Towards an Industry for Green Heat: heat in buildings supply chains delivery plan

Sets out how supply chains will need to grow and change to meet future demand driven by future regulations of heating and energy efficiency. In the plan we outline the actions we are taking to support growth across the green heat industry.


Our Heat in Buildings Strategy, published in October 2021[i], sets an ambitious vision for decarbonising the heat supply of Scotland’s buildings and removing poor energy efficiency as a driver for fuel poverty.

For ease of reference, throughout this document, we refer to that vision as ‘Green Heating’, essentially, heating our buildings in a way that’s fair on people, and fair on the planet.

Green Heating includes both the way we supply heat, as well as the thermal performance of the buildings being heated. Fundamentally, in order for heating to be green, it needs to be:

  • Generated in a way that does not contribute harmful greenhouse gas emissions to the environment.
  • Used in properties with a high level of thermal performance
  • Delivered at a price that’s affordable to consumers.

The industries that currently service the heating and building improvement markets in Scotland possess a deep knowledge and understanding of our built environment and offer a strong base to support the Green Heat transition.

A note on the scope of this plan:

Whilst some of the detail and actions included in this plan are relevant more broadly, this document focuses primarily on the supply chain required to support the Green Heat transition in the domestic property market. This is in recognition of the complexities associated with larger scale non-domestic building services and the corresponding challenges for the supply chain.

We will be consulting separately in due course on our approach to regulating for zero emissions heating in non-domestic buildings as set out in the Heat in Buildings Strategy. As part of this we will be seeking views on supply chain challenges specifically for non-domestic buildings, allowing us to refine our approach to public sector action in this respect.

However, in order to support delivery at the pace and scale required, we need to mobilise more companies to deliver services to this market and grow the overall size of the workforce.

As well as increasing in size, industry will also need to undergo a cultural and business model change in order to improve productivity, streamline services and develop new, attractive Green Heat propositions for consumers.

Our ambition is to see the emergence of a new Green Heat sector in Scotland, with a laser focus on delivering the ambitions set out in our Heat in Buildings Strategy, and equipped to support the transformation of our building stock.

Building a new Green Heat Sector means creating the right conditions for businesses to transition and grow, as well as attracting new entrants to the market. This document sets out the action we are taking alongside public sector partners, and in collaboration with industry, to make that happen.

Executive Summary:

  • This document provides an overview of Scotland’s heating and building improvement sector, and provides background to the challenges and opportunities of developing the supply chain for Green Heat.
  • We set out how the supply chain will need to grow and change to meet future demand driven by our proposed regulation of heating and energy efficiency. This includes the need for supply chains to innovate, and develop more attractive consumer propositions for Green Heat.
  • We set out that growing the sector and driving structural and business model change, is a significant opportunity for businesses already active in the sector, and those looking to enter or diversify into it. We also recognise that government can play a key role in providing a supportive ecosystem for this to happen.
  • We set out roles and responsibilities for supply chain development across our public and private sector partners, as well as the new Heat and Energy Efficiency Scotland, which will play a key role in coordinating activity across Scotland’s public sector landscape to drive collective impact on developing a sector for Green Heating.
  • We outline the action we are taking, including:
    • Making available up to £17.6 million for investment in research, development and innovation within the Green Heat sector
    • Launching a challenge to establish Scotland as a destination for Green Heat manufacturing
    • Undertaking a refresh of the Climate Emergency Skills Action Plan, setting out our approach to planning for Green Heat Skills
    • Using public procurement to maximise the supply chain impact of our funding programmes
    • Providing a dedicated programme to raise industry’s awareness of the Green Heat transition
    • Consulting on a new supplier led incentives scheme to provide a route to market for innovative business models and new consumer propositions.



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