domestic heat demonstrator.

Date announced: 2020-21 PfG

Progress on implementation since time of last report / CCPu: SGN’s H100 project continues to make good progress towards the expected launch date in the second half of 2025. Key contracts have been awarded, over 300 households are expected to have signed up by the launch date, and the demonstration homes were opened to the public by the First Minister in early February 2025.

In line with the Hydrogen Action Plan^[22] hydrogen will not play a central role in the overall decarbonisation of domestic heat, however, it could have a part to play in certain specific areas in Scotland, subject to the successful outcome of trials.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these: N/A

Timeframe and expected next steps: The H100 Fife hydrogen network is scheduled to go live in 2025.

Policy: Work with UK Government on product standards, with a view to making new gas boilers hydrogen-ready.

Date announced:CCPu

Progress on implementation since time of last report / CCPu: Product standards for boilers are a reserved matter but the Scottish Government continues to engage with the UK Government on this policy area, while calling for the phase-out of gas boilers to be expedited from the mid-2030s.

The UK Government consulted on product standards to improve the efficiency of home heating systems and reduce energy consumption in early 2025. These policy proposals are reserved and apply in Scotland. The UK Government’s position, set out in this consultation is that hydrogen-ready boiler standards will not be considered through this update to ecodesign and energy labelling. The UK Government has recently announced its intention to assess the current evidence base before consulting in 2025 on the role of hydrogen in home heating, and it will consider whether any changes to the approach to hydrogen-ready boilers is warranted following that consultation process.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these: N/A

Timeframe and expected next steps: 2026

Outcome 4: The heat transition is fair, leaving no-one behind and stimulates employment opportunities as part of the green recovery

Policy: Develop a long-term public engagement strategy and begin implementation of early actions.

Date announced:CCPu

Progress on implementation since time of last report / CCPu: We published the Heat in Buildings Public Engagement Strategy (PES) in December 2023. This sets out a strategic framework for how we will work and collaborate with partners and stakeholders to raises awareness of energy efficiency and clean heat, over the coming years.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these: In Chapter 5 of our strategy, we set out the indicators we will use to track Scottish public awareness and understanding of clean heating and public engagement in the heart transition. It is closely aligned with the wider Monitoring ad Evaluation Framework for the Heat in Buildings Programme.

Timeframe and expected next steps: The PES covers the period 2023 to 2026 with a commitment to review after that period. Current activity includes progressing work to establish a strategic partnership group and work to improve the customer journey.

Policy: Smart Meter installation: All homes and businesses will be offered a smart meter by 2020 under a UK Government initiative, providing the opportunity for a greater understanding of final energy consumption.

Date announced: CCP 2018

Progress on implementation since time of last report / CCPu: The smart meter programme is owned and led by the UK Government who have responsibility for the policy, regulatory and commercial framework. The UK Government introduced a four-year ‘Targets Framework’ on 1 January 2022, which sets energy suppliers annual smart meter installation targets.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these: The UK Government has set expectations for suppliers to achieve a minimum installation coverage in homes of 74% by the end of 2025. These targets are binding obligations set out in licence conditions and Ofgem is responsible for regulation and enforcement. There are now over 37 million smart and advanced meters in homes and small businesses across Great Britain. Latest statistics show over half (65%) of energy meters in Great Britain are now smart meters^[23].

Timeframe and expected next steps: The UK Government is currently in Year 4 of the four-year smart meter Targets Framework. Following the completion of this framework, work will continue towards making smart meters available for all consumers who wish to install them. The Smart Metering Implementation Programme is in the process of looking into the future of the smart metering framework, including maintaining smart meter functionality, ensuring 4G compatibility, and understanding the appropriate pace of new smart metering installations. The UK Government is also envisaging consulting on regulatory options for encouraging new installations in the near future.

Policy: Work with the Scottish Cities’ Alliance and the seven cities on the opportunities to accelerate activity on heat and energy efficiency.

Date announced:CCPu

Progress on implementation since time of last report / CCPu: The Verity House Agreement was signed by the Scottish Government and Convention of Scottish Local Authorities (COSLA) on 30 June 2023, setting out a vision for a more collaborative approach to delivering shared priorities for the people of Scotland. Aligned with the Verity House Agreement, we have worked with the Scottish Cities Alliance and COSLA to develop a Climate Delivery Framework between national and local government to agree shared approaches to delivering action on climate change. National and local leaders have met twice (December 2024 and March 2025) to jointly shape key climate change polices and implementation at the national, regional, and local level and so drive more effective delivery of policy and programmes against climate goals. Work is progressing to finalise priority areas for focus and workplans to bring forward delivery.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these: N/A

Timeframe and expected next steps: Ongoing

Policy: Provide capital investment for Scottish colleges for equipment to deliver training for energy efficiency and heat.

Date announced:CCPu

Progress on implementation since time of last report / CPUs: Thanks to previous investment, infrastructure in Scottish Colleges broadly matches the current levels of training demand. However, training is not equally available across all geographic areas. The Scottish Government has invested in a mobile heat pump training centre to ensure training is available to any college in Scotland to deliver on site heat pump training.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these: N/A

Timeframe and expected next steps: The Scottish Government will continue to work in partnership with the sector to ensure that appropriate support and training provision are aligned with business needs and future local demands.

Policy: Respond to the recommendations of the Expert Advisory Group on a heat pump sector deal for Scotland, by Q1 2022

Date announced:CCPu

Progress on implementation since time of last report / CCPu: The Scottish Government’s response was published on 11 November 2022.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these: N/A

Timeframe and expected next steps: Complete

Policy: Bring forward and support demonstrator projects, such as: hybrids and high temperature heat pumps; the use of hydrogen for space and water heating; projects to understand the impact of heat transition on existing energy networks.

Date announced:CCPu

Progress on implementation since time of last report / CCPu: In November 2022, the Scottish Government launched the Green Heat Innovation Support Programme that makes available funding for Scottish based companies to develop ideas that support growth of the clean heat sector. This includes funding for feasibility studies as well as large-scale research & development and capital investment projects.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these: As of February 2025, the programme has provided almost £1.5 million in funding to support the research and development of innovation projects within the clean heat and energy efficiency sector.

Timeframe and expected next steps: A review of future green heat innovation support programme (GHISP) funding is currently underway to ensure that the programme continues to meet the demands of the sector and identify opportunities to support research and development in Scotland's heat transition.

Policy: Publish a ‘Heat Network Investment prospectus’ in 2021-22 - a first cut of heat network zones across Scotland, combined with information on decarbonisation needs of existing networks.

Date announced:CCPu

Progress on implementation since time of last report / CCPu:

Further to the First National Assessment of Potential Heat Network Zones published in April 2022, local authorities have also carried out assessments of potential heat network opportunities at a local level through their Local Heat and Energy Efficiency Strategies (LHEES).

The projects receiving pre-capital and capital support via the Heat Networks Support Unit and the Scotland’s Heat Network Fund are included in our quarterly reports to give potential investors, the supply chain and building owners considering connecting to a heat network a clear view on the pipeline of projects the Scottish Government is supporting.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these: N/A.

Timeframe and expected next steps: N/A

Policy: Establish a short life working group on finance for the heat transition.

Date announced:CCPu

Progress on implementation since time of last report / CCPu: We established an independent Green Heat Finance Task Force in 2021 to explore potential new and innovative financing mechanisms to attract private financing at scale to support the transition to clean heat. The Taskforce published its Part 1 Report in November 2023 and its Part 2 Report in April 2025. The Scottish Government will formally respond outlining priorities and the partners we will work with in acting upon Taskforce conclusions.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these: N/A

Timeframe and expected next steps: We are considering the recommendations made by the Green Heat Finance Taskforce and will reply in due course.

Policy: Establish principles to underpin our commitment to ‘no-one being left behind’ in the heat transition, ensuring our approach neither increases the fuel poverty rate nor increases the depth of existing fuel poverty. This will include the effective design and targeting of our fuel poverty and heat in buildings programmes.

Date announced:CCPu

Progress on implementation since time of last report / CCPu: The Heat in Buildings Strategy sets out the principles that will guide our delivery programmes, to assess the impacts of our programmes on fuel poverty rates, and to ensure we only take forward actions where they are found to have no detrimental impact on fuel poverty rates, unless additional mitigating measures can also be put in place. We remain committed to these principles, for example through our delivery schemes, which offer targeted to support to those in or at risk of fuel poverty. The main driver of fuel poverty is surges in energy prices, which the Scottish Government has limited powers to influence, and these surges have resulted in a huge increase in fuel poverty in Scotland since 2020. We have been urging the UK Government to introduce a social tariff which we believe can have a substantial impact in addressing fuel poverty and will continue to make the case for a mechanism of this kind.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these: N/A

Timeframe and expected next steps: N/A

Policy: Ensure Local Heat and Energy Efficiency Strategies are developed through extensive engagement with local communities.

Date announced:CCPu

Progress on implementation since time of last report / CCPu: We published Guidance setting out what is required when developing an LHEES in October 2022. The Guidance included a requirement for extensive engagement as local authorities develop their LHEES, including with local communities.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these: N/A

Timeframe and expected next steps: Complete

Policy: Continue delivery of energy efficiency investment to support fuel poor households and conduct further modelling and analysis to better understand the potential impact of the heat transition on fuel poor households and the scale of, and options for, mitigation that may be required.

Date announced:CCPu

Progress on implementation since time of last report / CCPu: We continue to provide a broad range of delivery programmes to provide advice and support to people related to energy efficiency and clean heating, including to support those least able to pay, delivered through our Warmer Homes Scotland and Area Based schemes.

The Heat in Buildings Monitoring and Evaluation Framework, published in November 2023, is designed to demonstrate the extent to which our Heat in Buildings policies and programmes are delivering emission reductions and achieving wider outcomes, including people not being pushed into fuel poverty as we decarbonise our homes. In accordance with the Fuel Poverty 2019 Act, the first 3-year fuel poverty progress report will be published and laid in Parliament by the end of 202425. This will cover progress since publication of our Tackling fuel poverty in Scotland strategy in December 2021, with the steps, and the progress made towards addressing the four drivers of fuel poverty and meeting the fuel poverty targets.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these: N/A

Timeframe and expected next steps: We will continue to build on the evaluation work undertaken, which will be set out in our forthcoming 3-year statutory progress report. Together with continued ongoing engagement with the Scottish Fuel Poverty Advisory Panel, including waiting for the outcome of their own statutory report to Scottish Ministers. We will consider their advice and recommendations to inform and shape future policy direction and guide budget allocations.

Policy: Urge the UK Government to rebalance levy costs on energy bills to make gas and electric systems relatively more cost comparable.

Date announced:CCPu

Progress on implementation since time of last report / CCPu: The UK Government has committed to consult this year on rebalancing the price of gas and electricity by moving policy costs away from electricity and onto fossil fuels when current high gas prices fall. We continue to press the UK Government on this.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these: N/A

Timeframe and expected next steps: Ongoing