Energy Performance of Buildings (Scotland) Regulations 2025: equality impact assessment

Background

Policy Context

EPCs are an important source of information for current and potential building owners and tenants to help them understand the energy performance of their building. EPCs must be provided when a building is advertised for sale or for let to a new tenant, and upon completion of construction of a new building. They have formed part of the Home Report since 2008. EPCs are currently valid for a period of 10 years.

EPCs were first established as a legal requirement under the EU Energy Performance of Buildings Directive in 2002^[5], which has been recast several times since then^[6], and have been retained in Scottish law following the UK’s exit from the EU in 2020. They therefore represent a long-standing feature of Scottish law that has been embedded in the property market over several decades.

In spite of being well-established, many external stakeholders and independent reports have highlighted concerns around the relevance, accuracy and quality of EPCs produced. In large part, this reflects the changing policy landscape in the 16 years since EPCs became a legal requirement in Scotland – in particular since 2019 with the requirements of the Climate Change (Emissions Reduction Targets) (Scotland) Act 2019^[7] (which sets targets to reduce Scotland's emissions of all greenhouse gases to net-zero by 2045).

Following the net zero legislation, the ratings which EPCs display have been criticised by stakeholders, including the Climate Change Committee^[8], consumer groups such as Which?^[9], academics^[10] and from within the assessment industry itself^[11] as in need of reform as, in their current format, EPCs are not aligned with our net zero ambitions^[12].

We have also received recommendations from an independent review of EPCs on the need to improve the quality of EPCs and, in particular, to strengthen quality assurance requirements around audit and inspection of Certificates^[13].

As well as this, the supporting technical and operational infrastructure which underpins EPCs (the EPC Register and the EPC calculation methodology) is life-expired, requiring significant upgrades.

These calls for reform have been made across the UK, with the UK Government receiving similar recommendations from the Climate Change Committee and consumer groups such as Which?, following its decision to retain EPC legislation in UK law following EU exit.

EPC Reform more broadly will contribute towards the Scottish Government’s wider strategic priorities of:

• Tackling the climate emergency by investing in green energy and infrastructure, since introducing the new EPC rating system will ensure that consumers have better information on the steps they can make to improve their property for net zero through investment in clean heating and energy efficiency; and the new operational framework will ensure higher quality EPC assessments that consumers can trust; these reforms will underpin proposed regulatory standards that will drive emissions reduction through decarbonisation of heating; and
• Tackling child poverty, since the new EPC rating system will directly assess the contribution that poor energy efficiency makes towards fuel poverty specifically, and child poverty more widely, helping to inform the Scottish Government’s statutory fuel poverty strategy and to better-target government programmes and funding towards improving those properties which are hardest to heat.

Current EPC policies / frameworks in place

Domestic EPCs currently provide two key ratings and are modelled using the Standard Assessment Procedure (SAP) calculation methodology. The Energy Efficiency Rating (EER) is based on the cost to run the property based on standardised conditions, for example, the occupancy, heating setpoint and other factors. The Environmental Impact Rating (EIR) is based on carbon dioxide equivalent emissions from the same standardised conditions.

Non-domestic EPCs provide a rating based on the total emissions under the assumption of standardised conditions. Non-domestic EPCs use the Simple Building Energy Model (SBEM) calculation methodology, or an approved Dynamic Simulation Model. Assessments for new buildings are based on the building specification and data gathered during its construction. Assessments for existing buildings are based on non-intrusive surveys of the building under consideration.

EPCs are prepared and issued by assessors who must be qualified by education, training and experience to do this. Assessors must be members of Approved Organisations, which are approved by the Scottish Ministers to ensure that EPCs are prepared and issued in a consistent, accurate and independent manner.

EPCs are lodged by assessors on the publicly accessible EPC Register, which is currently maintained by the Energy Saving Trust which is appointed by the Scottish Ministers as Keeper of the Register.

Our decisions on EPC reform

The Scottish Government has consulted extensively on a package of reforms to address the need for reform outlined above. Following an initial scoping consultation in 2021^[14], we consulted again in 2023^[15] on a final package of proposed reforms to improve the quality of EPCs and make them more fit-for-purpose in supporting net zero. This was followed by a further technical consultation in early 2025 on EPC lodgement fees and penalty charges^[16]. We have also conducted an internal review during 2024-25 of the operational governance arrangements covering the Approved Organisations, EPC assessors and the Operational Framework, which has been supported by the evidence given during the technical consultation.

The Scottish Government set out its final decisions on EPC reform in its Response to the 2023 consultation^[17], which committed to laying new EPC Regulations in Parliament later during 2025. We also concluded our review of operational governance during spring 2025.

In summary, the Government Response to the 2023 consultation set out our final decisions on reform. We will:

• introduce new EPC regulations in the Scottish Parliament during 2025 and bring them into force in 2026.
• adopt a new EPC rating system for domestic buildings:
• Heat Retention Rating (fabric energy efficiency);
• Heating System Rating (type, emissions, efficiency, running costs)
• Energy Cost Rating (retaining the existing SAP-based EE Rating)
• adopt a new EPC rating system for non-domestic buildings;
• adopt a redesigned EPC certificate;
• reduce the validity period of EPCs from 10 to five years
• develop a new EPC user interface to sit alongside the published EPC;
• introduce strengthened operational governance arrangements for EPC assessors and Approved Organisations to enhance quality assurance for consumers;
• establish a new technical infrastructure: replacing the Standard Assessment Procedure (SAP) with the new UK Home Energy Model (HEM) calculation methodology; design and build a new EPC Register to be kept by the Scottish Ministers;
• continue to work with the UK Government and devolved administrations where we share elements of the EPC regulatory system across the UK internal market.

In response to the technical consultation on EPC lodgement fees and penalty charges, we can now confirm that we will:

• amend EPC lodgement fees within the regulations to ensure that they can cover the costs of providing the technical and operational infrastructure to support the EPC regulations and which provide benefit to consumers;
• use the lodgement fees to support the development and delivery of a new EPC Register, a new EPC calculation methodology (the Home Energy Model and updated SBEM), and to support the establishment of a new onsite audit and inspection function within the Scottish Government to oversee improvements to EPC accuracy and reliability;
• retain EPC penalty charges at the level currently set in the 2008 regulations;
• review lodgement fee and penalty charge levels every two years to ensure they remain fair and proportionate; and
• review the onsite audit and inspection function within two years to see if it is fit for purpose and continues to be needed.

In response to our internal review of EPC operational governance arrangements (which has also been informed by responses to the technical consultation), we can now confirm that we will:

• revise the Approved Organisation appointment process, to encourage new entrants to the market and re-appoint existing bodies deemed to meet the new requirements;
• establish new independent onsite audit and inspection arrangements to align with the recast EU Energy Performance of Buildings Directive (2024);
• adopt a new Memorandum of Understanding with the UK Government and devolved administrations w to agree a common approach to issues around accreditation, skills and consumer protection; and
• continue to work with local government to agree the future arrangements for the discharge of enforcement functions.

Policy Aim

The purpose of the new Regulations is to put in place reforms to the EPC regime that address the issues highlighted above. This will involve making EPCs as accurate and high quality as possible, to ensure Scottish citizens can make informed choices to ensure their homes and workplaces are retrofitted for net zero.

The aim of our reforms is to ensure EPCs:

• give better information to current and prospective property owners and tenants on the net zero impacts of their property;
• continue to perform their role as a key feature of a functioning property market whenever properties are sold, let or constructed;
• are based on the most accurate methodology;
• are carried out to the highest standard;
• adopt updated methodologies and infrastructure shared with the UK Government; and
• maintain broad alignment with the recast EU EPBD, in particular through introduction of a new onsite audit and inspection regime to verify the accuracy and reliability of certificates.

The overall intended outcome is to maintain a functioning EPC system which remains an integral part of the property market (whenever a property is advertised for sale or let), which consumers can trust, and which delivers high quality, accurate, reliable, and relevant information to help them make decisions on the energy efficiency and contribution to net zero of their property.

Policy development process

We have confirmed a comprehensive package of reforms to modernise and improve Energy Performance Certificates (EPCs). This follows three public consultations from 2021 to 2025 and an internal review. These reforms aim to make EPCs more accurate, user-friendly, and aligned with Scotland’s net zero targets.

Who EPC Reform affects

The EPC reforms will primarily impact property owners, landlords, and tenants, as they will receive updated, more relevant information through a new rating system and redesigned certificates. Although when EPCs are required will remain unchanged, the reduced validity period and new ratings will provide clearer insights into a property's energy performance and alignment with net zero goals.

EPC assessors and Approved Organisations will also be directly affected, as they must adapt to new methodologies, quality standards, and governance structures. Estate agents, solicitors, and mortgage lenders will need to understand the new system to ensure compliance and accurate advice during property transactions.

Installers and manufacturers of energy efficiency and heating products will see changes in how their technologies are assessed and reflected on EPCs, with the potential to influence consumer choice. Local authorities, as enforcement bodies, will continue their role but are not expected to face increased enforcement burdens.

Finally, government programmes, academics, and researchers that rely on EPC data will need to adjust to the new system, though access to data will continue under updated regulations.