Scottish Budget 2026 to 2027
The Scottish Budget sets out the Scottish Government's proposed spending and tax plans for 2026-27, as presented to the Scottish Parliament
Chapter 12 Climate Action & Energy
Portfolio Responsibilities
The Climate Action and Energy portfolio is central to delivering the Scottish Government’s mission to tackle the twin crises of climate change and biodiversity loss, while supporting a fair and inclusive transition that creates jobs and opportunities for businesses and communities. This work is underpinned by Scotland’s significant potential for renewable energy generation, one of our greatest environmental and economic opportunities.
The portfolio budget will fund initiatives that accelerate the transition to net zero, restore nature, and build resilience to climate impacts, while unlocking private investment and supporting skilled jobs across Scotland. The journey to net zero brings challenges, but it also offers major economic opportunities: attracting investment, creating high-quality jobs, and ensuring communities benefit from the transition.
In 2026-27, we will invest a further £93 million Capital and Financial Transaction funding to maintain momentum in the offshore wind sector, leveraging private investment into manufacturing and infrastructure projects that will create and sustain thousands of jobs. A further £16 million for the Just Transition Fund to respond to the needs of the North East and Moray, delivering benefits for businesses, workers and communities as we transition to a net zero future. £16 million will help secure a sustainable future for Grangemouth safeguarding its role as a leading industrial cluster, as well as a further £33 million within Energy Transitions to promote a secure, efficient and sustainable energy supply.
Our Domestic Climate Change package will provide a further £22 million investment, which includes £6 million to continue our network of Community Climate Action Hubs that empower local communities to develop place-based responses to climate change, and £1 million to support the Scottish Climate Intelligence Service, helping local authorities baseline emissions and plan for climate impacts. Internationally, we remain committed to climate justice, with over £12 million allocated to support vulnerable communities in the Global South, particularly women and young people.
To address the ongoing threat to nature and deliver our Scottish Biodiversity Strategy we will continue to invest in nature restoration, including our groundbreaking Nature Restoration Fund, with £26 million allocated to make progress towards our aim of halting the loss of biodiversity and being nature positive by 2030.
The portfolio also funds key public bodies including Environmental Standards Scotland, SEPA, NatureScot, Zero Waste Scotland, and provides loans to Scottish Water to reduce costs for customers.
Climate Action & Energy intended contributions to the National Outcomes
Primary National Outcomes
- Economy
- Environment
Secondary National Outcomes
- International
- Communities
- Fair Work and Business
- Health
- Culture
- Human Rights
Climate Action & Energy
The prior year 2025-26 Budget Comparator figures are based on the latest in-year budget numbers which were revised at the Autumn Budget Revision. The 2024-25 Scottish Budget comparator figures reflect the outturn numbers for that year.
| Level 2 | 2024-25 Outturn £m | 2025-26 ABR Budget £m | 2026-27 Budget £m |
|---|---|---|---|
| Offshore Wind | 5.8 | 137.0 | 110.2 |
| Energy Transitions | 27.6 | 83.7 | 48.2 |
| Environmental Services | 180.3 | 216.5 | 192.8 |
| Environmental Standards Scotland | 2.6 | 3.2 | 3.8 |
| Domestic Climate Change | 30.1 | 37.7 | 37.6 |
| International Climate Change | 14.5 | 13.7 | 12.7 |
| Scottish Water | 51.3 | 47.2 | 40.8 |
| Total Climate Action and Energy of which: | 312.3 | 538.9 | 446.1 |
| Total Fiscal Resource | 46.3 | 93.0 | 94.6 |
| of which: Programme Costs | 26.3 | 59.8 | 56.8 |
| of which: Operating Costs | 20.0 | 33.2 | 37.8 |
| Non-cash | 8.6 | 9.6 | 9.6 |
| Capital | 255.9 | 436.2 | 323.2 |
| Financial Transactions (FTs) | – | – | 18.0 |
| UK Funded AME | 1.5 | – | 0.7 |
| SEPA (NDPB Non-cash) | (6.4) | (7.4) | (7.4) |
|---|---|---|---|
| NatureScot (NDPB Non-cash) | (2.1) | (2.2) | (2.2) |
| Scottish Water loan repayments not included in Scottish Parliamentary budgets | 83.1 | 42.8 | 42.8 |
| Environmental Standards Scotland | (2.6) | (3.2) | (3.8) |
| Total Climate Action and Energy | 384.3 | 569.0 | 475.5 |
| Total Limit on Income (accruing resources) | 400.0 |
|---|
| Level 3 | 2024-25 Outturn £m | 2025-26 ABR Budget £m | 2026-27 Budget £m |
|---|---|---|---|
| Offshore Wind | 5.8 | 137.0 | 110.2 |
| Total Offshore Wind of which: | 5.8 | 137.0 | 110.2 |
| Fiscal Resource | 5.7 | 12.3 | 17.2 |
| Non-cash | – | – | – |
| Capital | 0.2 | 124.7 | 75.0 |
| Financial Transactions (FTs) | – | – | 18.0 |
| UK Funded AME | – | – | – |
| Level 3 | 2024-25 Outturn £m | 2025-26 ABR Budget £m | 2026-27 Budget £m |
|---|---|---|---|
| Energy Transitions | 20.5 | 72.0 | 39.7 |
| CARES Recovery | 7.2 | 11.7 | 8.5 |
| Total Energy Transitions of which: | 27.6 | 83.7 | 48.2 |
| Fiscal Resource | 2.2 | 23.3 | 22.6 |
| Non-cash | – | – | – |
| Capital | 25.4 | 60.4 | 25.6 |
| Financial Transactions (FTs) | – | – | – |
| UK Funded AME | – | – | – |
| Level 3 | 2024-25 Outturn £m | 2025-26 ABR Budget £m | 2026-27 Budget £m |
|---|---|---|---|
| Environmental Quality | 4.4 | 19.5 | 12.2 |
| Scottish Environment Protection Agency | 55.5 | 59.4 | 58.3 |
| Nature Restoration | 7.4 | 7.5 | 26.1 |
| NatureScot | 83.7 | 89.3 | 64.5 |
| Circular Economy | 9.6 | 16.4 | 15.1 |
| Zero Waste Scotland | 19.7 | 24.2 | 16.6 |
| Total Environmental Services of which: | 180.3 | 216.5 | 192.8 |
| Fiscal Resource | 131.3 | 146.6 | 150.8 |
| Non-cash | 8.5 | 9.5 | 9.6 |
| Capital | 38.9 | 60.2 | 31.7 |
| Financial Transactions (FTs) | – | – | – |
| UK Funded AME | 1.5 | – | 0.7 |
| Level 3 | 2024-25 Outturn £m | 2025-26 ABR Budget £m | 2026-27 Budget £m |
|---|---|---|---|
| Environmental Standards Scotland | 2.6 | 3.2 | 3.8 |
| Total Environmental Standards Scotland of which: | 2.6 | 3.2 | 3.8 |
| Fiscal Resource | 2.5 | 3.1 | 3.7 |
| Non-cash | 0.1 | 0.1 | 0.1 |
| Capital | – | – | – |
| Financial Transactions (FTs) | – | – | – |
| UK Funded AME | – | – | – |
| Level 3 | 2024-25 Outturn £m | 2025-26 ABR Budget £m | 2026-27 Budget £m |
|---|---|---|---|
| Domestic Climate Change Policy | 1.0 | 21.8 | 21.7 |
| Just Transition Fund | 29.1 | 15.9 | 15.9 |
| Total Climate Change of which: | 30.1 | 37.7 | 37.6 |
| Fiscal Resource | 13.9 | 21.8 | 21.7 |
| Non-cash | – | – | – |
| Capital | 16.2 | 15.9 | 15.9 |
| Financial Transactions (FTs) | – | – | – |
| UK Funded AME | – | – | – |
| Level 3 | 2024-25 Outturn £m | 2025-26 ABR Budget £m | 2026-27 Budget £m |
|---|---|---|---|
| International Climate Change | 14.5 | 13.7 | 12.7 |
| Total International Climate Change of which: | 14.5 | 13.7 | 12.7 |
| Fiscal Resource | 14.5 | 13.7 | 12.7 |
| Non-cash | – | – | – |
| Capital | – | – | – |
| Financial Transactions (FTs) | – | – | – |
| UK Funded AME | – | – | – |
| Level 3 | 2024-25 Outturn £m | 2025-26 ABR Budget £m | 2026-27 Budget £m |
|---|---|---|---|
| Interest on Voted Loans | (127.0) | (133.6) | (138.6) |
| Voted Loans | 170.0 | 170.0 | 170.0 |
| Hydro Nation | 1.6 | 3.4 | 2.0 |
| Drinking Water Quality Regulator | 0.3 | 0.5 | 0.6 |
| Private Water | 6.5 | 6.8 | 6.8 |
|
Total Scottish Water of which: |
51.3 | 47.2 | 40.8 |
| Fiscal Resource | (123.9) | (127.8) | (134.2) |
| Non-cash | – | – | – |
| Capital | 175.2 | 175.0 | 175.0 |
| Financial Transactions (FTs) | – | – | – |
| UK Funded AME | – | – | – |