Draft Climate Change Plan Scrutiny 2025 response

Regulatory policies to generate sufficient demand for clean heating and energy efficiency 

Meeting Scotland’s climate change targets will require a significant increase in the uptake of low carbon heating and energy efficiency across the country’s homes. The Climate Change Committee (CCC) has made it clear that transforming how we heat our homes is essential to meeting Scotland’s climate change targets.

Their advice, which will inform the development of Scotland’s Climate Change Plan, highlights that emissions reductions from buildings will be the second largest contributor to meeting the first two carbon budgets (2026-2030 and 2031-2035), accounting for 19% of total emissions reductions. 

To achieve this, the CCC recommends that by 2035: 

• 40% of existing homes should be using low-carbon electric heating – primarily heat pumps -rising to 92% by 2045. 
• Annual heat pump installations should reach nearly 35,000 by 2030 – in comparison, 7,660 MCS-certified heat pumps were installed in Scotland in 2023/24.  
• Alongside this, improving energy efficiency is expected to contribute 14% of the emissions needed by 2035. 
• This scale of transformation will not happen without strong policy intervention. Clear regulatory signals are needed to drive demand and give certainty to households, businesses and the supply chain.  

While the Scottish Government has proposals for what will go into the Heat in Buildings Bill, several key regulatory proposals from the original consultation have been dropped or weakened. These include: 

• The removal of point-of-sale trigger that would have required property buyers to replace polluting heating system within a set period. 
• Replacing a requirement for homeowners to replace fossil fuel heating systems by 2045 with a broader government target. 
• Replacing the proposal to introduce minimum energy efficiency standards for owner occupied homes with a provision allowing Ministers to bring in such standards later through secondary legislation, following further consultation. 
• Removing proposed powers for local authorities (and Scottish Ministers) to require buildings in Heat Network Zones to end their use of polluting heating systems within a set timeframe once a heat network becomes available. 

We supported all of these proposals and continues to do so. In addition, we recommended additional triggers be included to ensure clean heating systems are installed at other natural trigger points, including: 

• When a polluting heating system comes to the end of its life.
• At point of major renovation to the property. 
• At point of change of tenancy in relation to business premises.  
• At point of any application for change of use of business premises. 

If stronger regulatory policies on heating and energy efficiency are not included in the final Heat in Buildings Bill, it will be essential that the Climate Change Plan commits to publishing a clear regulatory roadmap – outlining how and when future decisions will be made – to provide certainty and support the transition to clean heat and improved building performance.  

Support for the supply chain 

Meeting Scotland’s climate change targets will require tens of thousands of low carbon heating and energy efficiency measures to be installed each year. That means that there will need to be sufficient numbers of trained professionals to carry out these installations. This will require a significant increase in workforce capacity, particularly in remote and rural areas where access to skilled installers can be more limited. To support this, policies are required that support supply chain growth, including: 

• Provide policy certainty. The Scottish Government should set out clear, long-term plans and funding commitments for retrofit programmes. This should include clarity on what measures will be needed, how much work is expected, when it will happen, and where – so that businesses can plan ahead and invest in workforce growth. Regulation will also be important to provide certainty for businesses. At present, uncertainty about future demand is holding back supply chain investment.  
• Support streamlined upskilling and retraining. Modern apprenticeships can take up to four years to complete, creating a time lag in delivering skilled workers. The Scottish Government should support faster training routes – such as conversion courses for people entering from other sectors – to help meet immediate demand.  
• Provide financial support for people reskilling. Introduce financial assistance for individuals undertaking training or changing careers into the retrofit sector. This would help remove income barriers during the training period and encourage more people to enter the sector.  
• Make it easier for young people to start careers in retrofit. The Scottish Government should work with partners such as the Scottish College Network and SNIPEF to expand modern apprenticeship pathways in renewables. This will help young people gain the skills they need to access secure, long-term jobs in the retrofit sector.
• Raise awareness and improve the sector’s appeal. The Scottish Government should launch targeted campaigns to raise awareness of retrofit careers, particularly among underrepresented groups such as women and ethnic minorities. A lack of visibility is currently limiting workforce growth. 
• Promote retrofit careers in schools. Collaborate with careers services to raise awareness of retrofit as a career option among school pupils. Early engagement will help young people make informed choices and enter the sector through supported pathways. 
• Support SME installers to grow with local markets. The Scottish Government should continue to provide tailored support to help local SME installers expand in response to growing demand – especially in rural areas. Programmes like the Scottish Government’s Green Heat Installer Programme (GHIEP), which is delivered by us, already play an important role in this space and should be built upon.
• Support small businesses to take on apprentices. The Scottish Government should provide targeted financial assistance to help small and micro businesses cover the costs of employing apprentices. Many small firms – particularly in rural areas – are currently unable to afford the costs of taking on new apprentices. Supporting these businesses to take on apprentices would help grow the skilled workforce in the medium term and ensure that retrofit jobs are distributed across Scotland’s communities.  

Awareness raising 

The Scottish Government already delivers a wide-ranging public engagement programme though initiatives such as Scotland’s Climate Week and the Let’s Do Net Zero Campaign, as well as other engagement and awareness activity.

However, while most people are concerned about climate change, many do not understand what they can do to reduce their own impact. In addition, the UK public do not feel part of the transition, with a recent survey of UK homeowners finding that 48% of respondents felt that the net zero transition was happening to them and over a third felt they could not engage with it at all.  

Across Great Britain, public knowledge of energy efficiency and low carbon technologies also remains low. Recent research found inaccurate beliefs and poor knowledge to be widespread amongs those surveyed. For example, 73% of British consumers surveyed stated they don’t understand what a heat pump is and 57% believed home insultation doesn’t work well in older homes.

Misinformation and negative stories also contribute to scepticism and a lack of trust around low carbon technologies, acting as a barrier to action. Recent Consumer Scotland research highlights the value of clear, trusted information and better signposting to impartial sources like Home Energy Scotland to help consumers make confident decisions.  

To secure public buy-in and ensure the success of decarbonisation policies, it will be important to maintain and build on existing engagement activity. Public engagement helps create the conditions for policy delivery by building public understanding and support – both of which are essential for introducing the policies needed to drive action on the ground.  

Continue to provide access to impartial, tailored advice 

To make informed decisions about improving the energy performance of their homes people need access to trusted advice. The Scottish Government’s Home Energy Scotland advice service plays a central role in meeting this need, offering free impartial advice to consumers on fuel poverty, energy and carbon-saving advice which is tailored to their individual circumstances.

Its advice aims to facilitate informed choices by removing technical jargon, making home improvements simple to understand, changing the buying and usage behaviours of householders and referring them to financial support schemes that best meet their needs. As demand for energy efficiency and clean heating grows, it will be important to continue building on Home Energy Scotland’s capacity to give households the confidence to make changes to their homes.  

Continue to ensure that there is a financial offering for all 

To meet Scotland’s carbon budgets and ensure a fair transition to clean heating, it is essential that financial support for clean heating and energy efficiency measures – including grants and subsidised finance – remains in place.

For heat pumps, financial support will need to remain in place until cost parity is achieved between owning and running a fossil fuel boiler and a heat pump. At current prices, the upfront costs of heat pumps are higher than fossil fuel boilers and without adequate financial support many households will struggle to afford the switch.  

While banks and other lenders may increasingly offer loans or other green finance products to support this transition, not all households will be eligible for such finance. The Scottish Government will therefore need to continue providing subsidised finance and grants to ensure that everyone – including those excluded from mainstream credit markets – can access the support they need. For fuel poor households, fully funded measures will be essential.  

Maintaining a financial offering is critical not only to support uptake and meet installation targets, but also to ensure fairness and avoid penalising those unable to access private finance.  

We therefore think that the following policies are necessary if climate budgets are to be met:  

• Maintain public financial support for clean heating until cost parity is achieved between installing and running fossil fuel boilers and heat pumps.
• Provide fully funded measures for fuel-poor households to ensure equitable access to clean heating and energy efficiency.
• Facilitate the development of private finance options to complement public support and expand consumer choice.
• Provide a clear roadmap for the evolution of financial support over time, offering certainty to households and the supply chain.  

Recognising overheating as part of the heat transition 

As Scotland’s climate continues to change and rising temperatures increase the risk of overheating in homes, it will be important to ensure that cooling is considered as part of the clean heat transition – both to protect health and wellbeing and to avoid unnecessary increases in energy use, emissions and household costs.  

Policy should prioritise passive cooling measures such as effective shading and natural ventilation. These approaches can often reduce or eliminate the need for mechanical cooling, helping households stay comfortable without driving up energy demand or costs. However, without clear guidance, there is a risk that households will default to energy-intensive solutions like standalone air conditioning units – when simpler, lower cost options would suffice.

There is also a risk that households will adopt fragmented and inefficient solutions – for example, installing a heat pump for heating and later adding a standalone air conditioning unit which would increase both energy demand and household costs more than would have been the case if cooling needs had been considered from the outset.  

For some households, the ability to cool as well as heat may actually be a driver for adopting heat pump technology – particularly air to air or bidirectional systems. Recognising this potential could help broaden the appeal of clean heating solutions and support uptake, especially in homes where overheating risk is already a concern.  

To date, public funding and incentives have so far focused primarily on heating. However, as overheating risks increase, there may be a case for revisiting subsidy design to ensure that it supports systems that offer both heating and cooling in certain circumstances.

While cooling may not yet be a widespread need in Scotland, it would be sensible to begin considering how and when cooling should be factored into future policy and funding frameworks – ensuring that Scotland is prepared for emerging climate realities rather than responding reactively.  

To help households make informed and energy efficient choices, future programmes, regulations and advice services should anticipate the potential need for cooling. This must include support for passive cooling measures, to ensure that any shift toward cooling does not result in unnecessary energy use, emissions, or costs. 

Policies to support decarbonisation in flats 

Flats face specific challenges to retrofit, including co-ordinating groups of owners, the technical complexity of the retrofit required and varying incomes and ability to pay within groups of owners.  

Given more than 36% of people in Scotland live in flats decarbonising these homes has an important role to play in meeting climate change targets. Last year, we published a report considering how to accelerate retrofit of flats in across the UK, learning lessons from countries across Europe.

The report set out a range of recommendations tailored to each UK nation. For Scotland one recommendation was to address the gap in financial support for groups of owners in flats, noting that current schemes do not include provisions for collective applications. We highlighted to need to enable groups of owners to access financial support and ensure that funding mechanisms are designed to support shared retrofit projects.  

Further recommendations can be found in the report and we would be happy to provide further information or discuss this work in more detail with you if that would be helpful.   

Many of the core policy levers – supply chain support, awareness raising, advice services and financial offerings – are already in place in Scotland, but they now need to be significantly enhanced and scaled up. This should happen as soon as possible.  

As part of this, retrofit policies should begin to consider current and future cooling needs now. While demand has historically been low, rising temperatures mean that overheating risks are likely to increase.

Early awareness campaigns and advice services can help people understand the risks and adopt more efficient and lower cost approaches. Taking action now will help avoid reactive, energy-intensive responses later and ensure households are better prepared for a changing climate.   

The Scottish Government estimate that the total investment required to transform Scotland’s homes and buildings is likely to be in excess of £33 billion. Analysis by WWF Scotland suggests that the total capital cost of meeting climate targets for housing alone to 2030 would be between £23.5bn and £26.5bn. The Scottish Government has emphasised that this investment cannot be provided by the public sector alone and that investment from the private sector will be required.  

Improving health outcomes 

Cold homes can have a significant impact on both physical and mental health. This includes increasing the risk of respiratory and circulatory diseases, with those suffering from asthma two to three times more likely to live in cold and damp homes.

Research has also found that young people without access to affordable warmth had an increased risk of suffering from multiple mental health symptoms and households on lower incomes are more likely to experience damp and mould, showing that our inefficient housing stock relates to broader health equality issues. 

Accelerating the roll out of energy efficiency can therefore support broader outcomes in relation to both mental and physical health. This could result in significant savings for the NHS, with Citizens Advice finding that upgrading 13 million homes across Great Britain to EPC C could save the NHS a total of £2 billion by 2030 by reducing levels of cold related illnesses and mental health conditions, as well as making them less severe. 

Reducing the need for infrastructure upgrades 

By reducing energy demand, energy efficiency also puts less strain on the energy networks, reducing the need for infrastructure upgrades and the costs associated with this, which are ultimately passed onto bill payers. Citizens Advice estimate that insulating 13 million homes across Great Britain to EPC C by 2030 would reduce national and peak electricity demand by 8%, saving consumers a total of £4 billion by 2030 in energy system costs and helping to permanently bring down bills.  

Wider benefits of reducing gas use 

Reducing gas use also has wider system benefits. Lower demand for gas can help to ease pressure on wholesale gas prices, which in turn can lower electricity prices – given the role of gas in power generation. This supports affordability for consumers, improves energy security and contributes to a more stable and resilient energy system overall.  

Reducing fuel poverty and improving energy affordability  

Upgrading homes to be more energy efficiency will lead to permanent reductions in energy bills. This is one of the most effective ways to tackle fuel poverty. According to the ECIU, those living in the most inefficient homes (EPC F) with high energy demand levels will be paying more than an efficient home at EPC bank C. And National Energy Action estimates that those in fuel poverty are paying up to £417 more per year for energy due to inefficient homes.  

Energy security 

Reducing overall energy demand through improved energy efficiency and switching to clean heating will reduce our reliance on international fossil fuel markets. This will strengthen Scotland’s energy security. 

Supporting economic growth 

Accelerating the rollout of energy efficiency and clean heating technologies like heat pumps will also support economic growth in Scotland. The sector is already expanding, but to meet net zero targets annual heat pump installations need to significantly increase by 2030 This scale up will sustain jobs in retrofit and low carbon heating across the country,  

The key challenges to improving the energy performance of Scotland’s homes through installing energy efficiency measures and clean heating in Scotland are well documented. Many of these challenges have already been outlined earlier in this response, for example supply chain constraints.  

It is also important to recognise that many existing Scottish Government policies and programmes already aim to overcome some of the challenges typically associated with improving the energy performance of Scotland’s homes – for example the Home Energy Scotland Grants and Loans scheme helps to overcome one of the most significant challenges – upfront costs.

Clean heating systems such as heat pumps typically have higher upfront costs than fossil fuel boilers. Without this financial support many households will struggle to afford the switch. In addition, advice from Home Energy Scotland helps overcome key barriers by providing trusted, impartial advice and information on available technologies and funding options.

The Green Heat Network plays a vital role in building trust and confidence among households by showcasing real-life examples of energy efficiency upgrades and clean heating technologies in action. This approach helps to normalise low-carbon choices and reduce perceived risks, especially for those unfamiliar with the technologies.  

Looking ahead, it will be important to build on the foundations of these programmes ensuring they continue to evolve in line with the level of activity required to meet Scotland’s climate change targets.  

It is also important to recognise that some of the barriers to clean heating adoption fall under the remit of the UK Government. For example, the higher cost of electricity relative to gas remains a significant obstacle. Addressing this issue will be essential to ensure that clean heating becomes a financially viable option for more households.  

Meeting Scotland’s climate targets will require a significant increase in the roll out of low carbon heating and energy efficiency measures each year, creating significant demand for skilled workers.

This presents an opportunity to support a just transition by investing in workforce development, particularly in remote and rural areas where access to skilled installers is currently limited and where access to training can also be difficult or economically challenging for workers.

The mobile heat pump training centre is a positive example of how these barriers can be addressed. Policies that support training, retraining, and career pathways into the sector — especially for those currently in high-carbon roles or facing barriers to employment — could help ensure that the transition is inclusive and benefits communities across Scotland.

Meeting Scotland’s climate change targets will require a major shift in how we travel, particularly to reduce emissions from road transport. The Climate Change Committee (CCC) has identified transport as the largest contributor to the emissions reductions needed to meet Scotland’s first two carbon budgets (2026–2030 and 2031–2035)

Decarbonising road transport — through reduced car use, increased active and public travel, and a shift to zero-emission vehicles — will be essential to delivering Scotland’s climate commitments. 

To meet these targets, Scotland will need a package of policies that reduce car use and accelerate the shift to zero emission vehicles. These should include: 

• Additional funding mechanisms. As demand for electric vehicles (EV) grows, local authorities will need access to flexible and scalable financing options to expand charging infrastructure. Asset financing or equity loans—offered by public or private lenders—can help unlock investment, provided there is a clear commercial model and reliable revenue from Electric Vehicle Infrastructure (EVI) use. Potential sources include the Public Works Loan Board (PWLB), Crown Commercial Service (CCS) asset finance, and the National Wealth Fund. 
• Tailored advice and support. Many people are unsure about switching to electric vehicles—from choosing the right model to understanding charging options and costs. Accessible, personalised advice can help overcome these barriers, particularly for small businesses, rural residents, and those with limited transport alternatives. 
• Public awareness campaigns. Coordinated national and local campaigns should promote the environmental, health, and financial benefits of low-carbon transport, and raise awareness of available support schemes. These campaigns must be inclusive and reach diverse communities across Scotland. This should be designed to address concerns and misconceptions about the need to decarbonise our transport sector and the wider net zero transition.  
• National scrappage scheme. A Scotland-wide scheme to replace older, high-emission vehicles with electric or ultra-low emission alternatives would help overcome upfront cost barriers and accelerate the removal of the most polluting vehicles. 
• Multi-year infrastructure funding. Long-term funding commitments are essential to give local authorities, housing providers, and communities the confidence to plan and deliver EV infrastructure. Targeted support should address challenges in flatted and factored developments, and rural and island areas. 
• Local incentives funded by LEZ penalties. Revenue from Low Emission Zone (LEZ) penalties should be reinvested into local incentives for low-carbon transport, such as EV grants, subsidised charging, or car club memberships. 
• Community action toolkits. Practical toolkits should be developed to support community-led initiatives on low-carbon transport, helping local authorities and grassroots groups design and deliver solutions tailored to local needs. 
• Expansion of LEZ and tightening of standards.  LEZ coverage should be gradually expanded with standards progressively strengthened over time. 
• Moving people up the sustainable travel hierarchy. Research and investment should focus on effective ways to reduce private vehicle ownership and reliance, while increasing use of public transport and active travel. This could include interventions such as traffic calming measures and the development of more cycle paths. 
• Support for areas with limited off-street parking. Targeted approaches are needed to address the challenges faced by households without access to off-street parking for EV charging. This could include trialling a range of innovative solutions in different locations and assessing their impact.  
• Apprenticeship and training scheme funding. Support is needed to ensure that there are enough qualified mechanics to service electric vehicles, and enough engineers to install and upkeep the infrastructure required to support the transition to EVs.  

Given the scale of emissions reductions required, these policies should be implemented as soon as possible.  

These policies should remain in place until privately owned vehicles have been fully decarbonised. Their scale may need to adjust over time in response to market conditions and the evolving role of the private sector in maintaining public charging infrastructure.

If efforts to reduce private car use are successful, the overall demand for charging infrastructure and its supporting industries may decrease. Once private vehicles are fully decarbonised, some policies can be phased out – though those aimed at reducing car dependency may need to continue.  

These policies will accelerate the shift to low-carbon vehicles, significantly cutting transport emissions and supporting Scotland’s climate targets. Reduced tailpipe emissions will improve local air quality, particularly in urban areas, helping lower rates of health conditions linked to poor air quality and in turn reduce pressure on health services.

Increased active travel will contribute to a healthier, more active population – supporting physical and mental wellbeing. Measures to reduce traffic volumes may also lower the incidence of road accidents.  

While public support for bringing down our carbon emissions remains high, wider societal pressures — such as the ongoing cost-of-living crisis — have understandably had an impact on public priorities and may start making it more challenging to maintain momentum around the net zero transition.

Public discourse is becoming more polarised, with some media narratives raising concerns about aspects of the transition, including around electric vehicle technologies and the costs. This highlights the importance of clear, inclusive communication and engagement to build understanding and trust of why the net zero transition is important and how it will benefit the public. 

Behavioural change around car use can be difficult, particularly when it involves perceived costs or restrictions. Measures such as low emission zones may face resistance and will need to be introduced with care, ensuring that the benefits are well understood and that support is available where needed. 

Safety concerns are a significant barrier to active travel. Many people report feeling unsafe cycling in some areas, and addressing these perceptions — alongside improving infrastructure — will be key to encouraging more sustainable travel choices. 

For those on lower incomes, the cost of switching to electric vehicles can be a significant barrier. Separately, households without off-street parking may face challenges accessing convenient and cost-effective charging options. 

These policies could help ensure that workers and communities have the charging infrastructure that they need to be able to make the switch to electric vehicles. They will also support the development of active travel routes and public transport systems, enabling more people to move up the sustainable transport hierarchy.  

For those working in sectors likely to be affected by the transition to net zero, training and reskilling opportunities can open pathways into the growing low-carbon transport industry. This can offer greater job security and long-term employment prospects, helping to ensure the transition is fair and inclusive. 

Not all of the key policies needed to meet Scotland’s climate targets are devolved. Progress will also depend on UK Government decisions in reserved areas, such as energy markets and regulation. For example, the way levies are currently applied to electricity bills can make electric heating more expensive than gas. Reforming this could help make heat pumps more affordable and speed up their uptake in Scotland. 

In this context we also note that the UK Government’s forthcoming Warm Homes Plan may play an important role. If it includes strong, well-funded policies to support energy efficiency and low-carbon heating, it could have a positive impact on uptake in Scotland.