Scottish Spending Review 2026

Chapter 13 Climate Action & Energy

The Scottish Spending Review reinforces the Scottish Government’s commitment to one of its four key missions: responding to the climate emergency. Climate change is already impacting Scotland, and addressing it requires strong leadership and coordinated action across government - on net zero and climate mitigation, resilience and adaptation, and a just transition that maximises the benefits of climate action. The Climate Action and Energy portfolio plays a critical role, providing a local focus for climate action and managing the transition for industries and communities most affected.

The portfolio is responsible for achieving a net-zero economy and protecting Scotland’s environment. This includes accelerating renewable energy, restoring nature and biodiversity, and promoting a sustainable economy while ensuring fairness and opportunity for workers and communities. Our ambition is to set a clear and just pathway to net zero by 2045, reducing emissions across all sectors, and fostering green innovation that benefits people and businesses. This approach is rooted in climate justice and resilience, aiming to cut emissions while improving health, strengthening energy and food security, and preparing Scotland for climate impacts.

Over £1.6 billion will be invested in the portfolio over the spending review period. £296 million will support Offshore Wind, catalysing private investment in infrastructure and manufacturing, creating thousands of jobs and building a skilled renewables workforce. £189 million will fund actions to reduce carbon emmissions, including modernising recycling, industrial decarbonisation, hydrogen and carbon capture development, and support for community energy schemes. £65 million will help secure the future of Grangemouth as an industrial hub and £64 million for the Just Transition Fund will support workers and communities in a fair and inclusive shift to a net-zero economy. Internationally, £38 million will be invested through the Climate Justice Fund to support vulnerable communities in the Global South.

We will invest £93 million in nature restoration to tackle biodiversity loss. Together with £32 million for environmental quality and over £416 million for key environmental bodies, we aim to ensure Scotland’s habitats and species are diverse, resilient, and adapting to climate change.

We seek to leverage private sector investment to address climate change and biodiversity loss, maximising the impact of public spending. Project pipelines are selected to maximise economic benefit and deliver value for money for taxpayers, while our directorates and public bodies actively secure efficiencies and reform savings through key areas such as digital, estates, and shared services.