Reducing emissions from our homes and buildings is one of the most important things we can do to help end Scotland’s contribution to climate change. Over the next 24 years Scotland’s homes and workplaces must transform, so they are warmer, greener and more efficient. This Heat in Buildings Strategy, which updates both the Energy Efficient Scotland Route Map and the Heat Policy Statement, sets out how we will achieve that ambition.
Our homes and workplaces account for around a fifth of Scotland’s total greenhouse gas emissions. We can and must make very significant progress towards eliminating these emissions over the next decade and reduce them to zero by 2045. Transforming our homes and workplaces will be immensely challenging, requiring action from all of us, right across society and the economy.
I was pleased the draft of this strategy received so many supportive responses, and that a broad range of stakeholders welcomed the scale and pace of the ambition laid out in the draft. This final strategy reflects much of the insight generated through the consultation. We know that, as we progress through the heat transition, there will be more issues to resolve. We will continue to build on the new ideas proposed by consultation respondents as we work our way through this important and unprecedented challenge.
This Strategy sets out the significant actions we are taking, but we do not have all the powers necessary to deliver the transformational change required. The delayed UK Heat and Buildings Strategy must set out how the UK will use its regulatory and policy levers to incentivise rapid deployment of zero emissions heat technologies. We urgently need a stronger commitment and clear action plan on heat from the UK Government. Recent volatility in global natural gas markets further underscores the urgency of UK Government action in reserved policy areas to maintain security of energy supplies and to support consumers.
As we address the damaging climate change impact of heating our homes and buildings with unabated fossil fuels, we must also continue to tackle the social inequalities that are all too prevalent in our housing sector, and deliver a just transition. In particular, we must redouble our efforts to end fuel poverty and the blight of unaffordable heating. This is challenging as many zero emissions heating systems are more costly to install and can be more expensive to run than high emissions alternatives. We need to work together across sectors and jurisdictions to overcome these issues, and to deliver a just transition. We remain steadfast in our commitment to supporting those least able to pay in this transition, and in protecting those who are most vulnerable to any increase in costs.
Decarbonising our homes and workplaces means a fundamental shift for almost all of us. Poor energy efficiency can lead to high energy costs which can push households into fuel poverty and present unnecessary financial burdens for businesses and the public sector. Many of us have already taken steps to improve the energy efficiency of our homes and workplaces. 45% of homes now achieve EPC C or better. We need to continue to prioritise improvement to the fabric of our homes and buildings, to accelerate our efforts and deliver a very significant reduction in our demand for energy as a society.
By 2030 we want to see a large majority of building achieving a good level of energy efficiency, which for homes is at least equivalent to an EPC band C, with all homes meeting at least this standard by 2033 where feasible and cost-effective. This will help ensure energy costs in future are affordable and that our actions continue to lift people out of fuel poverty. In this strategy we set out the guiding principles we will use to ensure our actions do not have detrimental impact on fuel poverty rates.
At the same time, we must rapidly scale up deployment of zero emissions heating systems so that by 2030 over 1 million homes and the equivalent of 50,000 non-domestic buildings are converted to zero emissions heat. We must do so in a manner that protects those in or at risk of fuel poverty from increased energy bills and that avoids placing a burden on those least able to pay for the transition.
The heat technologies identified in this Strategy as near term priorities – heat pumps and heat networks – are not new. They are widely used in other European countries and are now gaining a growing share of the market here in Scotland. But for many of us, they remain unfamiliar. As we deliver this Strategy, we will increase public engagement, building on our existing advice services and taking steps to raise awareness and understanding of these new technologies. We are establishing a National Public Energy Agency to provide leadership and harness the potential of scaled up programmes to decarbonise heat – with a virtual agency established within the coming year and a dedicated physical agency by September 2025.
We will work with local government to put in place Local Heat & Energy Efficiency Strategies, setting out a plan for all areas of Scotland, and work with local communities to design tailored solutions, matched to local circumstances.
Over this Parliament we will make available at least £1.8 billion for heat and energy efficiency projects across Scotland, helping to secure delivery against our targets, providing a much-needed stimulus to the heat and energy efficiency sector, and contributing toward a longer-term green recovery. We remain committed to working with the social housing sector and encourage the sector to take full advantage of the support available, including through our Social Housing Net Zero Fund through which we are committed to investing at least £200 million of capital funding to support decarbonisation of social housing over the course of this parliamentary term. Over this Parliament, we will also invest at least £200 million in the Scottish public sector estate to improve and reduce energy use and install zero emissions heating systems.
Our investment will generate significant opportunities for communities across Scotland. We will continue to flex our delivery programmes to support local jobs and create opportunities for young people. We will also expand our work with the supply chain, for example co-producing with the sector a Supply Chain Delivery Plan, to create new investment opportunities and create and support high value, local jobs.
We estimate that the total investment required to transform our homes and buildings is likely to be in excess of £33 billion. Clearly, this cost cannot be borne by the public sector alone. We are establishing a new Green Heat Finance Task Force to identify innovative solutions to maximise private sector investment, and find new ways to help individuals and organisations spread the upfront cost of investing in making their properties warmer, greener and more efficient.
To underpin and provide the certainty and assurance to secure this investment we will bring forward a framework of regulations setting clear standards for property owners across all tenures and buildings types. We will build on existing standards already in place, extending them to cover all properties and requiring action on both energy efficiency and zero emissions heating. This will support our commitment to phasing out the need to install new or replacement fossil fuel boilers in off gas properties from 2025, and in on-gas areas from 2030. We have already begun developing critical components of this framework, including our consultations on a 2024 Zero Emissions Heat Standard for new buildings and on the future reform of domestic EPCs.
There are no silver bullets or easy solutions to the heat in buildings challenge. We must use all the tools available to increase awareness, secure delivery and provide the certainty that individuals and the sector need to take action.
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