Scotland's Climate Change Plan – 2026-2040
This Climate Change Plan (CCP) sets out the policies and proposals the Scottish Government will take forward to enable our carbon budgets to be met between 2026-2040.
Annex 3 – Monitoring And Analytical Annex
Approach to Monitoring and Evaluation
Background
This annex sets out the approach to monitoring and evaluation (M&E) of the CCP. This CCP is the first of its kind to be underpinned by statutory just transition principles. Monitoring and evaluation of the plan should, therefore, not only assess the emissions reductions delivered across all sectors, but also the extent to which we are delivering a just transition for Scotland alongside this.
A series of questions are included within a separate annex to gather views on different elements of the proposed approach to help refine the method that we adopt.
Structure of the CCP Monitoring Framework
Reducing GHG Emissions in line with Scotland’s Carbon Budgets and Just Transition Principles
A. National, sectoral, and sub-sectoral emissions monitoring, based on annual Greenhouse Gas (GHG) Inventory Emissions Statistics published each June with an 18-month lag. Because publication of the CCP monitoring and evaluation report occurs in May each year, these monitoring elements are reported on with a three-year lag.
B. To supplement the comprehensive but time-lagged emissions monitoring, a set of emissions-reduction early-warning indicators will be developed and monitored for each sector.
C. For the first time, the CCP monitoring framework also includes a set of just transition indicators, to be reported on annually alongside progress on emissions reduction.
Proposed approach to monitoring emissions reductions
We propose a two-track process to deliver the emissions-focused monitoring framework described above: (i) monitor annual emissions output relative to the total envelope required to achieve the five-year carbon budget, reporting at the sub sectoral level for every major source of emissions; and (ii) early warning indicators to track recent delivery of the key actions required to achieve the carbon budget emissions envelope.
(i) Monitoring annual emissions output. As part of the development of the Climate Change Plan, emissions pathways have been produced for every major source of sub-sectoral emissions. These pathways inform the rate at which each source of emissions is expected to decarbonise and will be used to formulate sub sectoral outcomes. When summed together, these pathways form the total sectoral emissions envelope and when aggregated across sectors, the overall carbon budget. Each year, when Greenhouse Gas Inventory data is published, we will report output emissions at the sub sectoral level relative to their respective carbon budget envelopes.
(ii) Early-warning indicators: Given the time lag associated with Greenhouse Gas (GHG) inventory data, a complementary system of more timely indicators will be used to inform recent progress delivering the key actions required to achieve each respective outcome. The indicators used to monitor progress in decarbonising each source of emissions will depend on data availability and the complexity of the policy package underpinning each respective sub sectoral emissions pathway. Some indicators from the existing monitoring report will be retained where they remain relevant, while new indicators will be introduced where necessary and where data availability allows to capture the impact of updated policies and priorities.
Hypothetical Example: Emissions from cars
The emissions pathway for cars implied by the CCP suggests total output of below 18.1 MtCO2e during the first carbon budget period, with annual emissions expected to fall from 4.1 MtCO2e to 3.0 MtCO2e between 2026 – 2030. This envelope represents the estimated total impact of a range of policies in reducing emissions from road transport including Vehicle Emissions Trading Scheme (VETS) legislation, expansion of the electric vehicle (EV) charging network, EV loan schemes, and other measures that encourage both modal shift and the uptake of zero-emission vehicles. The sub sectoral outcome for cars will be explicitly informed by the emissions pathway.
An example formulation of the outcome for cars: 'Emissions from cars should remain below 18.1 MtCO2e between 2026-2030'.
(i) GHG Inventory data, when available on a three-year lag, can be used to evaluate out turn emissions relative to the stated emissions-based outcome.
Evaluation example (when publishing in 2029): ‘In 2026, emissions from cars totalled 4.1MtCO2e. Equivalent to 22.6% of the CCP-consistent envelope for this emissions source within the overall carbon budget, suggesting emissions from cars are broadly on track to achieve the outcome’.
(ii) With respect to indicator development, the emissions envelope for cars is predicated on the assumption that EV’s will comprise a growing share of all new car purchases, rising from 17.7% in 2024 to 80% in 2030, or by approximately 10 percentage points each year. Between 2026 – 2030, an estimated 910,000 new cars are expected to be registered, of which, 60% (approximately 550,000) should be EVs to remain on track to achieve the emissions envelope. The number of new EV cars registered each year can be used to evaluate whether progress reducing the number of internal combustion engine (ICE) cars is on track to achieve Carbon Budget 1.
Evaluation example (when publishing in 2029): ‘Between 2026-2028, 270,000 new EVs have been registered, equivalent to 50%% of the total number of EVs required to be registered between 2026 – 2030 to achieve the outcome for cars. The profile of EV car registration uptake is expected to be skewed towards the end of the carbon budget period and must continue to increase to achieve the carbon budget envelope. The number of EV cars registered in 2028 is broadly consistent with the number required to achieve the carbon budget envelope’.
Indicators currently used as part of CCPu Monitoring and Evaluation
Electricity
- Electricity grid intensity (CO2e per kilowatt hour)
- Installed capacity of renewable generation (GW)
- Renewable capacity at planning stages (GW: 3 categories)
- Loss of Load Expectation (hours per year)
Buildings
- Number of existing domestic properties using low and zero greenhouse gas emissions heating (LZDEH) systems
- Services sector fossil fuel heat consumption
- % of non-electrical heat consumption met from renewable sources
- Energy intensity of residential buildings (MWh per household)
- Emissions intensity of non-domestic buildings (tonnes of CO2e per £ million Gross Value Added)
- % of homes with an EPC1 (EER,2 or equivalent) of at least C
- % new homes built with a calculated space heating demand of not more than 20 kWh/m²/yrT
- Percentage of households in fuel poverty
Transport
- % reduction in car kilometres
- % of new car registrations that are ULEV
- % of new van registrations that are ULEV
- % of new HGV registrations that are ULEV
- % of new bus registrations that are ULEV
- % reduction in emissions from scheduled flights within Scotland
- % of ferries that are low emissions
- % of single track kilometres electrified
- % of train kilometres powered by alternative traction
Industry
- Industrial energy productivity (£GVAm per GWh)
- Industrial emissions intensity (tCO2e per £GVAm)
- % of Scottish gas demand accounted for by biomethane and hydrogen blended into the gas network
Waste
- Total amount of landfilled waste (tonnes)
- Total amount of biodegradable landfilled waste (tonnes)
- Number of closed landfill sites with exploratory landfill gas capture/ flaring
- Household and non-household food waste reduced (tonnes)
- Total waste generated (tonnes)
LULUCF
- Hectares of woodland created per year
- Woodland ecological condition
- Woodland Carbon Code: Projected carbon sequestration (validated credits)
- Annual volume (in millions of cubic metres) of Scottish produced sawn wood and panel boards used in construction
- Hectares of peatland restored per year
- Peatland Carbon Code: Projected emissions reduction (validated units)
Agriculture
- Increased engagement with Farm Advisory Services on environmental issues and climate change
- Use of Nitrogen fertilisers
- Spreading precision of Nitrogen fertilisers
- Nitrogen use efficiency for crop production
- Time taken from birth to slaughter and increased efficiency through improved health and reduced losses
- Improvement in covered slurry storage
- Precision application of manure and slurry
- Area of woodland on agricultural land
Proposed approach to monitoring a just transition
Underpinning Scotland’s carbon budget targets is a commitment to a just transition. The inclusion of just transition indicators in the CCP M&E framework represents a significant milestone in our commitment to embed the just transition principles across all aspects of climate policy.
The proposed just transition indicators, set out below, are organised into four outcome themes: Communities and Place; People and Equity (spatial and financial); Jobs, Skills and Economic Opportunities; and Environment and Biodiversity.
Through annual monitoring and reporting, these indicators aim to give an indication of whether we are achieving a just transition alongside progress on our emissions reduction pathways.[230]
Key to monitoring the delivery of a just transition to net zero is understanding how our policies and proposals affect different societal groups and geographic regions across Scotland. The indicators proposed below aim to address this need by combining metrics that provide a single whole-of-Scotland measure with those that focus on specific sub-groups of the population, including:
- Communities and workers facing significant impacts as a result of their close connections with particular carbon intensive industries.
- Places with significant local net zero infrastructure and land use change
- Differentiated rural, urban and island community impacts
- Businesses
The proposed indicators draw on an extensive evidence base, developed with key stakeholders, including the Just Transition Commission. By reporting on them as part of the CCP monitoring and evaluation process, we intend to provide an overview of progress on delivering our emissions reduction ambitions in a way which is fair and just.
Most of the indicators proposed have an existing data source. However, for others, we are proposing additional questions that could be added to the Scottish Climate Survey.
We know that it is not possible for a small set of metrics to provide a complete assessment of whether we are delivering a just transition for Scotland. The proposed indicators are inevitably partial and cannot capture the complex, dynamic and multi-layered range of outcomes that the Scottish Government has identified for Scotland’s wider just transition. As such, a project is currently underway to develop a more comprehensive just transition M&E framework through a staged process of evidence review, stakeholder engagement and co-creation. We intend for these CCP just transition indicators to form part of a full just transition M&E framework, which will sit separately to the CCP and CCP M&E process. The inclusion of these core indicators in the CCP will very much be a first step.
Proposed Just Transition Indicators:
1: Communities and Place
Enhance social cohesion and agency in communities across Scotland through participation in, and benefit from, the transition to net zero.
Indicator 1.1 (Participation in decision making)
Indicator: Proportion of people in Scotland reporting satisfaction with opportunities to influence (i) the Scottish Government’s approach to delivering net zero, and (ii) local policy and planning decisions relating to net zero
Data source(s): Scottish Climate Survey (from Autumn 2026) - New survey questions to be developed to gauge respondents’ views on whether they feel satisfied with the opportunities they have to participate in democratic processes to influence net zero policy and/or planning at both the national and local level.
Population(s): Scotland-wide (with breakdown of data by key demographic groups, including gender, age, and household income, to assess equity of opportunity for participation)
Ambition: Increasing over time
Rationale: This indicator aims to track the extent to which people in Scotland have adequate opportunity to participate in national and local decisions relating to net zero policy and planning. A participatory approach is fundamental to the concept of a just transition, given it is both a process and an outcome. It cannot be a just transition if those with a stake in the transition are not involved in informing the policies and action taken to reduce emissions. Currently, no robust data on public participation in climate change policy or planning in Scotland are collected on a regular basis. Therefore, we propose developing new questions for inclusion in the next wave of the Scottish Climate Survey to address this gap. This is a survey of a nationally representative sample across Scotland which will allow analysis of different subsets of the population to identify any differences between opportunities for participation for different demographic groups.
Limitations: Public participation can take a wide variety of forms, giving people varying degrees of influence over decision-making. The appropriateness and meaningfulness of a participatory process is highly dependent local context and purpose. Different people also have varying desire and motivation to participate in different decisions. This makes it challenging to define and monitor an objective measure of success with respect to facilitating public participation in climate policy and planning decisions. Therefore, the proposed approach is to capture data on subjective satisfaction with opportunities to participate. This can tell us how people feel about their opportunities to participate in climate decision-making, but will not give us a standardised, objective metric on the quality or success of participation processes, as different people may perceive and experience the same process differently. The viability of this indicator is contingent on the commissioning of future waves of the Scottish Climate Survey.
Indicator 1.2 (Community energy)
Indicator: Operational capacity of community and locally owned energy installations in Scotland
Data source(s): Energy Saving Trust - Community and locally owned energy in Scotland report
Population(s): Scotland-wide
Ambition: Increasing over time
Rationale: This indicator aims to track the extent to which communities are participating in, and benefiting from, the development and delivery of renewable energy projects. Community energy has been shown to create both monetary and non-monetary benefits in local areas, directly contributing to Scotland’s just transition outcomes. The evidence suggests that community-owned energy projects create opportunities for new revenue generation, local development and investment. They also often demonstrate stronger inclusion of citizens in energy decision making than non-community owned projects, which results in energy projects that are more reflective of local need.
Limitations: A limitation of the data (collected by the Energy Saving Trust (EST) on behalf of the Scottish Government) is that owners, installers, certifiers and many funders of renewable energy systems do not currently have a mandatory requirement to report that these systems are in community or local ownership, therefore, much of the data is voluntarily provided or is sourced from public datasets that may be partial.
Indicator 1.3 (Community benefits)
Indicator: Average value of community benefits committed from renewable energy projects commissioned in the last 36 months, where a community or developer form is attached to a project.
Data source(s): Local Energy Scotland community benefits register
Population(s): Scotland-wide
Ambition: Meet or exceed the principles set out in the Scottish Government “Good Practice Principles” for community benefits from onshore and offshore renewable.
Rationale: This indicator aims to track the extent to which communities are benefiting financially from non-community-owned renewable energy installations. Community benefits are additional benefits that developers provide to the community. Local Energy Scotland (LES) maintains the Register of Community Benefits and Shared Ownership, which provides details of community benefits committed to communities across Scotland.
Limitations: The provision of community benefits by developers is currently voluntary and the quality and accuracy of the information on the Register relies on the information provided by the community or renewable energy business submitting it. This metric is monetary only and focuses on distribution of energy-generated wealth. A community benefit fund is considered to be a fundamental component of a community benefit package, though other measures may be considered, such as, in-kind works, direct funding of projects, or any other voluntary site-specific benefits. Moreover, whilst developers are encouraged to work with communities to ensure community benefits packages are tailored to local needs, this indicator will not measure the recipient communities’ satisfaction with the community benefits provided, or the impact of the benefits on the community.
Indicator 1.4 (Changes to places)
Indicator: The proportion of people reporting that changes to their local place due to net zero infrastructure and/or land use change have maintained or improved the quality of their local area.
Data source(s): Scottish Climate Survey (Autumn 2026) – New survey questions to be developed to gauge respondents’ (i) awareness of new net zero infrastructure / land use change, and (ii) experience of the impact of that infrastructure / land use change on sense of place and local identity.
Population(s): People across Scotland reporting an awareness of changes to their local place due to net zero infrastructure and/or land use change
Ambition: Maintaining or increasing over time
Rationale: This indicator intends to track how places are impacted by net zero infrastructure or land use changes. It recognises that the Just Transition is not solely about the impacts of moving away from fossil fuels, but also the fact that net zero deployments (e.g. new energy infrastructure installations, land use changes for restoration), while necessary, will also impact communities in various ways.
Limitations: Measuring the impact of net zero development on people’s experience of their place is complex and challenging. There are variables within this indicator which we cannot currently control for e.g. a declining perception of local area quality for reasons other than net zero developments. The Scottish Climate Survey does not specifically target places where net zero developments are underway. However, it serves as a proxy starting point to capture these experiences. If there is high correlation between responses reporting a decrease in local area quality with locations directly affected by net zero developments, this provides insights to follow up with for further data generation in said locations (e.g. interviews, surveys) to better understand the reasons for this. Finally, while this indicator is strongly outcome oriented, we recognise that the process of net zero developments will also influence people’s wellbeing in relation to place. The viability of this indicator is contingent on the commissioning of future waves of the Scottish Climate Survey.
2: People and Equity
Address existing spatial and financial injustices and avoid creating new ones.
Indicator 2.1 (Fuel Poverty)
Indicator: Percentage of dwellings in Fuel Poverty
Data source(s): Scottish House Condition Survey
Population(s): Scotland-wide; 6-fold rural/urban classification groups; Island local authorities
Ambition: Statutory targets set by the 2019 Fuel Poverty (Targets, Definition and Strategy) (Scotland) Act: by the end of 2040 no more than 5% of households will be in fuel poverty. No more than 1% of households will be in extreme fuel poverty.
Rationale: It is essential to monitor progress towards fuel poverty targets and address fuel poverty as part of a just transition to net zero. Given that fuel poverty is directly affected by geographies, this indicator includes the aggregate fuel poverty % for Scotland alongside breakdown by 6-fold rural/urban classification within the Scottish Household Survey. It also reports on island local authorities due to the unique fuel poverty challenges faced on island and recognition that island realities are not fully captured within the 6-fold rural/urban classification.
Limitations: The rural/urban classification and island local authority data will overlap. Therefore, it will be reported on separately and should be read and understood separately, as different classifications. Similarly, while some local authorities are comprised solely of islands, others include island and mainland territories. Therefore, reporting on “island local authorities” will incorporate data from ‘non-island’ communities.
Indicator 2.2 (Transport affordability)
Indicator: Percentage of people reporting that they are able to afford their individual transport costs
Data source(s): Scottish Household Survey
Population(s): Scotland-wide; 6-fold rural/urban classification groups; Island local authorities
Ambition: Increasing over time
Rationale: This indicator is intended to measure the impact of the transition to net zero on transport affordability, a key dimension of transport poverty. We know that transport affordability varies and is conditioned greatly by geography – particularly for islands. Therefore, we will report on a Scotland-wide aggregate, alongside the 6-fold rural-urban classification and specifically on local authorities which include islands. We collect annual data on affordability of transport costs through the Scottish Household Survey.
Limitations: Transport poverty is multi-dimensional, integrating issues of availability, reliability, affordability, accessibility and safety. We recognise that there are implications for certain areas that this indicator does not capture – in particular, impacts in relation to peri-urban areas, or the use of cars in rural and island territories. However, affordability was identified as the best data point for this indicator, given its financial and spatial inequity implications.
Indicator 2.3 (Socio-economic impact on oil and gas communities)
Indicator: Employment rate for people aged 16-64 in local authorities with high socioeconomic dependence on oil and gas industries
Data source(s): Annual Population Survey
Population(s) : Aberdeen City; Aberdeenshire; Falkirk; Shetland Islands; Orkney Islands
Ambition: Maintaining or increasing over time
Rationale: This indicator is intended to track the socio-economic impact of the transition to net zero on local economies with a high reliance on fossil fuel production and refining industries (or ‘oil and gas industries’). It uses employment data in identified locations as a measure of socio-economic stability, progress or decline. This indicator purposefully takes a place-based approach. Aberdeen City, Aberdeenshire and Falkirk have been selected as they are the local authorities in Scotland with the greatest proportion of total employment in these industries (based on relevant UK Standard Industrial Classification (SIC) divisions). These three local authority areas have also been highlighted in much existing evidence on the potential impacts of the net zero transition on oil and gas activities in Grangemouth and Falkirk and the northeast of Scotland. The inclusion of Shetland Islands and Orkney Islands recognises the strong connections that these islands have with the oil and gas sector, and the particular impacts that island communities could face from the shift in our economy.
Limitations: There are different ways to identify communities with the strongest connection to carbon intensive industries. The method used here is just one approach, and other methods may result in different communities being identified. While employment data can provide a high-level indication of the socio-economic health of the identified locations, it does not provide a more granular understanding of the impacts of the transition. These we aim to capture with other indicators included in this list. This limitation applies most directly to the cases of Orkney and Shetland.
Indicator 2.4 (Impact on household finances in oil and gas communities)
Indicator: Proportion of households reporting that they are managing well financially in local authorities with a high proportion of employment in oil and gas industries.
Data source(s): Scottish Household Survey
Population(s): Aberdeen City; Aberdeenshire; Falkirk
Ambition: Maintaining or increasing over time
Rationale: This indicator is intended to track the financial health of households in places which have a high employment reliance on fossil fuel production and refining industries (or ‘oil and gas industries’).
Limitations: There are different ways to identify communities with the strongest connection to carbon intensive industries. The method used here is just one approach, and other methods may result in different communities being identified. This indicator is a subjective measure of the respondents’ current perception of how well their household is currently managing financially overall. The perception of what constitutes “managing well” will vary between respondents. Therefore this indicator cannot provide an objective measure of the actual financial circumstances of households. Moreover, this indicator does not provide a direct measure of the influence of the net zero transition on the respondents’ perception of their household’s financial situation, which will be influenced by many other factors unrelated to the transition.
3: Jobs, Skills and Economic Opportunities
Ensure a managed decline of high carbon sectors while capturing the economic opportunity of net zero, including through quality jobs in a decarbonised economy.
Indicator 3.1 (Access to training for offshore oil and gas workers)
Indicator: Number of recipients of the Oil and Gas Transition Training Fund (joint SG and UKG initiative)
Data source(s): Oil and Gas Transition Training Fund data (delivery of the Fund is currently via Skills Development Scotland)
Population(s): Offshore oil and gas, and associated supply chain workers interested in moving into clean/sustainable energy sectors (many of these workers being based in NE Scotland)
Ambition: Fund is sufficient to meet demand
Rationale: This indicator is intended to monitor uptake of training by workers in the offshore oil and gas sector wishing to reskill and upskill for careers in renewable and sustainable energy. The Oil and Gas Transition Training Fund offers financial help for workers in the Scottish oil and gas sector to upskill and reskill for careers in renewable and sustainable energy. Tracking the number of workers receiving funding for training will give an indication of the extent to which reskilling of the sector is taking place.
Limitations: It is challenging to set a specific ambition for this indicator as the number of people seeking funding will depend on the identified needs of specific individuals. Not all those currently working in the offshore oil and gas sector will want or require training. This indicator gives a measure of receipt of funding for training, but will not tell us whether that training enabled workers to go on to secure a high quality job in the renewable and sustainable energy sector. Work is underway to source data that could support monitoring of this outcome directly.
Indicator 3.2 (Green jobs)
Indicator: Employment (full-time equivalent) in low carbon and renewable energy economy in Scotland
Data source(s): Low Carbon and Renewable Energy Economy (LCREE) survey
Population(s): Scotland-wide
Ambition: Increasing over time
Rationale: This indicator is intended to measure the number of people in Scotland employed in jobs in green industries. The transition to net zero has the potential for significant employment creation in highly-skilled, well-paid green jobs that provide economic and social value across the country. Monitoring employment in the low carbon and renewable energy economy will give an indicator of the extent to which the transition is delivering new green jobs.
Limitations: This indicator tracks overall employment in the low carbon and renewable energy economy but does not provide any information on the quality of the employment, including whether the jobs support greater equality, diversity, security, and an effective voice for all workers. LCREE estimates are survey based and use a sample of businesses rather than the whole population, so are subject to measurable sampling uncertainty. Consequently, the indicator will only be able to track relatively large changes in the data. More info.
Indicator 3.3 (Impact of energy prices on small businesses)
Indicator: Proportion of small businesses in Scotland reporting the level of energy prices as an obstacle to the success of their business
Data source(s): Scotland Small Business Survey
Population(s): Micro, Small and Medium Businesses
Ambition: Decreasing over time
Rationale: This indicator is intended to track the perceived effect of energy prices on the success of small businesses in Scotland. This indicator is updated annually and as part of a longitudinal study.
Limitations: This indicator only focusses on small businesses (with one to 249 employees). Changes in terms of sampling and in terms of the questionnaire means questions will not always be comparable from year to year. Smaller sample sizes for sub-groups may make comparisons difficult.
4: Environment and Biodiversity
Deliver the transition to net zero, doing our part to safeguard wellbeing for present and future generations of people and nature worldwide.
Indicator 4.1 (Air pollution)
Indicator: Emissions of the eight priority Air Quality pollutants (ammonia, carbon monoxide, nitrogen oxides, non-methane volatile organic compounds, particulate matter, sulphur dioxide and lead) for Scotland
Data source(s): National Atmospheric Emissions Inventory (NAEI)
Population(s): Scotland-wide, by industrial sector
Ambition: Decreasing over time
Rationale: Many of the actions taken to achieve net zero should directly improve air quality (such as, electrification of transport and home heating). In a small number of areas, there is a risk that, without mitigations, net zero interventions could have adverse impacts on air quality (such as declines in indoor air quality due to reduced ventilation of homes and offices). Tracking changes in emissions of priority pollutants will give an indication of whether the transition to net zero is having a positive impact on air quality.
Limitations: This indicator will give us an overall measure of air pollution in Scotland, from which a theoretical assumption will be made about the contribution of net zero activities. It cannot provide evidence of the direct impact of net zero policies on air quality. This indicator will track overall changes in air quality across Scotland, but it will not provide an assessment of the equality implications of changes in air quality in particular places. The indicator is based on data from a wide range of sources, from national energy statistics to individual industrial plants. However, for many emission sources of air pollutants, the data available for Scotland are less detailed than for the UK as a whole and, for some sources, country-level data are not available at all. The air pollutant inventories for Scotland are therefore derived by disaggregating UK emissions across the four UK countries and the unallocated region. As a result, any UK-wide uncertainty is compounded by further uncertainty introduced by the methods developed to split emissions on a source-activity scale.
Indicator 4.2 (Woodland creation)
Indicator: Hectares of woodland created per year
Data source(s): Forestry Statistics
Population(s): Scotland-wide
Ambition: Increasing over time
Rationale: Woodlands provide a wide range of ecosystem services and benefits for people and the economy, beyond carbon sequestration. These benefits tend to increase as the forest area expands. More trees in the landscape protect the environment and increase biodiversity, enhance air quality and provide flooding regulation.
Limitations: This indicator will track total creation of woodland across Scotland, which is a measure of nature restoration. However, it will not provide an assessment of the socioeconomic implications of the woodland creation or the degree of local community involvement in the process. It should therefore be considered alongside other just transition indicators, particularly 1.1 and 1.4.
Indicator 4.3 (Peatland restoration)
Indicator: Hectares of peatland restored per year
Data source(s): NatureScot Peatland ACTION data
Population(s): Scotland-wide
Ambition: Increasing by 10% each year to 2030, then maintaining
Rationale: In good condition, peatlands provide a wide range of ecosystem services and benefits. As well as storing carbon, they support unique communities of plants and animals; they help regulate water quantity and quality in our burns, rivers and lochs, thereby supporting fisheries, managing flood risks and reducing water treatment costs; being wet habitats, they help to reduce the risk of wildfires. Peatland restoration is therefore an indicator of progress in addressing both the climate and nature crises.
Limitations: This indicator will track total peatland restoration across Scotland, which is a measure of nature restoration. However, it will not provide an assessment of the socioeconomic implications of the woodland creation or the degree of local community involvement in the process. It should therefore be considered alongside other just transition indicators, particularly 1.1 and 1.4.
Analytical Annex
Overview
This annex provides an overview of the analytical material which has underpinned the development of the Climate Change Plan (CCP). The information is presented by sector, together with the relevant baseline scenarios and associated policy and proposal packages.
The content is prepared in accordance with the requirements of the Climate Change (Scotland) Act 2009, which provides that the CCP must set out:
- the contributions towards meeting the carbon budgets that should be made by each of the sectors and by each group of associated policies set out in the plan, and
- an estimate of the costs and benefits associated with the policies set out in the plan.
The analytical work has been carried out by analysts across the relevant areas of Scottish Government and agencies and has, in general, followed a bottom-up process whereby policies and proposals, or groupings of policies and proposals, have been assessed for their impact on emissions and costs and benefits. This bottom-up analysis has used various analytical models and estimation approaches appropriate to each context. The component estimates for each policy and proposal or group of policies and proposals have then been summed to give the sector and whole-plan totals. Each element of the analytical process has had its own quality assurance process located at the sector level.
Baseline
The CCP comprises a package of measures adopted or proposed by the Scottish Government to mitigate climate change, including policies already in force but under continuing Ministerial discretion. These are assessed against and in addition to a baseline position in which such policies are assumed to have not been enacted, and all policies are assessed on this basis. The baseline takes account of expected wider actions by the private sector and by the UK Government which, while outside the scope of the CCP, are expected to influence Scottish Emissions.
Policies and Proposals
The Climate Change (Scotland) Act 2009 distinguishes between ‘policies’ and ‘proposals’. Policies are where it is possible to clearly set out a specific action, scale, a lever of choice, an outcome and a timeline, and, thus, it is possible to set out clear delivery details and cost implications. Proposals are where it is possible to clearly set out an outcome and a timeline, and it is recognised action needs to take place, generally these will have impact later in the plan period, so, consequently, more concrete detail on the precise policy levers and cost implications is more difficult to present. Proposals are not costed owing to the absence of sufficient certainty, though their estimated emissions impact is recorded.
All estimates of emissions reductions in this document include impacts of both policies and proposals.
Policy Categorisation
To frame the different policies and proposals that are included in the Scottish Government’s policy package, this annex divides the policies in the CCP into three broad classifications:
- Key policies / proposals – These policies are direct drivers of emissions reductions or are the most significant actions that drive emissions reductions. These policies often have financial impacts and would result in emissions reductions regardless of other policies.
- Supporting policies / proposals – These policies are actions that help support key policies, and while some could drive emissions reductions themselves are more likely to make a key policy more efficient, cost effective or support the wider just transition implications of a policy. Enabling policies have financial impacts but any emissions impact is captured in the key policy they support.
- Narrative policies – Narrative policies are important policies that support long-term action but have not progressed to the point of having clear impact. These include things like ongoing work to influence the UKG in reserved areas that might influence Scottish emissions and research projects that are not yet in progress. Narrative policies are not included in this annex as they are not yet material in terms of financial or emissions impacts. If a policy that is specified in the main body of the CCP does not appear in this annex it is because it is a narrative policy and should be assumed to have no immediate impact.
Presentation of Financial Impacts
For each policy or group of associated policies this annex sets out:
1. Benefits – This is calculated as the additional benefits resulting from the group of policies over and above the expected baseline:
e.g. If an Electric Vehicle was £1,000 cheaper to run each year than the petrol or diesel equivalent then the expected benefit would be £1,000 per year of operation.
2. Net CCP Costs – This is calculated as the additional costs over and above the expected baseline as a consequence of the associated group of policies less the benefits resulting from that group of policies. If the benefits exceed the costs, the net Climate Change Plan cost figure will be shown as negative.
e.g. If an Electric Vehicle is expected to cost £10,000 to purchase but costs £1,000 less to operate over the period of analysis then this annex would show a net CCP cost of £9,000 (£10,000 - £1,000) and a Benefit of £1,000.
The annex presents these as totals for each carbon budget of the plan period. All financial values are in 2025 prices unless otherwise stated. As noted above, all financial values are for policies only.
Summary of Impacts
This section provides a summary of the details contained within this annex.
Through the period of the Climate Change Plan, Scotland is projected to decarbonise significantly under the planned pathway with emissions in the third carbon budget less than half those of the first. This decarbonisation is driven by actions across all sectors, but most significantly is driven by the decarbonisation of car and vans, the restoration of peatland, and the development of removals. Areas of residual emissions persist where decarbonisation is difficult or impossible, including Agriculture and LULUCF, but investment in technological and natural offsets provide opportunities to mitigate these emissions.
The table below shows the expected pathway of remaining emissions in each carbon budget period following the policies and proposals in the CCP.
| MtCO2e | 2026-2030 | 2031-2035 | 2036-2040 |
|---|---|---|---|
| Climate Change Plan emissions pathway | 166.8 | 121.8 | 76.5 |
| Scottish Carbon Budget levels | 174.6 | 125.8 | 81.2 |
The Scottish Government’s Climate Change Plan substantially reduces emissions between 2026 and 2040 and is projected to meet each carbon budget and put Scotland firmly on the path to net zero by 2045.
Over the course of the CCP, emissions are projected to decline across all sectors. The table below shows the breakdown of the emissions pathway by sector.
| MtCO2e | 2026-2030 | 2031-2035 | 2036-2040 |
|---|---|---|---|
| Residential and Public Buildings | 28.7 | 26.4 | 16.7 |
| Transport | 55.4 | 38.6 | 24.6 |
| Waste Management | 5.9 | 4.3 | 3.4 |
| Energy Supply | 9.9 | 2.3 | -0.1 |
| Business and Industrial Process | 27.6 | 20.6 | 14.0 |
| NETs | -0.2 | -3.0 | -12.2 |
| Agriculture | 35.9 | 33.5 | 30.0 |
| LULUCF | 3.6 | -1.1 | 0.0 |
| Total | 166.8 | 121.8 | 76.5 |
Note: Totals may not sum due to rounding
The overall estimates of net CCP costs and benefits are presented below, showing the total direct financial estimates resulting from policies. This shows the CCP costs are most significant in the initial years where there are more policy related costs and fewer benefits. In later periods there are more proposals, which are not costed given the significant uncertainties, and more significant benefits from the policies.
| £2025 million | 2026-2030 | 2031-2035 | 2036-2040 |
|---|---|---|---|
| Benefits | 9,781 | 15,212 | 17,311 |
| Net CCP Costs | 6,106 | 1,104 | -2,373 |
Note: negative net CCP cost figures indicate that the estimated benefits exceed the costs. Totals may not sum due to rounding
| £2025 million | 2026-2030 | 2031-2035 | 2036-2040 |
|---|---|---|---|
| Residential and Public Buildings | 86 | 122 | 154 |
| Transport | 4,334 | 9,368 | 12,733 |
| Waste Management | 1,315 | 1,549 | 236 |
| Energy Supply | 0 | 0 | 0 |
| Business and Industrial Process (inc NETs) | 41 | 41 | 41 |
| Agriculture | 3,200 | 3,200 | 3,200 |
| LULUCF | 805 | 933 | 947 |
| Total | 9,781 | 15,212 | 17,311 |
| £2025 million | 2026-2030 | 2031-2035 | 2036-2040 |
|---|---|---|---|
| Residential and Public Buildings | 1,640 | 434 | 490 |
| Transport | 3,343 | -2,131 | -6,901 |
| Waste Management | -90 | -403 | -137 |
| Energy Supply | 0 | 0 | 0 |
| Business and Industrial Process (inc NETs) | 1,234 | 3,125 | 4,104 |
| Agriculture | 30 | 30 | 30 |
| LULUCF | -51 | 49 | 41 |
| Total | 6,106 | 1,104 | -2,373 |
Note: Totals may not sum due to rounding
Note: negative net CCP cost figures indicate that the estimated benefits exceed the costs. Totals may not sum due to rounding
Buildings (Residential and Public)
Summary of Residential and Public Buildings Pathway
The Residential and Public Buildings sector decarbonises by around 60% between 2025 and 2040 under the CCP pathway. The primary driver of emissions reductions is the transition from fossil fuels to clean heat sources in residential buildings. Additionally, substantial reductions are achieved through the installation of clean heating systems in public buildings over the period. The table below shows the estimated emissions arising for the CCP pathway of the Residential and Public Buildings sector for each carbon budget. The table following shows the pathway broken down by the component subsectors.
| MtCO2e | 2026-2030 | 2031-2035 | 2036-2040 |
|---|---|---|---|
| Residential and Public Buildings sector emissions pathway | 28.7 | 26.4 | 16.7 |
| Residential and Public Buildings baseline emissions | 29.2 | 28.8 | 28.6 |
| Residential and Public Buildings total policy reductions | 0.4 | 2.4 | 11.9 |
Summary of Emissions Sources
Emissions from Residential and Public Buildings sector are primarily as a result of the use of polluting heating systems such as natural gas, oil or other fossil fuel boilers. There are currently around 2.2 million residential properties in Scotland using a polluting heating system, and around 300,000 properties using a clean heating system.[231] Of those using polluting heating systems, around 92% use mains gas, 6% use oil, and the rest use LPG or solid fuel. Emissions reductions in the pathway are primarily achieved by transitioning to clean heating systems such as heat pumps, electric resistive heating or heat networks.
| MtCO2e | 2026-2030 | 2031-2035 | 2036-2040 |
|---|---|---|---|
| Residential | 24.3 | 22.2 | 13.8 |
| Public | 4.5 | 4.2 | 2.9 |
| Total | 28.7 | 26.4 | 16.7 |
Summary of costs and benefits
An assessment has been undertaken of the financial costs and benefits associated with the CCP policies to reduce emissions in the Residential and Public Buildings sector. Cost estimates for CB1 reflect the additional investment required to transition from fossil fuel heating systems to clean heat alternatives to support the delivery of the clean heat target, including improvements to energy efficiency. Costs in later carbon budgets are associated with the development of heat networks, the introduction of minimum energy efficiency standards, and Energy Performance Certificate (EPC) reform. Quantified benefits primarily relate to energy savings resulting from improved energy efficiency, as well as the wider benefits linked to increased uptake of EPCs driven by reform. A summary of these impacts is presented in the table below.
| £2025 million | 2026-2030 | 2031-2035 | 2036-2040 |
|---|---|---|---|
| Total benefits | 86 | 122 | 154 |
| Net CCP costs | 1,640 | 434 | 490 |
Residential and Public Buildings Baseline Emissions
| MtCO2e | 2026-2030 | 2031-2035 | 2036-2040 |
|---|---|---|---|
| Baseline emissions | 29.2 | 28.8 | 28.6 |
The current baseline for Residential and Public Buildings assumes that there is no significant decarbonisation absent further policy action. The small reduction reflects the impact of F-gas regulations on the baseline and a reduction in heating demand over time due to a warming climate.
The baseline assumes no increase in emissions from new buildings due to the New Build Heat Standard, which mandates the use of clean heating systems instead of oil and gas boilers. It also assumes that reductions mainly as a result of high energy prices in recent years are maintained. In the absence of additional measures, it is assumed that there is insufficient incentive to drive large-scale adoption of clean heating systems, which typically involve higher upfront capital costs compared to replacing existing systems.
Analytical Methodology for Baseline
The baseline was estimated through a continuation of the emissions levels for the sector reported in 2023. A minor adjustment was made to reflect the impact of GB-wide F-gas regulations on the baseline, by applying the anticipated percentage reductions from these regulations to the sector’s existing F-gas emissions. The impact of rising temperatures on heating emissions is estimated by modelling the relationship between average temperature and heating demand, then applying this to Met Office projected climate trends. The baseline is subject to considerable uncertainty, driven by factors that are difficult to predict, such as temperature variability, future energy prices, UKG policy decisions, and the future availability and cost of emerging technologies.
Policy Assessment
Residential Buildings
Residential building emissions are primarily from the use of heating systems in domestic building. These are reduced through either swapping to lower emissions heating systems or through efficiency improvements in the way buildings are heated. There are a number of small emissions resulting from the use of cooking, composting, and household machinery.
Residential and Public Buildings Policy Package 1 – Residential Decarbonisation
Key Policies
- Heat in Buildings – Clean Heat Target – Residential
- New heat network proposals
Supporting Policies
- Financial support for energy efficiency
- Minimum energy efficiency standards
- Minimum energy efficiency standards for the Private Rented Sector (PRS)
- Social Housing Net Zero Standard
- Energy Performance Certificate Reform
- Delivery schemes, including:
- Home Energy Scotland (HES) Advice Service
- HES Grant and Loan
- Area Based Schemes
- Warmer Homes Scotland
- PRS Loan
- Social Housing Net Zero Heat Fund
- Heat Networks Support Unit
- Scotland’s Heat Network Fund
- Future finance
- Local Heat and Energy Efficiency Strategies
- Community And Renewable Energy Scheme
| MtCO2e | 2026-2030 | 2031-2035 | 2036-2040 |
|---|---|---|---|
| Emissions reductions | 0.4 | 2.1 | 10.3 |
Residential heating policy is framed by the clean heat target to decarbonise buildings by 2045, which is supported by a series of grants, loans and support services to incentivise direct transition away from fossil fuel heating to heat pumps and other clean heat sources.
| £2025 million | 2026-2030 | 2031-2035 | 2036-2040 |
|---|---|---|---|
| Total benefits | 86 | 122 | 154 |
| Net CCP costs | 1,509 | 154 | 199 |
Costs associated with the delivery of the clean heat target are included in CB1 where there is greater certainty on action required. For subsequent carbon budgets the policy levers will be determined based on the outcome of existing SG policy, technologies and UKG policy decisions. As such they are not costed, given their proposal status. Costs associated with heat network provisions are included for CB1, CB2 and CB3.
Costs associated with minimum energy efficiency standards for the PRS, Social Housing Net Zero Standard and Energy Performance Certificate Reform are included in CB2 and CB3 due to their status as policies rather than proposals.
Residential Cost Summary
The current Residential CCP policy package is expected to have an additional cost of around £1.8 billion from 2026 to 2040, noting that delivery of the target is only costed to 2030 given the need for greater certainty based on outcome of existing SG policy, technology development and UKG policy decisions. The cost estimates presented reflect the additional cost required to transition from fossil fuel heating systems to clean heating alternatives, along with the supporting infrastructure necessary to enable this and improvements to energy efficiency. It is assumed that a substantial portion of these costs will be borne by the Scottish Government, with the remainder falling to Consumers. Businesses and Local Authorities that lease properties will also face costs as they decarbonise their buildings.
Residential Benefit Summary
We have quantified only the benefits associated with financial support for energy efficiency, EPC reform, minimum energy efficiency standards for the PRS and the Social Housing Net Zero Standard. The remaining policies are assumed not to have substantive benefits above and beyond their support for the key emissions reduction objectives
Average residential unit electricity prices are currently around four times the level of gas unit costs.[232] While heat pumps can be around three times more efficient than traditional gas boilers, this is currently offset by the electricity-to-gas price ratio, making it unlikely that households will experience reduced running costs from switching to heat pumps under current energy prices.[233]
There is potential for reduced running costs in the future if electricity prices decline relative to gas (e.g. if the UK Government were to use its reserved powers to reduce electricity prices). However, this potential benefit has not been quantified due to difficulties with predicting future energy prices which are influenced by a wide range of unpredictable factors, such as geopolitics, UKG policy decisions and future energy demand.
Non-Quantified Benefits
The deployment of clean heat and energy efficiency may provide health benefits through improvements to thermal comfort. Furthermore, switching away from polluting heating systems may have additional benefits in terms of reducing pollution and improving air quality.
Public Buildings
Residential and Public Buildings Package 2 – Public Buildings Decarbonisation
Key Policies
- Heat in Buildings – Clean Heat Target – Public
- New heat network proposals
Supporting Policies
- Green Public Sector Estate Decarbonisation Scheme
- Energy Performance Certificate Reform
- Heat Networks Support Unit
- Scotland’s Heat Network Fund
- Local Heat and Energy Efficiency Strategies
| MtCO2e | 2026-2030 | 2031-2035 | 2036-2040 |
|---|---|---|---|
| Emissions reductions | 0.05 | 0.3 | 1.6 |
Public buildings policy is primarily driven by the target to decarbonise buildings by 2045, with support to incentivise transition to clean heat.
Financial Impact Summary
| £2025 million | 2026-2030 | 2031-2035 | 2036-2040 |
|---|---|---|---|
| Total benefits | - | - | - |
| Net CCP costs | 132 | 280 | 291 |
Costs associated with the delivery of the clean heat target are included in CB1 where there is greater certainty on action required. For subsequent carbon budgets the policy levers will be determined based on the outcome of existing SG policy, technologies and UKG policy decisions. As such they are not costed, given their proposal status. Costs associated with heat network provisions are included for CB1, CB2 and CB3.
Public Buildings Cost Summary
The current Public Buildings Decarbonisation CCP policy package is expected to have an additional cost of around £702 million from 2026 to 2040, noting that delivery of the target is only costed to 2030 given the need for greater certainty based on outcome of existing SG policy, technology development and UKG policy decisions. The cost estimates reflect the additional cost required to transition from fossil fuel heating systems to clean heating alternatives, along with the supporting infrastructure necessary to enable this. It is assumed that the majority of these costs will be borne by the Scottish Government, with significant costs also falling on local authorities.
Public Buildings Benefits Summary
Benefits associated with decarbonising public buildings are not quantified in the Plan period.
Average non-domestic electricity prices per unit are currently around 4.6 times the level of gas prices per unit.[234] While heat pumps can be around three times more efficient than traditional gas boilers, this efficiency advantage is currently offset by the electricity-to-gas price ratio, making it unlikely that public buildings will experience reduced running costs from switching to heat pumps under current energy prices.[235]
There is potential for reduced running costs in the future if electricity prices decline relative to gas. However, this potential benefit has not been quantified due to difficulties with predicting future energy prices which are influenced by a wide range of unpredictable factors, such as geopolitics, UKG policy decisions and future energy demand.
Transport
Summary of Transport pathway
The Transport sector decarbonises by around 68% between 2025 and 2040 under the CCP pathway, mainly driven by the electrification of cars, vans and trucks. By 2040, the largest remaining sources of emissions are expected to be aviation (1.8 MtCO2e) and shipping (1.0 MtCO2e). While these sectors are expected to undergo some decarbonisation over time, the outlook for emissions from aviation and shipping is heavily dependent on future transport demand and the pace of technology rollout for lower carbon solutions. A summary of the Transport emissions pathway for the CCP is shown in the table below with the breakdown of that pathway into sub sectors shown in the table following.
| MtCO2e | 2026-2030 | 2031-2035 | 2036-2040 |
|---|---|---|---|
| Transport Sector Emissions Pathway | 55.4 | 38.6 | 24.6 |
| Transport Baseline Emissions | 62.9 | 56.4 | 48.4 |
| Transport Total Policy reductions | 7.5 | 17.8 | 23.8 |
Summary of Transport emissions sources
In 2023, road transport (cars, vans, trucks and bus) was responsible for the majority (68%) of total Scottish transport greenhouse gas emissions, with aviation (15%), shipping (14%) and others (3%) making up the remainder.
Between 2025 and 2035, road transport is expected to significantly decarbonise (a reduction of 64%). In particular, emissions generated by cars, vans and HGVs will gradually decline as policies designed to replace Internal Combustion Engine (ICE) vehicles with Zero Emission Vehicles (ZEVs) take effect. Policies to incentivise modal shift away from private car to sustainable modes of transport and freight from road to rail and water will also play a supporting but lesser role in reducing road transport emissions in Scotland. Aviation will experience little decarbonisation as gradual uptake of sustainable aviation fuel (SAF), aircraft efficiency improvements and contributions from Emissions Trading Schemes (UKETS/CORSIA) are expected to be offset by potential demand growth for air travel at Scottish airports. The decline in shipping emissions is mostly tied to the outlook for shipping activity which is expected to decline alongside reductions in oil and gas activity in the North Sea, and the potential impact from International Maritime Organisation (IMO) policies relating to carbon pricing.
As a result, by 2035, road transport is estimated to be responsible for less than half of total Scottish transport emissions (47%), followed by Aviation (29%) and Shipping (20%). A small share of emissions (4%) is made up of other sources, such as rail.
In 2040, emissions from aviation are projected to be the single largest contributor (44%) to total Scottish transport emissions. Road transport will have experienced significant decarbonisation – representing only 28% of Scotland’s transport emissions. Emissions resulting from shipping movements will have fallen further, accounting for 24% of total Scottish transport emissions.
| Mode | 2026-2030 | 2031-2035 | 2036-2040 |
|---|---|---|---|
| Car | 19.4 | 10.4 | 4.3 |
| LGV | 8.4 | 4.6 | 2.0 |
| HGV | 6.4 | 4.8 | 2.3 |
| Bus | 1.2 | 0.9 | 0.6 |
| Aviation | 10.2 | 9.8 | 9.4 |
| Shipping | 8.6 | 7.2 | 5.4 |
| Other | 1.2 | 1.0 | 0.8 |
| Total | 55.4 | 38.6 | 24.6 |
Summary of costs and benefits
Total financial benefit of the transport package across the planned period is in excess of £26 billion, taking account of the operating and maintenance costs savings associated with electric cars and vans compared with petrol and diesel vehicle equivalents; economic benefit from free bus travel for young people aged 22 and below and older and disabled persons; and reduced operating and maintenance costs of zero-emission trucks relative to those powered by diesel.
| £2025 million | 2026-2030 | 2031-2035 | 2036-2040 |
|---|---|---|---|
| Total Benefits | 4,334 | 9,368 | 12,733 |
| Net CCP Costs | 3,343 | -2,131 | -6,901 |
Transport Baseline Emissions
| MtCO2e | 2026-30 | 2031-35 | 2036-40 |
|---|---|---|---|
| Emissions | 62.9 | 56.4 | 48.4 |
In the absence of policy action, transport emissions are expected to follow a gradual decline over time. The baseline takes account of several inputs including transport demand forecasts.
For cars, vans, trucks and buses, some car demand decarbonisation is expected over time as newer more efficient vehicles replace older vehicles, and uptake of electric vehicles (for cars, vans and buses) continues as it has done in recent years. These savings are to some extent offset by forecast increases in demand for road transport.
For shipping, the baseline assumes a gradual decrease in emissions due to expected changes in vessel movements. The decline in shipping emissions is mostly tied to the outlook for shipping activity, which is expected to decline alongside reductions in oil and gas activity in the North Sea in the coming decades.
For aviation, the emissions baseline is relatively flat over the period to 2040. There are some improvements expected from newer more efficient aircraft, from the gradual introduction of Sustainable Aviation Fuel (SAF) and from emissions trading schemes, however these improvements are mostly offset by expectations around growth in demand for air travel.
Analytical methodology for baseline
The baseline emissions trajectory estimates the expected emissions outlook for the transport sector in the absence of the policy actions set out in the Climate Change Plan.
For each transport mode, a forecast of future demand (such as number of car miles driven; or passenger-km travelled by aeroplane) is taken together with assumptions around consumer choice, technological progress, fleet replacement, and the impact of any other relevant policies (such as UK Government or International policies that apply to Scotland), to make an assessment of the baseline emissions trajectory.
For example, in the case of vans, future demand is estimated using the Transport Model for Scotland. An assumption is made around the rate of Electric Vehicle uptake based on historical uptake, noting that this is likely to be lower than the rate of uptake compared to ‘with policy’, which is combined with forecasts of fuel efficiency of new ICE vehicles and fleet replacement rates to form an emissions baseline.
The baseline approach draws upon the evidence and analysis developed for Transport Scotland[236] and the Scottish Government.[237]
Policy Assessment
Road transport
The CCP transport policy packages are described in more detail below.
Transport Package 1- Measures to encourage uptake of Electric Vehicles (EVs) for cars and vans package
Key policies
- Vehicle Emissions Trading Scheme (VETS) & ZEV mandate
- Electric Vehicle Infrastructure Fund (public EV Chargepoint network)
- Consumer incentives
Supporting policies
- Investment in the skills to support the EV transition (such as in servicing and maintenance of EVs, and charging infrastructure installation and maintenance)
- Additional support to enable the more rapid rollout of critical EV charging infrastructure including public EV charging in Rural communities and cross pavement charging at domestic properties.
- Action plan for the decarbonisation of the Public Sector fleet
| MtCO2e | 2026-30 | 2031-35 | 2036-40 |
|---|---|---|---|
| Measures to encourage EV take up | 4.8 | 13.8 | 17.7 |
Summary of pathway for policy and proposals to encourage uptake of EVs
The decarbonisation of cars and vans is expected to occur through electrification, as policies designed to encourage the uptake of EVs gradually increase the share of zero-emission vehicles on the road, and polluting ICE vehicles are removed. The pathway is delivered through three key interlinked policies:
- The VETS legislation & ZEV mandate, which set targets on vehicle manufacturers for the emissions of new polluting vehicles and for the share of new vehicles sold that must be zero-emission. The ZEV mandate sets a gradually increasing target for new zero emission vehicles sales, reaching 80% of new cars and 70% of new vans by 2030, and 100% of new cars and vans by 2035.
- Incentives to support consumers and businesses to make the transition to EVs, making use of public funding to crowd in private investment.
- Expansion of the public EV charging network
Taken together with advice provided by the Committee on Climate Change around consumer choice and future EV uptake, this package of measures is expected to lead to increases in EV car and van sales.
The emissions pathway is aligned with the Climate Change Committee’s outlook for Scotland – which finds that EV uptake outstrips the ZEV mandate for cars (from 2026) and vans (from 2028). This expectation is driven by consumer choice and preference, built on an expectation that the price of EVs reach parity with new petrol/diesel cars and vans between 2026 and 2028. In order for EV uptake to outstrip the mandate, vehicle supply and charging infrastructure will also need to keep pace with vehicle demand.
| £2025 millions | 2026-2030 | 2031-2035 | 2036-2040 |
|---|---|---|---|
| Total Benefits | 1,196 | 5,420 | 8,544 |
| Net CCP Costs | 1,626 | -3,802 | -8,425 |
During the decarbonisation period spanning the next 15 to 20 years, large sums of investment will be required to support policies in place to achieve the pathway. These policies are expected to generate a range of benefits at an individual and societal level. The main financial benefit will be reduced operating costs from running electric vehicles, and reduced capital costs for the purchase of new vehicles as the prices of EVs falls below that of ICE vehicles. Wider benefits such as improved air quality and support for jobs in the maintenance of EVs and associated infrastructure are also expected.
Central costs and benefit estimates are presented in the table above. There is considerable uncertainty in these estimates due to uncertainty around future vehicle and energy prices.
The costs for this policy pathway are shared across Scottish Government (to deliver the policies outlined above), local government (to deliver local schemes and replace vehicles in their fleets), industry (to meet the supply of EVs required to deliver the pathway) and consumers (to purchase the EVs).
The main financial benefits of this policy package arise in the form of lower operating and maintenance costs of electric vehicles compared to conventional petrol and diesel vehicles. The main groups realising these benefits will be consumers and businesses who operate cars and vans.
In the first carbon budget period, the costs of investing in vehicles and in infrastructure is expected to outweigh the benefits of the transition to EVs, leading to a net cost of around £1.6bn. However, over the second and third carbon budget, the substantial operating and maintenance cost savings of EVs mean that the benefits of the transition are expected to significantly outweigh the additional costs. Net benefits over 2031-35 are estimated at £3.8bn, and in 2036-40 are estimated at £8.4bn.
Analytical methodology of impact pathway
The emissions reduction from the policy package is derived by modelling the change in vehicle fleet over time as more EVs are sold in Scotland. Expectations around consumer choice are combined with the expected outcomes of the ZEV mandate to inform the expected rate of EV uptake. This is combined with forecast demand for cars and vans and assumptions around the rate of fleet replacement to produce the emissions pathway. The policy pathway for car and van decarbonisation is aligned with the Balanced Pathway in the advice presented by the Climate Change Committee.[238]
Cost summary
Central costs estimates are presented in the table above. There is considerable uncertainty in some costs of the policy pathway as outlined below. The costs for this policy pathway are shared across Scottish Government (to deliver the policies outlined above), local government (to deliver local schemes and replace vehicles in their fleets), industry (to meet the supply of EVs required to deliver the pathway) and consumers (to purchase the EVs). Over the period to 2040, the net cost to consumers is expected to be negative as the price of new EVs falls below that of ICE vehicles.
Benefit summary
Central monetised benefits estimates are presented in the table above. There is considerable uncertainty in some benefits of the policy pathway as outlined below. The main financial benefits of this policy package arise in the form of lower operating and maintenance costs of electric vehicles compared to conventional petrol and diesel vehicles. The main groups realising these benefits will be consumers and businesses who operate cars and vans.
Package 2: Measures to encourage modal shift from car to active and public transport
Key policy
- Successor policy for car use reduction
Supporting policies
- Providing free bus travel for those aged under 22 and older and disabled persons through the National Concessionary Travel Schemes
- Work with LAs and RTPs to provide research, advice and guidance on reducing car use
- Multi-year funding for the development of bus infrastructure (Bus Infrastructure Fund) and development of Trunk Road bus priority
- Development of smart and integrated ticketing, digital enhancements to journey planning and improvements to the National Concessionary Travel Schemes
- Investment in active and sustainable travel programmes
- Promotion of car and bike share schemes; Mobility as a Service; demand responsive transport; and multi-modal mobility hubs
| MtCO2e | 2026-2030 | 2031-2035 | 2036-2040 |
|---|---|---|---|
| Measures to encourage mode shift from car to active and public transport | 0.8 | 0.9 | 0.9 |
| £2025 millions | 2026-2030 | 2031-2035 | 2036-2040 |
|---|---|---|---|
| Total benefits | 3,067 | 3,540 | 3,330 |
| Net CCP costs | 831 | 98 | -30 |
The main financial costs of this policy package relate to concessionary travel scheme costs and delivery of infrastructure for active and public transport, and potential costs of local car use reduction schemes. Given that the bulk of the costs relate to policies that have objectives that are wider than climate change, such as improving health and wellbeing, and providing access to education and employment for example, these costs should not be considered as fully contributing towards the delivery of the CCP. While the policies have a supporting role to play in delivering climate change ambitions, the costs and benefits here should be seen as additional to the core CCP policy package given the wider objectives of the bulk of policy spend in this package.
The benefits of this policy package mostly relate to the economic transfer to individuals generated by the concessionary travel schemes and potential revenues generated by local schemes. Again, these benefits mostly relate to policies that have objectives wider than climate change, so should not be thought of as directly resulting from the CCP. However, these policies do contribute and are relied upon to deliver emissions reduction over the CCP period, hence their inclusion in the CCP.
Analytical methodology of policy package
The analytical approach to this policy package estimates the combined impact that the suite of policies could have on future car demand. It estimates the potential role that improvements to for example, cycling infrastructure could have on reducing the demand for car trips. While there is limited evidence for some of these types of interventions, it is expected that they could reduce car demand in 2030 by around 2.5% below what it otherwise would be without these incentives. This draws on the analysis published by the Scottish Government.[239]
Cost summary
The costs associated with this policy pathway fall to local and central government to fund the delivery of these policies.
There are significant costs to providing free bus travel to young people aged 5 to 21 years-old, those aged 60 or above and disabled people, and delivering infrastructure for active and sustainable travel. However, these policies and programmes are not solely for the purpose of delivering climate change commitments and have far wider objectives such as improving health and wellbeing; improving air quality; increasing social and economic opportunities and reducing financial barriers to accessing vital services. Therefore, the costs associated with this policy package cannot be fully attributed to climate change objectives. It is not possible to estimate a share of these policy costs that contribute to climate change objectives, as without delivery of the policies in full with their associated costs, the full benefit of emissions savings would not be realised.
Benefits summary
The main financial benefits arise in the form of the economic transfer to individuals as a result of free bus travel to under 22s and older and disabled people, as well as potential revenues flowing to local government as a result of the implementation of local schemes. There are significant wider benefits of these policies, including improved health and wellbeing, improved access to services and employment, and the wider benefits of reduced congestion. Again, most of these benefits cannot be wholly attributed to the CCP, however because these policies contribute towards emissions reduction, they are included here for completeness.
Package 3: Measures to reduce emissions from Heavy Duty Vehicles
Key policies
- Investment in the replacement of vehicles and deployment of charging infrastructure
- Energy market reform to support decarbonising transport including HGVs
- Support skills development and aspect of economic development to support just transition.
- Grant support for modal shift of freight from road to rail or water
- Consideration and implementation of regulatory measures to encourage and ensure transition to zero-emission vehicles
Supporting policies
- Measures required to end the sale of fossil fuel powered trucks in 2035
- Support for the decarbonisation of drs Transport (Plugged-in Communities)
- Investments to enable more freight to be moved by rail
- Government support for bus decarbonisation
| MtCO2e | 2026-30 | 2031-35 | 2036-40 |
|---|---|---|---|
| Measures to reduce emissions from HDVs | 1.8 | 2.8 | 4.9 |
Summary of policy pathway for measures to reduce emissions from Heavy Duty Vehicles
Truck decarbonisation is expected to be achieved via the transition to zero emission vehicles. This transition is supported by three interlinked policies which aim to encourage the uptake of zero-emission HGVs, alongside developing the required charging infrastructure and providing the skills required to support a just transition to a zero-emission market.
The emissions pathway for the policy package follows the advice presented in the Climate Change Committee’s Balanced Pathway for HGVs, which is reliant on rapid uptake of zero emission trucks beginning from the late 2020s. To achieve the level of uptake needed to deliver the emission reductions set out by the CCC, financial incentives are required to support the up-front costs of more expensive vehicles and encourage the industry to invest in zero-emission trucks, alongside significant investment in charging infrastructure especially as Scotland faces additional challenges with longer average journey distances and more remote locations.
Further interventions to reduce emissions from the movement of freight, including grants for modal shift from road to rail or water, are also required.
| £2025 millions | 2026-2030 | 2031-2035 | 2036-2040 |
|---|---|---|---|
| Total benefits | 71 | 407 | 890 |
| Net CCP costs | 883 | 1,573 | 1,554 |
Unlike cars where the cost of EV cars falls below petrol and diesel powered equivalents, it is assumed the upfront capital cost of zero-emission HGVs will remain greater than ICE equivalents over the plan period. Costs estimates reflect an estimated £5 billion to £9.5 billion additional investment above the baseline scenario of replacing the fleet with new diesel vehicles spanning from 2025 to 2050. These costs are indicative based on an assumed 10% Scotland share (representative of an approximate Scotland population share of the UK) of the estimated £50 billion to £100 billion required at a UK-level to transition to zero-emission HGVs. Costs could be greater if, for example, road lengths are used to apportion costs to Scotland - around 15% of the UK’s roads are in Scotland, meaning costs may be £7.5 billion to £15 billion. This may be more appropriate given Scotland’s significantly higher portion of landmass that is rural. Applying Scotland’s share of road freight lifted (12% of the UK’s road freight is lifted in Scotland) would suggest a cost range from £6 billion to £12 billion.
The main direct benefits of the policy pathway are expected to come in the form of reduced operating and maintenance costs of zero-emission vehicles compared to diesel vehicles. Monetised benefits are indicative and intended to give an idea of the scale and direction of benefits.
Analytical methodology of policy pathway
The policy pathway for HGV decarbonisation is aligned with the Balanced Pathway in the advice presented by the Climate Change Committee to the Scottish Government. The analytical methodology involves modelling the change in vehicle fleet over time as more zero-emission HGVs are sold in Scotland. Expectations around fleet turnover, investment costs and operating costs are combined with forecast demand to produce the emissions pathway of the HGV segment.
Cost summary
Analysis published by the Green Finance Institute[240] estimates that the additional cost of decarbonising HGVs in the UK via zero-emission vehicles and building the supporting infrastructure may cost £50 billion to £100 billion between 2025 and 2050. A Scottish share of this is estimated to be in the region of £5 billion to £10 billion or more, of which the vast majority of the investment is assumed to be made by the private sector.
Analytical methodology
Cost estimates are indicative based on an assumed 10% Scotland share (representative of an approximate Scotland population share of the UK) of the estimated £50 billion to £100 billion required at a UK-level to transition to zero-emission HGVs. Costs could be greater if, for example, road lengths are used to apportion costs to Scotland - around 15% of the UK’s roads are in Scotland, meaning costs may be £7.5 billion to £15 billion. This may be more appropriate given Scotland’s significantly higher portion of landmass that is rural. Applying Scotland’s share of road freight lifted (12% of the UK’s road freight is lifted in Scotland) would suggest a cost range from £6 billion to £12 billion.
Costs for the replacement of public sector vehicles have been collated through survey work with public sector bodies.
Benefits summary
Most of the direct benefits of the policy pathway will accrue to industry who own and operate the majority of HGVs. The main benefits are expected to come in the form of reduced operating and maintenance costs of zero-emission vehicles compared to diesel vehicles.
Analytical methodology
Monetised benefits are indicative and intended to give an idea of the scale and direction of benefits. The net benefits to business considers the saving in operating costs compared to the baseline level of EV uptake without policy intervention.
Aviation
Transport policy Package 4: Key policies to reduce emissions from Aviation
Key policy
- Sustainable Aviation Fuel (SAF) and Project Willow
Supporting policies
- World’s first zero emission aviation region with Highlands and Islands Airports Limited (HIAL)
- Air Departure Tax
| MtCO2e | 2026-30 | 2031-35 | 2036-40 |
|---|---|---|---|
| Measures to decarbonise the aviation sector | 0.0 | 0.0 | 0.0 |
Summary of policy pathway for measures to reduce emissions from aviation
The Scottish policy package for aviation is expected to deliver limited emissions reductions in the overall scheme of aviation emissions, as its focus is on decarbonising flights within Scotland, which make up a small share of aviation emissions. Emissions reduction will be reliant on wider UK and international policies, however, such as the Sustainable Aviation Fuel (SAF) mandate, delivery of the UK Government’s Jet Zero strategy, and the impacts of airspace change and emissions trading schemes. Because these policies are not owned by the Scottish Government, their impact is captured in the emissions baseline for aviation.
Reducing aviation emissions in Scotland will be contingent on the supply and use of SAF, as well as efforts to produce low and zero-emission aircraft such as hydrogen and electric powered aircraft that can replace existing jet fuelled powered aircraft on commercial routes. Technological advancements that drive aircraft efficiency improvements, for example enhanced aerodynamics, can also help contribute to efforts to reduce aviation-related emissions in Scotland. Despite this, potential growth at Scottish airport and new long-haul routes may partially counteract efforts to reduce emissions generated by aircraft in Scotland over the short and medium term.
| £ millions | 2026-2030 | 2031-2035 | 2036-2040 |
|---|---|---|---|
| Total benefits | 0 | 0 | 0 |
| Net CCP costs | 2 | 0 | 0 |
Significant costs are expected in the process of manufacturing and purchasing SAF, developing new aviation technologies, and the development, testing and introduction of zero emission aircraft, for example. In their advice to Scotland, the Climate Change Committee have estimated the additional capital and operating expenditure associated with the Balanced Pathway for the Aviation sector in Scotland to be more than £3.5 billion between 2025 and 2045. This takes account of deployment of SAF, technological advancements to improve aircraft efficiency, production of low and zero-emission aircraft and engineered removals of residual emissions generated by aeroplanes. Although some of the assumptions underpinning the Scottish Government’s pathway differs to that of the CCC, it provides a sense of the costs involved in decarbonising the sector. These are not, however, as a result of Scottish Government policy in this area, and are therefore not considered as an additional cost resulting from the delivery of the CCP. The costs are expected to be incurred as in response to wider UK and international policy to decarbonise aviation.
Potential monetised benefits as a result of measures taken to decarbonise the aviation industry mainly arise in the form of carbon emission reductions, alongside potential job creation and contributions to economic growth. Again, these impacts are not attributable to the Scottish Government policies
Analytical methodology of policy pathway
The package of Scottish Government policies, which relate to flights within Scotland and the introduction of Air Departure Tax, have not identified significant quantifiable emissions savings at this stage. The baseline emissions pathways for aviation takes into account expected improvements in aircraft efficiency, the introduction of Sustainable Aviation Fuels, contributions from Emissions Trading Schemes (UK ETS/CORSIA), and forecast demand. These pathways take a balanced view of the evidence presented in the UK Jet Zero scenarios and CCC advice, with an adjusted demand forecast to account for potential growth at Scottish airports.
The pathway draws on the evidence presented in the UK Government’s Jet Zero modelling framework[241] and the advice provided by the Climate Change Committee to the Scottish Government.
There is no specific Scottish policy working to achieve this pathway, and therefore this pathway can be considered as an aviation baseline.
Cost summary
The cost of reducing emissions from aviation is expected primarily to be borne by the private sector, however there will be a small administration cost to Government related to developing Air Departure Tax (ADT) Significant costs are expected in the process of manufacturing and purchasing SAF, developing new aviation technologies, and the development, testing and introduction of zero emission aircraft, for example. There may be additional costs to consumers if the cost of these investments are passed on to passengers in the price of flying.
These are not, however, as a result of Scottish Government policy in this area, and are therefore not considered as an additional cost resulting from the delivery of the CCP. The costs are expected to be incurred as in response to wider UK and international policy to decarbonise aviation.
In their advice to Scotland, the Climate Change Committee have estimated the additional capital and operating expenditure associated with the Balanced Pathway for the Aviation sector in Scotland to be more than £3.5 billion between 2025 and 2045. This takes account of deployment of SAF, technological advancements to improve aircraft efficiency, production of low and zero-emission aircraft and engineered removals of residual emissions generated by aeroplanes. Although some of the assumptions underpinning the Scottish Government’s pathway differs to that of the CCC, it provides a sense of the costs involved in decarbonising the sector.
Analysis published by the Department for Transport[242] also estimated the total cost of introducing SAF at a UK-level ranges from £6.4 billion to £47.2 billion.
Benefits summary
Monetised benefits as a result of measures taken to decarbonise the aviation industry mainly arise in the form of carbon emission reductions and potential revenue streams to Government. The wider environment and economy may also benefit from decarbonisation through job creation and contributions to economic growth. Again, these impacts are not attributable to the Scottish Government policies
Shipping
| MtCO2e | 2026-30 | 2031-35 | 2036-40 |
|---|---|---|---|
| Measures to reduce emissions from shipping | 0.0 | 0.0 | 0.0 |
Summary of pathway for measures to reduce shipping emissions
Limited direct emissions savings are expected through Scotland’s actions relating to ferries and shipping. The emissions pathway for shipping mainly reflects the baseline of expected decline in shipping movements, tied to forecast reductions in oil and gas activity in the North Sea. Embedded into the baseline pathway is also the potential impact from International Maritime Organisation (IMO) policies relating to carbon pricing.
| £2025 millions | 2026-2030 | 2031-2035 | 2036-2040 |
|---|---|---|---|
| Total benefits | 0 | 0 | 0 |
| Net CCP costs | 0 | 0 | 0 |
There are no direct additional financial costs or benefits associated with the shipping pathway through the CCP. Activity to upgrade publicly owned vessels and ports will incur costs during the plan period, however these investments relate to business as usual upgrades to maintain and replace existing assets with cleaner technology where relevant, and so their costs and impacts are not considered to be related to the delivery of the CCP.
Analytical methodology of pathway
The outlook for future emissions is mostly tied to the outlook for shipping activity which is expected to decline alongside reductions in oil and gas activity in the North Sea. This trend is captured in the baseline for shipping emissions.
Future potential impacts of proposed carbon pricing schemes to be introduced by the IMO are also captured in the baseline.
Cost summary
The shipping policies above are not expected to incur additional costs for the delivery of the CCP. While there will be costs associated with some SG actions relating to shipping, such as replacement of publicly owned vessels, these costs would have occurred anyway in the course of maintaining and upgrading the ferry fleet. Therefore, these costs are not considered to be part of the CCP delivery.
Benefits summary
There are expected to be limited benefits directly relating to the decarbonisation of Shipping as a result of SG policies. Instead there may be some wider benefits to the industry in response to international regulations that monitor vessel carbon intensity and energy output during voyages. Scottish Businesses involved in the implementation of these interventions may benefit from the regulations. These impacts do not come directly as a result of SG action in this area.
Waste Management
Summary of Waste Pathway
GHG emissions from the Waste Management sector are forecast to decline by around 58% between 2025 and 2040, driven by reductions in methane emissions from landfill, reflecting reductions in the landfilling of biodegradable waste. The pathway (based on implementation of all relevant CCP policies and proposals) is shown in the table below. It includes a comparison with a baseline, which assumes that the levels of waste – in particular waste to landfill – remain at the 2023 level, the last year for which data is available.
It should be noted that the Waste Management sector, as defined in the CCP, relates only to direct emissions (within Scotland) and therefore does not include “upstream” emission savings from waste and circular economy policies and proposals – for example, where an increase in recycling avoids the need for emissions relating to the extraction of raw materials; or increasing the lifetime of a product avoids emissions relating to producing new products. In addition, the Waste Management sector does not include emissions relating to Energy from Waste (EfW) from incineration, which are included under the Energy Supply sector.
| MtCO2e | 2026-2030 | 2031-2035 | 2036-2040 |
|---|---|---|---|
| Waste management sector emissions Pathway | 5.9 | 4.3 | 3.4 |
| Waste management baseline emissions | 6.4 | 5.2 | 4.5 |
| Waste management total policy reductions | 0.5 | 0.9 | 1.1 |
Summary of emissions sources
Landfill emissions are the primary source of Waste emissions as well as the primary driver of emissions reductions resulting from the historic reduction in biogenic waste. Compost and Sewage are secondary source of emissions which are not expected to see significant reductions.
| Source | 2026-30 | 2031-35 | 2036-40 |
|---|---|---|---|
| Landfill | 4.2 | 2.6 | 1.7 |
| Compost/Anaerobic Digestion | 0.7 | 0.7 | 0.7 |
| Sewage and Water Treatment | 1.0 | 1.0 | 1.0 |
| Other | 0.0 | 0.0 | 0.0 |
| Total | 5.9 | 4.3 | 3.4 |
Summary of costs and benefits
| £million | 2026-2030 | 2031-2035 | 2036-2040 |
|---|---|---|---|
| Total Benefit | 1,315 | 1,549 | 236 |
| Net CCP Costs | -90 | -403 | -137 |
Note: negative Net CCP cost figures indicate that the estimated benefits exceed the costs.
The section below on costs and benefits has more detail on our approach.
Waste Baseline Emissions
| MtCO2e | 2023 (actual) | 2026-30 | 2031-35 | 2036-40 |
|---|---|---|---|---|
| Baseline | 1.7 | 6.4 | 5.2 | 4.5 |
Emissions follow a downward trajectory compared to 2023, as illustrated in the table above, principally due to the time lag in realising the emissions benefits of reducing landfill of biodegradable waste in earlier years.
Analytical Methodology for Baseline
The baseline is intended to show projected emissions if CCP policies and proposals were not implemented. However, it is difficult to determine a baseline for the Waste Management sector based on the implementation of specific policies or proposals due to:
- interactions between policies/proposals;
- the time lag between landfilling waste and generating methane in landfill (the largest source of emissions in the sector); and
- the fact that key policies can start having an impact before they are formally introduced (for example, the forthcoming biodegradable municipal waste landfill ban has already influenced treatment and disposal routes for municipal waste since the Scottish Government legislated for the ban in 2012).
For this reason, a simple baseline has been chosen where the amount of waste going to different treatment routes (landfill; composting / anaerobic digestion; etc) is assumed to stay constant at the 2023 level, the last year for which data is available, and no further policies or proposals are introduced to reduce emissions from the sector.
Policy Assessment
For the reasons mentioned in the baseline section above, it was not possible to identify emission savings for each individual policy / proposal and sum those emission savings to get overall emission savings for the sector. Instead an approach was taken where projections of the tonnages of different waste types going to different treatment routes (landfill; composting/AD; etc) were modelled based on broad assumptions around reductions in waste, improvement in recycling and, most importantly in terms of emissions, the implementation of the biodegradable municipal waste landfill ban in December 2025 (and ongoing landfill gas capture).
| MtCO2e | 2026-2030 | 2031-2035 | 2036-2040 |
|---|---|---|---|
| Waste Management | 0.5 | 0.9 | 1.1 |
Landfill
As shown in the table above, the largest source of GHG emissions in the Waste Management sector comes from landfill, and reductions in these emissions drive overall reductions in the sector. The other emissions sources in the sector total less than 0.4 MtCO2e per year, and are projected to remain relatively stable. However, the CCP does outline areas for further review to address emissions from these sources, and future projections will reflect any updated evidence.
Greenhouse gas emissions from landfill sites have reduced markedly in recent years, from 5.73 MtCO2e in 2000 to 1.33 MtCO2e in 2023, and are projected to fall to less than 0.3 MtCO2e in 2040. Landfill emissions are due to the generation (and subsequent emission) of methane within landfill sites as biodegradable waste decomposes. As well as reducing the amount of biodegradable waste landfilled, efficient landfill gas capture is another factor that reduces the amount of methane ultimately emitted to the air.
Landfill emissions were estimated by first forecasting the tonnages of different waste types that will be landfilled in future years, then applying the methods used in the National Atmospheric Emissions Inventory to determine the resultant emissions. Results were broadly in line with previous analysis undertaken by Ricardo-AEA for the Scottish Government which showed a clear drop in emissions driven by reductions in the landfilling of biodegradable waste. Policies / proposals can contribute by reducing the amount of waste generated, increasing recycling, diverting biodegradable waste from landfill or more efficiently capturing landfill gas generated within landfill sites.
A key policy for reducing emissions from landfill further is the biodegradable municipal waste (BMW) landfill ban, due to come into force on 31 December 2025. Since legislating for the ban over a decade ago, this policy has significantly reduced the amount of biodegradable waste landfilled and hence further reduced landfill emissions, and is projected to continue this downward trend. It is worth noting that, after waste has been landfilled, it takes time to decompose and hence methane is generated and emitted over a period of many years. For example, it is estimated that around a third of the methane generated from landfilling biodegradable waste is generated ten years or more after the waste was originally landfilled. Therefore landfill emissions continue to reduce as a result of significant reductions in landfilled biodegradable waste in previous years, and the benefits of the BMW landfill ban will be realised over an extended period.
In summary, much of the reduction in landfilling of BMW has already taken place ahead of the ban coming into force, and the time lag for waste to decompose and then generate methane over a period of years (discussed above) has a smoothing effect on the overall trend. This means that a steady reduction rather than a drastic step change in emissions is expected as the ban comes into force. It is important to note that the figures above are estimate projections, and actual emissions will be influenced by implementation of the policy as we continue to support ongoing compliance with the ban. Sensitivity analysis based on available evidence has indicated that, if a small amount of BMW was landfilled during years 1 and 2 of the ban, this would have a marginal impact on overall emissions. Further updates to forecasting will be made if deemed appropriate based on available evidence.
Cost and benefits summary
The actions described in the Waste Management chapter of the CCP have benefits in terms of direct emissions reductions in the Waste Management sector in Scotland, principally reductions in landfill emissions, but there are also wider benefits. These include reductions in “upstream” emissions (for example, the emissions related to the production of goods and reduced demand for raw materials). This may create economic opportunities to maximise higher value return from material reprocessing, keeping these materials in use for longer. This should reduce the negative environmental impacts of waste entering the terrestrial and marine environments. There are also likely to be economic benefits in terms of job creation, skills development, and retraining.
Many of the waste chapter’s actions are included in Scotland’s Circular Economy and Waste Route Map to 2030 and are at different stages of design and implementation. A business and regulatory impact assessment outlining information on costs and benefits for these actions was published alongside the Route Map. In addition, separate assessments for some measures have already been undertaken.[243]
Costs beyond 2030 are currently uncertain for the majority of policies / proposals under the waste package and are heavily dependent on implementation of measures up to 2030. The summary table below includes benefits and net costs for the package where available. Cost and benefit estimates for the Deposit Return Scheme (DRS) and Packaging EPR (pEPR) are included as they are more developed policies with quantified, published estimates. Otherwise budgeted costs are only available for carbon budget 1 (2026-2030) for the majority of the policies / proposals that are in varying stages of development. It is important to note that these financial estimates may change as measures are further developed in collaboration with different stakeholders, and will be subject to outcomes of future spending allocations.
| £2025 million | 2026-2030 | 2031-2035 | 2036-2040 |
|---|---|---|---|
| Total Benefit | 1,315.2 | 1,549.4 | 236.3 |
| Net CCP Costs | -89.9 | -402.8 | -137.0 |
Note: negative Net CCP cost figures indicate that the estimated benefits exceed the costs.
Quantified benefits are not currently feasible across all policies / proposals. Many of the actions are still under development and therefore do not have quantitative data on benefits at this time. For example, in the case of a new circular economy strategy and targets, as set out below, they can provide clear goals and certainty necessary for long-term planning. This may be beneficial to businesses, the third sector and public bodies, through offering regulatory certainty, and reducing risk associated with the necessary shift to circular economy practices. This may incentivise further investment in circular economy infrastructure and innovation.
Costs and Benefits Analytical Approach
Cost information for the Scottish Government is based on estimated resource and capital costs for the waste and circular economy measures for the first carbon budget. Further cost and benefit information is drawn from impact assessments for more developed policies including DRS and Packaging EPR (pEPR). Note that estimates for pEPR are based on Net Present Value (NPV) proportional to Scotland based on population share of the UK. As previously noted, many of the actions are still under development and therefore do not have quantitative data at this time.
The costs and benefits of measures in the waste package are inextricably linked, and should not be considered in isolation from one another. For example, extended producer responsibility schemes will have an impact on how household recycling measures are taken forward, as well as the composition and volume of waste that then needs to be managed.
Further detail on costs and benefits is summarised below by the four strategic areas: Strengthening Scotland’s Circular Economy, Reduce and Reuse, Modernise Recycling and Decarbonise Disposal.
Strengthening Scotland’s circular economy
Costs
Measures in this section include the development of statutory circular economy targets and a circular economy strategy. Associated public sector costs largely cover business-as-usual activities such as running consultations and engaging with stakeholders. Quantified costs for individuals, businesses and local authorities are not currently available, as they will be subject to the development of specific measures and the shape of the final circular economy strategy. Previous impact assessments have highlighted where potential costs for measures under this strategic outcome might develop. While the introduction of a new circular economy strategy and targets is intended to benefit individuals, the public and private sector, there is a possibility of costs to align with any new requirements, as well as the risk of unintended negative consequences.[244]
Benefits
Quantified benefits are not currently feasible for measures under this strategic outcome. In the case of a new circular economy strategy and targets, they can provide clear goals and certainty necessary for long-term planning. This may be beneficial to businesses, the third sector and public bodies, through offering regulatory certainty, and reducing risk associated with the necessary shift to circular economy practices. This may incentivise further investment in circular economy infrastructure and innovation. For example, research from PwC highlighted that adopting circular business practices in the construction, textiles, packaging and electronics industry alone could deliver an estimated 0.2-0.4% boost to UK productivity and 150 -170,000 new jobs.[245] The Green Alliance suggest that a more circular economy could create 470,000 jobs and add £25bn to UK GDP by 2035.[246]
Reduce and reuse
Costs
Measures under this strategic outcome cover a wide range of policy areas, from producer responsibility schemes to tackle the environmental impact of products; actions to tackle food waste; and embedding circular practices in the construction sector. These actions are at different stages of development. Further detail on costs are set out in the relevant assessments undertaken for individual measures to date, including for packaging extended producer responsibility and the Deposit Return Scheme (DRS).
Benefits
As outlined in the draft CCP, there are significant economic and environmental benefits to the shift to more sustainable resource use, and there will be very significant cost to employers and society as a whole if we do not take forward the actions in this CCP. For example:
- Mandatory reporting of food waste can generate benefits for businesses by supporting a more efficient business model that reduces waste within an organisation, leading to reduced costs.[247]
- Packaging EPR - Includes quantified transfer of costs for the collection, sorting, treatment, and disposal of household packaging waste to producers from the public sector[248]. Benefits to producers from collection cost savings and reprocessors from the secondary material market are also quantified.
- DRS – includes quantified benefits from reduction in material to be collected at the kerbside or public litter bins, and by the reduced littering. Note some of the benefits are for the System Administrator of the scheme.[249]
Modernise recycling
Costs
There are likely to be costs associated with the package of recycling measures outlined in the draft CCP, as we seek to work with partners to modernise household and commercial recycling. Estimated costs to government across the first carbon budget period (2026-30) include the final investments from the Recycling Improvement Fund, alongside initial projections for requirements to deliver policies up to 2030, such as implementation of the new statutory Code of Practice for household waste services.
Some indirect costs may be expected to households as a result of the new Code of Practice, such as the need to adapt to any new kerbside waste and recycling collections. For local authorities, additional resource costs may be associated with the implementation of any new services or infrastructure funded by the Recycling Improvement Fund or as a result of the new Code. Subject to the outcomes of co-design and final shape of the new Code of Practice, local authorities may also need to make one-off capital investments such as bins, vehicles and storage facilities. There are currently no total quantified costs for businesses as a result of policies in this area, but previous assessments have identified some areas where costs may occur. For example, there may be higher expected costs to producers as a result of the policy for recyclable plastic film and flexible packaging to be collected. These costs are not quantified for Scotland but are set out in the UK level pEPR impact assessment[250]. Costs for many other measures will be subject to outcomes from co-design and actions to build better understand the current commercial recycling landscape.
Benefits
Increasing the amount of materials recycled and increasing the proportion of these recycled in Scotland will deliver carbon reductions, reduce the environmental impacts associated with extracting new raw materials, and create a range of important economic opportunities to reprocess and reuse materials here in Scotland. It is not possible to quantify benefits for many measures at this stage, pending outcomes from design activity, such as the co-design of a new statutory Code of Practice for household waste and recycling services. However, as an example, the combination of measures to support business and commercial organisations to recycle more is likely to have positive economic benefits. For example, businesses that recycle are likely to avoid higher waste disposal costs.
Landfill Tax in Scotland is substantial, with rates increasing annually. The standard rate of Landfill Tax is applied to waste sent to landfill, and businesses can save money by recycling more, as landfill charges are generally higher than recycling fees. For the public sector, the new statutory Code of Practice for household waste services presents opportunities to maximise the value of collected recyclate for local authorities. Increased and more reliable supply of quality recyclate will support investment in domestic processing capacity, and may help drive greater revenue for local authorities.
Decarbonise disposal
Costs
This package consists of a collection of measures to reduce emissions at the point of disposal, including the forthcoming ban on biodegradable municipal waste going to landfill, and steps to increase the capture of landfill gas. Further detail on costs is set out in the draft CCP and Route Map BRIAs, and relevant assessments undertaken for individual measures to date.
As well as direct costs to government to deliver measures such as the residual waste plan, the continued reduction in landfilled waste in Scotland means that Scottish Landfill Tax (SLfT) revenue is declining.[251] This long-term trend of decreasing SLfT revenues reflects the success of efforts to encourage diversion of waste from landfill, driven by the SLfT and the introduction of the ban on the landfilling of biodegradable municipal waste from the end of 2025. Costs for the private sector associated with measures such as the residual waste plan and landfill gas capture are outlined in the Route Map BRIA. Over time reducing biodegradable waste will reduce the landfill gas available for capturing and use, reducing a potential revenue stream for landfill operators. There is also a strategic link between waste sector measures and measures in the Energy Supply chapter to address emissions from Energy from Waste. Analysis has been undertaken regarding the impact of the potential inclusion of EfW within the Emissions Trading Scheme (ETS) and the potentially transformative economic effects of its implementation. Provisional analysis suggests proportionally higher costs for Scotland given waste redirected to incineration from landfill.[252]
Benefits
While our focus is firmly on cutting waste, we want to ensure that materials that cannot be avoided, reused, or recycled are managed in a way that minimises environmental and climate impacts, encourages management of materials further up the waste hierarchy, and minimises broader societal impacts. Measures in this section will help drive this by delivering wider benefits, including helping us understand the best environmental outcomes for specific wastes, ensuring there is an appropriate capacity and investment to manage waste in Scotland, and driving greater innovation and new technologies to deliver improved environmental outcomes. For example, the introduction of ban on BMW going to landfill encourages greater focus on waste reduction, reuse, repair and recycling, as well as the use of composting, anaerobic digestion, and energy-from-waste (EfW) technologies, extracting value from materials that would otherwise go to landfill. Maximising opportunities for landfill gas capture helps mitigate the negative effects of landfill and the environmental impact of closed landfill sites. Previous investment in landfill gas capture at four existing sites has led to estimated combined contributions to economic welfare (for the period between 2015 -2047 and measured by NPV) of between £12m - £39m. Note that this is not included in the quantified benefits for this CCP package as it refers to previous investment at selected sites.
This indicates that investment in additional gas capture could yield further economic benefits, and further assessment may be required, subject to the scope and nature of future work.
Energy Supply
Summary of Energy Supply Pathway
The Energy Supply sector is projected to decarbonise by around 85% between 2025 and 2040, primarily as a result of the decline in demand for fossil fuels reducing emissions from the fuel supply subsector and from carbon capture technology being utilised at Peterhead power station.
This sector also includes emissions reductions associated with decarbonisation of Non-Road Mobile Machinery (NRMM) over and above those specified separately elsewhere. NRMM emissions arise across a number of sectors, but due to the nascent proposal and consequent uncertainty around the exact composition of any changes arising from the proposal, it is placed into Energy Supply as an interim ‘home’.
The table below shows the expected emissions from the sector as it follows the CCP pathway.
| MtCO2e | 2026-2030 | 2031-2035 | 2036-2040 |
|---|---|---|---|
| Energy Supply Sector Emissions* | 9.9 | 2.3 | -0.1 |
| Energy Supply Baseline Emissions | 9.9 | 4.8 | 4.4 |
| Energy Supply Policy Reductions | 0.0 | 2.5 | 4.5 |
*Energy supply including NRMM reductions, without NRMM reductions Energy supply emissions are 9.9,3.5 and 2.7Mt respectively. NRMM reductions are correct when aggregated across the whole plan.
Summary of Emissions sources
The sector pathway is broken down into its constituent sources in the table below. The sector covers two broad elements. The first is electricity generation and power stations, where emissions arise from three main sources: Peterhead gas-fired power station, Energy from Waste sites and island diesel generators. The second covers oil and gas supply emissions as a result of refining of crude oil into petroleum, the operation of terminals to manage the import and onshoring of oil and gas, leakage of gas from pipelines and emissions associated with the onshore production of oil and gas. As noted above, emissions reductions associated with the proposed stretch goals for NRMM are included here although the emissions occur in the Agriculture, Business and Industrial Process and Transport sectors. This is due to the current nascent state of policy development which makes a more precise allocation difficult.
| Emissions Source | 2026-2030 | 2031-2035 | 2036-2040 |
|---|---|---|---|
| Oil and Gas Supply | 4.7 | 0.9 | 0.9 |
| Electricity Supply | 5.2 | 2.5 | 1.9 |
| NRMM | 0.0 | -1.2 | -2.8 |
| Total | 9.9 | 2.3 | -0.1 |
Summary of Costs and Benefits
An assessment of the costs and benefits arising from the policies to be brought forward as part of this CCP to decarbonise energy supply has been undertaken. The summary of impacts is that:
| £2025 millions | 2026-30 | 2031-35 | 2036-40 |
|---|---|---|---|
| Benefits | 0 | 0 | 0 |
| Net CCP Costs | 0 | 0 | 0 |
There are no specific costs to government from energy supply policies, and all emissions reductions are expected to be market driven. However, the energy supply sector is expected to see significant investment over the period of the CCP in areas such as transmission networks, renewable energy generation, flexible demand, storage and carbon capture.
Energy Supply Baseline Emissions
Projected baseline emissions for the sector are shown in the table below:
| 2026-2030 | 2031-2035 | 2036-2040 | |
|---|---|---|---|
| Baseline (MtCO2e) | 9.9 | 4.8 | 4.4 |
Oil and Gas Supply
Oil and Gas Supply emissions in Scotland are the result of i) refining of Crude Oil into petroleum products (the largest source of such emissions in 2023), ii) the operation of terminals to manage the import and onshoring of Oil & Gas, iii) leakage of gas from pipelines and iv) emissions associated with the onshore production of Oil and Gas.[253]
| MtCO2e | 2026-2030 | 2031-2035 | 2036-2040 |
|---|---|---|---|
| Baseline Emissions | 4.7 | 0.9 | 0.9 |
Emissions associated with Oil and Gas Supply will continue to decline over the period of the CCP, as demand for these products falls through the decarbonisation of the wider economy along with the decline in production of O&G in Scotland.
Activity in the Oil and Gas Supply sector is expected to decline as a result of:
- Ceasing refining of crude oil and falling imports as a result of declining domestic demand for petroleum products and gas as major sectors such as transport, buildings, power stations, and industry decarbonise. In particular, the closure of the Grangemouth refinery in 2025, which was the only oil refinery in Scotland, will mean any residual demand is met by import of finished fuel products .
- North Sea oil and gas production will decline as a result of the maturity of the basin – this trend will lower exports volumes of Oil and Gas. This is expected to fall in line with the estimates produced for the Just Transition Review of the Scottish Energy Sector.[254]
The emissions levels for Oil and Gas supply are estimated based on the expected volumes of production, import and export in line with the declining activity projections relative to 2023 levels.
There are no emissions reduction policies directed towards the Oil and Gas Supply sector, and emissions reduction is expected to be market driven.
As such there is expected to be no Emissions Reductions or Financial impact as a result of Scottish Government Policy in what is a reserved policy area.
Electricity Supply
Electricity supply emissions have reduced from 14.7 MtCO2e in 1990 to just under 1 MtCO2e in 2023 (93.4 per cent reduction). Overall emissions reductions in this sector are mainly due to complete cessation of coal use for electricity generation in Scotland, and a reduction in generation from fossil fuels more generally.
The main sources of the remaining existing emissions from the electricity sector are from Peterhead Power Station, Energy from Waste (EfW), Islands generators and Other Fuel.
| MtCO2e | 2026-2030 | 2031-2035 | 2036-2040 |
|---|---|---|---|
| Electricity Supply Emissions | 5.2 | 3.8 | 3.5 |
Electricity Supply emissions are projected to decline between 2026 and 2040, due primarily to (1) Peterhead Power Station being replaced by Peterhead 2 CCGT in 2032 and (2) some Energy from Waste sites installing carbon capture and storage technology once the Scottish CCUS Cluster is online, by 2032. In the short-term, energy from waste emissions could rise as further waste is diverted from landfill (largely as a result of the forthcoming ban on the landfilling of biodegradable municipal waste), before this decline.
- Peterhead power station, as Scotland’s last remaining fossil fuel power plant, has a large bearing on Scotland’s electricity supply emissions. A closing date has not been set for the current Peterhead power station, however, the plant is coming to the end of its operational lifetime, and it is assumed that the plant will continue to emit at 2024 levels from Emissions Trading Scheme (ETS) emissions data until it ceases operating from 2032.
- Peterhead Carbon Capture Power Station (Peterhead 2) is assumed to come online to replace the current Peterhead power station in 2032, with an assumed 90% carbon capture rate and the plant operates for up to c. 8,000 hours per year at 100% full load. This is subject to a decision by Scottish Ministers on an application under S.36 Electricity Act 1989 for construction of the new power station and carbon capture facilities.
- Forecast household waste incineration have been used to provide a reasonable estimate for projecting future energy from waste. Emissions are expected to increase to a peak in 2026 thanks to the ban on biodegradable municipal waste (BMW) being sent to landfill from 31 December 2025. It is assumed that 45% of EfW sites (by emissions) install CCS by 2032, a 90% capture rate, and that 50% of emissions are from biogenic sources, leading to a share of negative emissions. It also ignores potential new sites coming online as the timing and scale of these is unknown.
- Fossil-fuel generators on islands are another source of emissions for the electricity sector in Scotland. They are commonly used for back-up supply. It is assumed that as grid infrastructure is reinforced, back-up generators will be utilised half as frequently from 2026 onwards.
- Other Fuel is the remaining very small portion of electricity supply emissions (0.02 MtCO2e) and this is assumed to remain constant.
Policy Assessment
Energy Supply package 1 - Energy From Waste
There are no specific costs for electricity sector policies as these are largely around a reserved area of policy and are anticipated to be industry led. One exemption to this is the Scottish Government’s role as part of the UK ETS Authority, which is currently exploring expanding ETS to include energy from waste (EfW)[255]. It is anticipated that cost exposure would introduce stronger incentives for EfW facilities to adopt CCS. There is therefore a clear interaction between the ETS, EfW and the resulting energy envelope. Because the inclusion of EfW in ETS remains subject to discussion within the ETS Authority, the four relevant measures are defined as proposals and cost estimates are not provided here.
The proposals in this policy package are:
- Support the inclusion of energy from waste in the UK Emissions Trading Scheme (ETS).
- Require new Energy from Waste (EfW) facilities to have an acceptable decarbonisation strategy aligned with Scottish Government decarbonisation goals.
- Encourage existing Energy from Waste (EfW) plants to CCS, working with the UK Government to develop a policy and funding framework to incentivise this.
- 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.
| MtCO2e | 2026-2030 | 2031-2035 | 2036-2040 |
|---|---|---|---|
| Emissions Reductions | 0.0 | 1.3 | 1.6 |
Energy Supply Package 2 – Electricity supply decarbonisation
Key Policies/Proposals
The following supporting policies have been assessed to have zero direct emissions impacts and zero costs:
- 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.
- 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.
- Work to influence the UK Government (e.g. through their Review of Electricity Market Arrangements) to better design energy markets and incentives which support the building and use of both medium and long duration energy storage and grid flexibility assets (such as battery storage and pumped hydro), as well as demand side including 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– thereby reducing the need for energy from unabated fossil fuels alongside a renewables-based power system.
- 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 aim to decarbonise the power system across Great Britain and plan a strategic approach to its deployment.
Energy Supply Package 3 – NRMM decarbonisation
Non-Road Mobile Machinery (NRMM) are a cross-sectoral source of emissions which range from Agricultural vehicles to Construction machinery. These sources are disparate but have similar challenges. To decarbonise these machines will require either new power trains that are low carbon like those which replaced ICE cars, more efficiency operations, or bio-fuels
Key Policies/Proposals:
- Target an 80% decrease in NRMM emissions by 2040
| MtCO2e | 2026-2030 | 2031-2035 | 2036-2040 |
|---|---|---|---|
| Emissions Reductions | 0.0 | 1.2 | 2.8 |
At present there are few alternatives to fossil fuels for NRMM. The SG ambition to support an 80% decarbonisation of NRMM relies on supporting the market across a range of potential mechanisms, the exact balance is still to be determined. However, it is expected that replacement of older NRMM stock with more efficient models and improvements in how NRMM are used through complementary technologies such as GPS will help drive earlier decarbonisation. Longer term decarbonisation to reach the target will be dependent on either increasing availability of biofuels for NRMM as less is required to blend into ICE road vehicles’ petrol supply, or through supporting the market as it develops effective alternative power trains.
This ambition matches the CCC’s 2040 expectations while starting later in recognition of SG’s view that there is not currently sufficient market potential to decarbonisation NRMM in line with the CCC’s pathway.
As NRMM is a cross-sectoral source of emissions which are not present in energy supply, the emissions reductions presented here represent the total potential reductions that would be allocated across, Agriculture, Transport, and Business and Industrial Processes. Given the uncertainty on how this technology will develop it is not known how these will be split and so the reductions are presented in aggregate here rather than in their respective sectors.
Given the uncertainty around how this technology will come into play it isn’t possible to provide cost estimates for NRMM and this is treated as a proposal.
Business and Industrial Process
Summary of the Business and Industrial Process Pathway
The Business and Industrial processes CCP envelope is projected to decarbonise by around 49% when comparing the 2036-2040 carbon budget with the 2026-2030 carbon budget, primarily as a result of policies to decarbonise industry and non-domestic buildings.
| MtCO2e | 2026-2030 | 2031-2035 | 2036-2040 |
|---|---|---|---|
| Business & Industrial Processes Emissions Projection | 27.6 | 20.6 | 14.0 |
| Business & Industrial Processes Baseline Emissions | 30.0 | 27.1 | 25.1 |
| Business & Industrial Processes Policy Reductions | 2.4 | 6.5 | 11.1 |
Total emissions over the carbon budget period 2026-2030 is projected to be 2.4MtCO2e lower when compared to a baseline without any Scottish Government policies. This gap is expected to widen over time with the carbon budget period 2036-2040 showing a 11.1MtCO2e reduction when compared to the baseline.
Summary of Emissions Sources
The table above shows projected CCP emissions pathway of the Business and Industrial Process sector in each carbon budget, while the table below shows this broken down by sub-sector. Within this envelope, the largest source of emissions is industry, followed by non-domestic buildings, and then sub-categories of transport and agriculture. The area expected to see the most decarbonisation within the envelope is industry, with emissions projected to fall from 20.2 MtCO2e during the period 2026-2030 to 10.1 MtCO2e during the period 2036-2040. This is followed by non-domestic buildings which is projected to fall from 7.2 MtCO2e in the first carbon budget (2026-2030) to 3.8 MtCO2e in the third carbon budget (2036-2040). Mobile air conditioning is expected to decarbonise in line with the pathway for F-gas emissions, which expects a decline of around 74% by 2036 when compared to 2023 levels. Agricultural combustion is projected to remain flat over each carbon budget.
| Emissions Source (MtCO2e) | 2026-2030 | 2031-2035 | 2036-2040 |
|---|---|---|---|
| Industry | 20.2 | 14.6 | 10.1 |
| Non-Domestic Buildings | 7.2 | 5.8 | 3.8 |
| Mobile Air Conditioning | 0.3 | 0.1 | 0.1 |
| Agricultural Combustion | 0.0 | 0.0 | 0.0 |
| Business & Industrial Processes | 27.6 | 20.6 | 14.0 |
Projected baseline emissions for the sector are shown in the table below:
| 2026-2030 | 2031-2035 | 2036-2040 | |
|---|---|---|---|
| Baseline (MtCO2e) | 30.0 | 27.1 | 25.1 |
An assessment of the costs and benefits arising from the policies to be brought forward as part of this CCP to decarbonise Business & Industrial Processes has been undertaken. The summary of impacts is presented in the table below.[257]
| £2025 million | 2026-2030 | 2031-2035 | 2036-2040 |
|---|---|---|---|
| Total Benefits | 41 | 41 | 41 |
| Net CCP Cost | 1,234 | 3,125 | 4,104 |
Policy Assessment
Industry
Industry is the largest source of emissions in the Business & Industrial Processes CCP envelope. Emissions are primarily a result of industrial combustion and industrial processes. Emissions from industrial combustion come from the burning of fossil fuels to generate heat or power required for manufacturing processes. Popular fuel sources are currently natural gas, oil and biomass. Switching away from fossil fuel technologies towards electricity-based technologies, or the adoption of hydrogen or carbon capture and storage are the main pathways available for industry to decarbonise. The electrification of industry also requires energy supply to decarbonise through the adoption of carbon-neutral electricity generation.
The table below presents three different scenarios for industry, compared to a baseline scenario which represents a scenario with no Scottish Government policy. In the central scenario, industry is supported by Scottish Government policy through multiple funds, as detailed below, and faces the centrally projected UK ETS carbon price[258]. This scenario coincides with the total CCP envelope decarbonisation pathway represented above. The low scenario represents a situation where Scottish Government policy is less effective, and industry faces relatively lower UK ETS carbon prices than the central scenario. Alternatively, the high scenario represents a more ambitious situation where Scottish Government policy is more effective and industry decarbonises further in response to higher carbon prices.
| Industry Emissions (MtCO2e) | 2026-2030 | 2031-2035 | 2036-2040 |
|---|---|---|---|
| Baseline | 22.5 | 20.6 | 18.7 |
| Central Scenario | 20.2 | 14.6 | 10.1 |
| High Scenario | 20.0 | 13.6 | 9.7 |
| Low Scenario | 20.4 | 16.3 | 13.4 |
Without policy action, baseline emissions in the industry sector are expected to see a steady decline across carbon budgets. At a high level, baseline industry emissions are based on projected sector GVA growth adjusted for alignment with energy and emissions projections (EEP)[259]. The latest UK projected territorial emissions in the EEP suggest modest emissions reductions in the 2020s before levelling out in the late 2030s. This pathway reflects the impact of previously announced UK Government industrial decarbonisation policy as well as the movement towards electrification technologies that reduce reliance on fossil fuels. One prominent policy is the Clean Power 2030 Action Plan[260], which has the potential to provide lower and less volatile electricity costs in the longer term, due to reducing reliance on gas which is more susceptible to global market shocks. The impact of this policy is included in the baseline, where electrification technologies become more favourable to industry compared to existing fossil fuel technologies that rely on natural gas and oil.
Given the Scottish Government’s support[261] for Carbon Capture, Utilisation and Storage (CCUS) in Scotland and the rollout of hydrogen technologies, it is assumed that no CCUS or hydrogen technologies would be available to industry in the baseline. It is also assumed that the carbon price faced by all of industry in the baseline mirrors the voluntary carbon price[262]. This approach is taken to try to account for some internalisation of the social cost of carbon, where industry may consider some of the social cost of polluting when making investment decisions.
Modelling Methodology
The Net Zero Industry Pathways (NZIP 2.0) model[263] is used to project industry emissions in Scotland. This model takes data for industry installations across the UK, and models how these sites may behave up until 2050 in response to the emergence of new decarbonisation technologies. Decarbonisation technologies vary across different sectors, with certain sectors having more limited decarbonisation options than others. For example, the cement industry is expected to have fewer options in the future with CCS being the main opportunity for reaching carbon neutrality. Each installation site behaves in a cost-effective way, subject to any imposed constraints such as minimum usage of certain technologies, where in every year they decide whether to switch to alternative technologies or to continue using existing infrastructure. The list of decarbonisation options in the model is extensive, and include electrification, CCS, hydrogen, biomass and heat pump technologies.
A core component of the model which has significant implications for the relative cost of decarbonisation technologies to fossil fuel technologies is the carbon price. Installation sites in the model are split into two groups, the traded and non-traded sector, each with their own carbon price which changes over time. This is an important consideration as it makes fossil-fuel based technologies more expensive to operate relative to decarbonised technologies.
Industry Package 1 - Key Scottish Government Industrial Decarbonisation Policies and proposals
- UK Emissions Trading Scheme (UK ETS)
- Scottish Industrial Energy Transformation Fund (SIETF) to support the decarbonisation of industrial manufacturing
- Support for CCUS, including the Acorn CCS Project and the Scottish Cluster
- Green Hydrogen Fund
| MtCO2e | 2026-2030 | 2031-2035 | 2036-2040 |
|---|---|---|---|
| UK ETS | 0.1 | 1.2 | 2.4 |
| SIETF | 0.2 | 0.2 | 0.2 |
| New ID Programme | 2.1 | 3.4 | 3.4 |
| Support for CCUS including Acorn CCS | 0.0 | 1.1 | 2.2 |
| Green Hydrogen Fund | 0.0 | 0.1 | 0.5 |
| Total | 2.3 | 6.0 | 8.7 |
While emissions reductions are presented broken down in the table above, in reality there will be strong interactions between policies and proposals. For example, the UK ETS is expected to drive emissions reductions through a decreasing UK ETS cap and decarbonisation across UK ETS sectors. This decarbonisation is expected to be supported through other Scottish Government policies and proposals, such as SIETF, support for the Acorn CCS project or the Green Hydrogen Fund. In the Net Zero Industry Pathways (NZIP 2.0) model, detailed below, each policy is introduced either through introducing projections of UK ETS carbon prices or by setting minimum uptakes of certain decarbonisation technologies to reflect the government support that is expected to exist for them over the next 20 years. Model results of emissions reductions are then broken down by decarbonisation technology and then attributed to each policy based on internal analysis of policy impacts, with the residual attributed to the UK ETS.
UK ETS
The UK ETS is a jointly run policy, by the UK Government, the Scottish Government, the Welsh Government, and the Northern Ireland Department of Agriculture, Environment and Rural Affairs. The UK ETS is the primary mechanism for carbon pricing across the UK. This cap-and-trade system currently covers industry, aviation and electricity generation (non-renewable). As opposed to a carbon tax which directly sets a price of carbon, this scheme sets a limit on the total number of allowances[265] available over a period of time, known as the UK ETS cap. The allowances available reduce over time, allowing for a market-driven carbon price to emerge where participants can trade allowances depending on whether it is cheaper to decarbonise or pay the UK ETS price. The UK Government produce a set of traded carbon price projections for modelling purposes using their Carbon Market Model, which attempts to project how a declining cap in combination with marginal abatement cost curves will affect UK ETS prices in the future[266]. The UK ETS is projected to have an increasing carbon value over time, which results in even stronger incentives to plan for decarbonisation as it becomes relatively more expensive to retain fossil-fuel based technologies. The UK ETS is modelled in NZIP 2.0 by the introduction of traded carbon price projections for the traded industry.
Three scenarios were explored:
- Central Scenario
This scenario assumes the net-zero strategy aligned traded carbon price[267] for the traded sector in NZIP 2.0. For the non-traded sector, the same carbon values are used as in the baseline to reflect that there may be some internalisation of the carbon price by those who aren’t part of the compliance market.
- Low Sensitivity
This scenario assumes the low sensitivity carbon price trajectory for the traded sector, and has a lower carbon price trajectory compared to the central scenario. This reflects a state of the world where fossil fuel prices are relatively higher than the cost of renewables, driving a lower carbon market clearing price. For the non-traded sector, slightly lower voluntary market prices are assumed to reflect a world with higher fossil fuel prices.[268]
- High Sensitivity
This scenario assumes the high sensitivity carbon price trajectory for the traded carbon price. This trajectory reflects a state of the world where fossil fuel prices are lower and as such require a higher carbon price to incentivise decarbonisation. The non-traded sector is assumed to face slightly higher voluntary carbon prices given lower fossil fuel prices.[269]
Scottish Industrial Energy Transformation Fund (SIETF)
The Scottish Industrial Energy Transformation Fund (SIETF) is a Scottish Government policy which provides grant funding to help energy-intensive industrial sites in Scotland cut energy costs and reduce greenhouse gas emissions by funding energy efficiency updates and decarbonisation projects. This includes project deployment such as fuel-switching and improving the efficiency of existing manufacturing equipment. It is due to end in 2026.
New Industrial Decarbonisation Programme
Building on SIETF, our ambition is to leverage investment that can help to secure Scotland’s existing diverse industrial manufacturing base and support Scotland to become a centre for clean Energy Intensive Industries of the future. From 2026, a new programme, subject to multi-year budget approval, will complement other policies such as ETS by providing a means for industry to cut emissions; while covering a range of decarbonisation technologies it will aim to unlock significant industrial electrification opportunities. This is treated as a proposal given its infancy in policy development.
Support for CCUS including the Acorn CCS Project and the Scottish Cluster
Acorn is a carbon capture and storage (CCS) project based at the St Fergus gas terminal in Aberdeenshire, Scotland. The project aims to use existing offshore pipelines to move compressed CO2 from St Fergus to offshore storage sites. In June 2025, the UK Government committed £200 million in development funding to help prepare the Acorn project for delivery, with UK ministers stating the goal is to reach a final investment decision by 2028/29. The Scottish Government has committed £80 million to support the Acorn CCS project, and has repeatedly urged the UK Government to work at pace to ensure the availability of CCS in Scotland.
Green Hydrogen Fund
The Green Hydrogen fund is a Scottish Government policy which provides cross-cutting grant support to help develop the hydrogen sector in Scotland. Its main goal is to accelerate green hydrogen production and help support the wider supply chain including transport, storage and industrial end-use.
Financial Impact Summary – Industry
| £2025 million | 2026-2030 | 2031-2035 | 2036-2040 |
|---|---|---|---|
| Total Benefits | 41 | 41 | 41 |
| Net CCP Cost | 1073 | 1451 | 2497 |
Costs and benefits of CCP policies in the table above derive from a combination of NZIP 2.0 modelling and internal policy estimates of costs and benefits. Alongside the financial support provided by government, a significant proportion of decarbonisation costs will need to be funded by industry. These costs have been estimated using NZIP 2.0, where modelled data on investment in decarbonisation technologies has been used. These costs include both the financial cost of investing in new climate-friendly technologies and financial savings from reduced expenditure on fossil fuel technologies. The benefits detailed represent the financial benefits to industry from improved energy and resource efficiency as a result of government decarbonisation policies such as SIETF. While not included in the table above, the primary benefit from these costs will be the social benefit of lower carbon emissions.
Analytical methodology
Cost estimates are based on NZIP 2.0 modelling results and internal estimates of policy costs. NZIP 2.0 models how industrial sites across Scotland could decarbonise over the next 25 years when cost minimising in their business decisions, considering the relative cost of existing industrial processes and the expected costs of emerging decarbonisation technologies.
Non-Domestic Buildings
Summary of CCP Pathway
Emissions from Non-Domestic buildings are primarily as a result of the use of polluting heating systems such as natural gas, oil or other fossil fuel boilers.
Non-domestic buildings decarbonise by around 64% between 2025 and 2040, mainly as a result of the transition from fossil fuels to clean heat sources. The estimated non-domestic buildings emissions pathway for CCP is shown in the table below:
| MtCO2e | 2026-2030 | 2031-2035 | 2036-2040 |
|---|---|---|---|
| Non-Domestic Buildings Pathway | 7.2 | 5.8 | 3.8 |
Baseline
| MtCO2e | 2026-2030 | 2031-2035 | 2036-2040 |
|---|---|---|---|
| Baseline Emissions | 7.2 | 6.4 | 6.2 |
The current baseline for Non-Domestic buildings assumes that there is no significant decarbonisation without further policy action. The small reduction reflects the impact of F-gas regulations on the baseline and a reduction in heating demand over time due to a warming climate. The baseline assumes no increase in emissions from new buildings, due to the New Build Heat Standard, which mandates the use of clean heating systems instead of oil and gas boilers. It also assumes that reductions, mainly as a result of high energy prices in recent years, are maintained. In the absence of additional measures (such as regulation or reforms to energy pricing, for example), it is assumed that there is insufficient incentive to drive large-scale adoption of clean heating systems, which typically involve higher upfront capital costs compared to replacing existing systems.
Analytical Methodology for Baseline
The baseline was estimated through a simple continuation of the emissions levels for the sector reported in 2023. A minor adjustment was made to reflect the impact of GB-wide F-gas regulations on the baseline, by applying the anticipated percentage reductions from these regulations to the sector’s existing F-gas emissions. The impact of rising temperatures on heating emissions is estimated by modelling the relationship between average temperature and heating demand, then applying this to Met Office projected climate trends. The baseline is subject to considerable uncertainty, driven by factors that are difficult to predict, such as temperature variability, future energy prices, UKG policy decisions, and the future availability and cost of emerging technologies.
Non-Domestic Policy Package
Key policies
- Clean Heat Target – Non-Domestic
- New heat network provisions
Enabling policies
- Minimum energy efficiency standards
- Energy Performance Certificate Reform
- Heat Networks Support Unit
- Scotland’s Heat Network Fund
- Delivery schemes, including:
- SME Loan Scheme
- Business Energy Scotland
- Green Public Sector Estate Decarbonisation Scheme
- Future finance, including the Green Heat Finance Taskforce
- Local Heat and Energy Efficiency Strategies
| MtCO2e | 2026-2030 | 2031-2035 | 2036-2040 |
|---|---|---|---|
| Emissions Reductions | 0.03 | 0.6 | 2.4 |
Non-domestic emissions reductions are primarily driven by the clean heat target to decarbonise buildings by 2045, with support to incentivise the transition to clean heat.
Financial Impact Summary
| £2025 million | 2026-2030 | 2031-2035 | 2036-2040 |
|---|---|---|---|
| Total Benefit | - | - | - |
| Net CCP costs | 162 | 1,674 | 1,607 |
Costs associated with the delivery of the clean heat target are included in CB1 where there is greater certainty on action required. For subsequent carbon budgets the policy levers will be determined based on the outcome of existing SG policy, technologies and UKG policy decisions. As such they are not costed, given their proposal status. Costs associated with heat network provisions are included for CB1, CB2 and CB3.
Costs associated with Energy Performance Certificate Reform are included in CB2 and CB3 due to its status as a policy rather than proposal.
Cost Summary
The current Non-Domestic CCP policy package is expected to have an additional cost of around £3.4 billion from 2026 to 2040, noting that delivery of the target is only costed to 2030 given the need for greater certainty based on outcome of existing SG policy, technology development and UKG policy decisions.
The cost estimates reflect the additional cost required to transition from fossil fuel heating systems to clean heating alternatives, along with the supporting infrastructure necessary to enable this. It is assumed that a substantial portion of these costs will be borne by businesses who own non-domestic buildings.
Benefit Summary
Benefits associated with decarbonising non-domestic buildings are not quantified in the Plan period.
Average non-domestic electricity unit prices are currently around 4.6 times the level of unit gas prices.[270] While heat pumps can be around three times more efficient than traditional gas boilers, this is currently offset by the electricity-to-gas price ratio, making it unlikely that non-domestic buildings will experience reduced running costs from switching to heat pumps under current energy prices.[271]
There is potential for reduced running costs in the future if electricity prices decline relative to gas (e.g. if the UK Government were to use its reserved powers to reduce electricity prices). However, this potential benefit has not been quantified due to difficulties with predicting future energy prices which are influenced by a wide range of unpredictable factors, such as geopolitics, UKG policy decisions and future energy demand.
Negative Emissions Technologies
Negative Emissions Technologies (NETs) have been highlighted by the Climate Change Committee as being crucial for Scotland achieving its 2045 net-zero target[272]. NETs are engineered greenhouse gas removals that directly remove carbon dioxide from the atmosphere and store it in secure storage sites.
While there are several types of NETs, the most significant in terms of emissions reductions and the technologies the Scottish Government will be focusing on are:
- Bioenergy with Carbon Capture and Storage (BECCS)
BECCS operates by capturing emissions from biomass used for producing power, heat, fuels or hydrogen, and storing it in secure CCS sites. As biomass absorbs CO2 as it is grown, any captured emissions from biomass is treated as essentially removing CO2 from the atmosphere. BECCS costs vary considerably, like most NETs, with estimates suggesting values as high as £314/tCO2 to as low as £12/tCO2[273].
- Direct Air Capture with Carbon Storage (DACCS)
This technology aims to directly capture carbon dioxide from the air using chemical sorbents, then compress and send to a secure CCS site via pipelines. DACCs is currently very costly, at between £315 and £550 per tCO2[274]. However, costs are expected to decrease over time, making DACCS more relatively cost effective as a means of reaching net-zero.
As the exact mix of deployment for these developing technologies in Scotland is currently unknown, this analysis is subject to a significant degree of uncertainty.
The emissions reductions anticipated from NETs are presented below:
| MtCO2e | 2026-2030 | 2031-2035 | 2036-2040 |
|---|---|---|---|
| NETs | 0.2 | 3.0 | 12.2 |
Note: NETs emissions reductions result in cumulative negative emissions reductions
Financial Impact Summary
The costs of deploying NETS are highly uncertain and cost and benefit estimates for this proposal are not provided. All costs from NETs are expected to fall on government, as there is no financial motive for the private sector to invest in NETs currently. While integration of Greenhouse Gas Removals into the UK Emissions Trading Scheme[275] may help improve private investment in NETs and reduce costs over time, the overall net impact on emissions will hugely depend on the design of the UK ETS cap. Any move to a long-term net cap would mean any NETs generated from the UK ETS would be offset by higher UK ETS emissions.
Agriculture
Summary of Agricultural Pathway
Agricultural GHG emissions are projected to fall by 21% between 2025 and 2040. Around half of this is as a result of the CCP policy package that includes mitigation measures delivered under the Agricultural Reform Programme and initial work to reduce non-road mobile machinery (NRMM) emissions across the time period. Significant baseline reductions generated by wider external factors are estimated to account for the other half of the decline in agricultural emissions. The emissions profile across the three carbon budgets to 2040, accounting for the policies and proposals in the CCP, are estimated as follows:
| MtCO2e | 2026-30 | 2031-35 | 2036-40 |
|---|---|---|---|
| Agriculture Sector Emissions Pathway | 35.9 | 33.5 | 30.0 |
| Agriculture Sector Baseline | 36.1 | 34.8 | 33.5 |
| Agriculture Sector policy reductions | 0.1 | 1.3 | 3.5 |
Note: Totals may not sum due to rounding
An initial assessment of the costs and benefits arising from the policies brought forward as part of this CCP to decarbonise agriculture has been undertaken. At this stage of ARP development it has not been possible to fully assess the costs and benefits to industry of all elements of the policy package. All figures should therefore be treated as provisional.
The cost of the support package is aligned to the Agriculture and Rural Communities (Scotland) Act 2024 and is based on the current annual budget of £640m. It has been rolled forwards until 2040 for the purpose of this analysis. It is not a financial commitment. As is appropriate for the treatment of subsidy payments in cost-benefit analysis it has been reflected as a cost to Government as well as a benefit to industry.
The budget covers the full future support framework across all four Tiers of the support framework as they are designed as a package to deliver the Vision for Agriculture, of which climate change is one component. It is not possible to disaggregate the climate costs as the 4-tier structure being developed will work together to deliver all the outcomes of the Vision including climate mitigation, nature restoration and sustainable food production. The projections in the CCP do require the future support framework to deliver the mitigation measures with an uptake of 45% as discussed under the analytical description.
Baseline Emissions Projection
The main sources of agricultural emissions as outlined in the table above combine to result in the following projection of overall baseline emissions:
| MtCO2e | 2026-2030 | 2031-2035 | 2036-2040 |
|---|---|---|---|
| Agriculture Baseline Emissions | 36.1 | 34.8 | 33.5 |
Without policy action, emissions in the agriculture sector are projected to continue declining on a similar trajectory to historic trends. This is primarily because of economic factors resulting in the wider use of more efficient farming techniques meaning an equivalent level of output can be produced with fewer inputs. However, these declines in emissions, on their own, are not sufficient to meet the needs of the Carbon Budgets. Agricultural Reform is seeking to deliver the Vision for Agriculture which includes climate mitigation as a key outcome. This means there is greater emphasis on and incentives to reduce emissions and adopt emissions reducing technologies and practices, alongside sustainable food production and nature restoration.
Baseline Analytical description
Our baseline projections are based on independent peer-reviewed modelling of key agricultural sub-sectors for livestock and arable farming carried out using the FAPRI-UK trade model which have then been aligned to emissions sources in the greenhouse gas inventory for agriculture. The model was developed by Agri-Food and Biosciences Institute and captures the dynamic interrelationships among the variables affecting supply and demand in the main agricultural sectors of England, Wales, Scotland and Northern Ireland.
The projection period for the FAPRI-UK model used in the CCP baseline is 2021 – 2031 and showed a broadly stable projection for the value of output from livestock and arable sub-sectors with a downward projection in livestock numbers and arable hectares. We have adjusted these based on the percentage difference in outturn figures based on the 2023 inventory and extrapolated them forwards on a simple linear basis to 2040. The FAPRI projections are based on macroeconomic factors such as population growth, exchange rates, oil prices and world commodity prices. The 2021-2031 projections are not directly published but the 2020-2030 projections can be found here and topical analysis on Greenhouse Gas related scenarios using the 2021-2031 projections can be found here.
Livestock Emissions
Livestock emissions - mainly methane created during digestion from ruminant livestock, particularly sheep and cows - are projected to decline over the projection period. This also includes other sources of emissions such as from slurry and manure storage and use. These emissions can be further reduced by changes to a wide range of management practices including improved efficiencies, new technologies and improved animal health.
Agricultural Soils (Management)
These are emissions of nitrous oxide due to management practices which have an impact on soil and are projected to decline over the projection period. They are mainly linked to nitrogen inputs through fertilisers, manure and crop residues and can be reduced through alternative, improved or more efficient use of fertilisers. This category also includes indirect emissions associated with nitrogen leaching and run-off. Emissions and removals associated with soil carbon are captured separately in the LULUCF sector in accordance with international reporting guidelines.
Agricultural Combustion
Combustion emissions are carbon dioxide emissions released from burning fuels for agricultural activities such as operating tractors, irrigation pumps and other machinery. They were originally projected to remain constant over the projection period. These emissions can be reduced by using low energy or renewable technologies or by changes to management practices.
Other Emissions (and Removals)
It is also important that we acknowledge the valuable contribution that our farmers and crofters make to address climate change and support biodiversity as custodians of the land. As outlined in the Agriculture and Rural Communities (Scotland) Act supporting evidence and analysis publication, agriculture has an important role to play in reducing emissions in the Land Use, Land Use Change and Forestry (LULUCF) sector in the Climate Change Plan. This covers emissions and removals of greenhouse gases resulting from direct human-induced land use, land-use change and forestry activities. For example, the award-winning Integrating Trees Network, a farmer and crofter led initiative showcasing the multiple benefits of increasing the integration of trees on farmland for climate change and wider environmental priorities. The agriculture sector also includes a key policy related to ‘Protections of peatlands and wetlands’. This is another example of a policy that will support farmers and crofters to continue to take hugely important actions that increase carbon sequestration on our land.
Carbon naturally cycles between the soil and the atmosphere, with the balance influenced by environmental conditions (such as temperature and moisture), how the land is used, and the soil’s natural characteristics. In farmland, the way the soil is managed, such as through ploughing, crop rotation, or fertiliser use, can have an impact on how much carbon the soil holds and how fast it is returned to the atmosphere. Soil can only store a certain amount of carbon under normal conditions. In Scotland, soils tend to be high in organic carbon, meaning there will be a limited number of farms that have the capacity to increase long-term carbon storage. However, if these carbon-rich soils are not managed properly, they could lose some of their stored carbon, resulting in additional GHG emissions.
Policy Assessment
Key Proposals and Policies
- Agricultural Reform Programme
- Working to reduce Non-Road Mobile Machinery (NRMM) emissions
- Slurry storage and management
- Supporting emerging technologies, including Smartsheds
- Alternative, improved or more efficient use of fertiliser
- Scottish Suckler Beef Support Scheme reforms to introduce calving intervals
- Protections of peatlands and wetlands
Supporting Proposals and Policies
- Rural Support Plan
- Future Farming Investment Scheme (FFIS)
- Agricultural Knowledge and Innovation Systems
- Supporting tenant farmers to benefit from the Land Reform Bill
- Whole Farm Plans
- Nitrogen Use Efficiency (NUE) improvements through crop varieties
- Development of MyHerdStats
- Animal Health and Welfare Initiatives
- Methane Inhibitor pilot
- Understanding of selective breeding for low methane genetics
- Supporting planting and managing of trees on farms
Emissions Reduction
The table below shows the estimated emissions reductions from agriculture policies and proposals in CCP.
| MtCO2e | 2026-30 | 2031-35 | 2036-40 |
|---|---|---|---|
| Total | 0.1 | 1.3 | 3.5 |
The primary driver of emissions reductions from the baseline in agriculture will come from the Agricultural Reform Programme which is being designed to incentivise the uptake of climate change mitigation measures.
As set out in our Agricultural Reform Route Map and co-developed with the agricultural industry, we will continue delivering the Agricultural Reform Programme and our new four tier framework throughout the lifetime of the Climate Change Plan and beyond. Significantly, the Agricultural Reform Programme will ensure that our farm businesses continue to receive funding to produce high quality food while reducing their emissions and improving biodiversity.
An assessment of the costs and benefits arising from the policies to be brought forward as part of this CCP to decarbonise Agriculture has been undertaken. The summary of impacts is presented in the table below.[276]
| £2025 millions | 2026-2030 | 2031-2035 | 2036-2040 |
|---|---|---|---|
| Total Benefits | 3200 | 3200 | 3200 |
| Net CCP Cost | 30 | 30 | 30 |
Policy Package Analytical Description
The extent of the mitigation potential in the Scottish Agricultural Reform Programme was developed based on evidence in the ‘Scenarios for emissions reduction targets in Scottish agriculture’ report carried out by Scotland’s Rural College (SRUC) and published on the ClimateXChange (CXC) website. This report was developed by drawing on recommendations from Farmer Led Groups and other key stakeholder and academic reports outlining the ways in which agriculture in Scotland could reduce its emissions. The primary role of the Agricultural Reform Programme is to develop delivery mechanisms for these mitigation measures.
At present the assumptions for the uptake on mitigation measures are aligned to public commitments to increase the conditionality on at least 50% of support payments and to enable farmers some choice in these. They factor in all measures with an uptake of 45% across the board. In line with the current aims of the Agricultural Reform Programme, the majority of measures are assumed to begin to be implemented from 2030 and take 10 years to reach their respective peak uptake levels. The estimated impacts of two measures begin from 2025 based on announcements already made (Changes to Greening requirements and Calving Intervals). The table below shows the measures quantified in this work, along with other measures in the Climate Change Plan policy package, as well as an indication of emissions reduction in 2040 based on the assumptions above.
The majority of the mitigation from these measures is estimated to come from the Agricultural Reform Programme above as well as other measures such as water regulations and technology for fertiliser. Reductions from emerging technology, such as for reducing emissions from machinery and Smartsheds, have been estimated separately.
To estimate the emissions reduction from agriculture in each year a model was developed to draw together the baseline projections and extrapolations alongside the SRUC emissions reduction evidence, both of which are discussed above. This gives the number of animals and area of land that each measure is being applied to in each year which is then multiplied by the emissions factor for each measure.
This 45% level of uptake will be extremely challenging for the sector to achieve. The approach has been presented to the Academic Advisory Panel who determined it may be beyond an achievable level of mitigation for the sector. As the Agricultural Reform Programme develops and policy mechanisms become clearer these assumptions will need to be revisited.
Reductions to NRMM emissions have been based on the emissions reductions estimates in an evidence review by ClimateXChange[277] and an assumption of a gradually increasing proportion of alternatively fuelled newly purchased vehicles reaching 50% of new purchases by 2040. Vehicle sales have been estimated from Agricultural Engineer’s Association data and as the average lifespan of agricultural machinery is very long the reductions will take a number of years to build up and significantly change the stock of vehicles.
Reduced emissions from Smartsheds have been based on estimated savings from the SRUC Smart Shed project with 100 sheds being established by 2040.
Financial Impact Summary
The table below summarises the estimated financial impacts of the Agriculture policies and proposals in the CCP for each carbon budget period:
| £2025 millions | 2026-30 | 2031-35 | 2036-40 |
|---|---|---|---|
| Benefits | 3200 | 3200 | 3200 |
| Net CCP Costs | 30 | 30 | 30 |
There is a £640m annual budget which covers the full future support framework across all four Tiers of the support framework as they are designed as a package to deliver of the Vision for Agriculture. It is not possible disaggregate the climate costs as the Tiers work together to deliver all the outcomes of the Vision including climate mitigation, nature and sustainable food production. The projections in the CCP do require the future support framework to deliver the mitigation measures with an uptake of 45% as discussed under the analytical description.
The main additional cost to Scottish Government will be realised through the implementation of the Agricultural Reform Programme. This has been estimated at a cost of £36m between 2024/25 and 2029/30. It has been reflected in this document as an average of £6m annually at a cost of £30m in the time period in question (2026-2030). Further development may be required beyond 2030 but it has not been possible to factor this in at present so an annual figure of £6m has been rolled forwards. As with agricultural support itself the Agricultural Reform Programme is seeking to deliver on multiple objectives not just climate change. The costs above reflect the costs of the programme, delivering on all objectives.
Cost Summary
The net CCP cost to government is set at £6m per year which is the cost of the Agricultural Reform Programme. However, the annual £640m full future support framework across all four Tiers is necessary in order to deliver the emission reductions. In addition to this there are costs and benefits to industry that are yet to be fully quantified.
Benefits Summary
As outlined above, the quantum of agriculture support package are included here as a benefit to industry as is appropriate for the treatment of subsidies in a cost-benefit assessment. In addition to this there are substantial costs and benefits to industry that are yet to be fully quantified.
Land Use, Land Use Change, Forestry
Summary of LULUCF pathway
The table below shows the expected pathway of remaining emissions in each carbon budget period for the LULUCF sector following the policies and proposals in the CCP.
| MtCO2e | 2026-2030 | 2031-2035 | 2036-2040 |
|---|---|---|---|
| LULUCF CCP Emissions Pathway | 3.6 | -1.1 | 0.0 |
| LULUCF Baseline Emissions | 5.7 | 11.1 | 15.9 |
| LULUCF Policy Reductions | 2.1 | 12.1 | 15.9 |
The main emissions and removals estimated for the main sub-components of LULUCF over the Plan period are detailed below (net removals shown as negative numbers).
| Emissions/Removals MtCO2e | 2026-2030 | 2031-2035 | 2036-2040 |
|---|---|---|---|
| Peatlands | 29.5 | 19.8 | 17.3 |
| Cropland Mineral Soils Change | 21.7 | 20.6 | 19.8 |
| Settlements | 3.7 | 3.7 | 3.8 |
| Other LULUCF | -0.3 | -0.3 | -0.3 |
| Grassland Mineral Soil Change | -17.5 | -17.5 | -17.5 |
| Forestry | -33.5 | -27.4 | -23.0 |
| Total | 3.6 | -1.1 | 0.1 |
An assessment of the financial costs and benefits arising from the policies to be brought forward as part of this CCP to expand woodland creation and restore degraded peatlands has been undertaken. The summary of impacts is shown in the table below.
| £2025 millions | 2026-2030 | 2031-2035 | 2036-2040 |
|---|---|---|---|
| Total Benefits (Forestry) | 633 | 727 | 741 |
| Net CCP Costs (Forestry) | -151 | -71 | -79 |
| Total Benefits (Peatlands) | 172 | 206 | 206 |
| Net CCP Costs (Peatland) | 100 | 120 | 120 |
| Total Benefits LULUCF | 805 | 933 | 947 |
| Total Net CCP Costs LULUCF | -51 | 49 | 41 |
Note: negative Net CCP cost figures indicate that the estimated benefits exceed the costs.
Note that there are also considerable non-monetary benefits of the LULUCF policy package that is presented in this Plan.
Largest source of emissions
The LULUCF sector in the national greenhouse gas inventory is unique in that it includes both sources and sinks of greenhouse gas (GHG) emissions. Forestry is responsible for the biggest GHG removal, while peatlands are the biggest emissions source within the sector.
Land use change and management of agricultural soils contribute additional sources and sinks to the LULUCF sector. However, because soil carbon stocks change very slowly over time, much of the current emission source comes from land transformations more than 20 years old. While agricultural policies encourage good practices to maintain soil carbon, insufficient data and evidence exists to accurately quantify the impacts of these activities. Emission reductions associated with soil carbon stock changes in mineral soils are therefore not included in this analysis. For further information, see Agriculture Sector.
Forestry
Projections in sources of forestry emissions
The emissions from the forestry sector are derived from existing forest land, harvested wood products and land converted to forest land. The latest UK inventory data (2023) shows that the forest estate removes 7.6 MtCO2 annually, or 9.2 MtCO2e if sequestration in harvested wood products is included. These are expected to contract to –2.9 MtCO2e and -5.0 MtCO2e by 2040 if no further woodland creation takes place after 2025. This is primarily due to the uneven age profile of the forests, higher levels of timber harvests in recent years and their replacement with younger, temporarily slow-growing trees.
Harvested Wood Products (HWP) are wood-based materials harvested from forests. These are used in production and/or energy, acting as substitutes for more environmentally harmful materials and energy sources and help to sequester carbon by forming a wood-based sink. The HWP sink has increased 200% since 1990, which also highlights the increased demand for Scotland’s wood products.
| MtCO2e | 2026-2030 | 2031-2035 | 2036-2040 |
|---|---|---|---|
| Forestry Baseline Emissions Pathway | -33.5 | -27.4 | -22.4 |
The reduction in the forest carbon sink is projected to level-off in the period after 2040 and rise thereafter as recently planted woodlands move towards maturity and faster rates of growth. Creating new woodlands now is the main forestry measure to mitigate the decline in the sink in the next 15 years or so and to increase the rate at which sequestration capacity builds up again after that.
Analytical methodology for baseline
The Department for Energy Security and Net Zero (DESNZ) is responsible for producing the emissions baseline for the Land Use, Land-Use Change and Forestry (LULUCF) sector which includes forestry. The technical compilation of the inventory is produced by the UK Centre for Ecology & Hydrology (UKCEH) who, for the forestry component, use data provided by Forest Research. UKCEH uses a wide array of data sources (e.g. National Forest Inventory) as key inputs in carbon flow models to calculate the net emissions or removals in the forestry sector. These models simulate changes in forest carbon stocks and are driven by historical and current data on forest planting rates, management practices and harvesting to measure the entire forest lifecycle and estimate annual net CO2 removals. The central baseline scenario used assumes a minimal woodland creation schedule of 326 hectares per year.
Key Policy
Summary of key policy – woodland creation
Scottish Forestry has worked with colleagues in the Scottish Government to prepare forestry’s contribution to the Climate Change Plan. The current policy (Policy 1) is to scale up to 18,000 hectares of new woodland a year by 2029, with a further 10% “stretch” in CO2 removals due to the potential for improved location, species and management of trees. By 2040, this will result in an estimated total of 258,000 hectares of new woodland being planted.
| 2026-2030 | 2031-2035 | 2036 -2040 | Total | |
|---|---|---|---|---|
| Woodland Creation Schedule, (hectares) | 78,000 | 90,000 | 90,000 | 258,000 |
The anticipated annual increase in the carbon sink from the proposed woodland creation schedule is estimated at 0.3 MTCO2e in 2040, as sequestration picks up from woodlands created in previous years. There is then increasing sequestration after this period. This will reduce the contraction in the annual carbon sink, which will reach -5.3 MTCO2e in 2040, a reduction of 38% of current levels.
| MtCO2e | 2026-2030 | 2031-2035 | 2036-2040 |
|---|---|---|---|
| Key Policy, Woodland Creation | 0.0 | 0.0 | 0.6 |
Although out of scope for this assessment, higher sequestration levels will continue beyond 2040 due to the new planting achieved, rising to -5.8 MtCO2e in 2045.
Supporting Policies
Summary of policy – increase the use of sustainably sourced wood-fibre or harvested wood products
A secondary policy is to increase the use of sustainably sourced wood-fibre or harvested wood products (HWP) to reduce GHG emissions. This will be achieved through greater use of wood products by the construction and productive industries, thereby substituting for more carbon intensive materials and resulting in the potential for further emissions reductions in the Industrial and Business Processes sector. The amount of HWP available for use and its associated carbon sequestration is directly although partially dependent on woodland creation policy, as the policy influences the type, volume, and quality of timber that will be available in the future.
Summary: Monetised Impacts
| £2025 millions | 2026 – 2030 | 2031 – 2035 | 2036 - 2040 |
|---|---|---|---|
| Benefits | 633 | 727 | 741 |
| Net CCP Costs | -151 | -71 | -79 |
Note: negative Net CCP cost figures indicate that the estimated benefits exceed the costs.
The main affected groups under the key policy are government and business. The results present analysis for a 15-year assessment period commencing in 2026. Central costs values are used here although the development of high, and low scenarios was considered.
The total benefits to government and business are an estimated £2.1bn over the appraisal period. The monetised benefits are derived from economic activity from timber (public and private benefits) and estimated carbon market value of woodland projects (private benefits only).
The estimated total impact is a net benefit (negative costs) of £301 million over the appraisal period.
The costs of delivering on the Forestry ambitions of this CCP are primarily from the required capital investment for new forestry planting, maintenance costs and Scottish Forestry resource costs. The exact split of these is determined by Government’s level of funding through the Forestry Grant Scheme (FGS) which include 5-yearly maintenance costs and by the level of resourcing required by Scottish Forestry to achieve the hectare targets.
Any capital funding not provided by Scottish Government will have to be sourced from businesses which will result in a direct financial cost during initial planting phases and ongoing maintenance during the growth period.
There are some additional private costs for administration but these costs have not been accounted for due to the limited evidence at this stage. Expected additional emissions reductions from this policy will not be realised until 2040 due to the time taken for newer trees to sequester carbon.
Policy summary of benefits
The key and supporting policies are expected to result in total benefits of £2.1 billion across government and business. These values are derived from the economic activity from timber and estimated carbon market value of woodland projects under the key policy.
The key policy of expanding and sustained woodland creation, together with the Forest Grant Scheme incentive, provides the conditions for a predictable, rising future timber supply and an increased revenue and profit stream beyond 2040. The policy can help reduce business risk of investment in innovation, widen timber procurement, increase productivity and market expansion; particularly as domestic demand for timber remains high to meet construction and Net Zero targets across the UK.[278]
The release of carbon credits is a market-based way of valuing CO2 removals, although the true social value of carbon is an order of magnitude greater than the market value. In this case, Scottish Forestry uses the FGS investment to unlock private market funding in the creation of woodland in order produce the positive spillover effects from woodlands (e.g. carbon sequestration) and securing long-term benefits to the public. Additionally, the economic value of wider non-market benefits (e.g. biodiversity, health and well-being) is estimated to be at least £2bn annually across the whole forest estate.
Other benefits
Other benefits of the forestry policy package for the CCP are based on non-market values. However, some evidence-based methodologies for approximating co-benefits and non-market values of woodland creation per annum are outlined below for context. Methodology for employment figures in direct woodland creation is also given.
- The social benefits have been valued as £400 million and £32.5 million per year for recreation and landscape amenity, respectively. Recreation value was estimated using a willing to pay unit values to travel to woodlands for recreation, multiplied with the number of visits to woodlands per year. Landscape valuation is based on public preferences and willing to pay for forested landscapes and views, multiplied by rural populations from census data.
- Human health benefits have been estimated as £34 million per year, being the estimated avoided costs of healthcare (issuing prescriptions) for reduction in mental health prevalence from visiting woodlands regularly. This achieved from establishing the estimated number of adults who visit woodlands and have a mental health condition and multiplying with the prevalence reduction from regular visits and relevant treatment cost profile.
- An annual average of 1,700 FTE jobs will be supported directly from woodland creation over the appraisal period. Employment benefits have been modelled using expected marginal FTE from initial planting, maintenance and management. These FTE estimates are multiplied by the annual woodland creation schedule under the key policy.
Peatlands
For the purposes of emissions reporting, peatlands are categorised based on their condition, land use and vegetation composition, with drainage recognised as a key driver of increased emissions. Drainage has historically been driven by a combination of land use pressures, economic incentives, and development practices, for example for agricultural expansion, afforestation, peat extraction or infrastructure development. In addition to the impact of drainage, emissions estimates from peatlands include quantification of carbon that is lost through grazing and/or harvesting, and peat that is washed downstream, which is particularly important for heavily eroded and exposed sites.
| 2026-2030 | 2031-35 | 2036-2040 | |
|---|---|---|---|
| Peatland baseline emissions pathway | 31.6 | 31.9 | 32.6 |
Peatland emissions are not expected to change substantially without policy action. There may be some further emissions reductions from restoration carried out in previous years, recognising that it takes time for peatlands to fully recover. However, it is also likely that the condition of some peatlands already in a degraded state, or subject to continual overgrazing, may degrade further without intervention, leading to some increase in emissions. Emissions may also rise in response to the changing climate. While this has not been explicitly quantified, evidence suggests degraded peatlands are less resilient to the impacts of climate change, such as drought and wildfire, than those in good condition.
For the purpose of this analysis, baseline peatland emissions have been extracted from the Department for Energy Security and Net Zero’s (DESNZ) Land Use, Land-Use Change and Forestry (LULUCF) sector modelling, which assumes no additional restoration without policy intervention.
Peatland policies have been designed to improve peatland condition and stewardship across Scotland, in order to maintain or reinstate their natural function for the benefit of the climate, nature and people. They are gathered into 3 outcomes – protect, manage and restore – supported by world-class evidence and research.
In addition to ‘restore’, the Plan contains other peatland policies and proposals under ‘protect’ and ‘manage’ including those relating to banning the sale of peat for horticulture, changes to deer management, windfarm and other development on peat, muirburn, and agriculture and crofting. These contribute towards our overarching vision for improving the condition of peatlands across Scotland to strengthen their role in mitigating and adapting to the climate and nature emergencies. However, these other policies and proposals are not yet sufficiently developed to allow emissions reduction estimates at this time. The analysis below is therefore focused on emissions reductions associated with peatland restoration.
However, changes in emissions associated with improved accuracy in reporting are also quantified, recognising the continual update and improvement of the evidence base used by the UK GHG inventory.
Key Policy
- Peatland Restoration. 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.
Analytical methodology
Peatland restoration is the primary means of reducing peatland GHG emissions, with restoration efforts focussed on rewetting, reprofiling, stabilising and revegetating dry or damaged peatlands.
A model based on the UK GHG Inventory methodology was used to estimate the emissions reductions associated with peatland restoration.
Working in collaboration with delivery partners, ambitious yet achievable annual restoration rates have been calculated. Total annual restoration projections were further refined by splitting between peatland condition categories, following the approach of the UK GHG Inventory, and based on advice from the Scottish Government’s Peatland Science and Technical Advisory group. Whilst the majority of peatland restoration is assumed to be carried out on modified bog, which represents the biggest area of degraded peat, the proportion restored within high emitting categories such as eroded and eroding peats are assumed to increase to maximise emissions savings.
The peatland model uses these restoration projections to calculate emissions savings based on emission factors and lag times for each condition category. Lag times reflect the reality that severely degraded peatlands require several years to recover and achieve the full potential for emissions reduction after restoration activities are complete. This means that the emission savings from restoration undertaken in the late 2030s will not be fully realised within the quantified timeline presented here.
Emission factors used in the model are based on those in the UK GHG Inventory. As the inventory methodology does not include lag times in its calculations, these were estimated based on available literature and expert advice from the Scottish Government’s Peatland Science and Technical Advisory group.
Supporting Policies
- Improved accuracy in emissions reporting
Recent evidence has shown that the area of peatland currently assumed to be under grassland vegetation in Scotland has previously been significantly overestimated. Peatland mapping is therefore being improved to provide more accurate peatland emissions calculations.
Analytical methodology
Recent detailed ground surveys and modelling carried out by the James Hutton Institute (JHI) show that the area of grassland on peat in Scotland has been significantly overestimated in the UK GHG Inventory. The research team at JHI are a leading authority on Scottish peatlands, strongly involved in the development and implementation of the UK GHG inventory peatland reporting methodology.
Many sites currently mapped as grassland on peat were found to contain either shallow peat or less intensive land use than assumed, leading to inflated emissions figures. Conservative estimates of the adjusted emissions, as a result of expected area corrections, have been drawn from these preliminary research studies.
Correcting this results in an additional reduction in calculated emissions over the time period.[279]
Emissions Reduction
The cumulative emissions reductions from the above policies combined are estimated as follows:
| MtCo2e | 2026-2030 | 2031-2035 | 2036-2040 |
|---|---|---|---|
| Peatland restoration | 2.1 | 4.5 | 7.6 |
| Peatland area correction | - | 7.7 | 7.7 |
| Total | 2.1 | 12.1 | 15.3 |
As a result, reported annual peatland emissions are expected to reduce from an estimated 6.1 MtCO2e in 2025 to 3.2 MtCO2e by 2040.
Financial Impact Summary
A summary of the estimated financial impacts of the peatland policies for each carbon budget period are shown in the table below:
| £2025 millions | 2026-2030 | 2031-2035 | 2036-2040 |
|---|---|---|---|
| Total Benefit | 172 | 206 | 206 |
| Net CCP Costs | 100 | 120 | 120 |
There are potential benefits deriving from Peatland Code carbon credits for businesses and landowners which could be expected to be around £583 million over the CCP appraisal period.
The Scottish Government recognises through the Natural Capital Market Framework that high integrity private investment in nature-based solutions has a role to play. The voluntary Peatland Code currently offers financial incentives for landowners, while further blended finance models are being explored to reduce landowner risk and help ease public funding demands. The expectation is that private finance is going to contribute more to funding peatland restoration over time.
This policy package is expected to generate multiple non-financial benefits as a result of improved peatland condition and its ecosystem services, including reducing carbon emissions, as well as significant co-benefits associated with improved water and air quality, flood alleviation, increased biodiversity, reduced wildfire risk and resulting health benefits to the population. Further benefits of healthy peatlands to Scotland include culture, tourism and wellbeing impacts, as well as supporting rural economies.[280]
However, these wider benefits of peatland restoration can be difficult to quantify and monetise compared to costs, resulting in a skewed picture of the benefit-cost ratio to the wider society. The net impact of the peatland policy considered under CCP appears as a net cost, which can be misleading. The analysis for the CCP was not able to include all the wider benefits, nor the potential future shift of financing from Scottish Government to a more balanced and shared funding with private finance. There are continued efforts to improve Natural Capital valuation, and improved methodologies will therefore be explored to better quantify socio-economic impacts of peatland restoration.
Costs
Summary
| £2025 millions | 2026-2030 | 2031-2035 | 2036-2040 |
|---|---|---|---|
| Net CCP Cost | 100 | 120 | 120 |
Central cost estimates are reported in the table above for each carbon budget period although low, central and high were considered in the cost analysis. Quantified cost estimates are provided where feasible. The Scottish Government funds a significant portion of the carbon reduction through capital grant schemes administered via the Peatland ACTION programme. However, as noted above the contribution of responsible private finance is expected to increase over time and meet some of the capital costs in the modelling.
Analytical methodology
The methodology for assessing the costs of the peatland policy as for the CCP pathway is as follows. Annual cost estimates are derived from the capital costs recorded in NatureScot’s Peatland ACTION grant data which are modelled to align with the CCP restoration pathway key policy scenario as outlined earlier in the document. The costs are split according to Brown et al. peat condition categories and capital costs based on grant data for 2022[281].
A 20% assumption of resource costs has been applied to arrive at approximate total costs. For sensitivity analysis, low, central and high scenarios for costs are considered, the central scenario being the 75th percentile of restoration costs to reflect optimism bias. In reality delivery costs vary considerably and the cost to public sector could be lower than these estimates. All costs are reported in 2025/26 prices.
Benefits
Summary
The below table summarises the estimated benefits arising from the peatland policies in the CCP, which we have been able to monetise.
| £2025 millions | 2026-2030 | 2031-2035 | 2036-2040 |
|---|---|---|---|
| Total Benefit | 172 | 206 | 206 |
Benefits modelled for the CCP package are for the potential benefit to businesses and landowners from the opportunity to sign up to the Peatland Code and generate income from carbon credits.
Benefits for business and landowners are formalised here as the unrealised market value for the asset, produced by the Pending Issuance Unit (PIU) volume given upon a project’s validation. Under the peatland restoration policy there is an expected total benefit to business of £583 million over the CCP appraisal period.
Context
There are significant benefits to society of restoring degraded peatlands, feeding into achieving multiple Scottish Government objectives and commitments. Benefits of peatland restoration are realised for the general population in Scotland, but can also support Local Authorities and businesses located near the areas where peat is located.
This is because peatlands are able to store carbon emissions whilst also delivering wider co-benefits to society. Restoring peatlands improves habitats, enhances biodiversity, reduces flooding and wildfires, improves water quality, and protects iconic Scottish heritage whilst providing recreation and health benefits. Restoration activity can also stimulate local economies and support resilience of supply chains and infrastructure to climate change.
In general, broad estimates suggest that the economic value of restored peatlands could be deemed to range from £130 to £415 per hectare per year when considering a broad range of ecosystem services, and £90 to £210 per hectare per year for climate benefits alone[282]. Such studies estimate the value that people place on the benefits of peatland restoration, such as carbon capture, habitat provision and regulation of water quality. As noted above, whilst it is hard to model precisely these wider benefits in full for the current CCP trajectory for peatland restoration, the figures above provide the general context to illustrate the socio-economic importance of peatlands.
The latest estimates for peatland restoration workforce projections are summarised in the table below[283].
| Occupation | Low Demand Scenario (10,000 Hectares) | Medium Demand Scenario (100% increase to 20,000 hectares) | High Demand Scenario (250% increase to 35,000 Hectares) |
|---|---|---|---|
| Peatland ACTION Partner | 87.9 | 132 | 198 |
| Agents | 50 | 125 | 200 |
| PC Validators | 5 | 12.5 | 20 |
| Ecologist/ site surveyors | 40 | 80 | 140 |
| Contractors | 200 | 400 | 700 |
| Total | 382.9 | 749 | 1,258 |
There are caveats to these estimates of job creation[284], which is why they are not used for modelling of the peatland policy package CCP benefits. These caveats are outlined in detail in the accompanying BRIA document.
The portion of benefits that has been monetised for the CCP is through carbon income, as landowners and businesses can voluntarily apply for the IUCN’s Peatland Code to receive income from carbon credits from peatland restoration. This is a market-based mechanism that turns potential or realised carbon sequestered from voluntary peatland restoration projects into potential (Pending Issuance Unit) or realised (Peatland Code Units) carbon credits, which are a standardised, tradable commodity. As such, this provides income to businesses and landowners recognising the carbon benefit of their restored peatland as valued by the market. For projects to register with the Peatland Code they have to meet the additionality criteria where at least 15% of project funding must come from carbon finance.[285]
Analytical methodology
Suggested methodologies for approximating monetised carbon and co-benefits of peatland restoration per hectare per annum are outlined below for context. Whilst the direct benefits of carbon reduction can be measured through tracking emissions reductions, they can also be monetised using one of two proposed methods:
1. Carbon credits from registering restoration with the voluntary Peatland Code. These credits currently have a value of around £25 (in 2024) and represent 1 tonne of CO₂ equivalent (tCO₂e) emissions saved from restored peatland. The price of each credit reflects the market traded value of carbon.
2. UK Government carbon values for appraisal. The BEIS carbon value represents the marginal abatement cost consistent with the UKG 2050 Net Zero target. It is used in government policy appraisal to include the costs of carbon emissions in decision-making. The BEIS carbon value in Scotland can be estimated to be around £642.56 per hectare of peat restored.
In order to avoid double counting the value of carbon, it is recommended that these two values cannot be used in combination, but they do reflect different scope of economic valuation.
For the CCP analysis, market values from the IUCN’s Peatland Code were adopted to model the potential benefits to businesses. This was based on IUCN data for Peatland Code (PC) projects that have achieved validation and are therefore eligible for the issuance of Pending Issuance Units (PIUs). A nine-year average proportion of 36% for total validated projects was applied to the annual peatland restoration pathway. No lag assumptions were incorporated into the benefits realisation timeline. The current market price of PC PIUs (£25 as of 2024) was held constant, with no inflationary adjustments modelled. It should be noted that future fluctuations in market price could significantly impact the projected benefits. The benefits for the CCP are presented in 2025-26 prices.
Overall this approach considers the monetised long-term benefit of the unrealised asset value of the carbon value from the restoration of peatlands. These long term benefits are not fully realised until the PIUs are verified and converted into Peatland Carbon Units (PCUs) and can be classed as a stock asset to the businesses and landowners. This analysis for the CCP does not model the PCUs. Finally, the range of significant co-benefits of peatland restoration is not reflected in the market prices of PIUs, as such the modelled benefits to businesses are not inclusive of the value of the wider co-benefits.
List of Policies and Proposals
Key:
The full list of policies and proposals related to this CCP are listed below. Each box sets out the policy and the outcome it contributes to.
It also sets out whether the action is new for this CCP or existing and the time the emissions impacts will take effect.
For example:
“(Existing) [In Progress, CB1-CB4]” means the action is pre-existing, is already implemented/in progress and will have emissions impacts in Carbon Budgets 1-4
“(New) [CB1, no direct emissions impact]” means the policy is new, will be implemented in Carbon Budget 1, but does not have any direct emissions impact associated with it (though supports and enables delivery of the package as a whole).
Heat in Buildings
Heat in Buildings 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.
Heat in Buildings 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.
Heat in Buildings Outcome 3: The heat transition is fair, leaving no-one behind and stimulates employment opportunities as part of the green recovery.
Heat in Buildings Outcome 1 & 3 Policy 1, Proposal 1 & Proposal 2 (Existing) [In Progress, CB1-CB4]: A target for decarbonising heating systems. We are setting a target to decarbonise buildings by 2045. By establishing and confirming 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 will also publish, by the end of 2026, 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).
Heat in Buildings Outcome 1,2 & 3 Enabling Policy 2 (Existing) [In progress, no direct emissions impact]: 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.
Heat in Buildings Outcome 2 & 3 Enabling Proposal 3 (New) [In progress, no direct emissions impact]: Minimum Energy Efficiency Standards. We are considering options to introduce powers to set Minimum Energy Efficiency Standards for owner/occupier and non-domestic properties, subject to further consideration.
Heat in Buildings Outcome 2 & 3 Enabling Policy 3 (Existing) [CB1, no direct emissions impact]: 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), which our consultation proposed could apply to new tenancies from 2028 and all tenancies from 2033. Further to decisions on the consultation outcome, we intend to progress regulations using existing powers to introduce this MEES within this parliamentary term.
Heat in Buildings Outcome 2 & 3 Enabling Policy 4 (New) [CB1, no direct emissions impact]: 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.
Heat in Buildings Outcome 1 & 2 Enabling Policy 5 (New) [In progress, no direct emissions impact]: Energy Performance Certificate (EPC) Reform. We will introduce new Energy Performance Certificate (EPC) regulations in 2025 which will bring an improved EPC rating system into force in autumn 2026. 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 & 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.
Heat in Buildings Outcome 1,2 & 3 Enabling Policy 6 (Existing) [In progress, no direct emissions impact]: 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.
Heat in Buildings Outcome 1 & 3 Enabling Policy 7 (New) [CB1, no direct emissions impact]: Heat Networks – new Heat Network proposals. We will boost heat network development by requiring large, non-domestic premises to move away from fossil fuel heating systems when they have the opportunity to connect to a heat network. We are also planning 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. We will continue to support the development of these heat networks through funding and advice, such as our two existing schemes, Scotland’s Heat Network Fund and our Heat Networks Support Unit.
Heat in Buildings Outcome 1 & 3 Enabling Policy 8 (Existing) [In progress, no direct emissions impact]: Heat Networks - ç (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.
Heat in Buildings Outcome 1 & 3 Enabling Policy 9 (Existing) [In progress, no direct emissions impact]: 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.
Heat in Buildings Outcome 1,2 & 3 Enabling Policy 10 (New) [CB1, no direct emissions impact]: Heat in Buildings Strategy and Delivery Plan.
Heat in Buildings Outcome 1 & 3 Enabling Policy 11 (Existing) [In progress, no direct emissions impact]: 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 will respond to the Taskforce this year, setting out the early actions 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 we will take to explore the potential to create a market for innovative financing approaches.
Heat in Buildings Outcome 1 & 3 Enabling Policy 12 (Existing) [In progress, no direct emissions impact]: 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.
Heat in Buildings Outcome 1,2 & 3 Enabling Policy 13 (Existing) [In progress, no direct emissions impact]: 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.
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) [CB1, no direct emissions impact]: Work with Local Authorities and Regional Transport Partnerships to provide research, advice and guidance on reducing car use.
Transport Outcome 1 Policy 2 (Existing) [In progress, in progress]: 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) [CB1, no direct emissions impact]: Successor Policy Car Use Reduction – Following a review of the car use reduction policy, a new draft target has been set out in alignment with the Climate Change Plan and supportive of our Net Zero targets. A draft 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).
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) [In progress, In progress]: 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) [In progress, In progress]: 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) [no direct emissions impact, no direct emissions]: 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) [no direct emissions impact, no direct emissions impact]: 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) [In progress, In progress]: Retain the commitment to Active and Sustainable Travel investment.
Transport Outcome 2 Enabling Proposal 1 (New) [CB1, no direct emissions impact]: 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) [CB1]: Increases in funding alongside capacity and capability of Local Authorities/ Regional Transport Partnerships/Transport Scotland and supporting consultancy.
Transport Outcome 2 Policy 6 (New) [CB4]: 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.
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)[CB1, It is not possible to estimate carbon saving as the mode shift grants are not based on emissions, instead they’re based on removing HGVs from roads to reduce congestion and safeguard the condition of the road surface.]: Providing grant support for modal shift of freight from road to rail or water.
Transport Outcome 3 Policy 2 (New): Specific rail freight investments.
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) [CB1, CB2, CB3, CB4 VETS runs from 2024-2030, with a follow on phase to be legislated for 2030-2035. The carbon benefits will apply across all four CB periods, VETS aims to reduce emissions in Scotland by 0.7 MtCO2e in CB1, 5.2 MtCO2e in CB2, 10.3 MtCO2e in CB3, and 10.5 MtCO2e in CB4. A total of 25.2 MtCO2e reduced from the business-as-usual. LCTL aims to fund approximately 700 EV cars and up to 125 vans in FY 2025/26.]: 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. VETS operates UK-wide and is currently the single most effective policy measure for reducing transport emissions in Scotland, mandating an annual escalation in the proportion of sales of new zero emission cars and vans from 22% of cars and 10% of vans in 2024 to 80% cars and 70% vans by 2030. VETS
Transport Outcome 4 Enabling Policy 2 (Existing) [CB1, supports the transition of zero emissions vehicles]: 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) [CB1, supports the transition of zero emission vehicles]: EV Infrastructure Fund (public EV charging network).
Transport Outcome 4 Policy 4 (Existing) [CB1, Minimal, the public sector car and van fleet are less than 1% of licensed road vehicles in Scotland]: 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) [CB1 and CB2, supports the development of new incentives to support the transition of zero emission vehicles]: 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) [CB1, support the transition of zero emission vehicles]: 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.
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) [CB1, ScotZEB funding in place. Vehicles on order or already deployed. Full benefits to accrue during CB1]: support the transition of zero emission vehicles]: Providing Government support for bus decarbonisation (ScotZEB).
Transport Outcome 5 Policy 2 (Existing) [CB1, Funding in place. Vehicles on order or already deployed]: Providing Government support for decarbonisation of Community Transport (Plugged-in Communities).
Transport Outcome 5 Policy 3 (New) [CB1 CB2 CB3, Funding programme proposed to launch in 2026-27 with transition taking effect from that point and increasing thereafter.] : Investment in replacement of HGV vehicles and deployment of charging infrastructure.
Transport Outcome 5 Proposal 1 (New) [CB2 CB3, Regulation not expected to be in place until late CB1 with effect in CB2 and 3.] : Consider what regulatory options are available to encourage and ensure transition; implement as required.
Transport Outcome 5 Proposal 2 (New) [CB1 CB2 CB3, No direct emissions impact but essential enabler of policy 3.]: Support skills development and other aspects of economic development to support a Just Transition.
Transport Outcome 6: We will work to decarbonise scheduled flights within Scotland by 2040.
Transport Outcome 6 Supporting Policy 1 (Existing) [CB1 and ongoing, Currently minimal, but by 2040 in theory will be emission free]: Developing the world’s first zero emission aviation region in partnership with Highlands and Islands Airports Limited (HIAL).
Transport Outcome 6 Policy 2 (Existing) [CB1/CB2, minimal until production underway]: SAF & Project Willow. The development of new electric/alternative fuels and vehicles, 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.
Transport Outcome 6 Policy 3 (New) [unknown, no direct emissions impact]: Air Departure Tax. The Scottish Government is committed to introducing Air Departure Tax (ADT) as a devolved replacement for the UK-wide Air Passenger Duty. This will be in a manner that protects Highland and Island connectivity while complying with the UK Government’s subsidy control regime.
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) [CB1-CB4, no direct emissions]: Lay and publish the initial Rural Support Plan in Winter 2025 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) [in progress and further in CB1, CB2-CB4]: 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) [CB1-CB4. CB2-CB4]: 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) [In progress, CB1-CB4]: By 1st 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 engage with farmers to improve storage management and investigate with industry representatives how compliance with the regulations may be monitored and enforced.
Agriculture Outcome 1 Enabling Policy 4 (New) [In progress, no direct emissions impact]: Support enhancing the delivery of climate change and nature outcomes by farmers and crofters through our Future Farming Investment Scheme, which provides funds to drive efficiency and support nature and climate friendly farming.
Agriculture Outcome 1 Proposal 2 (New) [CB1-CB4, CB2-CB4]: 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) [In progress and in CB1, no direct emissions impact]: 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 will contribute to the suite of support provided under an Agricultural Knowledge and Innovation System coming into operation under tier 4 from 2027. This will disseminate learning on low emissions farming, through a range of communication methods.
Agriculture Outcome 2 Enabling Proposal 1 (New) [CB1-CB4, no direct emissions impact]: We will ensure that tenant farmers are able to capitalise on the benefits of measures in Part 2 of the Land Reform Bill, and once enacted, 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) [In progress and in CB1. No direct emissions impacts]: 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) [In progress and in CB1, no direct emissions impact] : 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) [CB1-CB4, CB1-CB4]: 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) [CB1-CB4, no direct emissions impacts]: 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) [In progress and CB1, CB1-CB4]: 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) [CB1-CB4, no direct emissions impact]: 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) [CB1, no direct emissions impact]: Launch a pilot scheme working with industry to identify the barriers to uptake of approved methane inhibitors and to identify a pathway, where appropriate, for the industry to adopt methane supressing feed products.
Agriculture Outcome 4 Enabling Proposal 2 (New) [CB1, no direct emissions impact]: 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) [In progress and in CB1, CB1-CB4]: 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) [In progress, CB1-CB4]: 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) [In progress, no direct emissions impact]: 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) [CB1, no direct emissions impact]: 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)[In progress and in CB1-CB4, no direct emissions impact]: We will continue to explore options for more integrated land use, including through the upcoming fourth iteration of Scotland’s 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) [CB1-CB4, No direct emissions impact]: 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.
Business and Industrial Process/NETs
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) [In progress, CB1-CB4]: 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) [In progress, CB1-CB4]: 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) [CB1, CB1-CB4]: 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) [In progress, CB1-CB4]: 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) [In progress, CB1-CB4]: 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) [CB1, CB2,CB4]: 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) [In progress, CB1- CB4]: 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) [CB1, CB2-CB4]: 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) [In Progress, CB2-CB4]: 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) [In Progress, CB2-CB4]: 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) [In progress, no direct emissions impact]: 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) [In progress, no direct emissions]: 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) ) [In progress, no direct emissions]:: 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) [CB1, No direct emissions impact]: 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) [No direct emission impact]: Replicate and scale-up demonstration projects and the evidence base for hydrogen-based technologies
Business and Industrial Process/NETs Outcome 2 Proposal 5 (New) [In progress, CB2-CB4]: 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) [In progress, CB2-CB4]: Continue to explore and understand the potential of Negative Emissions Technologies (NETs) in Scotland to develop clear NETs ambitions.
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)[CB1. No direct emissions impact]: We will publish Scotland’s 4th Land Use Strategy by end of March 2026.
Land use Outcome 1 Enabling Policy 2 (Existing) [CB1, no direct emissions impact]: 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.
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) [CB1-CB4, no direct emissions effect]: Forestry grants will provide funding via a grant scheme to support eligible landowners to establish appropriate woodlands.
Forestry Outcome 1 Policy 2 (Existing) [CB1-CB4, CB3-CB4]: 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) [CB1, no direct emissions impact]: 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) [CB1, no direct emissions impact]: 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) [CB1-CB4, no direct emissions impact]: 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), [CB1-CB4, no direct emissions impact]: 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) [CB1-CB4, no direct emissions impact]: 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) [CB1-CB4, no direct emissions impact]: To work closely with the sector through the Scottish Forestry and Wood Based Industries Industry Leadership group.
Forestry Outcome 2 Enabling Policy 3 (Existing) [CB1, no direct emissions impact]: 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) [CB1, CB2-CB4]: 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) [CB1, no direct emissions impact]: 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) [CB1-CB2, CB2- CB4]: 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) ) [CB1, no direct emissions impact]: 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) [CB1-CB2, no direct emissions]: We will continue our work with partners and stakeholders to develop incentives, guidance and advice on peatland stewardship within the new agricultural support framework for land-owners and managers looking to enhance peatland protection, management and restoration on their land.
Peatlands Outcome 2 Proposal 2 (New) [CB1-CB2, CB1-CB4]: We will continue our work with Peatland ACTION to support crofters on the Scottish Ministers’ estate wishing to progress peatland restoration. The new Crofting and Scottish Land Court Bill aims to bolster and strengthen the role of these 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) [CB1, no direct emissions impact]: 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) ) [CB1, no direct emissions impact]: 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) [CB1-CB3,CB1-CB4]: 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. Along with other reductions in peatland emissions enabled by the package, this will reduce peatland emissions from 6.2 MtCO2e in 2023 to 3.2 MtCO2e in 2040.
Peatlands Outcome 3 Enabling Policy 2 (New) [CB1-CB3, no direct emissions impact]: To support peatland restoration targets, we will publish a Five-Year Peatland ACTION Plan. This will document realistic and achievable targets and activity to document what the peatland sector in Scotland has the capacity, skills, capabilities and finance to deliver.
Peatlands Outcome 3 Enabling Policy 3 (Existing) [CB1, no direct emissions impact]: 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) [CB1-CB2, no direct emissions impact]: 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) ) [CB1-CB4, no direct emissions impact]: Through our Private Investment in Natural Capital programme, we will continue our work to leverage and blend responsible private investment into peatland protection, management and restoration up to and beyond 2030.
Peatlands Outcome 3 Proposal 1 (Existing) [CB1-CB3, CB1-CB4]: 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) [CB2-CB3, no direct emissions impact]: 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) [CB1-CB4, no direct emissions impact]: Through our forthcoming Strategic Research Programme and other routes, we will continue to invest in research, monitoring and mapping to: better understand the distribution and condition of Scotland’s peatland resource; better understand businesses in the supply-chain and any impacts arising from our actions, build the restoration pipeline and drive efficiencies; and understand the complex relationship between herbivore grazing and peatland condition and emissions.
Peatlands Outcome 4 Enabling Proposal 1 (New) [CB1-CB4, no direct emissions impact]: 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.
Waste
Waste Outcome 1: Strengthen the Circular Economy
Waste Outcome 1 Enabling Policy 1 (New) [CB1, no direct emissions impact]: Publish a Circular Economy Strategy in 2026.
Waste Outcome 1 Enabling Policy 2 (New) [CB1, no direct emissions impact]: Set new circular economy targets by 2027.
Waste Outcome 1 Enabling Policy 3 (New) [CB1, no direct emissions impact]: Develop public procurement opportunities to reduce the environmental impact of public spending.
Waste Outcome 1 Supporting/ Enabling Policy 4 (Existing) [CB1, no direct emissions impact]: 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) [CB1, no direct emissions impact]: 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) [Ahead of CB1 (2025), CB1 onwards]: Packaging: Introducing reforms to extended producer responsibility (EPR) for packaging, working with the other UK governments.
Waste Outcome 2 Policy 3 (Existing) [CB1, CB1 onwards]: Policy 3: Packaging: Implementation of the Deposit Return Scheme (DRS) for single-use drinks containers.
Waste Outcome 2 Policy 4 (Existing) [CB1, CB1 onwards]: Develop action to tackle the environmental impact of single-use drinks cups.
Waste Outcome 2 Enabling Proposal 1 (New) [CB1, no direct emissions impact]: 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) [CB1, CB1 onwards]: WEEE: Reform extended producer responsibility for waste electrical and electronic equipment (WEEE), working with the other UK administrations.
Waste Outcome 2 Proposal 3 (New) [CB1, CB1 onwards]: Batteries: Reform extended producer responsibility for batteries, working with the other UK Governments.
Waste Outcome 2 Proposal 4 (New) [CB1, CB1 onwards]: 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 Policy 5 (New) [CB1, no direct emissions impact]: 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) [CB1, no direct emissions impact]: 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) [CB1, no direct emissions impact]: Develop measures to address the disposal of unsold consumer goods.
Waste Outcome 2 Enabling Proposal 6 (New) [CB1, no direct emissions impact]: Develop an intervention plan to guide long-term work on household food waste reduction behaviour change.
Waste Outcome 2 Policy 7 (New) [CB1, CB1 onwards]: Develop with stakeholders effective options to implement mandatory reporting for food waste and surplus by businesses.
Waste Outcome 2 Enabling Proposal 7 (Existing) [CB1, no direct emissions impact]: Support the development and implementation of an NHS Scotland national action plan on food waste.
Waste Outcome 2 Enabling Policy 8 (New) [CB1, no direct emissions impact]: 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) [CB1, no direct emissions impact]: Investigate and promote options to incentivise and build capacity for the refurbishment of buildings.
Waste Outcome 2 Enabling Proposal 9 (New) [CB1, no direct emissions impact]: 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) [CB1, no direct emissions impact]: Consider how devolved taxes can incentivise the use of secondary aggregates and support circular economy practices.
Waste Outcome 2 Enabling Narrative Policy 10 (Existing) [CB1, no direct emissions impact]: Delivery of the National Litter and Flytipping Strategy.
Waste Outcome 3: Modernise Recycling
Waste Outcome 3 Policy 1 (Existing) [ongoing implementation (2021-2026)/CB1, CB1 onwards]: Make our final investments from the Recycling Improvement Fund to improve local authority recycling collection infrastructure.
Waste Outcome 3 Enabling Policy 2 (New) [CB1, no direct emissions impact]: Develop a statutory Code of Practice for household waste and recycling services.
Waste Outcome 3 Policy 3 (New) [CB1, CB1 onwards]: 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) [CB1, no direct emissions impact]: Review separate collections of textile waste from households, following recent consultation.
Waste Outcome 3 Enabling Policy 5 (Existing) [CB1, no direct emissions impact]: Review current practices with respect to separate collection of bio-waste (e.g. garden waste).
Waste Outcome 3 Enabling Policy 6 (New) [CB1, no direct emissions impact]: Undertake a review of waste and recycling service charging.
Waste Outcome 3 Enabling Policy 7 (Existing) [CB1, no direct emissions impact]: Review the rural exemption for food waste recycling, following recent consultation.
Waste Outcome 3 Enabling Policy 8 (New) [Targets to apply from CB2 onwards, no direct emissions impact]: Setting statutory local recycling and reuse performance targets for household waste services from 2030 onwards.
Waste Outcome 3 Enabling Narrative Policy 9 (New) [CB1, no direct emissions impact]: Actions to strengthen household waste enforcement tools, as set out in Circular Economy and Waste Route Map.
Waste Outcome 3 Enabling Policy 10 (New) [CB1, no direct emissions impact]: Review of compliance with commercial recycling requirements.
Waste Outcome 3 Enabling Policy 11 (New) [CB1, no direct emissions impact]: Conduct a national compositional study of waste from commercial premises.
Waste Outcome 3 Enabling Policy 12 (New) [CB2, no direct emissions impact]: 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) [Ongoing Implementation/CB1, CB1 onwards]: Introduce a ban on biodegradable municipal waste going to landfill (from December 2025).
Waste Outcome 4 Enabling Proposal 1 (Existing) [CB1, no direct emissions impact]: 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) [CB1, no direct emissions impact]: Develop a Residual Waste Plan to 2045.
Waste Outcome 4 Policy 3 (Existing) [CB1, CB1 onwards]: Increase the capture of landfill gas.
Waste Outcome 5: Other Sources (anaerobic digestion and composting and wastewater).
Waste Outcome 5 Enabling Proposal 1 (New) [CB1 CB2 CB3, no direct emissions impact]: 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) [CB1, no direct emissions impact]: 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.
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 Policy 1 (New) [In progress, CB2]: Support the inclusion of energy from waste in the UK Emissions Trading Scheme (ETS).
Energy Supply Outcome 1 Key Policy 2 (New) [In progress, CB2-CB3]: 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 Policy 3 (New) [In progress, CB2-CB3]: 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 Policy 4 (New) [In progress, CB2-CB3]: 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 Policy 5 (New) [In progress, no direct emissions]: 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 Policy 6 (New) [In progress, no direct emissions]: 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 Policy 7 (New) [In progress, no direct emissions]: 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 Policy 8 (New) [In progress, no direct emissions]: 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.
Contact
Email: climatechangeplan@gov.scot