Publication - Impact assessment

Scotland's Climate Change Plan – 2026-2040 - FSDA

Published: 24 March 2026
From: Cabinet Secretary for Climate Action and Energy
Directorate: Energy and Climate Change Directorate
Topic: Environment and climate change
ISBN: 9781807750695

Fairer Scotland Duty Assessment (FSDA) of the climate change plan (CCP) 2026 to 2040.

5. Sectors

5.1 Business and Industrial Process

The COVID-19 pandemic had an unprecedented effect on Scotland's industrial labour market. During its peak, it disrupted supply chains, heightened economic insecurity and exacerbated time poverty – where workers lacked sufficient time to meet growing demands. Many individuals were furloughed or lost their jobs due to the temporary or permanent closure of workplaces. Although the immediate crisis has passed, the pandemic’s legacy continues to shape the labour market, particularly for those experiencing poverty. These individuals remain disproportionately represented in low-paid, insecure employment with poor working conditions, highlighting the enduring vulnerabilities exposed and intensified by the pandemic^[30]. Employment deprivation disproportionately impacts groups who face existing structural disadvantages in accessing employment, such as individuals with limited resources or those in deprived areas. The unemployed also make up a substantial proportion of those experiencing socio-economic disadvantage.

Business and Industrial Process/NETs Outcome 1: Scotland’s industrial sector will be on a managed pathway to decarbonisation, whilst remaining highly competitive and on a sustainable growth trajectory.

Business and Industrial Process/NETs Outcome 1 Policy 1 (Existing): Continue to engage with UKG on the UK ETS: The UK Emissions Trading Scheme (ETS) is a carbon pricing system that caps emissions from energy-intensive industries, aviation, and power generation. Companies must hold allowances for every tonne of CO2 they emit, which they can buy, sell, or trade. Over time, the cap tightens, indirectly driving down emissions. The ETS is key for supporting net zero goals. The scheme is developed and managed by the UK ETS Authority, comprised of the four governments of the UK. The ETS Authority published its intention to include engineered greenhouse gas removals into the ETS from 2029. This aims to support net zero targets and incentivise the uptake of carbon removal technologies—such as direct air capture with geological storage—by providing an UK ETS allowances for each tonne of CO2 successfully stored. However, without proper investment in carbon capture and storage sites, the ETS will not promote by itself uptake in these technologies.

Business and Industrial Process/NETs Outcome 1 Policy 2 (Existing): Continue to deliver a Scottish Industrial Energy Transformation Fund (SIETF) to support the decarbonisation of industrial manufacturing through matching private funding for specific energy efficiency projects.

Business and Industrial Process/NETs Outcome 1 Policy 3 (New): Explore a new industrial decarbonisation programme to incentivise further investment and accelerate the pace of transformation for industry.

Business and Industrial Process/NETs Outcome 1 Proposal 1 (Existing): Continue to support the Renewable Heat Incentive (RHI), a scheme created by UK Government: The Renewable Heat Incentive (RHI) is a Great Britain-wide scheme created by the UK Government (with the agreement of the Scottish Government) which will continue to support the decarbonisation of public buildings by providing existing installations already accredited and meeting obligations with payments.

Business and Industrial Process/NETs Outcome 1 Policy 4 (Existing): Continue to deliver the Grangemouth Future Industry Board (GFIB) to coordinate public sector initiatives on growing economic activity at the Grangemouth industrial cluster, whilst supporting its transition to our low carbon future.

Business and Industrial Process/NETs Outcome 1 Policy 5 (New): Work with the UK Government to develop a framework for demand-side measures to increase the market for low carbon industrial products.

Business and Industrial Process/NETs Outcome 1 Policy 6 (New): Support the Scottish Environment Protection Agency (SEPA) in using existing regulatory powers to drive energy efficiency across priority sites.

Business and Industrial Process/NETs Outcome 1 Proposal 2 (New): Support the reduction of fossil fuels in chemicals and manufacturing through research and innovation, providing support for certain infrastructure and considering how to grow the market.

Business and Industrial Process/NETs Outcome 2: Technologies critical to further industrial emissions reduction (such as carbon capture and storage and storage and the production and use of hydrogen) are operating at commercial scale in the 2030s.

Business and Industrial Process/NETs Outcome 2 Policy 1 (Existing): Continue to support the delivery of the Acorn Transport and Storage (T&S) Project and the Scottish Cluster.

Business and Industrial Process/NETs Outcome 2 Policy 2 (Existing): Continue to support and develop Carbon Capture Utilisation and Storage (CCUS) in Scotland through continued collaboration with the UK Government to create the policy and regulatory frameworks required to support CCUS at scale.

Business and Industrial Process/NETs Outcome 2 Enabling Policy 3 (New): Support planning, permitting and consenting processes to ensure they work effectively for the development of carbon capture projects.

Business and Industrial Process/NETs Outcome 2 Enabling Proposal 1 (New): Engage with the UK Government, Ofgem and the National Energy System Operator (NESO) on actions to help facilitate quicker electricity grid connections for Scottish industrial electrification and to reduce the cost of electricity for industry.

Business and Industrial Process/NETs Outcome 2 Enabling Proposal 2 (New): Support knowledge sharing across industry and academia to raise awareness and understanding of technical opportunities and innovations for decarbonisation.

Business and Industrial Process/NETs Outcome 2 Policy/Proposal 3 (Existing): Support the development of the emerging hydrogen sector in Scotland to maximise the ‘new industry’ benefits that the production of hydrogen could bring to Scotland.

Business and Industrial Process/NETs Outcome 2 Enabling Policy/Proposal 4 (Existing): Replicate and scale-up demonstration projects and the evidence base for hydrogen-based technologies

Business and Industrial Process/NETs Outcome 2 Proposal 5 (New): Undertake development work to increase our understanding of the viability of nearshore carbon storage in Scotland.

Business and Industrial Process/NETs Outcome 2 Proposal 6 (Existing): Continue to explore and understand the potential of Negative Emissions Technologies (NETs) in Scotland to develop clear NETs ambitions.

The policies and proposals included in the Business and Industrial Processes sector will not have a direct impact on socio-economic groups as they are largely aimed at operators, industry and businesses and the actions that can be taken to support them to decarbonise. However, it is recognised that there is potential for indirect impacts on employment, skills and regional economies, particularly in carbon intensive industries or regions. Without targeted interventions, there is a risk that the benefits of these policies may not be equitably distributed. Opportunities have been identified to strengthen these polices and proposals to limit the potential implications for socio-economic inequality. The Scottish Government could adapt a set of targeted inclusive and place-based strategies to ensure that the benefits of investment and new technologies are shared fairly across communities, especially those facing socio-economic disadvantages. These include:

Embedding equity into policy design and delivery to ensure that all decarbonisation policies include explicit equality objectives,
Involving communities in decision-making through local advisory boards,
Ensuring engagement reflects local languages, traditions and concerns, particularly in rural and island communities,
Setting targets for inclusive recruitment, requiring community benefit clauses in industrial contracts, and prioritising investment in areas with high levels of deprivation or vulnerability to climate impacts, and
Expanding access to skills and training benefit to all.

These strategies offer benefits by:

Embedding equality into policy design, ensuring that decarbonisation efforts are inclusive and just,
Community involvement develops trust, a sense of ownership while tailored engagement enhances accessibility, especially in rural and island areas,
Inclusive recruitment and targeted investment can stimulate local economies and address socio-economic issues, and
Expanding access to skills and training supports workforce development and long-term resilience helping ensure that the benefits of green transition are shared fairly across all communities.

However, the proposed strategies may introduce challenges such as increased resource demands, longer implementation timelines and added complexity for policy teams and industry partners. There is a risk of engagement appearing as a “tick box exercise” if community involvement lacks genuine influence. Businesses could resist measures like inclusive recruitment targets and, without clear monitoring, these initiatives may fall short. Additionally, training efforts may not align with actual job opportunities which could limit their effectiveness for disadvantaged groups.

It is important that we are aware that even if these actions are taken, those with existing transferable skills will be at an advantage, and additional training opportunities may need to be made available.

Some may have indirect impacts on marginalised communities in the future. For example, the costs associated with higher carbon products could increase. Likewise, energy efficiency and fuel switching measures may alter demand and change prices. The decisions of the operators, industries and businesses affected by these policies and proposals will be a commercial decision, but this is something that the Scottish Government cannot speculate or provide information on currently.

While formal engagement with communities is still developing, existing research and stakeholder feedback consistently highlights that people with lived experience of socio-economic disadvantage are more vulnerable to the impacts of climate change and may face barriers to benefiting from the transition. Communities in areas with high concentrations of carbon-intensive industries – such as parts of Grangemouth or the North East – are more exposed to economic disruption from decarbonisation. However, there are gaps in understanding the wider distributional effects of these policies across other regions, as well as across different income groups and protected characteristics. There is also limited data on how accessible reskilling and transition support is for disadvantaged groups. These gaps will be addressed through targeted engagement, surveys and collaboration with community organisations.

The Duty Assessment highlights that socio-economic disadvantage is not experienced equally across the population, but often intersects with protected characteristics such as sex, gender, race, or disability. These inequalities must be factored into decision-making to ensure that policies do not inadvertently reinforce these inequalities.

As policies are still developing, plans to monitor or evaluate the impact on inequalities are still to be determined. The Scottish Government has tools that could be considered to monitor outcomes. For example, the Scottish Index of Multiple Deprivation (SIMD) can track inequalities across regions and propose mitigations.

As individual policies and proposals develop, further impact assessments will be completed to ascertain any indirect or direct impacts as and when required.

Carbon Capture, Utilisation and Storage (CCUS) and Negative Emissions Technologies (NETs)

Policies and proposals included in Outcome 2 aim to support Scotland’s target of achieving net zero by 2045 through enabling the deployment of CCUS and NETs across Scotland, particularly in carbon-intensive sectors. These policies and proposals will affect industries which are large carbon emitters, local communities near large industrial facilities which are likely to deploy carbon capture technology or other facilities likely to utilise NETs, those employed in these industries, and workers/supply chains involved in the construction of new infrastructure.

These policies offer opportunities to protect and create jobs in carbon-intensive sectors and support a just transition through investment in skills and training. However, without targeted interventions, the benefits may not be equitably distributed. Barriers include:

Skills gaps, limited transport access, and digital exclusion, which may disproportionately affect groups in rural areas,
Environmental disruption near infrastructure sites, which may disproportionately affect disadvantaged communities, and
Funding mechanisms such as levies on energy bills, which may exacerbate fuel poverty.

To address these risks and ensure benefits are shared fairly, policy officials could adopt a suite of targeted, inclusive, and place-based strategies, including:

Requiring socio-economic assessments before any project approval,
Involving communities in decision-making through local advisory boards,
Tailoring engagement to local languages, traditions, and concerns – especially in rural and island communities,
Legislating for transparent benefit packages (e.g. energy rebates, infrastructure upgrades).
Supporting dispersed emitters (for rural or small-scale industries) via modular or shipping-based CCUS/NETs solutions,
Exploring smaller-scale CO2 hubs for remote regions,
Aligning infrastructure investment with improvements in transport and housing,
Prioritising training and local hiring, especially for fossil-based workers and disadvantaged groups, and
Requiring project developers to hire locally and offer apprenticeships.

These strategies would help build trust, deliver a just transition, and maximise social and economic gains. However, they may be resource-intensive and complex, requiring strong coordination, oversight, and cross-sector collaboration.

Delivery risks remain due to the reserved nature of key policy levers, including regulation and funding, which are set by the UK Government. This creates uncertainty around the Scottish Government’s ability to fully implement its CCUS and NETs ambitions.

Scottish Industrial Energy Transition Fund (SIETF)

This policy is designed to support capital investment projects over temporary periods, and there is no evidence of significant direct impacts on socio-economic groups resulting from its delivery. As such, no consultation with communities of interest is planned, particularly as the Fund is in its final year.

However, since 2023, SIETF has aligned with the Scottish Government’s Fair Work First (FWF) policy, requiring grant recipients to pay at least the real Living Wage to all employees and provide effective channels for workers’ voices, such as trade union recognition.

Monitoring currently focuses on CO2 emissions reductions and energy use, but there is an opportunity to expand this to include Fair Work First criteria which could inform future policy.

5.2 Energy Supply

Energy Supply Outcome 1: By 2035, emissions will have reduced from thermal power generation to 0.4MtCO2e through the use of CCS, renewable power and alternative power means such as hydrogen.

Energy Supply Outcome 1 Narrative Proposal 1 (New): Support the inclusion of energy from waste in the UK Emissions Trading Scheme (ETS).

Energy Supply Outcome 1 Key Proposal 2 (New): Require new Energy from Waste (EfW) facilities to have an acceptable decarbonisation strategy aligned with Scottish Government decarbonisation goals, e.g. installation of carbon capture and storage (CCS) technology, or connection to Heat Network (National Planning Framework 4 (NPF4) Policy 12).

Energy Supply Outcome 1 Key Proposal 3 (New): Encourage existing Energy from Waste (EfW) plants to retrofit CCS, working with the UK Government to develop a policy and funding framework to incentivise this, e.g. expanding the UK Government's existing Industrial Carbon Capture Waste Business Model to include new projects.

Energy Supply Outcome 1 Key Proposal 4 (New): Incentivise advanced sorting and separating technologies for residual waste (e.g. to separate key recyclable material streams before incineration) where feasible, to be explored through the 2045 residual waste plan, and sector-led plan for Energy from Waste (EfW) decarbonisation, as part of wider efforts to end the unnecessary incineration of plastics.

Energy Supply Outcome 1 Enabling Proposal 5 (New): Work with Scottish Southern Electricity Networks (SSEN) to reduce reliance on island diesel power stations through supporting establishment of new connections between islands and mainland; and explore the use of alternative, non-fossil-fuel based solutions to diesel for back-up supply, including the use of Hydrotreated Vegetable Oil (HVO) as a transition fuel and flexibility contracts.

Energy Supply Outcome 1 Enabling Proposal 6 (New): We will continue to work constructively with the UK Government to ensure the Acorn Project and Scottish Cluster secure the fastest possible deployment, so that a just transition for our energy workforce can be secured, while delivering on net zero targets.

Energy Supply Outcome 1 Narrative/ Enabling Proposal 7 (New): Work to influence the UK Government (e.g. through development of its Reformed National Pricing Delivery Plan) so that energy markets incentivise the building and use of both medium and long duration energy storage and grid flexibility assets (such as battery storage, pumped hydro and hydrogen production), as well as demand side including hydrogen production, Electric Vehicle (EV) smart charging and other smart appliances to use electricity during off-peak hours, helping balance the grid and reduce costs and emissions which in turn can reduce the need for energy from unabated fossil fuels.

Energy Supply Outcome 1 Narrative/ Enabling Proposal 8 (New): Work with the UK Government and the National Energy Systems Operator (NESO) on the Clean Power 2030 Action Plan (CP2030) and the Strategic Spatial Energy Plan (SSEP) to represent Scotland’s interests in reducing power sector emissions. Both of these aims to decarbonise the power system across Great Britain and plan a strategic approach to its deployment.

Energy Supply Outcome 2: Support the decarbonisation of Non-Road Mobile industrial and Construction Machinery.

Energy Supply Outcome 2 Proposal 1 (New): In addition, to Agriculture Outcome 2 Proposal 1, we will also work with industry and policy sectors to reduce emissions from non-road mobile industrial and construction machinery by investigating and promoting efficiencies, alternative fuels and technological developments and providing knowledge exchange, guidance and advice.

Access to renewable electricity, energy efficiency and heat decarbonisation can benefit people’s health and wellbeing by increasing warmth, comfort and affordability. These measures are particularly important for addressing fuel poverty and improving outcomes for socioeconomically disadvantaged groups.

However, some crucial powers to address inequality lie with the UK Government, including reform of the energy market, which dictates consumer pricing, and the ability to mandate community benefits. The Scottish Government will:

Engage with the UK Government to bring forward wholesale electricity market reforms to ensure consumers benefit from more affordable electricity, including decoupling the cost of gas from the cost of electricity, and
Work with Ofgem, NESO, Consumer Scotland and other stakeholders to ensure consumer fairness and equity is front and centre in energy market reforms and system design.

Given the right conditions, the energy transition can strengthen communities, enabling local economic benefits that help address inequality and fuel poverty. While the Scottish Government’s ability to influence inequalities is limited due to reserved powers, programmes such as the Community and Renewable Energy Scheme (CARES), the Onshore Wind Sector Deal, and fair work requirements in contracted programmes support Fairer Scotland objectives.

Consideration has been given in the policy design phase to ensuring communities more at risk of inequalities of outcome (e.g. islands) are not harmed by fossil fuel phase-out policies, such as avoiding supply issues from reduced diesel use.

Some policies included in the energy sector policy package for the CCP already have a disproportionate benefit for socioeconomically disadvantaged groups, such as EfW site restrictions and CCS retrofitting, which improve air quality in neighbourhoods of multiple deprivation.

It has been assessed that the Energy from Waste proposals included in the plan will primarily affect EfW businesses, with wider implications for consumers and bill payers, particularly local authorities who are typically the main customers for municipal incineration facilities. Incineration of waste is linked to air and noise pollution on a local scale, though with current stringent emissions standards, the evidence is that the air quality impacts are likely to be small.^[31] A reduction in volumes of waste disposed of by incineration or energy from waste is likely to have a minor positive impact on air quality. . Measures to improve air quality are, therefore, likely to have benefits for vulnerable groups including children, the elderly, pregnant women and those with preexisting health conditions, who may be more likely to experience or be impacted by worse air quality, helping to reduce health-related inequalities linked to socioeconomic disadvantage.

Reducing thermal emissions from fossil fuel generation (policy 5, 6) is also likely to increase air quality. There are also increased fairness and socio-economic benefits possible from less reliance on expensive fossil gas, through as mentioned above this is dependent on the future electricity market adopted across the UK. This is particularly relevant given the high levels of fuel poverty in Scotland, with an estimated 28.7% (around 732,000 households) in fuel poverty in 2024 and 14% (357,000 households) living in extreme fuel poverty.^[32] 42% of households using electricity as their primary heating fuel were fuel poor, higher than households using gas (27%), oil (23%), and households using other fuel types (26%) as their primary heating fuel.

Offshore wind developments offer potential for positive impacts for rural and island communities, particularly in areas that are more economically disadvantaged, through job creation in the Highlands and Islands and the North East and contracts for local supply chain companies throughout stages of development. There is also potential for a reduction in consumer bills as more offshore wind is developed and deployed, although this is dependent on electricity generation prices and reforms taken forward by the UK Government/NESO (e.g. Review of Electricity Market Arrangements (REMA), with further details expected in 2026).

Communities of interest, including those with lived experience of poverty and disadvantage, have been involved through the draft Energy Strategy and Just Transition Plan (ESJTP) consultation process, which held over 20 in-person sessions across Scotland and engaged with almost 1,500 people from a range of backgrounds, including communities situated in areas with carbon intensive industries, energy workers, young people and businesses. The draft CCP also underwent a public and Parliamentary consultation process which mirrors this.

5.3 Buildings (Residential and Public)

Buildings (Residential and Public) Outcome 1: The heat supply to our homes and non-domestic buildings is very substantially decarbonised, with high penetration rates of renewable and zero emissions heating.

Buildings (Residential and Public) Outcome 2: Our homes and buildings are highly energy efficient, with all buildings upgraded where it is appropriate to do so, and new buildings achieving ultra-high levels of fabric efficiency.

Buildings (Residential and Public) Outcome 3: The heat transition is fair, leaving no-one behind and stimulates employment opportunities as part of the green recovery.

Buildings (Residential and Public) Outcome 1 and 3 Policy 1, Proposal 1 and Proposal 2 (Existing) A target for decarbonising heating systems.

We are setting a target to decarbonise buildings by 2045. By establishing a target for decarbonising heating systems by 2045, where reasonable and practicable to do so, we are sending a strong signal to homeowners, landlords and other building owners on the need to prepare for change. We published the Draft Buildings (Heating and Energy Performance) and Heat Networks (Scotland) Bill, and will also publish a Heat in Buildings Strategy and Delivery Plan which sets out the actions on the part of the Scottish Government and others which will be designed to enable and achieve this target (see below).

Buildings (Residential and Public) Outcome 1,2 and 3 Enabling Policy 2 (Existing): Financial support for energy efficiency.

We will enable progress towards our goal of decarbonisation, while reducing fuel poverty, by continuing to provide targeted advice and financial support for energy efficiency measures in homes through schemes such as Warmer Homes Scotland, our Area Based Schemes, the Social Housing Net Zero Heat Fund and our Home Energy Scotland Grant and Loan Scheme (see above).

This will support the transition while targeting measures at those most at risk of fuel poverty. These measures will help reduce the cost of living pressures still being faced by too many.

Buildings (Residential and Public) Outcome 2 and 3 Enabling Proposal 3 (New): Minimum Energy Efficiency Standards.

We have published plans to give Scottish Ministers a regulation-making power to set minimum energy performance standards for buildings with direct emission heating systems.

Buildings (Residential and Public) Outcome 2 and 3 Enabling Policy 3 (Existing): Minimum energy efficiency standards for the Private Rented Sector (PRS).

We are analysing the responses to our consultation on a minimum energy efficiency standard (MEES) in the domestic private rented sector (PRS). The consultation proposed that the standard would apply to new tenancies from 2028 and all tenancies from 2033. Further to decisions on the consultation outcome, we intend to progress regulations , subject to the views of the next Scottish Government. Analysis has suggested that all PRS homes installing certain measures could reduce emissions in PRS dwellings, across the sector as a whole, by around 5% (although this is dependent on behaviour, as some tenants may choose a warmer home for the same cost, rather than the same temperature at lower cost).

Buildings (Residential and Public) Outcome 2 and 3 Enabling Policy 4 (New): Social Housing Net Zero Standard.

We will review and complete work on our Social Housing Net Zero Standard in line with progress on the areas above – taking into account the standards and requirements established for other tenures through separate regulations.

Buildings (Residential and Public) Outcome 1 and 2 Enabling Policy 5 (New): Energy Performance Certificate (EPC) Reform.

We laid revised Energy Performance of Buildings Regulations in October 2025 which were approved by the Scottish Parliament in December 2025. These were due to come into force in October 2026, but are now likely to be delayed into 2027, subject to the agreement of Parliament. The delay is due to the UK Government slowing down its timeline for EPC reform from October 2026 to the second half of 2027 – meaning that technical infrastructure (including the Home Energy Model and assessor training) will not be ready to support reformed EPCs as planned.

That new rating system will accompany the introduction of the new Home Energy Model across the UK, and the establishment of a new EPC Register and operational governance framework in Scotland.

EPCs are a modelled, standardised assessment process; so, we are consulting on the development of a more detailed, bespoke Heat and Energy Efficiency Technical Suitability Assessment (‘HEETSA’) to make sure that the right measures are being installed – particularly for more challenging buildings like tenements or historic buildings.

Buildings (Residential and Public) Outcome 1,2 and 3 Enabling Policy 6 (Existing): Delivery schemes.

We will continue to deliver a programme of support schemes and advice services which are designed to support a wide range of groups to decarbonise heat in our buildings. We are committed to ensuring that support continues to be prioritised for those who need it most. We also recognise that the significant cost of moving to clean heating cannot be funded by the public purse alone. These support mechanisms will provide a platform for future progress, and will evolve alongside the role of private investment and finance.

Buildings (Residential and Public) Outcome 1 and 3 Enabling Policy 7 (New): Heat Networks – new Heat Network proposals.

The Draft Buildings (Heating and Energy Performance) and Heat Networks (Scotland) Bill^[33] sets out plans to boost heat network development. These include potentially requiring large, non-domestic premises to move away from fossil fuel heating systems when they have the opportunity to connect to a heat network. The draft Bill also includes plans to introduce powers to create a new licensing system for heat network operators across Scotland which, if an application is approved, will provide new rights and powers like access to the roads which will reduce the time and cost associated with constructing and maintaining heat network projects.

Buildings (Residential and Public) Outcome 1 and 3 Enabling Policy 8 (Existing): Heat Networks -Heat Networks Support Unit (HNSU).

The HNSU supports the development of heat network projects in Scotland. It does this by offering grant funding and expert advice throughout the pre-capital stages of development. We are working on building a project pipeline to meet our targets and to build capacity within the public sector to lead on, invest in and deliver heat network projects.

Buildings (Residential and Public) Outcome 1 and 3 Enabling Policy 9 (Existing): Heat Networks – Scotland’s Heat Network Fund (SHNF).

SHNF offers capital grants to businesses and organisations in the public, private and third sectors to develop heat network projects. It aims to support the roll-out of zero emission district heat networks and communal heating systems.

Buildings (Residential and Public) Outcome 1,2 and 3 Enabling Policy 10 (New): Heat in Buildings Strategy and Delivery Plan.

A Heat in Buildings Strategy and Delivery Plan will be published outlining Scottish Government actions, key delivery dependencies (including UK Government), and priorities such as skills and supply chain development.

The Plan will be co‑developed with stakeholders and set out how all levels of government, the private sector and individuals will work together. It will summarise future training provision and address climate adaptation, including passive cooling measures, integration of adaptation into energy‑efficiency engagement, and the role of clean heat systems that can also provide cooling, such as reversible heat pumps.

Buildings (Residential and Public) Outcome 1 and 3 Enabling Policy 11 (Existing): Future finance, including the Green Heat Finance Taskforce (GHFT).

The independent Green Heat Finance Taskforce reports identified key barriers to the scale up of private finance provision as a lack of consumer demand and a shortage of a delivery ready project pipeline for initiatives to upgrade groups of properties collectively. However, it expressed confidence that the supply of private lending would increase to match consumer and project demand.

We responded to the Taskforce last year, setting out the early actions that we have already progressed to raise understanding of the current clean heat financing landscape amongst mortgage advisors who engage directly with consumers, as well as steps that we will take to explore the potential to create a market for innovative financing approaches. As we do this we will work with lenders and the UK Government given the UK-wide nature of financing markets and regulation.

Buildings (Residential and Public) Outcome 1 and 3 Enabling Policy 12 (Existing): Local Heat and Energy Efficiency Strategies (LHEES). Our aim is to build on the existing LHEES, standardise where possible and create a streamlined and investible delivery route to underpin our Heat in Buildings Programme.

Buildings (Residential and Public) Outcome 1,2 and 3 Enabling Policy 13 (Existing): Community And Renewable Energy Scheme (CARES). Community And Renewable Energy Scheme (CARES) provides advice and funding to communities across Scotland looking to develop renewable energy, heat decarbonisation and energy efficiency projects.

There are a number of existing FSD impact assessments that are relevant to these policies:

Supporting documents – Heat in Buildings Bill consultation: Fairer Scotland impact assessment - gov.scot

Supporting documents – Heat in buildings strategy: fairer Scotland duty – gov.scot, and

Heat Networks (Scotland) Bill : Fairer Scotland Duty

The Scottish Government consulted on proposals for a Heat in Buildings Bill from November 2023 – March 2024. This was accompanied by a Fairer Duty Scotland Assessment: Stage 2 – Evidence – Heat in Buildings Bill consultation: Fairer Scotland impact assessment - gov.scot

While the consultation elicited general support for the direction of travel in the heat in buildings sector, a key theme emerging from the Scottish Government’s consultation on proposals for a Heat in Buildings Bill, and from our engagement since it concluded, has been affordability and cost of living pressures.

With this in mind, the Cabinet Secretary for Housing made a statement to the Scottish Parliament on 18 November 2025 about the draft Buildings (Heating and Energy Performance) and Heat Networks (Scotland) Bill. The intention is to formally introduce the Bill early in the next Parliament, but that will be subject to the outcome of the election. The objective of this target is to accelerate the decarbonisation of heat in buildings, sitting alongside the Scottish Government’s commitment to protect those who are already experiencing, or who are at risk of fuel poverty.

We will also publish a Heat in Buildings Strategy and Delivery Plan, setting out the approach that Ministers intend to take or consider should be taken to ensure that the decarbonisation of heating target is, as far as reasonably practicable, met.

As an assessment was already undertaken as part of the Bill consultation process, the strategic impacts identified remain valid for the current approach. However, we do believe it would be beneficial to carry out a Fairer Scotland Assessment for future legislation, as well as for the Delivery Plan.

5.4 Agriculture

Agriculture Outcome 1: A more sustainable Scottish agriculture sector that contributes to delivering Scotland's climate change targets and wider environmental outcomes while continuing to produce high quality, nutritious food.

Agriculture Outcome 1 Enabling Policy 1 (Existing): Lay and publish the initial Rural Support Plan in Spring 2026 to set out how support, over the initial five-year period (2026-2030), will deliver on the Agriculture and Rural Communities (Scotland) Act 2024 objectives, the Vision for Scottish Agriculture, the Agricultural Reform Route Map and wider Scottish Government priorities. We will continue to publish Rural Support Plans every five years.

Agriculture Outcome 1 Policy 2 (Existing): Continue the delivery of the Agricultural Reform Route Map that outlines the phased transition from legacy EU Common Agricultural Policy (CAP) schemes to the new Four-Tier Framework, with new conditions from 2025, and ensures that future support will deliver high-quality food production, climate mitigation and adaptation, and nature restoration, informed by the co-development process within the Agricultural Reform Programme.

Agriculture Outcome 1 Proposal 1 (New): Working with industry and policy sectors, reduce emissions from agriculture non-road mobile machinery by investigating and promoting efficiencies, alternative fuels and technological developments and providing knowledge exchange, guidance and advice. (See also Energy Supply, Outcome 2, Proposal 1)

Agriculture Outcome 1 Policy 3 (Existing): By 1 January 2027, as per The Water Environment (Controlled Activities) (Scotland) Amendment Regulations 2021, all Scottish livestock farmers producing slurry must use precision equipment for the application of slurry. We will encourage use of best practice and investigate with industry representatives how compliance with the regulations are monitored and enforced.

Agriculture Outcome 1 Enabling Policy 4 (New): Support enhancing the delivery of climate change and nature outcomes by farmers and crofters through our Agricultural Modernisation Fund which provides funds to drive efficiency and support nature and climate friendly farming.

Agriculture Outcome 1 Proposal 2 (New): Monitor, support knowledge transfer for and, where necessary, support the commercialisation and uptake of emerging low carbon farming technologies and innovations.

Agriculture Outcome 2: More farmers and crofters have the skills, knowledge and opportunity to implement climate change measures, continuing to produce high quality, nutritious food.

Agriculture Outcome 2 Enabling Policy 1 (Existing): Since July 2024 the Farm Advisory Service has delivered an updated programme including a minimum of 70% content on climate change, sustainable agriculture and biodiversity support. This contributes to the suite of support provided under the current Agricultural Knowledge and Innovation System framework and will continue to evolve and respond to user needs as we continue to develop AKIS in the coming years to further disseminate learning on low emissions farming, through a range of communication methods.

Agriculture Outcome 2 Enabling Proposal 1 (New): We will ensure that tenant farmers are able to capitalise on the benefits of measures in Part 2 of the Land Reform (Scotland) Act 2025, and, will continue to work with the Tenant Farming Advisory Forum/Tenant Farming Commissioner towards promoting the uptake of sustainable and regenerative practices and environmentally beneficial activities going forward.

Agriculture Outcome 2 Enabling Policy 2 (New): From 2025, agricultural businesses receiving Basic Payment Scheme support payments will be required to undertake 2 of 5 relevant assessments contributing to a Whole Farm Plan, while by 2028 agricultural businesses will need to have all relevant plans and audits in place for all assessments under the Whole Farm Plan.

Agriculture Outcome 3: Soil health is improved and nitrogen emissions, including from nitrogen fertiliser, have fallen.

Agriculture Outcome 3 Enabling Policy 1 (Existing): Support farmers and crofters to improve their soil health including through soil analysis as part of the Whole Farm Plan and the provision of guidance and advice. From 2028, agricultural businesses will all be required to complete soil analysis and produce a nutrient management plan.

Agriculture Outcome 3 Proposal 1 (New): Investigate technologies for alternative, improved or more efficient fertilisers, including organic and organo-mineral fertilisers and fertilising products, and encourage uptake where appropriate. Also increase understanding of nitrification and urease inhibitors and the opportunities for their use including through use of the Strategic Research Programme and the development of a new regulatory regime for non-mineral fertilising products.

Agriculture Outcome 3 Enabling Proposal 2 (Existing): Improve nitrogen-use efficiency through supporting research into crop varieties with increased nitrogen-use efficiency, or crops which increase levels of available nitrogen in the soil, while exploring ways of supporting the uptake and development of these crops.

Agriculture Outcome 4: Reduced emissions from red meat and dairy through the implementation of measures, including improved efficiencies, new technologies and improved animal health.

Agriculture Outcome 4 Policy 1 (New): Work with industry bodies and livestock producers to develop the MyHerdStats dashboard to provide all cattle keepers with information on herd fertility and animal mortality to support them to improve farm management practices.

Agriculture Outcome 4 Enabling Policy 2 (Existing): Working with the Scottish livestock sectors, co-design and realise the potential of a range of animal health and welfare initiatives and projects at farm, regional and national level. Use research, development and veterinary expertise to underpin a programme of continuous animal health and welfare improvement including dynamic health planning; promotion of best practice; health-driven improvements in efficiency.

Agriculture Outcome 4 Enabling Proposal 1 (Existing): Engage with academics and stakeholders to identify barriers and develop policy interventions to support appropriate uptake of methane suppressing feed products.

Agriculture Outcome 4 Enabling Proposal 2 (New): Work with the livestock sector to develop understanding of selective breeding for low methane genetics in reducing overall emissions from Scottish livestock production as well as the current infrastructure gaps in order to identify activity to accelerate livestock genetic improvement.

Agriculture Outcome 4 Policy 3 (New): As part of proposals to reform the Scottish Suckler Beef Support Scheme, voluntary coupled support (VCS) payments will be linked to calving interval performance from 2025. The threshold for calving interval performance will start at 410 days for both the 2025 and 2026 scheme years.

Agriculture Outcome 5: Carbon sequestration on agricultural land is increased, and carbon stores are maintained or increased.

Agriculture Outcome 5 Policy 1 (New): Protecting Peatlands and Wetlands through the introduction of new measures under existing Good Agricultural and Environmental Condition (GAEC 6 – maintenance of soil organic matter) which came into effect in 2025.

Agriculture Outcome 5 Enabling Policy 2 (New): Support knowledge transfer and skills development on planting and managing trees as part of a farm business throughout the lifetime of the CCP to increase tree planting and improve management of trees on farmland.

Agriculture Outcome 5 Enabling Proposal 1 (New): Review, update and develop mechanisms, as appropriate, to better support the establishment and management of trees on farms including future agricultural support and the Forestry Grant Scheme.

Agriculture Outcome 5 Enabling Policy 3 (New): We will continue to explore options for more integrated land use, including through the delivery of Scotland’s Fourth Land Use Strategy so that food production is reflected as part of a multi-faceted land use, including forestry, peatland restoration and management, energy and biomass production, aligning with policies in the Land Use, Land Use Change and Forestry chapter.

Agriculture Outcome 5 Enabling Proposal 2 (New): Work with the Tenant Farming Commissioner to develop a Land Management Tenancy following the completion of the Land Reform Bill. This will enable individuals to undertake a range of land use activities in a way that supports: Sustainable and regenerative agriculture, the achievement of net zero targets, Adaption to climate change, and increasing or sustaining biodiversity.

Agriculture lies at the heart of our thriving rural communities and underpins many of Scotland’s key industries. The policies and proposals included in the Agriculture chapter of the CCP have an impact on the agricultural industry and are designed to help the industry (i.e. our farmers and crofters, and land managers, regardless of if they are performing arable, dairy, mixed, or upland farming activity) to reduce their overall greenhouse gas emissions out to 2040 and play a role in Scotland’s commitment to reduce its emissions. The aim is to reduce emissions through a range of Key Proposals and Policies, for example:

The continued delivery of the Agricultural Reform Programme,
Whole Farm Plans to help farmers and crofters measure their businesses’ impact,
Rural support plan to continue to deliver our Vision for Agriculture and the wider Agricultural Reform Programme,
Supporting our farmers and crofters to build their skills, knowledge and expertise,
Seeking efficiencies and exploring technologies and innovations for low carbon farming,
Improving the productivity and efficiency of the Scottish livestock sector and supporting animal health and welfare initiatives,
Support our farmers and crofters to sequester and store carbon on their land and improving support for the integration of trees on farms ,
Enabling tenants to take climate action through Part 2 of the Land Reform (Scotland Act 2025,
Improving Scotland’s soil health, and
Supporting the decarbonisation of agricultural non-road mobile machinery.

Any effect from these policies and proposals on specific socio-economic groups would likely be indirect, arising from the positive advantages to the broader community and Scotland resulting from changes in farming practice, land use and the support provided to businesses. For example, various policies and proposals across the five Outcomes may indirectly benefit low-income households and those households in deprived areas through the production of more sustainable and nutritious food, potentially improving household health and wellbeing. Additionally, there is an opportunity for some of the policies and proposals outlined above to allow the population to enjoy a more biodiverse countryside, offering public health benefits through nature restoration. Some policies and proposals included could contribute indirectly to improve the population’s earning capacity and future career prospects, particularly among young or unemployed people in rural Scotland, through agri-tech and upskilling and offer the potential for wider economic stability, growth and job retention/creation.

However, some policies and proposals may present short-term challenges for less financially stable or in some cases, smaller farming businesses. For example, they may involve lost income or increased spending to meet new conditions for support payments or there may be up-front fixed costs for Whole Farm Plans. We will continue to work with the industry to ensure all farmers and crofters, regardless of scale, identify ways to reduce their costs and emissions, and become more efficient.

Evidence from the SIMD shows a large variation in deprivation around ‘Rural’ Scotland. One rural area may be highly deprived while a neighbouring area may not. Although rates of poverty can be lower in rural Scotland, rural poverty may be harder to identify due to higher living costs, especially travel and fuel, which are less influential in SIMD rankings.

There is limited bespoke direct evidence of inequalities caused by socio-economic disadvantage within Scottish farming, due to current statistical methods. The 2025 agricultural census recorded 66,800 people working on agricultural holdings, including 15,800 full-time, 23,500 part-time, and 8,100 seasonal staff, with migrant labour contributing around 368,000 person working days. The sector also supports a wide range of supply chain jobs, though exact numbers are difficult to determine.

Each farming business is unique and total income from farming is estimated at £1.3 billion in 2024, with average farm income at £35,500 in 2023–24, the lowest since 2019–20 (adjusted for inflation). Income varies widely depending on what is produced, land use, support levels and diversification activity.

There is general agreement between stakeholders, industry and government that the agriculture sector must contribute more towards climate and biodiversity outcomes. We have not been made aware from key stakeholders of any concerns about any impacts on inequalities and socio-economic disadvantage arising from the policies and proposals included in the CCP.

There is the potential for future engagement and research to test out the impacts of the policies and proposals on inequalities and socio-economic disadvantage within agriculture through our stakeholders and the wider population. As working with farmers, crofters, and land managers is critical to ensure a just transition so that future rural and agricultural policy works for all.

5.5 Land Use, Land Use Change and Forestry

Land use Outcome 1: To set and promote the national strategic approach to the integrated nature of land use and support and empower rural communities and stakeholders to co-develop natural capital led solutions that help address the climate and nature crises while delivering environmental, social, and economic benefits.

Land use Outcome 1 Enabling Policy 1 (Existing): We will publish Scotland’s 4th Land Use Strategy by end of March 2026.

Land use Outcome 1 Enabling Policy 2 (Existing): We will support the four successful Regional Land Use Partnerships to transition from pilots to Scottish Government-backed initiatives, and using the learning from these Partnerships, seek opportunities to expand land use partnership working over the longer term.

5.6 Peatland

Land use Outcome 1 Enabling Policy 1 (Existing): We will publish Scotland’s 4th Land Use Strategy by end of March 2026.

Forestry Outcome 1: An increase in annual woodland creation rates, with the consequent benefits of more carbon sequestration, rural employment and community benefits, enhancements to biodiversity, landscape and tourism, and support for agricultural business (e.g. shelter for livestock, wind and flood management).

Forestry Outcome 1 Enabling Policy 1 (Existing): Forestry grants will provide funding via a grant scheme to support eligible landowners to establish appropriate woodlands.

Forestry Outcome 1 Policy 2 (Existing): Woodland creation on Scotland's national forests and land. Forestry and Land Scotland will deliver an annual contribution towards the overall woodland creation target by creating new sustainable woodland on Scotland's national forests and land, including through partnerships with external organisations to scale carbon capture opportunities.

Forestry Outcome 1 Enabling Policy 3 (Existing): Awareness-raising. We will continue to deliver a programme of farm-based events to demonstrate and support improved productivity through integration of farming and forestry enterprises.

Forestry Outcome 1 Enabling Policy 4 (Existing): Woodland Standards. The Scottish Government will lead on the work with the UK and other UK Governments to maintain and develop a UK Forestry Standard that articulates the consistent UK wide approach to sustainable forestry. The Standard defines how woodland should be created and managed to meet sustainable forest management principles and provides a basis for monitoring.

Forestry Outcome 1 Enabling Policy 5 (Existing): Under the National Strategy Economic Transformation commitment to develop a values-led, high integrity market for responsible investment in natural capital - we will increase private investment in land management for climate change by March 2026 through enhanced uptake of existing mechanisms (Peatland Code, Woodland Carbon Code) and implementation of new mechanisms.

Forestry Outcome 1 Enabling Policy 6 (Existing): Woodland carbon capture. The Scottish Government will further develop and promote the Woodland Carbon Code in partnership with the forestry sector, and will work with investors, carbon buyers, landowners and market intermediaries to attract additional investment into woodland creation projects and further increase the woodland carbon market.

Forestry Outcome 2: Increase the use of sustainably sourced wood fibre to reduce emissions by encouraging the construction industry to increase its use of wood products where appropriate.

Forestry Outcome 2 Enabling Policy 1 (Existing): Collaboration with the private forest sector and other public sector bodies, we continue to implement the timber development programme through an annual programme of projects that support the promotion and development of wood products for use in construction.

Forestry Outcome 2 Enabling Policy 2 (Existing): To work closely with the sector through the Scottish Forestry and Wood Based Industries Industry Leadership group.

Forestry Outcome 2 Enabling Policy 3 (Existing): Making funding available to support the sustainability of forest nurseries.

Peatlands Outcome 1: Protect. Protect and support the natural function of areas of peatland that are already in good condition, and prevent areas already degraded from deteriorating further.

Peatlands Outcome 1 Policy 1 (Existing): We will continue our work alongside other UK nations to ban the sale of peat for horticulture in Scotland. We will draw on the outputs of our consultation, stakeholder engagement and commissioned research to ensure that the timing and scope of the ban are right for Scotland.

Peatlands Outcome 1 Enabling Proposal 1 (New): We will continue work started by the Peatland Expert Advisory Group to improve the tools, guidance and monitoring relating to the design and construction of windfarms on peat.

Peatlands Outcome 1 Proposal 2 (New): Informed by the local pilot projects announced in our 2025-26 Programme for Government, we will ensure that future deer management arrangements in Scotland support our peatland and wider soils ambitions to 2040. This will include requiring and, where appropriate, incentivising activity to control deer numbers in areas where priority work to improve nature is underway, such as peatland restoration.

Peatlands Outcome 1 Enabling Policy 2 (Existing): In 2026, we will commence the new measures introduced in the Wildlife Management and Muirburn (Scotland) Act 2024 that increase protection for peatlands by establishing a licensing scheme which only permits muirburn on peatland for certain purposes such as for the creation of firebreaks to help prevent wildfires.

Peatlands Outcome 2: Manage. Support positive measures by landowners and managers to manage and improve degraded peatlands.

Peatlands Outcome 2 Enabling Proposal 1 (Existing): We will continue our work with partners and stakeholders to develop incentives, guidance, advice and support on peatlands within the new agricultural support framework for land-owners and managers looking to integrate peatland protection, management and restoration with existing land use on their farm or croft.

Peatlands Outcome 2 Proposal 2 (New): We will continue our work with Peatland ACTION to support crofters wishing to progress peatland protection, management and restoration, and ensure we learn from the experience of initiatives working to bring private finance into this sector. The new Crofting and Scottish Land Court Bill aims to bolster and strengthen the role of grazing committees, giving them, and individual shareholders, more options for proposing a range of environmental initiatives on common grazings.

Peatlands Outcome 2 Enabling Policy 1 (New): NatureScot will progress a holistic ‘Developing Healthy Ecosystems’ approach to strengthen monitoring of peatland condition within all designated sites even where it is not a listed feature.

Peatlands Outcome 2 Enabling Policy 2 (New): Through the Land Reform (Scotland) Bill we will:

a. legislate to adjust tenancy arrangements allowing tenant farmers, small landholders and others to deliver multiple eligible land use activities including peatland restoration and rewetting,

b. propose a new model lease for environmental purposes to assist individuals, communities and landlords to undertake hybrid land management actions including peatland restoration and rewetting, and

c. introduce Ministerial powers to make regulations for Land Management Plans; these will require landowners who own land over a certain threshold to set out how they are managing or intend to manage the land in a way that contributes towards achieving Net Zero emissions targets, adapting to climate change and increasing or sustaining biodiversity.

Peatlands Outcome 3: Restore. Support focused interventions to return degraded peat to a more natural condition and reinstate the natural ecosystem functions and benefits they can provide.

Peatlands Outcome 3 Policy 1 (Existing): We will increase peatland restoration by 10% each year to 2030 and maintain levels after that leading to the restoration of more than 400,000 hectares by 2040. Within this, we will look to increase the proportion of the most highly degraded and emitting peat that is restored.

Peatlands Outcome 3 Enabling Policy 2 (New): To bring focus, stability and certainty to the sector going forward, and to take us towards our 2040 ambitions, we published our first Peatland ACTION Partnership Plan on 15 December 2025. This details the realistic and achievable actions needed over the next five years reflecting the current capacity, skills and capabilities of the sector. It also seeks to ensure that our investment maximises the multiple benefits of peatlands for climate, nature and people.

Peatlands Outcome 3 Enabling Policy 3 (Existing): In 2026, we will consult on and launch Scotland’s Peatland Standard which will ensure quality and consistent peatland restoration standards and bring efficiencies to the sector for training, project development, delivery techniques and monitoring and verification.

Peatlands Outcome 3 Enabling Policy 4 (New): We will continue to deliver the Scottish Government’s Implementation Plan in response to the recommendations of the Land-Based Learning Review to contribute to attracting and equipping more people with the skills and knowledge needed to work in land-based and aquaculture sectors.

Peatlands Outcome 3 Enabling Policy 5 (Existing): In addition to our multi-year investment plans for peatland restoration set out in our 2026 spending review over the next four years, we will also continue our work to leverage and blend responsible private investment into peatland protection, management and restoration through our Private Investment in Natural Capital Programme.

Peatlands Outcome 3 Proposal 1 (Existing): Informed by new approaches to monitoring, we will continue work to restore and improve the condition of degraded peat on land that is publicly owned, managed by Crown Estate Scotland and within formally designated nature conservation sites.

Peatlands Outcome 3 Enabling Policy 6 (New): As announced in the budget 2025-26 we will continue working with the Scottish Land Commission to develop the evidence necessary to identify and assess options for a carbon land tax.

Peatlands Outcome 4: Research and evidence. Continue to invest in world-class peatland research to inform the development of policy and practice.

Peatlands Outcome 4 Enabling Policy 1 (New): Through our forthcoming Strategic Research Programme and other routes, we will continue to invest in research on: the distribution and condition of Scotland’s peatland resource; businesses in the supply-chain and any impacts arising from our actions; building the restoration pipeline and driving efficiencies; and understanding the complex relationship between herbivore grazing, peatland condition and emissions.

Peatlands Outcome 4 Enabling Proposal 1 (New): Scotland’s new LiDAR data will contribute to the identification and monitoring of peatland restoration sites and contribute to transparency and cost effectiveness of some surveys.

Scotland has around 2 million hectares of peatland, of which around 70% is degraded, releasing carbon rather than storing it and offering other co-benefits for climate, for nature and for people. The restoration and management of these peatlands is a strategic priority, delivering multiple benefits and supporting a Just Transition.

Protecting, managing and restoring degraded peatlands benefits climate, nature and people. Restoration efforts reduce emissions, enhance biodiversity and increase resilience to climate change, reduce wildfires and flooding, and improve water quality. They also support a Just Transition by creating good green jobs in rural communities.

By 2030, Scotland’s peatlands are expected to be valued for the many benefits they can provide, healthier, resilient and integrated into rural land management and communities within multifunctional landscapes, supporting good green jobs in the rural economy and delivering positive outcomes for the climate, nature and people. A shift in funding for stewardship from public to private sources is being encouraged, with appropriate rewards for the benefits derived from the peatlands’ natural capital and the services flowing from their healthy ecosystem functions. Legislation will support a transition away from using peat in horticulture, and development decisions will be informed by stronger assessment of their impacts on climate and nature.

By 2050, the rewards of restoration effort undertaken in previous decades should be evident. The effects of a changing climate will be more apparent, but the effort we put in now, in terms of restoration and establishing sound management practices, will prepare our peatlands and increase their resilience. Restoration and management work will continue to secure and maintain multiple benefits, with the income from this helping to maintain rural skills and employment.

These peatland policies will affect or bring opportunities for a wide range of groups and sectors across Scotland. Key affected groups include:

Landowners, farmers, and crofters, who will be supported and incentivised to protect, manage and restore peatlands within their land management practices,
Rural communities, benefiting from good green jobs created in peatland restoration and related environmental stewardship,
Environmental organisations and delivery partners, actively involved in restoration projects and skills development,
Private businesses offering peatland restoration consultancy, design, management and contracting services,
Private investors and businesses interested in natural capital and ecosystem services,
Public agencies and policymakers, through new legislation (e.g., horticultural peat ban, land reform) and regulatory frameworks influencing land use and development decisions on peatland, and
Regions across Scotland, especially those with substantial degraded peatland which spans large rural and upland areas, impacting biodiversity, climate mitigation and water quality.

Peatland restoration policies have the potential to reduce inequalities by creating sustainable employment and investing in skills development in rural communities, supporting a Just Transition. Targeted legal and financial support for crofters, small landholders, and tenant farmers aims to lower barriers to participation and promote more equitable access to benefits. Additionally, encouraging private investment and ecosystem service payments could open up new income opportunities and support economic diversification for landholders and communities.

Care is needed to ensure that increased regulatory requirements (e.g. on peat use, land management plans) do not disproportionately burden small-scale land users or less resourced groups, which the programme acknowledges through targeted support and advisory services. The evidence indicates that peatland restoration affects rural communities where socio-economic disadvantages such as low income, debt and material deprivation are more common. People living in deprived or remote areas, tenant farmers, crofters and small landholders may face barriers due to limited resources, lack of knowledge and difficulties navigating funding or application processes. Social class differences may also play a role, with smaller-scale land managers sometimes experiencing more challenges engaging with restoration initiatives. However, there is limited direct evidence quantifying inequalities of outcome specifically tied to peatland policy, highlighting some gaps in understanding of these socio-economic dimensions.

These policies and proposals aim to reduce inequalities by supporting vulnerable groups through advisory and financial support, legal reforms and incentives tailored to crofters, tenant farmers and small landholders. It promotes green job creation in rural and deprived areas, potentially bringing economic benefits and skills development. Nevertheless, there are risks that increased regulatory burdens or complex procedures could disproportionately affect less-resourced groups without continued targeted support.

International and UK evidence suggests that early, ongoing community engagement, provision of clear and accessible information, upfront funding to mitigate cashflow issues, and embedding facilitators and support in local organisations improve participation rates and equity in restoration projects. Approaches that combine public and private funding mechanisms and utilise ecosystem service markets have been effective elsewhere in promoting inclusive restoration outcomes.

Assessment of these policies and proposals alongside the Fairer Scotland Duty has emphasised a requirement to consider the impacts from peatland policies more systematically. This work will be taken forward as part of the overall peatland project.

5.7 Forestry

Forestry Outcome 1 Enabling Policy 1 (Existing): Forestry grants will provide funding via a grant scheme to support eligible landowners to establish appropriate woodlands.

Forestry Outcome 2: Increase the use of sustainably sourced wood fibre to reduce emissions by encouraging the construction industry to increase its use of wood products where appropriate.

Forestry Outcome 2 Enabling Policy 2 (Existing): To work closely with the sector through the Scottish Forestry and Wood Based Industries Industry Leadership group.

Forestry Outcome 2 Enabling Policy 3 (Existing): Making funding available to support the sustainability of forest nurseries.

Forestry is one component of the Land Use, Land-Use Change and Forestry (LULUCF) sector included within the Climate Change Plan which contributes to Scotland’s statutory emissions reduction targets under the Climate Change (Scotland) Act 2009. The policies included in their two outcomes aim to expand Scotland’s forests and woodlands to reduce net greenhouse gas emissions, support biodiversity, generate a commercial natural resource, and provide recreational and public health benefits.

The policies included under Forestry will affect a wide range of stakeholders. Approximately 34,000 people work in the forest industry, with woodland creation being a significant component. 80% of new woodland creation comes from small and medium rural land management businesses, including farms and crofts. The benefits of woodland creation are widely felt across Scotland, including in urban and remote rural areas, contributing to economic development, biodiversity, recreation, and climate resilience.

Evidence from the Scottish Government’s Forestry Strategy 2019–29 and other studies highlights that urban areas with high deprivation tend to have fewer trees and woodlands. Urban forestry presents an opportunity to address this by providing accessible green spaces, promoting physical and mental health, improving air quality and enhancing social inclusion.

These policies are expected to reduce health inequalities and support a just transition by offering green economic and employment opportunities, particularly in disadvantaged rural and urban areas. For example, creating 50 hectares of new woodland can support around 5 FTEs, depending on location and type. The policy also helps address rural depopulation and supports community wealth-building.

To mitigate financial barriers for small-scale landowners, enhanced grant rates and cash flow loans are available. The Forestry Grant Scheme and Scottish Forestry Community Fund support community woodland creation and management. Scottish Forestry has also supported stakeholder engagement training and is working with Community Land Scotland to establish a network of advisors to facilitate collaboration between communities, landowners and investors.

These policies are informed by consultation and are subject to ongoing monitoring and evaluation, particularly regarding its impact on disadvantaged and under-represented communities. The Public Opinion of Forestry Survey 2025 found that 81% of respondents support planting more trees in Scotland, indicating strong public backing.

While no changes are proposed as a result of this assessment, enhancements to the Forestry Grant Scheme and engagement processes are ongoing. Processes are already in place to enable particular groups and/or communities of interest to be engaged in the design and implementation of woodland creation schemes, and a loan scheme is available for small projects to bridge the period until grant payments are made. Recent enhancements to the Forestry Grant Scheme have increased the payments for agroforestry, small woodlands, native woodland and riparian planting, and a further increase in funding for small-scale woodland creation was introduced in autumn 2025. Collectively, these measures aim to:

Deliver sustainable economic development,
Support a just transition to net zero,
Achieve social justice, and
Enhance community wellbeing.

5.8 Transport

Transport Outcome 1: To address our overreliance on cars, we will create the enabling environment for reducing car use, incentivising behaviour change towards sustainable travel modes and disincentivising private car use, where these align with a just transition.

Transport Outcome 1 Enabling Policy 1 (Existing): Work with Local Authorities and Regional Transport Partnerships to provide research, advice and guidance on reducing car use.

Transport Outcome 1 Policy 2 (Existing): Through the sustainable travel element of the People and Place behaviour change programme for the financial year 2025/26, encourage promotion of car and bike share schemes, Mobility as a Service, demand responsive transport and multi-modal mobility hubs to encourage the use of integrated public transport and reduce car use.

Transport Outcome 1 Policy 3 (New): Successor Policy Car Use Reduction – Following a review of the car use reduction policy, a new target has been set out in alignment with the Climate Change Plan and supportive of our Net Zero targets. A target has been set to reduce emissions from cars in the first carbon budget (2026-2030) by at least 16% from today’s levels (2023).

This outcome included in the Transport section of the Climate Change Plan builds on the existing Scottish Government commitment made in the CCP Update to reduce car use. It aims to ensure that the equality, economic and health and wellbeing benefits of car use reduction are experienced nationally. The policy will particularly benefit those on lower incomes and those living in more deprived areas, who are less likely to use cars but disproportionately suffer the negative impacts of others’ car use. Benefits include:

Improved access to services without the need to travel;
Enhanced local environments;
Greater access to walking, cycling, and bus travel; and
Facilitation of car sharing.

The current transport system drives inequalities by prioritising car ownership. We live in a ‘moto-normative’ society, increasingly dependent on private car use. Evidence shows:

56% of households earning under £10,000 have no car, compared to only 4% of households earning over £50,000,^[34]
Disabled people are less likely to hold a driving licence (56% vs 78%) and have household access to a car (56% vs 80%),^[35] and
Lower income households, minority ethnic communities, women, older, and disabled people are less likely to own or use a car, yet suffer more from air and noise pollution, road danger, and congestion.^[36]

Walking and Cycling:

Walking rates are similar across income groups, but 17% of low-income individuals walk to work, compared to 6% of high-income individuals,^[37] and
Only 2% of low-income individuals cycle for transport, and 17% have access to a cycle, compared to 60% of high-income households.^[38]

Public Transport:

50% of low-income individuals use buses, compared to 32% of high-income individuals,^[39] and
Train use is higher among high-income groups (40% vs 21%).^[40]

Health and Wellbeing:

Deprived areas face higher exposure to poor air quality and road danger,^[41]
These areas also show higher prevalence of cardiovascular and respiratory diseases,^[42] and
Transport poverty contributes to social isolation, which can be mitigated by accessible, affordable transport.^[43]

Employment:

Lack of affordable transport is a barrier to accessing good-quality employment, especially for those with non-standard working hours, and
In-work poverty is exacerbated by transport challenges.^[44]

Previous consultation feedback showed that the benefits to the public of the car use reduction include improved active travel and public transport, concessionary fares, access to cycles and investment in 20-minute neighbourhoods. Concerns from the consultation included cost of public transport and potential for isolation for those without alternatives. The route map does not contain any interventions that will prevent car use amongst those who have no alternatives, instead it includes a range of interventions to support those who are able to reduce their car use to do so.

Mitigations proposed in consultation included:

Support with public transport costs,
Increased services for non-standard hours,
Secure cycle storage,
Reduced-cost internet connectivity,
Promotion of sustainable travel support, and
Targeting disincentives at higher income groups.

Based on the existing consultation, this policy has been revised as a result of the findings with a suite of impact assessments already published. Available here: Reducing car use for a healthier, fairer, and greener Scotland: Analysis of Consultation Responses | Transport Scotland.

Transport Outcome 2: To support modal shift through more sustainable forms of travel, including incentivising public transport use and supporting more people to walk, wheel and cycle for everyday journeys.

Transport Outcome 2 Policy 1 (Existing): Provide free bus travel for those under 22 years of age and older and disabled persons through the National Travel Concessionary Schemes.

Transport Outcome 2 Policy 2 (Existing): Bus Infrastructure Fund: Provides funding to Local Authorities and Regional Transport Partnerships to work together with bus operators to develop and deliver local bus infrastructure improvements. These will improve the quality of bus infrastructure and perceived safety; make it easier to access bus services; improve integration between bus and other modes of transport; and make bus journeys shorter and more reliable. This will provide benefits for existing bus passengers as well as encouraging people to leave their cars at home and take the bus.

Transport Outcome 2 Enabling Policy 3 (Existing): Progress development of smart and digital integrated ticketing and payment systems and technology across public transport in Scotland.

Transport Outcome 2 Enabling Policy 4 (Existing): We will deliver improvements to the national concessionary schemes, enhance the digital travel data services that sit behind Traveline Scotland and other journey planner providers, and will develop the Open Data provisions in the Transport (Scotland) Act 2019.

Transport Outcome 2 Policy 5 (Existing): Retain the commitment to Active and Sustainable Travel investment.

Transport Outcome 2 Enabling Proposal 1 (New): Guarantee of multi-year funding to provide confidence to the public sector to plan and invest in bus priority.

Transport Outcome 2 Proposal 2 (New): Increases in funding alongside capacity and capability of Local Authorities/ Regional Transport Partnerships/Transport Scotland and supporting consultancy.

Transport Outcome 2 Policy 6 (New): Transport Scotland to develop and deliver trunk road bus priority and bus priority at trunk road signals.

Transport Outcome 2 Enabling Proposal 3 (New): Multi-year funding commitments required to enable build-up of capacity and capability in the active and sustainable sector and confidence for planning and delivery of long-term, large-scale ambitious infrastructure programmes.

The Young Persons Scheme, introduced on 31 January 2022, benefits up to 930,000 people and aims to embed sustainable travel behaviours from an early age. It supports a green recovery by encouraging long-term shifts to public transport, particularly benefiting low-income families and those disproportionately impacted by the COVID-19 pandemic.

Evidence shows that lack of access to good, affordable transport can trap people into poverty by limiting access to jobs, education, and training. 44% of people with an income of less than £10,000 travel by bus weekly, compared to 16% of those earning over £40,000. The scheme improves access to opportunities, independence, and wellbeing, especially for young people in material deprivation.

91% of public consultation^[45] respondents agreed the scheme would contribute to increasing opportunities and reducing inequalities. It particularly benefits children and older people, who are more vulnerable to air pollution, and low-income groups, who are more likely to live in urban areas with high pollution levels. Policy development considered options such as application processes, accompaniment requirements, smartcard vs mobile app, and replacement fees, with further details available in the under 19s assessment. No further changes are proposed following the extension to 19–21 year olds, and awareness will be raised through relevant channels.

Public Transport / Active Travel Infrastructure Investment

The Strategic Transport Projects Review 2 (STPR2)^[46], published in 2022, outlines 45 Recommendations for future transport investment across Scotland. It considers active travel (walking, wheeling, cycling), bus, ferry, rail, motorways, trunk roads, and freight access to ports and airports, with a focus on regional differences and travel patterns.

STPR2 aims to:

Make Scotland more accessible,
Create better connectivity with sustainable, smart and cleaner transport,
Enable and sustain economic growth,
Reduce transport emissions, and
Address inequalities and improve health and wellbeing.

The review was supported by extensive and robust transport appraisal, including regional Appraisal Summary Tables (ASTs) and statutory impact assessments. For example, Recommendation 3 notes that:

“Beneficiaries of this recommendation could potentially include accessibility for deprived rural communities including deprived and disadvantaged communities... the recommendation could potentially improve access to services for ‘communities of interest’ including those with lower access to private vehicle (such as women, young people and low-income households)...”

The Fairer Scotland Duty assessment was integral to STPR2 and subject to 12 weeks of public consultation. While no new recommendations emerged, minor amendments were made to reflect feedback.

No further changes are proposed to the STPR2 recommendations. The assessment process ensured due regard to socio-economic disadvantage, and the proposals are expected to contribute to reducing inequalities of outcome, particularly for communities of place and interest.

Transport Outcome 3: To support modal shift through encouraging more freight to move by rail or water instead of road.

Transport Outcome 3 Policy 1 (New): Providing grant support for modal shift of freight from road to rail or water.

Transport Outcome 3 Policy 2 (New): Specific rail freight investments.

This outcome aims to promote and facilitate modal shift to rail/water to take advantage of the environmental and economic benefits associated. The focus is on moving freight/goods currently transported via road onto rail or water wherever feasible. This applies to longer-distance movement of goods between key freight destinations, such as warehouses, distribution centres, factories, and quarries.

This policy does not typically include delivery to shops or homes, and, therefore, will not impact on a socio-economic level. It is not strategic or key or high level at the wider Scottish Government level, but will impact those involved in transport and logistics. Expected outcomes include a reduction in transport emissions and fewer HGVs on the road network.

While the overall impact is expected to be neutral, promoting and investing in sustainable freight transport could positively contribute to improvements in place, health and wellbeing, particularly for deprived urban communities more likely to be located in areas of poor air quality. This could help reduce inequalities of outcome, such as lower healthy life expectancy.

Given the nature of the policy, which focuses on the movement of goods over longer distances between key freight destinations, and its lack of direct impact on individuals or communities, no adjustments are required to address inequalities associated with particular groups or communities of interest or place. While the direct socio-economic impact is neutral, the indirect benefits to air quality and health in deprived urban areas are acknowledged as a positive contribution to reducing inequalities of outcome.

Transport Outcome 4: We will phase out the need for new petrol and diesel cars and vans by 2030.

Transport Outcome 4 Policy 1 (Existing):

Policy 1: Vehicle Emissions Trading Schemes (VETS) legislation/ Zero emission vehicle (ZEV) mandate. The four-nation Vehicle Emissions Trading Schemes (VETS) Order 2023 is the main policy instrument for phasing out the sale of new petrol and diesel cars and vans in Scotland.

Due to the CO2 trading schemes and flexibilities inherent in the design, manufacturers can comply with VETS without meeting the headline ZEV sales percentages providing their remaining non-ZEV sales are of sufficiently efficient vehicles and by trading with other manufacturers with excess credits.

Transport Outcome 4 Enabling Policy 2 (Existing): Continue to invest in critical skills in the servicing and maintenance of Electric Vehicles (EVs) and charging infrastructure to support a just transition.

Transport Outcome 4 Enabling Policy 3 (Existing): EV Infrastructure Fund (public EV charging network).

Transport Outcome 4 Policy 4 (Existing): Develop a Public Sector Fleet Decarbonisation Action Plan, developed in partnership with public sector fleet operators, including identifying new delivery models that crowd in private investment and for the sharing of vehicles and infrastructure with fleet decarbonisation costs incorporated into business-as-usual fleet operations.

Transport Outcome 4 Enabling Policy 5 (New): Develop a range of new policy interventions that support consumers, sole traders and micro businesses to more rapidly transition to EVs.

Transport Outcome 4 Key Enabling Policy 6 (New): Additional support to rapid rollout of critical EV charging infrastructure including public EV charging in rural communities and home charging at domestic properties, including cross-pavement charging.

Outcome 4 supports Scotland’s transition to a net-zero transport system, aligning with the Climate Change Plan and National Transport Strategy (NTS2). It is underpinned by two key policies: the Vehicle Emissions Target Scheme (VETS) and the Vision for Scotland’s Public Electric Vehicle Charging Network, which together aim to expand the share of zero-emission vehicles and leverage private sector investment while ensuring equitable access to public charging infrastructure.

The policies outlined will likely affect:

Low-income households, who may face affordability challenges in transitioning to EVs,
Rural and island communities, where infrastructure may be less developed,
Disabled people, with specific accessibility needs for EVs and charge points,
Small businesses and fleet operators, who rely on vans for operations, and
Young people and future generations, who will benefit from improved air quality and sustainability.

The policies included in this outcome aim to:

Accelerate the shift to zero-emission vehicles,
Improve public health through better air quality,
Stimulate green innovation and job creation in the EV and charging sectors,
Reduce noise pollution and support quieter, more liveable communities, and
Promote social equity by ensuring access to cleaner transport options for all.

Evidence suggests that areas suffering from socio-economic inequality will benefit from targeted infrastructure deployment. Charge points will be integrated into multi-modal plans and spatial planning to support sustainable travel, especially in areas where the market has shown less interest, but where regeneration could help overcome disadvantage. Such planning will also support remote and rural communities, where utilisation rates of EV charging alone may need a more diverse offering to ensure that the hub becomes commercially viable.

To address environmental and social challenges — such as transport-related pollution and social isolation — and support a net zero, nature-positive Scotland, the National Planning Framework 4 (NPF4) reorients the planning system to prioritise climate action and nature recovery in all decisions, with particular benefits for communities facing socio-economic disadvantage.

Accessibility is being addressed through the VETS wheelchair accessible vehicles forum and BSI accessible charge point standards, ensuring that existing and future EV owners with physical disabilities are considered.

No additional options were proposed at this stage, as the policy is covered by parent policies (namely the NPF4^[47]) that have already undergone Fairer Scotland Duty assessments. These frameworks ensure that due regard has been given to socio-economic inequalities.

Transport Outcome 5: We will work with the energy, finance and road transport sectors and related businesses to ensure all road vehicles are zero emission by 2040.

Transport Outcome 5 Policy 1 (Existing): Providing Government support for bus decarbonisation (ScotZEB).

Transport Outcome 5 Policy 2 (Existing): Providing Government support for decarbonisation of Community Transport (Plugged-in Communities).

Transport Outcome 5 Policy 3 (New): Investment in replacement of HGV vehicles and deployment of charging infrastructure.

Transport Outcome 5 Proposal 1 (New): Consider what regulatory options are available to encourage and ensure transition; implement as required.

Transport Outcome 5 Proposal 2 (New): Support skills development and other aspects of economic development to support a Just Transition.

The policies and proposals included in this outcome are expected to affect similar groups to those identified in the assessment of Outcome 4.

Infrastructure development is guided by the Vision for Scotland’s Public Electric Vehicle Charging Network, setting the direction for public charging to 2030 while transitioning away from a public network model to a network funded by private investment. This will be done in a manner that leaves no-one behind, ensuring the right charge points are available in the right places to meet consumer demand.

The VETS legislation increases the share of new zero emission cars and vans year-on-year to 2030. As outlined in assessment of Outcome 3, accessibility is being addressed through the VETS wheelchair accessible vehicles forum and BSI accessible charge point standards.

The HGV Decarbonisation Pathway outlines actions to be taken by government and stakeholders to address challenges in energy infrastructure, financial models, technological confidence, and workforce skills. As the transition to zero emission trucks is at a very early stage, the actions largely relate to gathering evidence and improving understanding of the options for policies, other government intervention and sector-led activity. The activity is strategic in nature and explicitly recognises the need to take into account the needs of different communities.

Work to create an evidence base for the development of charging for HGVs and other heavy road vehicles is assessing the need for charging locations that ensure zero emission heavy duty vehicles can be used to serve communities across Scotland. This work is being mapped against data on the strength of energy networks to encourage increase in grid capacity to allow heavy duty charging to be put in place in good time.

No negative implications for inequalities have been foreseen. Costs of EV ownership are expected to fall as competition increases and used zero emission vehicles enter the market. The policy is designed to be inclusive and equitable, with no adjustments required at this stage, as it is covered by parent policies.

Monitoring and evaluation will be informed by the NPF4 Integrated Impact Assessment, which supports this area and ensures that due regard to the Fairer Scotland Duty has been achieved.

Transport Outcome 6: We will work to decarbonise scheduled flights within Scotland by 2040.

Transport Outcome 6 Supporting Policy 1 (Existing): Developing the world’s first zero emission aviation region in partnership with Highlands and Islands Airports Limited (HIAL).

Transport Outcome 6 Policy 2 (Existing): SAF and Project Willow. The development of alternative fuels, such as sustainable aviation fuel (SAF). SAF will play a crucial role in reducing emissions over the short and medium term. SAF as a potential opportunity area for Scotland and the work of Project Willow demonstrated that a long term, new industrial future is achievable at Grangemouth, and the report includes two potential SAF projects that could be developed at Grangemouth. The Grangemouth Just Transition Fund is available to support new low carbon propositions, in particular a SAF proposition at Grangemouth.

Transport Outcome 6 Policy 3 (New): Air Departure Tax. The Scottish Government will introduce Air Departure Tax (ADT) as a devolved replacement for the UK-wide Air Passenger Duty (APD) from 1 April 2027. This is possible due to the development of a new Highland and Island exemption that protects crucial connectivity in the region while complying with the UK Government’s subsidy control regime.

Outcome 5 supports Scotland’s transition to a net-zero transport system by phasing our internal combustion engine vehicles. It aligns with the Climate Change Plan, National Transport Strategy (NTS2) and National Planning Framework 4 (NPF4). The desired outcome is a significant reduction in greenhouse gas emissions from road transport, improved air quality, and the promotion of sustainable, inclusive mobility through the uptake of electric vehicles (EVs) and other zero-emission alternatives.

While aviation is a reserved matter, the UK Government’s Jet Zero Strategy sets a target for UK domestic flights to reach net zero by 2040 and aspires to zero-emission routes by 2030. This aligns with Scotland’s ambition and will require ongoing engagement with the UK Government to ensure benefits for Scotland.

At this stage, the technology required – both aircraft and infrastructure – is in early development. Therefore, it is not yet possible to assess the implications for socio-economic inequalities. A Ministerial Roundtable was held in June 2025 with key stakeholders from the aviation sector to explore understand the challenges and opportunities around facilitating the operation of zero-emission aircraft in Scotland. This was a positive discussion and Ministers are currently considering next steps to encourage and support more effective collaboration and innovation within the sector Impact assessments will be undertaken once specific policies are formulated.

One potential mechanism to support the transition and reduce inequalities could be through differential treatment of fuels under ADT. As stated in the high-level principles publication:

“…it is expected that passengers on flights fuelled by less polluting, non-kerosene aviation fuels (e.g. hydrogen aircraft) will continue to be tax exempt.”

While broader decisions on ADT rates and bands will not be made until the middle of the next Parliament, this potential exemption could help incentivise cleaner technologies and reduce costs for passengers on zero/low emission flights, including those in remote or disadvantaged areas.

A consultation on the Scottish Government’s ADT proposals was launched on 29 January 2026. The consultation invites comment and evidence from interested parties and is open until 26 March 2026. The contributions received will then be analysed with a response published in due course.

There is currently a lack of data on how decarbonisation of aviation may affect people on low incomes, those in deprived areas or communities reliant on lifeline air services. It is recommended that evidence gathering and engagement with these groups be undertaken and considered once technological pathways and policy options become clearer.

5.9 Waste Management

Waste Outcome 1: Strengthen Scotland’s Circular Economy

Waste Outcome 1 Enabling Policy 1 (New): Publish a Circular Economy Strategy in 2026.

Waste Outcome 1 Enabling Policy 2 (New): Set new circular economy targets by 2027.

Waste Outcome 1 Enabling Policy 3 (New): Work to embed circularity into public sector procurement processes, helping to reduce the environmental impact of public spending.

Waste Outcome 1 Supporting/ Enabling Policy 4 (Existing): Develop digital waste tracking service, in partnership with the UK government and other devolved governments.

Waste Outcome 2: Reduce and Reuse

Waste Outcome 2 Policy 1 (New): Publish a product stewardship plan to set out our framework to prioritising products based on their environmental and economic impact, by 2026.

Waste Outcome 2 Policy 2 (Existing): Packaging: Introducing reforms to extended producer responsibility (EPR) for packaging, working with the other UK governments.

Waste Outcome 2 Policy 3 (Existing): Policy 3: Packaging: Implementation of the Deposit Return Scheme (DRS) for single-use drinks containers.

Waste Outcome 2 Policy 4 (Existing): Develop action to tackle the environmental impact of single-use drinks cups.

Waste Outcome 2 Enabling Proposal 1 (New): Develop further measures to tackle consumption of problematic single-use items and promote and enable the uptake of reusable alternatives (including consideration of environmental charging where appropriate and working with other UK nations and industry on reusable and refillable packaging targets and wider support).

Waste Outcome 2 Proposal 2 (New): WEEE: Reform extended producer responsibility for waste electrical and electronic equipment (WEEE), working with the other UK administrations.

Waste Outcome 2 Proposal 3 (New): Batteries: Reform extended producer responsibility for batteries, working with the other UK governments.

Waste Outcome 2 Proposal 4 (New): End of Life Vehicles: As part of UK-wide Extended Producer Responsibility (EPR) reform, seek to place greater financial responsibility on vehicle producers for the environmental impact of their products at end-of-life.

Waste Outcome 2 Enabling Narrative Policy 5 (New): Working with the fishing and aquaculture sectors to improve the collection and recycling of end-of-life gear.

Waste Outcome 2 Enabling Proposal 5 (New): Mainstreaming reuse and repair, including developing measures to improve the reuse experience for consumers and support alternative business models that prolong product lifespan.

Waste Outcome 2 Enabling Policy 6 (New): Develop measures to address the disposal of unsold consumer goods.

Waste Outcome 2 Enabling Proposal 6 (New): Develop an intervention plan to guide long-term work on household food waste reduction behaviour change.

Waste Outcome 2 Policy 7 (New): Develop with stakeholders effective options to implement mandatory reporting for food waste and surplus by businesses.

Waste Outcome 2 Enabling Proposal 7 (Existing): Support the development and implementation of NHS Scotland actions to tackle food waste, to be reflected in NHS Scotland’s forthcoming revision to its Climate Emergency and Sustainability Strategy.

Waste Outcome 2 Enabling Policy 8 (New): Support the development of a model for regional Scottish hubs and networks for the reuse of construction materials and assets.

Waste Outcome 2 Enabling Proposal 8 (New): Investigate and promote options to incentivise and build capacity for the refurbishment of buildings.

Waste Outcome 2 Enabling Proposal 9 (New): Develop new and promote existing best practice standards in circular practices within the construction sector, and assess the options for both voluntary and mandatory compliance.

Waste Outcome 2 Enabling Narrative Policy 9 (New): Consider how devolved taxes can incentivise the use of secondary aggregates and support circular economy practices.

Waste Outcome 2 Enabling Narrative Policy 10 (Existing): Delivery of the National Litter and Flytipping Strategy.

Waste Outcome 3: Modernise Recycling

Waste Outcome 3 Policy 1 (Existing): Make our final investments from the Recycling Improvement Fund to improve local authority recycling collection infrastructure.

Waste Outcome 3 Enabling Policy 2 (New): Develop a statutory Code of Practice for household waste and recycling services.

Waste Outcome 3 Policy 3 (New): Recyclable plastic film and flexible packaging is to be collected for recycling from both households and businesses across the UK by 31 March 2027.

Waste Outcome 3 Enabling Policy 4 (Existing): Review separate collections of textile waste from households, following recent consultation.

Waste Outcome 3 Enabling Policy 5 (Existing): Review current practices with respect to separate collection of bio-waste (e.g. garden waste).

Waste Outcome 3 Enabling Policy 6 (New): Undertake a review of waste and recycling service charging.

Waste Outcome 3 Enabling Policy 7 (Existing): Review the rural exemption for food waste recycling, following recent consultation.

Waste Outcome 3 Enabling Policy 8 (New): Setting statutory local recycling and reuse performance targets for household waste services from 2030 onwards.

Waste Outcome 3 Enabling Policy 9 (New): Actions to strengthen household waste enforcement tools, as set out in Circular Economy and Waste Route Map.

Waste Outcome 3 Enabling Policy 10 (New): Review of compliance with commercial recycling requirements.

Waste Outcome 3 Enabling Policy 11 (New): Conduct a national compositional study of waste from commercial premises.

Waste Outcome 3 Enabling Policy 12 (New): Co-design measures, including targeted communications, to improve commercial waste service provisions that drive waste prevention and reuse, with a particular focus on food waste recycling.

Waste Outcome 4: Decarbonise Disposal

Waste Outcome 4 Policy 1 (Existing): Introduce a ban on biodegradable municipal waste going to landfill

Waste Outcome 4 Enabling Proposal 1 (Existing): Review and target materials currently landfilled to identify and drive alternative management routes, including the potential to extend the BMW landfill ban to include biodegradable non-municipal wastes.

Waste Outcome 4 Enabling Policy 2 (New): Develop a Residual Waste Plan to 2045.

Waste Outcome 4 Policy 3 (Existing): Increase the capture of landfill gas.

Waste Outcome 5: Other Sources (anaerobic digestion and composting and wastewater).

Waste Outcome 5 Enabling Proposal 1 (New): Broadly align with Energy Neutrality and Resource Recovery requirements in the EU's Urban Waste Water Treatment Directive (Art 11 and 20). Likely to include Energy audits, energy recovery and resource recovery. Scottish Water is currently mandated to achieve net zero by 2040 across all of its water and wastewater operations.

Waste Outcome 5 Enabling Proposal 2 (New): Continue to work with the Scottish Environment Protection Agency (SEPA) and the sector to ensure there is appropriate capacity in Scotland to manage these biodegradable materials and optimise the efficiency of both anaerobic digestion and composting.

The Waste policy package within the CCP aims to reduce emissions from sectoral sources — primarily landfill, wastewater, and anaerobic digestion — while driving a more circular economy in Scotland, where materials are valued and kept in use for as long as possible. Many of these policies and proposals align with the Circular Economy and Waste Route Map to 2030 and the Circular Economy Strategy, and have already undergone Fairer Scotland Duty Assessments. The Circular Economy and Waste Route Map FSDA, alongside specific FSDAs for legislation and specific policies^[48] provides detailed information on the impacts of the above policies. However, further impacts from other policies not included in this have also been summarised below.

Evidence from consultations and previous FSDAs highlights several socio-economic considerations. Respondents raised concerns about potential increases to living costs, especially for low-income households, and emphasised the need to avoid adverse impacts from environmental charges or waste management costs.

Key findings in the information gathering stage of this assessment include:

The poverty premium means low-income consumers often overpay for goods and services, lacking access to affordable, durable products. This is noted especially for energy, communications and insurance, but also for food,
Reuse initiatives, such as those by Circular Communities Scotland and the Reuse Network, have supported over 1.5 million UK households,
Remote rural areas face higher living costs and more limited waste management options,
Food waste reduction measures must align with efforts to tackle food insecurity. The Cash-First Plan supports dignified food provision and community resilience,
Construction reuse hubs may impact market prices and affect socio-economic groups differently, and
Evidence suggests that littering and fly tipping are more prevalent in more deprived areas, with associated negative impacts on local people and businesses.

Information gathering also evidenced the reality of recycling disparities. Local authority recycling rates are variable across Scotland, and are influenced by geography, housing type, levels of deprivation as well as service design, waste awareness and prevention activity and investment in infrastructure. In particular, 2024 data indicated that the percentage of household waste recycled was below 35% in three council areas: Glasgow City, Orkney and Shetland – and over 55% in three local authorities: Clackmannanshire, East Lothian and Moray. Households in flats and deprived areas are likely to recycle less, especially glass. Recycling rates also show correlation with the SIMD, with recycling rates for all materials being below average in the 20% most deprived areas, and above average in less deprived areas, based on 2017 data. The data does not show whether recycling rates vary by household income.

It is not yet possible to determine if these differences would mean that those experiencing socio-economic disadvantage are affected by changes to household recycling differently from those who are not disadvantaged, either in terms of the materials collected or the way that services are delivered or funded (e.g. garden waste collections). However, co-design of household services is specifically intended to implement high-performing systems that take account of geography and socio-demographics to best serve householders while maximising capture and quality of material.

A Deposit Return Scheme (DRS) FSDA^[49] identified risks for low-income groups due to increased container costs and emphasised the need for reasonable access to return points, especially in rural and island areas.

Decarbonising disposal policies may benefit communities near landfills, which are often in areas of higher social deprivation. Actions to move waste away from landfill could, therefore, reduce impacts from the management of residual waste on these communities. However, post-landfill site closure impacts must be monitored. The Residual Waste Plan is intended to consider how we manage legacy waste infrastructure to continue to minimise environmental impacts and maximise societal gains, and may also highlight alternative treatment technologies for areas generating lower tonnages.

Policies to strengthen the circular economy presents opportunities for:

Upskilling and training for those with limited qualifications;
Green jobs for those in precarious employment; and
Circular procurement to support local businesses and provide affordable refurbished goods.

While many interventions are still in development, the assessment recommends:

Continued impact assessments as policies evolve;
Stakeholder engagement, especially with those with lived experience of poverty; and
Ongoing evidence gathering and monitoring.

It is also important to recognise that there will be a significant cost to society as a whole if we do not take forward the actions in the waste sector package. The positive economic opportunities and environmental impacts from a circular economy will not be fully realised, and the cost of waste and its environmental externalities will continue to be borne by public bodies, businesses, and communities – risking exacerbating existing inequalities rather than addressing them.

In conclusion, while the CCP waste sector policies may have both positive and negative impacts on socio-economic groups, the environmental and economic benefits are expected to outweigh any potential disadvantages. However, careful design, consultation, and monitoring are essential to ensure that inequalities of outcome are addressed and that no group is disproportionately impacted.

Contact

Email: ClimateChangePlan@Gov.Scot

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