Draft Energy Efficiency (Domestic Private Rented Property) (Scotland) Regulations: consultation

1. Ministerial foreword

In 2019, the Scottish Parliament committed to end Scotland’s contribution to global emissions as soon as possible and by no later than 2045, through the Climate Change (Emissions Reduction Target) (Scotland) Act 2019^[1]. Our commitment to that ambition is unwavering. We’ve halved our emissions since 1990 but we know the most challenging part of the journey lies ahead.

Reducing emissions from our buildings is one of the most important actions we can take to help Scotland’s contribution to preventing climate change. Scotland’s homes and workplaces account for about 19% of Scotland’s total emissions, and must transform so they are more comfortable, efficient and green.

The Scottish Government is also committed to reducing fuel poverty and we published our first three-year fuel poverty periodic report 2021-24 in April, in line with the Fuel Poverty Act 2019. It sets out the progress and steps that we are making in Scotland, with the limited powers at our disposal, in tackling fuel poverty^[2]. The report highlights two main reasons for rising fuel poverty: the volatile nature of energy price increases and the UK Government’s (UKG) control over key fiscal and energy policy levers. We need to take joint action to continue to reduce fuel poverty in Scotland.

It is vital that we find the right balance to do both of these – reach net-zero by 2045, and reduce fuel poverty. Improving energy efficiency is one of the levers available to the Scottish Government that enables this dual progress.

Making fabric improvements to our homes, such as improving the levels of insulation, reduces the energy demand required to have a warm, comfortable home. This has the potential to reduce emissions and improve conditions for those living in fuel poverty. Installing better insulation and other energy efficiency measures could reduce emissions from the private rented sector (PRS) by up to 5% and would make our homes more comfortable and easier to heat, helping to reduce the amount we have to spend on energy. The health of people living in better quality homes also improves by reducing the risk of cold and dampness-related conditions^[3].

In 2023, 56% of Scottish homes were rated Energy Performance Certificate (EPC) band C or better (using existing EPC ratings), compared with 52% in 2022. We are already making improvements. However, in the PRS 48% of properties are rated EPC band D or lower, with the sector also having the highest percentage (14%) of EPC band E, F or G rated properties compared with the social rented sector (5%) and owner occupied sector (11%). We believe this is contributing to the high numbers of people living in fuel poverty in the PRS (44%). The lowest rates of fuel poverty are associated with higher energy efficiency standards^[4].

That’s why we are now proposing to progress regulations under existing powers in the Energy Act 2011 to introduce a minimum energy efficiency standard (MEES) in the PRS. These regulations would mean all PRS properties, as far as possible, reaching reformed EPC Heat Retention Rating (HRR) band C from 2028 for new tenancies and by 2033 for all privately rented homes. This will improve those homes, reduce energy costs for tenants and support the transition to clean heating.

I invite anyone with an interest in these proposals – tenants, landlords, suppliers and others – to respond to this consultation. We welcome your views, to help us understand the practical implications, so we can reflect those as we finalise our proposals to help ensure these regulations to work as effectively as possible.