Building regulations - proposed changes to energy and environmental standards: stage 2 consultation and BRIA

Annex A – Partial Business and Regulatory Impact Assessment (Stage 2 review)

1 Purpose and intended effect

1.1 Title of proposal

Delivering a Scottish equivalent to the Passivhaus standard.

1.2 Objective

Buildings have significant implications for health, safety, the environment and our communities. Through the appropriate application of minimum building standards, set by regulations and supported by published guidance, the design and construction of Scotland’s built environment can benefit all owners, users and people in and around buildings.

This impact assessment forms part of a wider review that has considered changes to requirements and processes set within The Building (Scotland) Regulations 2004 and The Building (Procedure) (Scotland) Regulations 2004. Changes under consideration are to introduce updates within Scottish building regulations and supporting guidance to define a Scottish equivalent to the Passivhaus standard. The intent is that these changes will deliver two outcomes:

• Improvements to the setting of energy and environmental (ventilation) performance standards for new buildings, leading to lower energy demand (and reduced running costs) and a healthy indoor environment; and
• Improvements to the design and construction process to give greater assurance that compliance, and therefore the performance sought, is delivered in practice.

This Impact Assessment considers the second stage in the review and will consider the technical, commercial and wider policy implications of proposed updates and provision of guidance supporting the Building (Scotland) Regulation 2004 (as amended) and the Building (Procedure) (Scotland) Regulations 2004 (as amended).

The second stage consultation seeks views on the detail of the supporting guidance to the regulations that a Scottish equivalent to the Passivhaus standard, implemented through building regulations, should adopt. It seeks information to enable confirmation of the extent of amendment of guidance proposed for implementation. It also seeks views on the review programme which modifies the current March 2028 implementation date within the Building (Procedure) (Scotland) Regulations 2024.

Details on the review to date can be found on the review webpage.

1.3 Background

The building standards system in Scotland is established by The Building (Scotland) Act 2003 (The 2003 Act). The Act gives powers to Scottish Ministers to make building regulations, procedure regulations, fees regulations and other supporting legislation as necessary, to fulfil the purposes of the Act.

The purpose of the building standards system is to protect the public interest. The system regulates building work on new and existing buildings, to provide buildings that meet reasonable standards which:

• Secure the health, safety, welfare and convenience of persons in or about buildings and of others who may be affected by buildings or matters connected with buildings;
• Further the conservation of fuel and power; and
• Further the achievement of sustainable development.

The thirty-two local authorities in Scotland are appointed by Scottish Ministers as verifiers to administer the building standards system in their geographical areas. Responsibility for compliance with the building regulations lies with the “relevant person” as the party instructing building work and, ultimately, with the building owner.

The building standards system is pre-emptive and is designed to check that proposals meet building regulations. The main principles of the system are that a building warrant must be obtained from a verifier before work commences on site and a completion certificate is accepted by a verifier if, after undertaking reasonable inquiry, they are satisfied the building work meets the building regulations, prior to the building being occupied.

Requirements applicable to building work are set through The Building (Scotland) Regulations 2004 (as amended) as a set of mandatory functional standards. These are statements on what outcomes must be achieved when undertaking building work. These standards are supported by a body of guidance set out in Domestic and Non-domestic Technical Handbooks. This published guidance assists by defining the scope of action expected under each standard by providing one or more examples of how compliance with the standard can be achieved. However, it is quite acceptable to use alternative methods of compliance provided they fully satisfy the regulations.

The Building (Procedure) (Scotland) Regulations 2004 (as amended) outline the procedures that underpin the building standards system, such as the building warrant and completion processes. The regulations also deal with other matters covered in the Act, for example the serving of notices for dangerous buildings.

The Building Standards Division (BSD) is part of the Scottish Government Building Safety and Standards Directorate. Our purpose is to provide and maintain a robust legislative framework to ensure that the building standards system in Scotland protects the public interest. BSD prepares and updates building standards legislation and guidance documents, conducting any necessary research and consults on changes as The 2003 Act requires.

We also work in partnership with Local Authority verifiers and other stakeholders in the delivery and updating of the system and contribute to wider policy objectives of government on issues such as energy efficiency, climate change and building safety.

1.4 Energy environmental standards within building regulations

Since the introduction of national building regulations to Scotland in 1964, there have been energy standards, in one form or another. Initially these only applied to the external fabric of certain residential buildings and were minimal in nature. Later, they evolved to take account of commercial and industrial non-domestic buildings and to address the energy efficiency of those building services essential to provide comfort to occupiers of buildings.

Prior to 2000, reviews of energy standards were less frequent, with the outcome of such reviews resulting in modest standards that kept pace with change but which could be comfortably achieved by all aspects of industry. An impact assessment carried out on subsequent changes over this era would show a cost-benefit for modest improvements which would pay back quickly through reduction in the occupier’s energy bills.

Following the introduction of The 2003 Act and our current system of building standards in May 2005, energy standards within section 6 of the Building Standards Technical Handbooks were reviewed and improved in 2007, 2010, 2015 and most recently in 2023. For new buildings, 2007 saw the introduction of a single means of demonstrating compliance on the basis of calculated carbon dioxide emission targets, using the Standard Assessment Procedure (SAP) for dwellings and the Simplified Building Energy Model (SBEM) (or equivalent) for non-domestic buildings.

Each review introduced further staged improvement to energy standards and related changes on topics such as ventilation. It is assessed that emissions arising from energy use in new buildings constructed to the 2023 standards are, on aggregate, around 32% lower for new homes and 20% lower for new non-domestic buildings, compared to the previous 2015 standards and more than 80% lower than standards in force in 1990, the baseline reporting year for CO₂ emissions.

Key actions taken forward in the 2023 standards include:

• A focus on actions at a building level that reduce energy demand, including improved fabric insulation in new homes, to reduce space heating demand.
• The introduction of a new energy target for new buildings, measuring ‘delivered energy’ (that energy which is supplied to the building).
• In setting targets for new buildings, an amended approach for on-site generation of power, excluding credit for energy exported from the building.
• A simplified process when connecting a new building to a heat network (standardising the building performance needed to comply).
• Changes to ventilation standards to reflect the expectation of improved levels of insulation, resulting in reduced air leakage/infiltration.

A further, specific change was introduced by the New Build Heat Standard (NBHS), which applies to new buildings and certain conversions where a building warrant application was submitted on or after 1 April 2024. The NBHS was further amended in January 2025 to permit bioenergy and peat heating and exempt secondary heating appliances from the standard.

1.5 Rationale for Government intervention

The Climate Change (Scotland) Act 2009 (the 2009 Act), which originally received Royal Assent on 4 August 2009, remains the key climate legislation of the Scottish Government.

As per the 2009 Act, Ministers must ensure that Scotland’s emissions are net zero by 2045. The 2009 Act also legislates the Scottish carbon budgets for each five-year period between 2026 and 2045, setting out the trajectory to net zero.

Our target of net-zero emissions by 2045, five years ahead of the rest of the UK, is firmly based on advice of the independent Climate Change Committee.

With the introduction of the New Build Heat Standard in April 2024 there is a shift in the way we heat our new buildings. The standard requires that heating in new buildings is not by ‘direct emission heating systems’ such as gas and oil boilers, as such, supporting our climate targets. A further step reduction in delivered energy will reduce total upstream emissions associated with the operational energy use in these new buildings.

In December 2022, Ministers confirmed, that in response to Alex Rowley MSP’s Proposed Domestic Building Environmental Standards (Scotland) Bill, the Scottish Government would make subordinate legislation by 14 December 2024 to give effect to Mr Rowley’s final proposal “to introduce new minimum environmental design standards for all new build housing to meet a Scottish equivalent to the Passivhaus standard, in order to improve energy efficiency and thermal performance”. Regulations, satisfying the response to Alex Rowley MSP, were laid in December 2024.

1.6 The risks to be addressed

The actions proposed within this review are the reduction in delivered energy demand of new buildings and improvements in the indoor environment whilst introducing a robust compliance regime: actions drawn from useful lessons from the Passivhaus and other low energy building standards.

The reduction in energy use of new development will contribute positively to the Scottish Government’s Climate Change, Energy Strategy and Fuel Poverty Programmes as well as aiding achievement of the First Minister’s four priorities especially eradiating child poverty and tackling the climate emergency.

In delivering improvement, there are subsidiary risks that must also be considered. Minimum standards applicable to new buildings should still:

• Be achievable across the whole of Scotland;
• Be proposed with an understanding of the potential cost of improvement to the delivery and operation of buildings;
• Remain technically feasible;
• Offer flexibility in the ways in which standards can be achieved, to allow best value;
• Ensure proposals do not conflict with or duplicate other regulatory requirements; and
• Be implemented with consideration of wider societal issues related to the occupation and use of buildings.