Progress in reducing emissions in Scotland – 2023 Report to Parliament

Mostly reserved

• The UK, Scottish and Welsh Governments have confirmed the introduction of the zero-emission vehicle mandate from 2024 as planned.
• In June 2023, Transport Scotland published a charging network vision, and intends to publish an implementation plan in the coming year.^[2] The vision includes choosing charge point locations to support use of active travel, shared and public transport.
• In 2023, the Scottish Government launched a £900,000 pilot Mobility and Scrappage Fund to help low-income households replace a high-emitting vehicle with more sustainable travel options.

To be addressed:

• Support the market to move more quickly than set out in the UK-wide zero-emission vehicle mandate. This will be necessary if the Scottish Government is to achieve its aim of removing the need for people to buy new petrol and diesel cars, including hybrids, by 2030.
• Installation rates of charging points need to accelerate, and reliability must improve.^[3] A full implementation plan should be published in 2024 and should include details on how Scotland will meet its share of the UK-wide infrastructure strategy’s goal of 300,000 chargers nationwide by 2030. That is 24,000 based on relative car- and van-kilometres (recommendation R2022-338).

Risks due to UK Government action: medium

• Scotland’s transition to zero-emission cars and vans is dependent on the establishment of a robust UK-wide market for electric vehicles (EVs). Despite progress in this area, the messaging around the UK Government’s recent decision to delay the planned 2030 phase-out of new petrol and diesel vehicles risks undermining consumer and investor confidence in this transition, which could reduce opportunities for sales to increase.

Mostly reserved

• In January 2023, Transport Scotland’s Zero-Emission Truck Taskforce held two workshops on HGV decarbonisation. Future work will build upon real-world findings from the UK’s
  zero-emission HGV demonstrator, whose winners were announced in November 2023.
• In May 2023, Transport Scotland opened phase 2 of the £58 million Zero-Emission Bus Challenge Fund, expanding eligibility to coaches and community transport providers.^[4]

To be addressed:

• The Scottish Government should work with the UK Government to co-develop:
  • An infrastructure strategy for deploying the required charging and refuelling infrastructure for zero-emission HGVs.
  • Appropriate regulatory strategies for enabling operators to switch to zero-emission options, building on the car/van mandate and findings from demonstration projects.

Risk due to UK Government action: medium

• Decarbonisation of the fleet will depend on UK-wide markets, which are expected to expand through ongoing UK demonstrations and UK Government phase-out dates.

Joint responsibility

• The 2023/24 Programme for Government (PfG) sets out plans to refresh the Rail Services Decarbonisation Plan and commits to electrifying the Glasgow to Barrhead line.
• In February 2023, the Scottish Government sets out its asks for Scotland’s Railway over the next control period, including objectives on climate change adaptation and mitigation.^[5] Scotland’s Railway addressed these as part of its July 2023 Strategic Business Plan.^[6]

To be addressed:

• Further challenges remain around decarbonising rail freight, especially on less busy lines where network electrification is unlikely to be cost-effective.

Risk due to UK Government action: low

• Scotland is dependent on UK-wide decisions, through bodies such as Network Rail and the new Great British Railways, on cross-border infrastructure and services. Great British Railways is still being established, so there remain uncertainties around how it will operate and how it will work with Transport Scotland.

Fully reserved

Risk due to UK Government action: high

• Alongside the zero-emission vehicle mandate, the UK Government introduced regulations that require the average emissions of new non-zero-emission cars/vans to remain flat at 2021 levels.
• This policy is insufficiently ambitious and will deliver weaker emissions savings than required to meet Scotland’s targets. It misses opportunities to incentivise manufacturers to reverse recent trends towards heavier, more emissions-intensive vehicles.
• In the absence of more ambitious UK-wide regulations, the Scottish Government should explore opportunities to encourage Scottish drivers to purchase smaller vehicles and to discourage high levels of use of larger, more polluting ones.

Mostly devolved

• In December 2022, the Scottish Government published its second Strategic Transport Projects Review. It sets out 28 relevant recommendations across themes including improving active travel infrastructure, influencing travel choices, and enhancing public transport affordability.
• In April 2023, the Scottish Government published a consultation on local living and 20-minute neighbourhoods.
• There has been good progress on active travel, including publication of a cycling framework and delivery plan to promote active travel and establishment of funds, including the £20 million Active Travel Transformation fund.^[7],[8],[9] The 2023/24 PfG sets out plans to implement the Active Travel Transformation Project to realise the commitment to invest at least £320 million in active travel in future budgets.
• The 2023/24 PfG sets out plans to:
  • Roll out 20 mph speed limits in built-up areas.
  • Publish a 20% car-km reduction route map.
  • Publish the Fair Fares Review, which has been delayed from 2021.
  • Enable bus franchising and partnerships.
  • Trial removing ScotRail peak-time fares from October 2023, as well as digitalising tickets and payments.

To be addressed:

• A clear strategy is urgently needed on how the 20% car-km reduction by 2030 target will be achieved and 20-minute neighbourhoods will be implemented. The Scottish Government should provide clear timelines of when these will be published and how the 2030 car-km target will be met (recommendation R2022-332).
• Set out the impact on achieving the 20% car-km reduction target of the road-building plans, including road-dualling, set out in the 2023/24 PfG.
• While Scotland has a strong system of concessionary public transport fares which have increased ridership, the Fair Fares Review must develop a wider plan to simplify fares, maintain and enhance services, and make public transport, including buses and trains, more attractive, increasing its frequency, reliability and cost-competitiveness against car travel. Concerningly, the end of the Network Support Grant Plus in March 2023 has led to some operators reducing services.

Risk due to UK Government action: low

• There remains a risk that UK Government’s reluctance to consider demand-side measures could hinder public acceptance of the Scottish Government’s demand-reduction plans (e.g. the recent Plan for Drivers, the review of low-traffic neighbourhoods).

Mostly devolved

• Scotland’s Railway set a target for 8.7% rail freight growth over 2024–2029 in its Strategic Business Plan.

To be addressed:

• Van traffic has risen faster than that of any other vehicle type over the past twenty years. Alongside developing plans for the 20% car traffic reduction target, the Scottish Government must explore options to address this. It must ensure that the 20% target is not achieved at the cost of exacerbating van traffic, particularly in urban areas.

Risk due to UK Government action: medium

• Cross-border freight and UK-wide haulage companies will be influenced by policies imposed by both the Scottish and UK Governments. The cancellation of HS2 Phase 2b will reduce the connectivity and capacity benefits that the scheme would have brought to Scotland, which could reduce the scope to shift freight from road to rail.

• There was no significant progress in this area.

To be addressed:

• The Scottish Government should set out how the aviation sector will decarbonise in line with Scotland’s emissions targets, while managing technology risks (recommendation R2024-004).

Risk due to UK Government action: high

• Aviation decarbonisation will require UK-wide cooperation and progress across all aviation emissions mitigation solutions.

Joint responsibility

• There was no significant progress in this area.

To be addressed:

• The Air Departure Tax should be implemented as soon as possible (recommendation R2022-348).

Risk due to UK Government action: high

• There is a lack of UK commitment to use policy to address aviation demand management.

Fully reserved

• Scottish Enterprise commissioned an independent assessment of capability and interest in Scotland to support the adoption of sustainable aviation fuel (SAF). The study found that Scotland has both the foundations to build a SAF supply chain and demand for SAF, but it will need joint public and private efforts around investment.^[10]

To be addressed:

• Address how SAF uptake can be incentivised in Scotland.

Risk due to UK Government action: medium

• Risks remain regarding ensuring adequate SAF supply to the UK to meet the UK Government’s SAF mandate target of securing 10% SAF supply of jet fuel by 2030.

• There was no significant progress in this area.

To be addressed:

• Detail is required on how the Scottish Government intends to purchase low-emission aircrafts, which the Sustainable Aviation Test Environment concluded are well suited to serve the Highlands and Islands passengers and freight.^[11]

Risk due to UK Government action: high

• The development of zero-emission aircraft will require extensive research and development and international cooperation, both of which are risks within the sector. The UK Government’s Jet Zero Strategy aims for rollout by 2040.

Joint responsibility

• As part of its Sustainability Strategy 2023–2033, Highlands and Islands Airports Limited has set out a plan to decarbonise airport operations.^[12] This sets out how airports will reduce their environmental impact to meet the Scottish Government’s target of a net-zero aviation region by 2040 and how it will support the sector’s decarbonisation goals.

To be addressed:

• Set out how to ensure greater low-carbon connectivity to Scottish airports and how all Scottish airports will develop the infrastructure required for aviation decarbonisation.

Risk due to UK Government action: low

• The UK Government’s second SAF mandate consultation considers mechanisms for airlines to avoid tankering.

Joint responsibility

• There was no significant progress in this area.

To be addressed:

• The UK Government and devolved administrations will be consulting on the interactions between the UK Emissions Trading Scheme (UK ETS) and the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA).

Risk due to UK Government action: high

• There is a significant risk that CORSIA is not stringent enough and that offsets are of insufficient quality.

Joint responsibility

• Transport Scotland published a draft for consultation of the Long-Term Plan for Vessels and Ports on the Clyde and Hebrides and Northern Isles Networks, including a section on decarbonisation, which considers low-carbon technologies for ferries.^[13]
• Transport Scotland’s second Strategic Transport Projects Review recommended renewal and replacement of vessels on the Clyde and Hebrides Ferry Services and Northern Isles Ferry Services networks, including progressive decarbonisation by 2045.
• The Electric Orkney project and the Port of Aberdeen both won a share of the UK Government’s £80 million Zero Emissions Vessel and Infrastructure fund, to begin commercial demonstrations of electric foiling vessels and shore power infrastructure.^[14]

To be addressed:

• The Islands Connectivity Plan was due in 2023 but has not been published yet. Clarity is needed on the timeline to ensure the commitment to 30% of Scottish Government-managed ferries being low-emission by 2032 is met (recommendation R2022-342).
• To accelerate reduction of emissions at berth there is a need for a comprehensive assessment of the suitability of deploying shore power and electric recharging infrastructure at all Scotland’s major ports and for a deployment plan. Deployment of these solutions can also offer co-benefits for local air quality.

Risk due to UK Government action: medium

• The Scottish Government holds direct influence over its ports policy and the ferry contracts that it controls. However, wider maritime decarbonisation is dependent on the uptake of zero-emission vessels by national and multinational shipping operators and on the provision of the required refuelling infrastructure at destination ports across the rest of the UK and overseas.

• The Scottish Government is currently consulting on proposals for a Heat in Buildings Bill which would, subject to the outcome of the consultation, introduce powers to create a new ‘Heat in Buildings Standard’.^[15] The Standard will prohibit the use of polluting heating from 2045 in all buildings (including non-domestic premises). To ensure fairness, the plans are to protect those who will struggle to pay through exemptions, to allow extra time to transition from direct emissions heating systems and make it easy for people to appeal where they feel the requirements under the proposed Bill are incorrect or unfair.

• • In order to achieve a smoother transition to this 2045 date, the consultation seeks views on a proposal which would require those purchasing a property to comply with the prohibition on direct emissions heating systems^[*] within a specified amount of time following completion of the sale.
• The Green Heat Finance Taskforce published a report looking at finance options to cover the upfront costs for replacing direct emissions heating systems, with a second report due in 2024 that looks, among other things, at financing for social housing retrofitting (see the business and finance section in the people and business scorecard in Chapter 3).^[16]

To be addressed:

• Provide clarity and a timeline, and avoid delays, on the Heat in Buildings Bill so that we move towards delivery (recommendation R2024-001).
• Work with lenders to provide financing options for those with and without mortgages.
• Continue to explore additional finance indicators that could be added to future iterations of the Heat in Buildings Monitoring and Evaluation Framework.^[17]

Risk due to UK Government action: high

Dependencies on UK Government policy areas include:

• Decisions on the future role of gas networks in the transition to clean heat.
• Regulations requiring the energy and installer markets to help accelerate the transition.
• Rebalancing the cost of electricity so that clean heating systems become cheaper to run.

• Following a review of the Energy Efficiency Standard for Social Housing in 2023, the Scottish Government is consulting on a new Social Housing Net Zero Standard which is aligned to its commitment to achieve Net Zero by 2045. The consultation proposes and seeks views on a standard comprising a fabric efficiency rating, no direct emissions heating systems by 2045 and air quality systems.
• The second Energy Performance Certificates consultation concluded in October 2023. The government response, which will confirm the timeline for revising the Performance of Buildings (Scotland) Regulations, is planned to be published later in 2024.
• The Heat in Buildings Bill consultation seeks views on requirements for owner-occupied homes to meet a minimum energy efficiency standard by the end of 2033, and by the end of 2028 for private rented homes. This standard will not apply to non-domestic buildings as well as social rented houses, which make up 23% of dwellings in Scotland as of 30 March 2020.^[18] In addition, the consultation proposes:
  • A set of measures to achieve a good level of fabric energy efficiency as alternatives to an EPC assessment.
  • An exemption from the energy efficiency standards for owner-occupied homes if they stop using direct emissions heating systems by 2033.
  • No restriction on the sale of homes, although properties in the private rented sector which don’t meet the energy efficiency standard by 2028 would not be allowed to be leased to a new tenant (should the existing tenant leave).
  • A cap on compliance costs, which could be set as a flat cap at different levels for homes and non-domestic buildings or based on property price or floor area.

To be addressed:          

• Provide clarity and a timeline, and avoid delays, on the Heat in Buildings Bill so that we move towards delivery (recommendation R2024-001).
• Consider carefully whether and how to create a ceiling or cap on the potential cost of meeting the Heat in Buildings Standard.

Risk due to UK Government action: medium

• Policy solutions which rely on regulation of finance providers require implementation by the UK Government.

Joint responsibility

• In September 2023, the Heat Networks (Heat Network Supply Target) (Scotland) Regulations 2023 were laid in the Scottish Parliament to set a target for thermal energy supply to heat networks in Scotland to be 7 TWh by 2035.^[19]
• As part of the Heat Networks (Scotland) Act (2021), the Scottish Government’s first set of regulations on heat networks came into force in May 2023. This requires local authorities to review the potential for heat networks in their area and requires people responsible for public buildings to assess their heat demand and ability to connect to heat networks through Building Assessment Reports.
• The Heat in Buildings Bill consultation proposes that local authorities and Scottish Ministers acquire powers to require buildings within a Heat Network Zone to end their use of direct emission heating systems by a certain date and with a minimum notice period. It also proposes investigating the same powers being applied in relation to developers connecting new builds to heat networks.

To be addressed:            

• Issues need resolving around aligning the UK and Scotland’s regulatory frameworks and giving Ofgem authority over consumer protection and licensing.

Risk due to UK Government action: medium

• The appointment of Ofgem to regulate and license heat networks in Scotland is reliant on the UK Government. The required legislation has yet to be enacted.

Mostly devolved

• In 2023 the Scottish Parliament passed the Building (Scotland) Amendment Regulations 2023 which require new buildings receiving approval on or after 1 April 2024 to no longer use direct emissions heating systems. Some developments will be permitted to complete the installation of direct emission heating systems for four months after that date if they had a contract in place before April 2024.^[20] We welcome the reduction in the transition period for direct emissions heating, down from several years to the proposed four months.

To be addressed:

• Energy standards could be improved by using absolute targets for energy use rather than comparison against notional buildings.
• Improvements to building standards enforcement are needed, including expanding the use of performance testing, to ensure that the actual performance of new buildings aligns with expectations and to hold contractors to account for quality and performance.

Risk due to UK Government action: medium

• The Scottish Government intends to adopt the UK calculation methodologies, SAP10 and SBEM (v6), however, the UK Government has just launched a consultation to significantly change these metrics.^[21] Improvements to the accuracy of modelled performance of new homes therefore rely on delivery of an updated calculation methodology from the UK Government.

Mostly devolved

Progress:  

• Up to £728 million was allocated to launch a refreshed Warmer Homes Scotland programme in October 2023, with increased household grant limits. This funding is for a seven-year programme, and forms part of the £1.8 billion committed over this Parliament.

To be addressed:

• Policy solutions are required to enable the delivery of energy efficiency standards in tenements – 22% of fuel-poor households in inefficient homes live in tenements.^[24]
• The Scottish Government must ensure a timely and effective delivery of the investment made under the Warmer Homes Scotland programme.

Risk due to UK Government action: low

• Risk level is low as the Scottish Government has committed its own funding, so ECO funding is now less critical to progress in Scotland.

Mostly devolved

• The Heat in Buildings Bill consultation also proposes giving Scottish Ministers the power to require non-domestic buildings to end their use of direct emission heating after the purchase of a property, as well as where they can connect to a nearby heat network.

To be addressed:

• Consult on and finalise plans for delivering energy efficiency improvements and low-carbon heating in non-residential buildings (recommendation R2022-384).
• Although the Bill would prohibit the sale of direct emissions heating systems from 2045 for non-domestic buildings, there is a need for a clear plan for improving energy efficiency as the Bill currently does not propose minimum energy efficiency standards due to the ‘extreme variety of size, construction, operating hours, business activity etc’.

Risk due to UK Government action: medium

• The dependency on UK Government policy areas comes from the clean heat market mechanism.

Mostly devolved

• The Heat in Buildings Bill consultation is demonstrating public sector leadership by proposing that all buildings owned by a Scottish public authority must use a clean heating system by the end of 2038. Additional measures are being consulted on to decarbonise public sector buildings more quickly than the wider building stock.

To be addressed:

• Consider whether to place a new statutory reporting duty on public sector organisations to demonstrate progress towards their 2038 objective.
• Consult separately on a potential new duty on public sector organisations to connect the buildings they own to a local heat network, where available.

Risk due to UK Government action: low

• Funding for public sector decarbonisation is determined by the Scottish Government.

The Scottish Government has:

• Pledged to pay Scottish farmers and crofters £550 million in the coming year, starting from September 2024, to support an economically sustainable agricultural sector, in the 2023/24 PfG.
• Announced a new round, which opened on 1 February 2024, of the Agri-Environment Climate Scheme (AECS) to promote land management practices to tackle climate change and restore nature.
• In February 2023 (and updated in June 2023), published the Agricultural Reform Route Map which sets out what changes recipients of current farm payments will be expected to make from 2025 and beyond, introducing new support policies and conditions (from 2025) to the Basic Payment Scheme, which will end in 2026 when Tier 1 Base and Tier 2 Enhanced come in.
  • At the same time, it published a draft Agriculture Reform List of Measures that outlines the types of measures that are expected to be part of future support.
• In September 2023, introduced the Agriculture and Rural Communities (Scotland) Bill to replace the current CAP and to deliver the key ambitions set out in the Scottish Government’s Vision for Agriculture.

To be addressed:            

• The Agriculture and Rural Communities (Scotland) Bill lacks detail on the financial support framework that will be offered to farmers and land managers as they transition to post-CAP agricultural policy. The Scottish Government should set out how future support systems will integrate and address the objectives for food, nature, and climate (recommendation R2022-406).
  

Risk due to UK Government action: low

• Agriculture policy is largely devolved to the Scottish Government.

Mostly devolved

• The Scottish Government allocated £1 million in funding to boost forestry skills, including training courses on planning and planting new woodland.^[26]
• Scottish Forestry has run a consultation on the Scottish Forestry Grant Scheme on support for forestry post 2025.^[27]
• In the 2023/24 PfG, the Scottish Government committed to restore and expand the Atlantic rainforest and Caledonian pinewoods, and to set out plans for Glenprosen Estate’s integrated land management approach.

To be addressed:

• Scotland missed the Scottish Government’s 2022 to 2023 woodland creation target. A quarter of the approved woodland creation was delayed or not taken forward by landowners, with Scottish Forestry suggesting this is due to skills and capacity issues.^[28] Plans are needed to address barriers to meeting future targets, which are also important for UK-wide planting targets (recommendation R2022-356).
• The Scottish Government needs to show how it will meet future woodland creation targets following the reduction in spending plans for 2024-25, from a budget of £103.7 million for Scottish Forestry in 2023-24, to £70.1 million in 2024-25.^[29]

Risk due to UK Government action: medium

• The UK Government could support by addressing common issues such as nursery capacity, timber supply and finance, e.g. via carbon markets. The Scottish Government has stated that one factor in its reduction in spending plans for Scottish Forestry was the UK Government’s 10% reduction in capital allocation, which forced it to reallocate funding from forestry to other areas. In the longer term, the Scottish Government should facilitate other funding streams alongside public funding, which would help mitigate the impact of such risks to woodland creation.
  

Mostly devolved

• In June 2023, Scottish Forestry introduced new measures to boost agroforestry: increasing the grant rate for agroforestry projects by 50% per hectare; expanding agroforestry funding to planting fruit, nut, and native trees; changes to tree protection measures; and more flexibility to adapt the planting thresholds for farmers.^[30]

To be addressed:

• There have been no updates on the future of funding for hedgerow creation and management, and small-scale tree planting after the AECS supports end in 2026.

Risk due to UK Government action: low

• Policy in this area is largely devolved to the Scottish Government.
  

Mostly devolved

The Scottish Government has:

• Published a report on mobilising private investment into peatland restoration.
• In February 2023, launched a consultation on the ban of sale of domestic horticultural peat for domestic use, which had been committed as part of the 2021/22 PfG.
• Introduced a Bill in March 2023 that extends licensing across all applications of muirburn and restricting when burning can be used on peat soils to limited circumstances.^[31]
• In the 2023/24 PfG, committed to progress action to support peatland restoration on crofting land.

To be addressed:

• Scotland missed the Scottish Government’s peatland restoration target for the fifth year in a row. The Scottish Government should identify and set out how the current barriers will be addressed (recommendation R2022-358).

Risk due to UK Government action: low

• Policy is devolved. However, the UK Government could support upscaling action by addressing common areas relevant to both administrations such as skills gaps, contractor capacity and carbon finance to support restoration.

Mostly devolved

^[*] This section relates to emissions and sequestration associated with land use to grow domestic energy crops. Policies relating to the use of bioenergy are in the industry sector.

• In the Draft Energy Strategy and Just Transition Plan, the Scottish Government sets out that bioenergy should align with ambitions for nature and uses should support Net Zero. The potential to scale up domestic biomass supply is being reviewed.

To be addressed:

• The Scottish Government should provide clarity on its bioenergy plans. In the 2020 Climate Change Plan update (CCPu), it committed to publish a Bioenergy Action Plan in 2023. This has not yet been published.

Risk due to UK Government action: medium

• Biomass is an area of devolved responsibility. However, the UK Government’s Biomass Strategy, published in 2023, recognises that required actions such as research and development and deployment of biomass production and technologies are relevant across the UK.^[32]
  

Mostly devolved

• The consultation on the National Good Food Nation Plan was published in January 2024, clearly articulating the connection between food and food systems and climate and biodiversity impacts.^[33] The Plan recognises that population dietary shifts towards the Eatwell Guide would be expected to have a positive impact on GHG emissions.

To be addressed:            

• The next iteration of the Plan should seek to provide further detail on the emissions reduction potential of dietary choices, particularly relating to meat and dairy consumption.

Risk due to UK Government action: low

• The UK Government’s reluctance to consider dietary shifts could hinder public acceptance of the Scottish Government’s plans in this area.
  

Mostly devolved

• The Circular Economy (Scotland) Bill was laid in Parliament in June 2023. This will provide the legislative framework to develop a circular economy strategy and targets, alongside powers to set local recycling targets and a new waste and recycling code of practice.
• The Packaging Waste (Data Reporting) (Scotland) Regulations 2023 requires producers to collect and report on packaging data, which will be used to enact the Extended Producer Responsibility (EPR) reforms in Scotland, which are planned to start in 2024. The Scottish Government, alongside the other UK nations, launched a consultation on reforming the producer responsibility system for waste electrical and electronic equipment.
• The National Planning Framework 4 (NPF4) includes ‘conserving and recycling assets’ as one of its six overarching spatial principles that should inform the planning of places. It also includes circular economy materials management facilities as one of 18 national developments that will support the delivery of the spatial strategy.^[34]
• The Scottish Government published a review of its food waste reduction action plan in January 2024.^[35]

To be addressed:

• Plans are urgently needed to increase recycling rates to the 70% target by 2025, given the slow progress made in recent years, with recycling rates in 2022 at just over 40%. It is not clear how including this in NPF4 will on its own be enough to drive up recycling rates and incentivise the circular economy.
• A Circular Economy and Waste Route Map was consulted on in 2022 with a final version expected in 2023.^[36] This has not yet been published. Instead, an updated draft was published for a second consultation in January 2024, including proposals for mandatory public reporting of food waste and surplus to support businesses to reduce food waste.
• The Scottish and UK Governments should work together to avoid further delays in launching Scotland’s Deposit Return Scheme. It was due in August 2023 but delayed to at least October 2025 due to the UK Government’s refusal to fully exclude it from the Internal Market Act.^[37]

Risk due to UK Government action: high

• There is high risk from the UK-wide approach to forthcoming waste management reforms, including the deposit return scheme, which are at risk of further delay.

Joint responsibility

• The Scottish Government responded to the February 2023 Independent Review of the Role of Incineration in the Waste Hierarchy in Scotland in May 2023, accepting all recommendations either in full or in principle, and referring to the forthcoming Circular Economy and Waste Route Map to address these, which is yet to be published.^{[38], [39]}
• NPF4 introduced restrictions on new energy from waste (EfW) facilities, which will not be supported except under limited circumstances where a national or local need has been sufficiently demonstrated and where accompanied by a heat and power plan that considers how to reduce emissions.
• As part of the Circular Economy and Waste Route Map consultation process, the Scottish Government gathered views on ensuring that new EfW plants are future-proofed for carbon capture and storage (CCS) technology.

To be addressed:

• The quantity of waste incinerated, including EfW, in Scotland in 2022 was 5% higher than the previous year and more than double 2011 levels.^[40] This growth needs to be addressed.
• While restrictions on new EfW in NPF4 are welcome, stronger action is needed. A moratorium on additional EfW capacity should be introduced subject to a review of capacity needs and how they align with emissions pathways and wider objectives, including on a more circular economy.
• Ensure the Circular Economy and Waste Route Map contains clarity on how the Scottish Government intends to address the recommendations from the Independent Review of the Role of Incineration in the Waste Hierarchy in Scotland (recommendation R2022-329).

Risk due to UK Government action: medium

• The UK Government’s CCS business model to support an initial phase of industrial CCS projects includes EfW and the UK Government has announced plans to include EfW and waste incineration in the UK emissions trading scheme from 2028.^[41] However, UK-wide packaging reforms will be crucial to reduce the amount of waste that goes to EfW in Scotland and are delayed.

Mostly devolved

• NPF4 introduced restrictions on new landfill sites while also introducing support for capture, distribution or use of gases captures from landfill sites.

To be addressed:

• Scotland landfilled a quarter of waste generated in 2022, which is considerably worse than the Scottish Government’s 2025 target of 5%. Further action is therefore urgently needed to reduce the amount of waste landfilled.
• The Scottish Government should outline clear plans and a timeline to address the intention to extend the ban on landfilled biodegradable municipal waste to biodegradable
  non-municipal waste by 2025, which was due to be subject to a 2022 consultation.^[42]

Risk due to UK Government action: low

• Landfill policy is mostly devolved, with the Scottish Government setting targets and restrictions.

Mostly devolved

• Scottish Water’s Net Zero Emissions Route Map set out an aim to reduce process emissions by 20% by 2040, including actions to improve measurement accuracy and explore new technologies. Progress towards this in the last year includes installation of the first nitrous oxide monitors at two sites in Glasgow, piloting artificial intelligence software to reduce emissions and reviewing all wastewater treatment works to understand the risk of nitrous oxide production.^[43]
• NPF4 includes a policy intent to ‘encourage, promote and facilitate development that is consistent with the waste hierarchy’. This includes a policy to support development proposals for the capture, distribution, or use of gases from wastewater treatment plants.

To be addressed:

• Scottish Water should publish the findings of its process emissions monitoring and other pilot schemes to inform the evidence base in this area.
• The Scottish Government should develop plans to reduce industrial wastewater emissions.

Risk due to UK Government action: low

• Wastewater policy is mostly devolved with targets and action determined by Scottish Water, supported by Scottish Government.
  

Joint responsibility

• The Scottish Government published the Circular Economy Bill in June 2023 (see Table 2.4). This will give ministers powers to set statutory targets to measure progress in reducing waste and Scotland’s carbon footprint.

To be addressed:

• While some measures in the Circular Economy Bill will help to reduce industrial emissions, this is not its focus. There is limited funding available for resource efficiency in manufacturing, other than the £2 million Circular Textiles fund.
• More measures are needed to increase the efficiency of resource use, with particularly large opportunities in construction materials (recommendation R2022-376).

Risk due to UK Government action: high

• The CCC has identified urgent need for new policies to achieve the UK Government’s ambition for industrial resource efficiency.

Mostly reserved

• There was no significant progress in this area.

To be addressed:

• The Scottish Industrial Energy Transformation Fund (SIETF) is expected to end by 2026. There is no clear strategy or timeline to incentivise industrial energy efficiency after this.

Risk due to UK Government action: medium

• This area is mostly reserved to the UK Government. The UK Government plans to extend existing energy efficiency schemes but there are no new measures planned.
  

Mostly reserved

• There was no significant progress in this area.

To be addressed:

• There is no certainty on industrial electrification funding in Scotland once SIETF ends. There is currently no strategy or policy directly targeting industrial electrification in Scotland.

Risk due to UK Government action: high

• This area is mostly reserved to the UK Government. We have identified a lack of policy to support industrial electrification as a major gap in UK Government policy.

Mostly reserved

• In July 2023, the Acorn project at St. Fergus was awarded Track 2 status as part of the UK Government’s CCUS cluster sequencing process, subject to final assessments. Acorn also retains its Track 1 reserve cluster status.^[44]
• The Scottish Government provides funding to stimulate innovation in CCUS, including the Emerging Energy Technologies Fund which will invest up to £80 million in the development of CCUS industries in Scotland, running until 2026.

To be addressed:

• Current funding arrangements for CCUS are expected to end by 2026 or earlier.

Risk due to UK Government action: medium

• The UK Government has detailed policy mechanisms to support CCS in industrial clusters. It is less clear how Scottish industrial sites outside Acorn will be supported to adopt CCS.
• The UK Government is yet to set out the criteria for its final assessment of Track 2 clusters or confirm when the criteria will be published.^[45] The uncertainty in timelines means the Scottish Government has been unable to allocate funding to CCS projects.
  

Mostly reserved

• The Scottish Government set out its strategy for hydrogen in its December 2022 Hydrogen Action Plan.^[46] The plan reaffirmed the Scottish Government’s ambition of at least 5 GW of renewable and low-carbon hydrogen production capacity by 2030 and 25 GW by 2045.
• To support the ambitions outlined in the Hydrogen Action Plan, the Scottish Government has committed to provide £100 million to renewable hydrogen projects up to 2026. The first portion of this funding has been launched through the £10 million Hydrogen Innovation Scheme, to help develop and demonstrate renewable hydrogen technologies.^[47]
• In December 2023, the UK Government announced the projects to be offered contracts under the hydrogen allocation round through the Net Zero Hydrogen Fund. This includes two projects in Scotland that will produce hydrogen for industrial users.

To be addressed:

• The Scottish Government previously said it would release the remaining £90 million of its £100 million commitment via a Green Hydrogen Fund at the start of 2023. This launch is yet to happen. The Scottish Government should provide clarity on the fund details and timelines, and any interactions with UK Government funding where possible.

Risk due to UK Government action: high

• Key decisions (e.g. hydrogen for heat) that will shape the demand and scale of hydrogen production and storage are reserved to the UK Government.
• Furthermore, the overall fiscal regime for hydrogen is within the control of the UK Government and therefore the UK Government’s hydrogen business model will be a key factor in determining the development of hydrogen use in Scotland.

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^[*]  This section relates to the use of bioenergy. Policies relating to the emissions and sequestration associated with land use to grow domestic energy crops are considered in the agriculture and land use sector.

• The Scottish Government’s Draft Energy Strategy and Just Transition Plan outlines an aim to ensure bioenergy is only used where it can best support Scotland’s goals for the climate and nature.^[48] To facilitate this, a bioenergy policy working group was set up to inform development of a strategic framework for the most appropriate use of bio-resources.^[49]

To be addressed:

• As part of the 2020 CCPu, Scotland committed to publishing a Bioenergy Action Plan by 2023.^[50] However, this has not been published yet.
• The Bioenergy Action Plan must clarify the Scottish Government’s position on bioenergy, setting out its best use, delivery mechanisms, funding, licensing requirements, future timelines and sustainability and food security implications.
• The UK Biomass Strategy commits to consult on a cross-sectoral sustainability framework.^[51] Some of the proposals within the consultation may fall into an area of devolved responsibility in Scotland. The Scottish Government should work closely with the UK Government to further develop biomass governance and sustainability criteria.

Risk due to UK Government action: medium

• The majority of powers are reserved to the UK Government. The UK Government recently published its Biomass Strategy.
  

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Progress:

• The NPF4 aligns with these policy positions. It sets out that proposals that seek to explore, develop, and produce onshore fossil fuels (excluding unconventional oil and gas) will only be supported in exceptional circumstances aligned with national policy on energy and emissions targets. The development of unconventional oil and gas is not supported.^[55]

Risk due to UK Government action: high

• The Scottish Government’s powers on fossil fuel supply are broadly limited to planning and consenting of onshore exploitation. Powers relating to the licensing of onshore oil and gas were devolved in 2018 under the Scotland Act 2016, while offshore licensing is reserved through the North Sea Transition Authority.^{[56], [57]} The UK Government is responsible for the fiscal regime and regulation of the oil and gas industry. For coal exploitation, environmental duties in connection with planning policy and determinations are devolved to the Scottish Government, but licensing is reserved through the Coal Authority.
• We have set out in letters to the UK Government and through two priority recommendations in our UK Progress Report our view of the evidence against new consents for coal exploration or production, and our support for tighter limits on UK oil and gas production, with stringent tests and a presumption against exploration.^{[58], [59]}
  

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• In January 2023, the Scottish Government consulted on its draft Energy Strategy and Just Transition Plan (ESJTP).^[60] The draft consults on an ambition to deliver more than 20 GW of additional renewable generation capacity by 2030, including 12 GW of onshore wind, as well as on setting a further offshore deployment ambition and a new ambition for solar, wave and tidal deployment.
• NPF4 is a key lever for considering major infrastructure and aims to encourage, promote, and facilitate all forms of renewable energy development onshore and offshore.^[61]
• The Scottish Government agreed the Onshore Wind Sector Deal with industry to deliver on the ESJTP ambition to install 20 GW of onshore wind capacity by 2030.^[62]
• In August 2023, the Scottish Government signed a cooperation agreement with the French region of Brittany to capitalise and share best practices on the expansion of offshore wind projects.^[63]
• As part of the 2023/24 PfG, the Scottish Government set out its intention to streamline offshore wind consenting processes and shorten timelines and to publish a Solar Vision for Scotland.^[64]

To be addressed:

• The final ESJTP, due in Summer 2024, should include a delivery plan on how Scotland will achieve the vision for the energy system set out in the draft ESJTP.
• The Scottish Government should work with the UK Government to ensure that the targets for Scotland set out in the ESJTP are met and that the UK-wide objective of a decarbonised electricity supply by 2035 is achieved, subject to ensuring security of supply. This must include working closely as part of the new governance arrangements convened through the Connections Action Plan and the Transmission Acceleration Action Plan to accelerate the delivery of energy infrastructure in Scotland.^{[65], [66]}

Risk due to UK Government action: high

• Almost all powers are reserved to the UK Government, including energy policy, regulation of energy markets and networks, and nationally significant infrastructure planning.
• The UK Government still lacks a delivery plan for its objective to decarbonise electricity supply by 2035. Scottish targets are therefore dependent on UK policy and supporting infrastructure (e.g. networks and grid connections) delivering at scale and to time.

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• In July 2023, Acorn was awarded Track 2 status as part of the UK Government CCUS cluster sequencing process, subject to final assessments.^[67] Acorn also retains its Track 1 reserve cluster status. The UK Government is provisionally targeting deployment by 2028–2029, depending on technical feasibility, affordability, and value for money.
• In November 2023, the Scottish Government published a feasibility study that estimates the potential to deploy Negative Emissions Technologies (NETs)^[*] in Scotland from 2030 to 2045.^[68] It estimates that, assuming that Acorn is active by 2030, the maximum NETs potential achievable in Scotland is 2.2 MtCO₂/year in 2030 and 6.8 MtCO₂/year in 2045, and that this requires joint UK and Scottish Government action. These updated figures are lower than the potential outlined in the CCPu of 3.8 MtCO₂/year by 2030.

To be addressed:

• Once the UK Government provides a concrete timeline for the development of Track 2 CCUS clusters, the Scottish Government should assess the compatibility of Acorn’s timeline and deployment potential with the Scottish Government’s 2030 removals target.
• The Scottish Government needs to put in place policies and delivery and implementation plans to address barriers to the deployment of engineered removals highlighted by stakeholders as part of the 2023 feasibility study. This includes providing long-term financial support as well as upfront CAPEX support. Action should be taken this year as part of efforts to mitigate the substantial delivery risk to the 2030 engineered removals target.
• The Scottish Government should respond to the NET feasibility study recommendations as part of the upcoming Climate Change Plan.

Risk due to UK Government action: high

• Delivery of engineered removals in Scotland is reliant on the development of conveniently located CCS infrastructure with adequate capacity. The Scottish Government does not have all the necessary regulatory and legislative powers to develop these networks and is therefore reliant on UK Government processes in this area.