National Islands Plan Annual Report 2025

Climate Change and Energy

Strategic Objective 9 – Contribute to climate change mitigation and adaptation and promote clean, affordable and secure energy

Commitment 9.1 Work with island communities to support their climate change aspirations.

Islands Growth Deal

The Islands Growth Deal is working to support island communities in responding to climate change. This includes the Islands Centre for Net Zero (ICNZ) programme, which works across islands and is led by Orkney. This project will contribute greatly to achieving our net zero targets by piloting innovation in island transitions through research and development in collaboration with businesses and communities across Orkney, Shetland and Na h-Eilean Siar.

The ICNZ will work with local communities and businesses to navigate pathways to decarbonisation and aims to deliver significant year-on-year reductions in carbon emissions over the ten-year lifespan of the Deal, creating green sustainable jobs.

The first work package within the ICNZ programme, the Creed Hydrogen Skills and Innovation Centre in Stornoway, commenced delivery in 2024 and has levered in over £1.1 million of funding from the Scottish Government’s Emerging Energy Technologies Fund.

Climate Action Hubs

Four of the Scottish Government funded Climate Action Hubs support community-led climate action across our islands. These are the Outer Hebrides Climate Hub, the Argyll and Bute Climate Action Network (ABCAN), the Ayrshire Climate Hub and the Highlands and Islands Climate Hub. The hubs raise awareness of climate and nature emergencies within island contexts, provide support and advice on project development and funding options, offer small seed grants and support groups to learn from each other. They facilitate a joined-up approach to climate action across their area and support communities to shape local and national policy and decision-making.

All Hubs work closely with local authorities and other key partners to ensure local policies are shaped and informed by intelligence of local lived experience through community engagement.

Carbon Neutral Islands

The Carbon Neutral Islands Project (CNI) is supporting six Scottish islands – Hoy, Barra, Raasay, Islay, Yell and Great Cumbrae – to become carbon neutral by 2040, in line with the principles of a Just Transition. The project has fully embedded communities in its delivery model to ensure that islanders have a say in how they wish to decarbonise.

In 2025-26, the Carbon Neutral Islands Capital Fund awarded £1.4 million through a bidding process, with local authorities acting as the lead applicant in partnership with the six island communities. In addition, Raasay, Barra, Hoy, Islay and Cumbrae each received a £40,000 capital grant to support small-scale, high-impact community projects. The projects funded through the CNI Capital Fund are set out below:

• Vatersay Community Hall and Café – Decarbonising Community Spaces – £249,000
• This project will decarbonise Vatersay Community Hall and Café, a key hub for Barra and Vatersay, through renewable energy and efficiency upgrades. Millport Solar PV and Battery Project – £293,101
• Phase 2 of Carbon Neutral Cumbrae’s solar initiative will install solar PV and battery systems in up to 30 homes, targeting those with the lowest EPC ratings. Sellafirth Community Hub – £298,675
• This project will create a low-carbon, mixed-use community hub on Yell featuring energy-efficient design, air source heating, solar PV with battery storage, EV charging, and low-energy lighting. Decarbonisation of Islay Community Buildings Phase 2 – £401,843
• Phase 2 of this retrofit programme will deliver solar PV, battery systems, and energy upgrades across six community buildings, reducing emissions by 15.5 tCO2e annually. Community Transport Electrification Project – £131,484

The Island of Hoy Development Trust will fully electrify its community transport fleet, replacing diesel minibuses with electric vehicles and installing EV charging infrastructure.

The Scottish Government has also continued to support Local Anchor Organisations across the six islands with £479,000 to enable their activities, including employing Community Development Officers who are integral to the project’s success and lead delivery on the ground.

Furthermore, we continue to work with Community Energy Scotland as a delivery partner to begin to share the experiences of the project. They are currently supporting a number of islands to take early steps towards decarbonisation informed by the experiences of the project to date. This includes direct engagement with a cluster of the outer Orkney Islands (Eday, Westray, Papa Westray, Shapinsay, North Ronaldsay, Stronsay, and Sanday) and seven other community groups (Tiree, Luing, Colonsay, Uist, Bressay and the Galson Estate in Lewis).

Commitment 9.2 Work with island communities to look at alternative solutions to managing waste, particularly in respect of Scotland’s Circular Economy Strategy.

In October 2025, the Scottish Government published its Draft Circular Economy Strategy and public consultation. The Strategy sets out the rationale and benefits of transitioning to a circular economy within the wider economic framework. It describes our overall vision to 2045 and the outcomes that we are working towards. Following consultation, the final strategy will be published in 2026.

An Island Communities Impact Assessment was undertaken to consider the potential impacts of the draft Strategy on Scotland’s island communities. A final impact assessment will be published alongside the final Strategy in 2026.

Progress also continues to deliver priority actions set out within Scotland’s Circular Economy and Waste Route Map to 2030, which was published in December 2024. Key measures within the Route Map span the waste hierarchy and are being designed to account for different geographical requirements, including a co-designed new Code of Practice for household waste and recycling services (see commitment 9.14).

An updated Island Communities Impact Assessment Screening Report for the Route Map outlines key findings, stakeholder feedback and recommendations to ensure the impacts of policies on island communities continue to be assessed as they are developed and implemented.

In preparation for the ban on landfilling biodegradable municipal waste coming into force on 31 December 2025, Scottish Government worked closely with COSLA and local authorities to support a smooth transition away from landfill, recognising the particular implementation considerations faced by island communities.

Commitment 9.3 Work with local authorities to help them work towards their statutory targets.

In spring 2025, the Scottish Government consulted on new statutory guidance for public bodies to support them in putting their climate change duties into practice. The guidance highlights the need to consider island communities, including through Island Communities Impact Assessments, when developing carbon reduction and adaptation plans. Consultation responses were received from several island local authorities, and this feedback will inform the final version of the guidance, due for publication in March 2026.

Throughout the development of Strategy and Expansion Plans (SEPs) for electric vehicle charging infrastructure, Transport Scotland encouraged partnership working amongst local authorities including through the Electric Vehicle Infrastructure Fund (EVIF) and by increasing communication to ensure better regional awareness of different approaches. Through EVIF projects, collaboration and engagement with public sector organisations on islands encourages demand aggregation. This includes increasing the usage of existing or planned infrastructure and minimising the number of low usage charge points.

Commitment 9.4 Work towards creating net zero emission islands and providing global climate change leadership.

Please see commitment 9.1 for information regarding the Carbon Neutral Islands Project.

Commitment 9.5 Put in place resilient adaptation plans on islands that are at greater risk from climate change linking these strongly with development plans for those islands.

The Scottish Government-funded Adaptation Scotland Programme has continued to support island communities and local authorities by:

• encouraging relevant public bodies to share learning on climate adaptation through the Public Sector Climate Adaptation Network. All island local authorities are members of the network as are Highlands and islands airports;
• supporting island regions in the initiation and development of Climate Ready Regional partnerships;
• continuing to participate in, and supporting the work of, the Outer Hebrides Community Planning Partnership’s (OHCPP) Climate Change Working Group (CCWG), the Climate Hebrides partnership and its Outer Hebrides Climate Action Hub activities; and
• training and raising awareness on climate adaptation with HIE.

Commitment 9.6 Work closely with island partners, the network owner and all other key stakeholders to deliver existing proposals for electricity transmission links to mainland Scotland.

Diesel power stations on islands make up a residual and relatively negligible source of emissions in Scotland. However, they play a crucial role in ensuring security of supply for Scotland’s islands in the event of national grid faults, or in providing additional power supply to the main grid if required.

The Scottish Government is working with stakeholders to ensure that reforms to, and expansion of, the electricity grid are robust and work for Scotland, including our island communities. While regulation of electricity networks is reserved to the UK Government, we are engaging with them as well as regulators, National Energy System Operator and Scotland’s Transmission Owners (such as SSEN) to encourage them to take account of the needs of Scotland’s island communities. These transmission links will support the continued growth of renewables and the decarbonisation of our island communities, whilst creating a host of wider economic and environmental benefits across the islands.

Shetland’s 600MW HVDC transmission link connection to the mainland GB electricity system will supply Shetland’s demand needs most of the time. However, a standby solution is also required to ensure homes and businesses continue to receive the power they need during transmission system outages. The completion of the SSEN’s Gremista Grid Supply Point Project will enable the timely transition of Lerwick Power Station into standby mode in 2026 , meaning it will provide only back-up supply in the case of a cable outage, like other diesel power stations on Scottish islands.

The removal of unabated diesel and heavy oil fuelled generators from islands is an ambition of the supplier (SSEN) and is supported by Ofgem. In time, it is anticipated that these generators will be replaced either with additional connections to the mainland national grid (making emergency supply use less frequent) or renewable and storage technology such as batteries combined with solar and/or wind. In many cases renewables generation is already successfully providing additional power to supplement the main power supply during periods of high electricity demand. We will continue to work with SSEN and Ofgem to drive forward progress in these areas over the next decade.

Commitment 9.7 Work with Resilience Partnerships and energy providers to encourage them to focus on the resilience of islands’ energy supply networks.

Diesel generators on Scottish islands now contribute only minimally to emissions but remain essential as standby supply during national grid or subsea cable outages. Major electricity network investments – including Sumitomo’s £350 million subsea cable manufacturing facility at Nigg – will support reduced diesel reliance and deliver economic benefits for rural and island communities.

For more information please see commitment 9.6.

Commitment 9.8 Wo rk with transport-related stakeholders to have the most energy-efficient and climate-friendly transport services possible across the islands.

Transport Scotland is working with stakeholders to develop a Public Sector Fleet Decarbonisation Action Plan. It will demonstrate a continued commitment to decarbonising the public sector fleet and will identify actions that better align public spending with emission reductions, reflect the current fiscal and operating environment and recognise the cost and availability of associated technology.

Electric Vehicle Infrastructure Fund (EVIF) projects are progressing well, with Transport Scotland continuing to work closely with the various local partners. A key initiative is the North-West Scotland project, which brings together Comhairle nan Eilean Siar, Orkney, Shetland, and Argyll and Bute councils, with Highlands and Islands Transport Partnership serving as the lead partner. Procurement for phase one is advancing steadily and is expected to deliver solutions that help address some of the unique challenges faced by island communities. This phase will upgrade the network, reduce risk and enhance attractiveness for private investment.

Transport Scotland continues to work closely with both the North of Scotland (covering) the Inner Hebrides and Ayrshire (covering Arran and Cumbrae) collaborations.

Commitment 9.9 Continue working to unleash the potential of renewable energy as both a way to mitigate climate change and as a driver of sustainable and inclusive economic growth.

Scotland’s vast renewable energy potential is one of our greatest economic opportunities. The expansion of our renewables sector and its wider supply chain is expected to deliver thousands of well-paid, sustainable jobs across Scotland, including in our island communities. Our clean energy resources are also delivering real, long-term benefits for the people who live alongside them.

There is a strong pipeline of future projects across our island communities, and these will play a key role in decarbonising the power system.

The Scottish Government is committed to working collaboratively with other governments to accelerate progress towards Scotland’s economic and net zero targets. The UK, Scottish and Welsh governments have jointly commissioned the National Energy System Operator (NESO) to produce a Strategic Spatial Energy Plan that will help plan the future energy system for the whole of Great Britain.

In conjunction with Regional Energy Strategic Plans (RESPs) and the Centralised Strategic Network Plan (CSNP), this strategic approach will help cut grid connection waiting times, reduce overall system costs and accelerate the transition to net zero in both Scotland and across Great Britain. We have continued to engage extensively with the UK Government, NESO, Ofgem, and industry stakeholders on electricity market reform to ensure the interests of all Scottish consumers and stakeholders are represented in these plans.

Reforms to the wholesale market could have far-reaching implications for all market participants, including consumers and in particular those on Scottish islands, where fuel poverty rates are higher. We will therefore continue to engage with the UK Government to ensure Scottish Ministers are fully involved in shaping decisions on the future of the electricity market.

The Scottish Government continues to press Ofgem on the impact of unfairly high and volatile transmission charges on Scottish renewable generators. We have called for long-term measures to address the inequities in the current charging regime and expressed our disappointment at the rejection of proposed code modifications that would have provided short-term relief for Scottish generators.

As part of our strategic approach to catalysing investment in the infrastructure and manufacturing facilities that are critical to growing the offshore wind sector, we have provided £5 million for the Scapa Deep Water Quay and over £1.1 million for the Ultra Deep Water Quay at Lerwick Harbour, as well as £3.4 million to improve access to the Arnish Industrial Complex and £1.8 million for Stornoway Port’s proposed new Deep Water South project.

Commitment 9.10 Work with communities, crofters, farmers and landowners to expand forests and woodlands on the islands, recognising wider land-use objectives.

Scottish Forestry

The Forestry Grant Scheme includes a specific premium option for crofters in the Northern Isles, Na h-Eileanan Siar and other crofting counties, where establishing trees can be more expensive. The Croft Woodlands Project covers all the islands and offers free advice and support to crofters to plant and manage woodlands. Over the years, the project has supported significant increases in woodland planting by crofters.

Scottish Forestry (SF) also continues to support the award winning Integrating Trees Network, a farmer and crofter-led initiative hosting free on-farm and virtual events across Scotland. It brings together farmers, crofters, and technical experts to share practical knowledge, experiences, and advice about the processes, objectives, challenges and outcomes of integrating trees into agricultural businesses.

SF’s contribution and support have been instrumental in the approval of the Bute Community Forest Management Plan and the Isle of Gigha Heritage Trust Management Plan. These collaborations have fostered strong ties with the local communities and enabled them to achieve their management objectives in line with sustainable land-use priorities.

Commitment 9.11 Put the themes of meeting emissions targets and adapting to the effects of climate change at the heart of the preparation of National Planning Framework 4.

Commitment fulfilled.

This commitment was fulfilled. Please see the National Islands Plan Annual Report 2022 for details.

Commitment 9.12 Support the adaptation of Scotland’s aquaculture and fishing industry.

As set out in the Scottish Government’s Vision for Sustainable Aquaculture, we will continue to support the aquaculture sector to put in place climate resilience plans to manage the risks of climate change by 2029.

There is growing interest within the aquaculture sector to develop farms beyond 3 nautical miles from the coast, with developments in technology making farms in this region feasible. In June 2025, Scottish Ministers introduced the Town and Country Planning (Marine Fish Farming) (Scotland) Amendment Order 2025 to ensure consistency in approach to aquaculture planning regulations across the 0-12 nautical mile zone, by identifying relevant local planning authorities as the responsible body for assessing and determining fish and shellfish farm planning applications out to 12 nautical miles.

Work is now underway to clarify the responsible authority for fish farm environmental discharges between 3-12 nautical miles. A public consultation on proposals to identify the Scottish Environmental Protection Agency (SEPA) as the responsible authority for this activity was launched on 24 September 2025 and closed on 16 December 2025.

Understanding and mitigating the impacts of climate change on our seas is one of the 12 actions in Scotland‘s Fisheries Management Strategy. We continue to work closely with island stakeholders drawing on their expertise and experience to help shape our approach to climate change in a fisheries context.

In addition, the development of the Scottish-led Fisheries Management Plans (FMPs) brings together evidence on the state of the relevant fish stocks and identify policies and actions necessary to manage our fisheries in an effective and sustainable way, including policies relating to climate change.

Several Regional Marine Plans are under development, with the Shetland Islands Regional Marine Plan and Orkney Islands Regional Marine Plan recently adopted by Scottish Ministers. These will guide decision-making in Scottish marine regions, in conformity with national marine planning policies and objectives (including those on climate change mitigation and adaptation). Once adopted, the plans will support coastal community decision-making to deliver multiple local-scale benefits, including adaptation and mitigation of coastal erosion and flood risk, and protection of blue carbon habitats.

Commitment 9.13 Work with a range of stakeholders to develop an action plan to improve resilience to properties at flood risk.

The Scottish Government’s National Flood Resilience Strategy was published in December 2024 in direct response to the climate emergency and the challenges t hat Scotland faces. The Flood Resilience Strategy Implementation Governance Group (FRSIGG) was established in August 2025 to lead and oversee implementation of the Flood Resilience Strategy. The Implementation Governance Group will support the delivery of the priority actions set out in the Strategy and an implementation action plan will be completed in 2026.

Other early actions from the Strategy include providing £970,000 to SEPA to improve coastal flooding monitoring and a further £600,000 to develop a national register of flood and coastal assets. Work is also underway to establish a national Flood Advisory Service to improve delivery of high value flood protection schemes as well as procurement of coastal and land LiDAR mapping to improve mapping data, the launch of our Flood Recovery Framework with local authorities, and funding research into home flood plans to ensure we are can best support the mental health and wellbeing of people impacted by flooding.

The Scottish Government also continues to provide funding to the Scottish Flood Forum who offer advice and information to individuals across Scotland to help them protect their homes (and recover from) flooding.

Commitment 9.14 Work with local authorities to strengthen recycling and food waste services in island communities.

The Circular Economy (Scotland) Act 2024 requires the development of a statutory Code of Practice for Household Waste Recycling. As outlined in the Circular Economy and Waste Route Map, we are working with local authorities, including island authorities, and wider sector stakeholders to co-design this Code of Practice and support the delivery of high-quality, high-performing household recycling and reuse services. The co-design process work is currently underway and is scheduled for completion by the end of 2026, after which the draft code will be published for public consultation.

In parallel, we continue to support local authorities to improve household waste recycling, with Argyll and Bute Council awarded over £726,000 from the Recycling Investment Fund (RIF) to enhance six Household Waste Recycling Centres (HWRCs) across their islands.

A consultation on potential changes to the rural food waste exemption was included in a wider consultation into changes to waste management services during the first part of 2025. The consultation sought to understand whether the exemption, which has existed in its current form since 2012, is still the right approach for rural and island communities given the importance of food waste recycling for reducing carbon emissions.

Commitment 9.15 Work closely with key stakeholders to ensure that the voices of islanders are fully heard, achieving a just transition to net-zero, and that islands benefit from the many opportunities associated with a green and sustainable economy.

The Scottish Government is committed to ensuring the transition to net zero delivers tangible benefits for the people of Scotland, including our island communities who are central to Scotland’s clean energy revolution. Our approach is rooted in the principles of a Just Transition – fairness, inclusion, and partnership – so that islanders are active participants in shaping this future.

The Scottish Government currently has no powers to legislate for the provision of community benefits from renewable energy developments. However, we have made good progress through our voluntary Good Practice Principles (GPP), with around £30 million in community benefits offered last year. We are refreshing the guidance for onshore and offshore developments to ensure it continues to deliver for communities and industry in Scotland’s evolving energy landscape.

Island voices have been integral to this process, and evidence gathered through public consultation and targeted engagement – including an in-person community event in Stornoway and specific island-focused online session – which have informed priorities for the refreshed guidance. Review Advisory Groups, which include representatives from Orkney Islands Council, Shetland Islands Council, Comhairle nan Eilean Siar, Shetland Community Benefit Fund, HIE and other island community organisations, are helping shape practical solutions that reflect island needs.

We have also called on the UK Government to introduce a mandatory community benefits scheme for mature onshore technologies, a robust voluntary framework for emerging technologies, and a fair approach to offshore wind across Great Britain to create a level playing field, so that communities see maximum benefits from renewable energy projects.

Community Shared Ownership has also an important role to play in delivering a Just Transition by giving communities the chance to make an investment in a commercially owned renewable energy project. We continue to encourage developers to offer shared ownership opportunities to communities on all new renewable energy projects, including repowering and extensions to existing projects. We are now also calling on the UK Government to introduce a mandatory requirement for shared ownership offers in onshore renewable energy developments, highlighting the need to ensure communities receive tangible, long-term benefits from the energy transition.

Our Community and Renewable Energy Scheme (CARES) continues to provide advice and funding to communities across Scotland looking to develop renewable energy, heat decarbonisation and energy efficiency projects. In 2025-26, CARES’ ‘Community Energy Generation Growth Fund’ is boosting community energy in Scotland through a combination of Scottish Government and Local Power Plan funding from GB Energy. In October 2025, we announced that almost 50 projects had been offered over £5.5 million in funding through the first round of this Fund. This included projects on Scotland’s islands, such as support for Arran Community Renewable’s project to develop a community-owned solar farm and Eigg Electric’s work to decarbonise their island.