Energy Performance of Buildings (Scotland) Regulations 2025: business and regulatory impact assessment

Section 4: Additional Implementation Considerations

Enforcement, Compliance, Monitoring & Sanctions

As highlighted earlier within this BRIA, under the Energy Performance of Buildings (Scotland) Regulations 2008^[55], local authorities are designated as the enforcement authority. The current penalty charges for failure to comply with the existing EPC legislation are set out within Section 17^[56] of the Energy Performance of Buildings (Scotland) Regulations 2008:

(i)£500 for dwellings or buildings [(or building units)] that are ancillary to dwellings; or

(ii)£1000 in any other case.

The Scottish Government consulted in early 2025 on our future approach to penalty charges within the new legislation. We sought stakeholder views from enforcement authorities and other respondents on what the appropriate level of penalty charges should be under the new regulations going forward. We also committed to reviewing the penalty charge level within two years of the new regulations coming into force to ensure they remain appropriate

A range of views were expressed by respondents in relation to this proposal. Some were strongly supportive of penalty charges and increasing these in some or all circumstances. Others were against or ambivalent about the prospect of increasing penalty charge levels. Some were against the use of penalty charges at all (typically individuals). Mixed opinions were also expressed by the same respondents.

Generally, respondents did not specify the exact amounts they thought the penalty charges should be set at/increased to. While a few suggested they should be higher than the current level, others simply advised that the levels needed to be sufficiently high enough to act as an effective deterrent.

Of the 25 respondents who answered the question on reviewing the level of penalty charges within two years, nearly two thirds (64%, n=16) supported the proposal to review the level of penalty charges within two years of the new regulations coming into force. Conversely, 20% (n=5) opposed this, all of whom were individuals.

On this basis, the Scottish Government has decided to maintain penalty charges in the new regulations at their current levels, and we will review these again two years after the regulations come into force.

In order to support local authorities, the Scottish Government will work with local government representatives to develop further guidance, in the form of an enforcement ‘toolkit’, to help the enforcement authorities in the discharge of their duties.

Longer-term, we will continue to engage with local authorities around whether additional resource would be required to support EPC enforcement activities as the market evolves, particularly around enforcement of related regulations which we are proposing for minimum energy efficiency standards in the private rented sector.

UK, EU & International Regulatory Alignment and Obligations

Internal Market

Intra-UK Trade

As part of our EPC reform work, a Memorandum of Understanding (MoU) has been established with the UK Government and other Devolved Administrations. This ensures there is an official forum for engagement across the UK, and facilities joint working on areas such as EPC assessor skills and consumer protection.

The EPC assessor market operates across the UK and is covered by relevant provisions in the UK Internal Market Act 2020 (IMA) relating to mutual recognition of both “services” and “professional qualifications and regulation” . However, legislative competence for EPC Regulations is devolved to the Scottish Parliament. We do not anticipate the new regulations would have any IMA impacts, and as set out in the Government Response to the 2023 consultation, the Scottish Government will work with the UK Government and other devolved administrations to agree a common approach to issues around skills and qualifications, given that these are covered by UK internal market legislation.

The approach that we will take to implementation of the new regulations will ensure that the EPC regulatory regime in Scotland continues to, as far as possible, share technical and operational infrastructure with the UK Government and across the UK market. This will mean that the Scottish EPC Register will link to the UK Government’s cloud calculation service, and the Scottish EPC Calculation Methodology will be based upon the UK Home Energy Model and Simplified Building Energy Model (SBEM). EPC assessors and Approved Organisations will continue to be able to operate across the Scottish market.

The difference in lodgement fees charged in Scotland reflects the higher operational costs of administering the EPC system in Scotland – however, the increase is lower than would have been the case had elements in Scotland (i.e. the Register and Calculation Methodology) been funded exclusively by Scottish fees (with no sharing of infrastructure across the UK). We estimate that this would have added an additional £0.6m per annum of running costs and would have resulted in higher fees.

We, therefore, do not anticipate any negative impacts on intra-UK trade or on the operation of the UK internal market.

International Trade Implications

None identified.

EU Alignment consideration

The Scottish Government has made a commitment to maintain and advance the high standards that Scotland shares with the EU. The principal legal instrument by which the EU sets out its standards for EPCs is the Energy Performance of Buildings Directive (EPBD), which has been recast several times since it was first adopted in 2002 (in 2010 and 2018).

Implementation of the EPC elements of the Directive in Scotland to date has been primarily the Energy Performance of Buildings (Scotland) Regulations 2008, made through the European Communities Act 1972(a). Transposition of relevant EPC provisions in the 2018 recast of the Directive took place prior to EU Exit and it forms part of the body of ‘assimilated’ Law (the new name for retained EU law). Powers now exist under Part 10 of the Energy Act 2023 to make new EPC Regulations.

The EPBD has now been recast again in April 2024 and includes measures to help ensure consistent high quality EPC assessments and encourage energy efficiency improvements. Measures in the EPBD which relate to EPCs include increased reliability, quality, and digitalisation of EPCs to maintain high quality EPCs. The recast EPBD also introduces the need for enhanced independent verification of energy assessments, including through on-site audits. The EPBD also calls for digital data collection and sharing, to improve knowledge on the building stock and awareness on energy consumption in buildings

The reforms which we are introducing in the new regulations, and through the related operational infrastructure (such as creating the new onsite audit and inspection function) will enable the Scottish Government to maintain broad alignment with the main provisions and outcomes of the EPBD in relation to EPCs.

Legal Aid

No part of EPC reform will create a new procedure or right of appeal to a court or tribunal, or any change in such a procedure or right of appeal.

Digital Impact

We are addressing digital impacts through:

• redesigning EPCs through continued user testing
• ensuring EPCs move to a more accessible, digital format
• scoping out the potential content for a new, dynamic EPC user interface

In our 2025 Government Response to the 2023 EPC reform consultation, we set out our commitment to redesigning EPCs through a further phase of user testing, and that we would also move to a more accessible, digital format for EPCs. We have worked with design experts to ensure the reformed certificate design meets relevant accessibility standards.

EPCs are already accessed via a website. This website will be updated, modernised, and developed to meet the latest accessibility standards, in line with the Scottish Government’s Response to the 2023 consultation on EPC Reform.

The Government Response confirmed that:

“As part of our proposed move to the more accessible, digital format for EPCs we have also now commissioned research to scope out the potential content for a new dynamic EPC User Interface. This would include interactive features allowing consumers to input different variables in terms of their behaviour and preferences, to understand the likely impact that this would have on their energy use”.

It also confirmed that:

“The research will:

• review existing approaches to displaying dynamic and interactive information about home energy efficiency,
• review evidence regarding the effectiveness of these approaches, and
• assess the importance of different occupancy variables that impact heat use and energy efficiency”.

We are now undertaking additional work to consider how an optional extension to the EPC Register could allow building occupiers to see how their behaviour (such as heating setpoint) could impact their energy use and potential savings. We intend to include this functionality on the Scottish EPC Register at a later date.

Business Forms

The EPC system relies upon assessors submitting data which they gather during the course of surveying the building, which is then processed by software using the EPC calculation methodology (i.e. HEM or SBEM) to generate the EPC ratings and certificate.

The forms and calculation software used to record and process this data are developed by the Approved Organisations, and are regularly updated whenever changes are made to the conventions on how EPC data is gathered and processed. Since it is already long-established normal practice for the Approved Organisations to regularly update the forms which assessors use to enter and process data, we do not therefore envisage any negative impacts from moving to new forms when the new regulations and calculation methodology come into force.

When introducing the new operational governance arrangements which will accompany the new regulations, the Scottish Government will need to create a process for appointing or re-appointing Approved Organisations. New documentation (including a new Framework, application form, reporting form, etc.) will be issued to existing and prospective AOs for completion. We will ensure that parties receive sufficient advanced notice of our intention to appoint / re-appoint them, including publication of the relevant forms which need to be completed. We will also work with the Approved Organisations, when appointed under the new regulations, to develop the forms and documents necessary to introduce the new onsite audit and inspection function to be exercised by the Scottish Government, including its interaction with the AOs’ existing desk-based audit function.