Update to the Climate Change Plan | Contents 1 our policies mean in practice 18 How this document relates to the Looking forward to the next full 1.1 Engagement with Stakeholders 1.2 Delivering a Green Recovery 42 Part 2: Coordinated Approach 58 2.1 Whole System Energy Approach 59 2.2 Land Use, Nature Based Solutions and the link to Biodiversity 64 2.5 The Planning System and National 2.6 Wellbeing and National Outcomes 70 ANNEX Policies and Proposals in the Climate Change Plan 212 Waste and the Circular Economy 230 Negative Emissions Technologies 241 ANNEX Monitoring Framework 243 Sector Policy Outcome Indicators 246

2 Update to the Climate Change Plan | Ministerial Foreword When we first set out to update social crisis. The challenges we In this context, it is clear that the challenge of meeting our emissions reductions targets becomes more difficult. COVID-19 has affected every aspect of our lives, with thousands of people losing their jobs and businesses in distress; and a fundamental shift in how we live and work in our local communities, towns and cities. We are witnessing war-time levels of lending and significant pressure on budgets, especially on devolved budgets where we lack the necessary financial Amid the enormous challenges of the global pandemic, the climate emergency has not gone away – far from it – and the Scottish Government remains absolutely committed to ending Scotland’s contribution to climate change by 2045 in a just and fair way. Indeed, it is central to our recovery. We have the opportunity to design a better future and, coming out of the pandemic, put things back together That is why we have committed to a ‘green recovery’ from COVID-19, one which captures the opportunities of our just transition to net zero. That means creating green jobs, developing sustainable skills and nurturing wellbeing. This approach recognises climate change as a human rights issue and the transition to net zero as an opportunity to tackle inequalities. It is an approach that is fundamentally important to the future prosperity of our people and planet. Update to the Climate Change Plan | Ministerial Foreword 3 Put simply, a green recovery is our commitment to transition to net zero emissions in a way that is just, and that delivers a thriving, sustainable economy that works for all of us. Our last two Programmes for Government have committed to delivering a Green New Deal, setting out how the investments we are making will support this holistic and fair transformation of our economy in the coming decades, leading to greater prosperity and social outcomes. This Climate Change Plan update builds on that work and sets out the actions we are taking to make this Deal a reality through our green recovery. The prize of achieving this is a better world – a more equal world, a world of greater opportunities, and a natural environment that is vibrant We have developed our approach based on the advice and contributions received from the Climate Change Committee, Just Transition Commission, Advisory Group on Economic Recovery, Climate Emergency Response Group, Scottish Science Advisory Council and the Sustainable Renewal This update to the 2018 Climate Change Plan sets out bold actions, which together reduction targets out to 2032. This journey will not be easy, and will need to be a truly national endeavour with business, communities, and individuals contributing fully. It will require us to be innovative, to learn as we are going and to utilise new and exciting technologies and ideas. It will also mean supporting individuals and businesses to adapt their choices and behaviours, as set out in our new Public Engagement ‘Net Zero Draft Public Engagement Strategy for Climate Change’. This Plan update therefore gives clear signals of where we are going, what the Scottish Government is doing to enable us to get there and how others can contribute. Looking ahead to the UN Climate Conference, COP26, that will take place in Glasgow in 2021, we are also reminded that not only do we need a truly national endeavour, we also need this spirit and commitment to be applied internationally. This plan sets out areas where we are already collaborating with our global partners; but also provides a foundation to strengthen and deepen our engagement with other countries, states and regions Over and above the impacts of COVID-19, we are also facing the impacts of EU Exit, a set of circumstances which is not of Scotland’s choosing. As we move to a new relationship, we remain committed to a deep and close partnership with the EU, its Member States and other European actors, and indeed to Scotland re-joining the bloc as an independent country. We believe this plan can support that

4 Update to the Climate Change Plan | Ministerial Foreword The scale of the challenge ahead, both to rebuild our economy in the wake of COVID-19, and to deliver our world- leading climate change targets, is unprecedented. However, we know the huge opportunities that a transition to a fairer, more sustainable and greener economy can bring for Scotland, including in creating green jobs and wellbeing for everyone. We are therefore determined to grasp these opportunities and transform our country for the better. This Climate Change Plan update is a vital step in this process, ahead of the next full Plan, to be

Update to the Climate Change Plan | Ministerial Foreword 5

6 Update to the Climate Change Plan | Executive Summary

Update to the Climate Change Plan | Executive Summary 7 This document updates the 2018 Climate Change Plan. Since that Plan we have set new ambitious targets to end our contribution to climate change by 2045. We have committed to reduce emissions by 75% by 2030 (compared with 1990) and to net zero by 2045. COVID-19 does not change our ambitions. As Scotland emerges from COVID-19 we have a chance to rebuild our economy in a way that delivers a greener, fairer and more equal society.
This Plan sets out our approach to delivering a green recovery, and sets out a pathway to deliver our world leading climate change targets1. In line with the 2018 plan, the focus is on the period up to 2032. You will see from what we have set out here that our approach must be iterative, we must learn by doing. No-one currently has all the answers on how we deliver the transition over the next 25 years or how emerging technologies can be deployed efficiently at scale. Many of the solutions rely on further technological innovation, market development and wider take up and adoption as well as action by others. By monitoring, evaluating, updating and adapting this plan over the coming decade we can be on track to meeting our ambitious targets and capturing the opportunities of the transition. This iterative approach will prepare the ground for the next statutory Climate Change Plan, which is to be completed by early 2025. 1 Targets set in law in the Climate Change (Scotland) Act 2009 (as amended by the Climate Change (Emissions Reduction It is essential that our recovery from the pandemic responds to the climate emergency, and puts us on a pathway to deliver our statutory climate change targets and a just transition to net zero, by ensuring our actions in the immediate term are in line with our long-term goals. The Scottish Government has been clear in its commitment to securing a just and green recovery, which prioritises economic, social and environmental wellbeing, and responds to the twin challenges of the climate emergency In developing our understanding of what a green recovery will mean for Scotland, we have listened to stakeholders from across academia, industry, business, trade unions and environmental organisations and other experts including the Climate Change Committee, Just Transition Commission, Advisory Group on Economic Recovery, Scottish Parliament, Climate Emergency Response Group, Scottish Science Advisory Council and the Sustainable Renewal Advisory Group. Delivering a green recovery is at the heart of the 2020-2021 Programme for Government. Part 1 of this Update sets out the progress that is being made in delivering these commitments and the further actions we will take to secure a green recovery from the COVID-19 pandemic. Our response is framed around the following key themes which have consistently been highlighted by Ħ Recognising the role that both public and private investment must play in delivering the transition to net zero. committed the first tranche of the £2 billion Low Carbon Fund and this update sets out a number of additional investments being made by Government as well as opportunities to leverage in investment from others. The second tranche will Ħ £180 million for an Emerging hydrogen and providing impetus to the development of Negative Emissions Technologies (NETs);

8 Update to the Climate Change Plan | Executive Summary Ħ £120 million for Zero Emission Buses, driving forward a fully decarbonised future for Scotland’s bus fleet and support the Scottish Ħ £50 million to transform Vacant and Derelict Land, ensuring that this land is utilised for maximum Ħ £50 million to create Active Freeways, providing a sustainable link between our towns, cities and some of our most beloved national Ħ These investments will be critical in laying the foundations for our Ħ At the centre of our approach is a commitment to increase the number of good, green jobs, and to enable people to access these jobs through training and reskilling. To further align the skills system with the demand resulting from a green recovery and the transition to net zero, the Climate Emergency Skills Action Plan has been published Ħ The COVID-19 pandemic has proven the importance of embedding resilience and security into our society and economy. Adaptation and resilience are key components of our green recovery. committed to investing an extra £150 million for flood risk management over the next 5 years and £12 million in Ħ We know the impacts of COVID-19 on people’s lives and livelihoods have been enormously difficult. In their advice the CCC recommended that actions to maintain positive behaviours in the long term are prioritised and our update sets out the policy measures to embed behaviour change in each of the sectors. Our new Draft Public Engagement Strategy, published alongside this update sets out how we will continue to engage with citizens in developing and implementing climate policy that has widespread support and Ħ We are also committed to delivering a place-based approach to our green recovery working closely with those communities and organisations that need change, are undergoing change or affected by change. Our ongoing planning system reforms will aim to reduce process and procedures so that planning can focus more on places and people and evolving concepts such as 20 minute neighbourhoods will prioritise quality of life and health as well as our net zero ambitions. The green recovery and transition to net zero present considerable economic opportunities for Scotland. By capitalising on Scotland’s strengths in energy, natural capital, innovation and our skilled workforce and universities, we can set Scotland at the forefront of growing global markets. The recent Inward Investment Plan identified Energy Transition and Decarbonisation of Transport as two areas of competitive strengths in Scotland as well as strengths in Digital, Health, Space and Food and Drink which will all contribute to a thriving net zero economy in the future. Scotland is already harnessing our considerable strengths and expertise in offshore energy to drive our energy transition and develop and deploy new technologies in hydrogen production and use and in Carbon Capture and Storage. This is driving a revolution in our transport system, with new hydrogen bus fleets on the streets of Aberdeen. Scotland’s natural capital is one of our greatest assets and is central to our future net zero economy, developing thriving rural economies based around woodland creation, peatland restoration and biodiversity as well as sustainable tourism, food and drink and energy.
Update to the Climate Change Plan | Executive Summary 9 The policies and actions in this update to the 2018 Climate Change Plan are set out on a sector-by-sector basis. However, achieving our climate change targets will require us to align and deliver these policies in a joined-up way. This means that some of our policies will involve two or more sectors (for example, the development of renewable energy will support decarbonisation across the whole energy system, including electricity, transport, industry and buildings or land use relates to agriculture, forestry and bioenergy crops), and also means integrating climate change action into all of the decisions we make across government. For this reason, we have dedicated Part 2 of this update to our ‘Coordinated Approach’ to meeting our emissions reduction targets. This section looks at how we take a cross-cutting, systems opportunities for inclusive jobs, growth A coordinated approach is fundamental to delivering a just transition, given that the transition will transform all parts of our society and economy. Fairness will be at the heart of our climate action, ensuring that individuals and communities are not left behind. Collectively, we must plan and prepare, so that that these transformational changes are harnessed to tackle inequalities, provide good jobs, improve our environment and support a thriving, wellbeing economy. In this update we present a range of policies that will boost social and economic opportunities and, in particular, underpin the importance of equity, engagement and Ħ improvements for bus priority infrastructure will improve connectivity for people in lower socio-economic Ħ investment in heat and energy efficiency creates jobs and includes explicit support for those least able to We are committed to taking a Whole System Energy Approach, encouraging joined-up and collaborative thinking across sectors, particularly with regards to emerging technologies related to hydrogen, bioenergy and Negative Emissions Technologies. The Scottish Government also recognises the vital importance of innovation in meeting our climate change targets, and this Plan update includes details of our actions to date and plans for the future to support world-leading innovators in Scotland. In 2017 we published Scotland’s first Energy Strategy in alignment with the 2018 Plan. This championed a whole system view of energy as one of its three core principles, along with an ‘inclusive energy transition’ and ‘a smarter local energy model’. We will update our energy strategy in 2021 to lay out a coordinated vision for the whole energy system. This will be based on our best understanding of the technologies and options available today, and focused on delivering our economy- wide emissions reduction targets and just transition and wellbeing economy Another area where a coordinated approach is essential is on land use. Not only is our land the cornerstone of our society and bedrock of Scotland’s natural capital, but it has many uses. We have a finite amount of land and are making increasing demands upon it. Our upcoming third Land Use Strategy will set out how the various aspects of land use and actions of the Scottish Government come together to deliver on our overarching sustainable land use vision. The Coordinated Approach section also includes details of our approach to a circular economy in Scotland, and our commitment to a Wellbeing Economy. 10 Update to the Climate Change Plan | Executive Summary We also have an excellent opportunity to embed emissions reduction and climate change adaptation into Scotland’s long term development strategy through the National Planning Framework 4. This update includes policies and proposals for each sector that build on those contained in the 2018 Plan. We have also added an eighth sector for this Negative Emissions Technologies The key policies which underpin this progress are set out below, as well as in Part 3, and in full at Annex A. In Electricity, the Climate Change Plan update announces further policies to continue the rapid growth in renewable generation over the past twenty years, moving from a low to a zero carbon electricity system, with the potential for NETs to deliver negative emissions. In our Energy Strategy Update, to be published in 2021, we will set out in detail the role that electricity generation will have in the wider energy system. We will continue to review our energy consenting processes, making further improvements and efficiencies where possible, and we will deliver the actions from our Offshore Wind Policy Statement published in October which supports the development of between 8 and 11 GW of offshore wind

Update to the Climate Change Plan | Executive Summary 11 We will review and publish an updated Electricity Generation Policy statement by 2022 reflecting the contribution that renewable electricity generation is likely to have to achieving our Net Zero target in line with the CCC recommendation to do so. We will continue our efforts to ensure a sustainable security of electricity supply, and in 2021 we will launch a call for evidence and views on technologies including energy storage, smart grid technologies and technologies to deliver sustainable security of supply. There are a number of important actions that affect a number of sectors, including We will also take forward actions to develop the role of hydrogen in our energy system. We will build on the outputs of the Hydrogen Assessment project and publish a Hydrogen Policy statement this month, and then a We know that bioenergy will be important in helping us deliver negative emissions, and a key challenge for the early 2020s is to understand the extent to which bioenergy should be used in each of our sectors. In early 2021 we will publish a Bioenergy Update and will establish an Expert Working Group to consider and identify the most appropriate and sustainable use of bioenergy resources within Scotland. We will publish a Bioenergy Action Plan in 2023. In Buildings, we know that around 50% of homes and non-domestic buildings will need to convert to a low or zero carbon heating system by 2030.
We will set out a clear, long term vision and policy direction for heat in buildings in the forthcoming Heat in Buildings Strategy. Our approach will be framed around 3 key regulatory change, delivering significant investment and supporting supply chain growth. In this Plan update we’ve confirmed our New Build Zero Emissions from Heat Standard will be introduced from 2024 by which point all new builds will have to have zero emissions heating systems. We are seeking evidence on the impact of introducing these requirements earlier than 2024 if feasible. We have also set out a clear approach to developing a long term regulatory framework, within the limits of our competence, for decarbonising heat in buildings and ensuring a good level of energy efficiency. We will stimulate adoption of zero emissions heating systems and pursue expanded investment in zero emissions heating by developing innovative solutions to leverage private capital. We will bring forward the review of the existing Energy Efficient Standard for Social Housing to conclude in 2023. As announced in the Programme for Government, we will invest £1.6 billion in heat and energy efficiency over the next Parliament, using this to leverage in UK Government and private finance to see, as a minimum, the rate of zero emissions heat installations in new and existing homes and buildings double every year

12 Update to the Climate Change Plan | Executive Summary In transport we set out ambitious actions which are aligned with our new National Transport Strategy. There is a key focus on technological advances, but equally on measures to encourage mode-shift and significant societal changes. This update commits to reduce car kilometres by 20% by 2030, a truly world-leading aspiration, and we are not aware of any other country that has committed to such an ambitious transformation. Once the pandemic has moved to a phase to allow more certainty regarding future travel demand we will produce a route-map to meet the reduction. Alongside that we will phase out the need for new petrol and diesel cars and vans by 2030 (bringing this ambition forward from the 2018 plan by 2 years), We will work with public bodies to lead the way by phasing out the need for new petrol and diesel light We will continue to work to establish a Zero Emission Heavy Duty Vehicle programme with Scottish Enterprise to support innovation in the Scottish supply chain for HGVs and we will engage with industry to understand how changing technologies and innovations in logistics can help reduce carbon emissions. On aviation, we will decarbonise scheduled flights within Scotland by 2040 and will work with the sector to encourage sustainable growth post COVID-19. As announced in our Programme for Government we will aim to create the world’s first zero emission aviation region in partnership with Highlands and Islands On public transport, Scotland’s rail services will be decarbonised by 2035 and we will work with the newly formed Bus Decarbonisation Taskforce, comprised of leaders from the bus, energy and finance sectors, to ensure that the majority of new buses purchased from 2024 are zero- emission (brought forward from 2032). On active travel, as announced in the Programme for Government we will support transformational active travel projects with a £500 million investment over 5 years for active travel infrastructure, access to bikes In industry, we know that emissions need to continue to decline significantly whilst ensuring Scottish industry competes on a level playing field and remains globally sustainable. We also know that Scottish industry has much to gain from being at the forefront of the transition to net zero. In this Climate Change Plan update we commit to taking a properly sequenced and strategic approach to Scotland’s industrial sector, creating opportunities for Scottish industries and supply chains to expand exports into global markets. Many industrial decarbonisation powers lie with the UK Government and we will continue to press the UK Government to implement the jointly developed UK ETS and agree a link to the EU ETS to enable a smooth transition for industry. Carbon capture and storage (CCS) is essential to We are announcing a new Emerging Energy Technologies Fund of £180 million that will support the development of hydrogen and CCS, which will add new impetus to the development of NETs, and we will work with our agencies to develop a £5 million Carbon Capture and Utilisation Challenge Fund to boost early stage work and technologies in this area. In these challenging economic conditions, we will continue to develop the conditions for private sector investment by supporting innovation throughout the industry the Scottish Industrial Energy Transformation Fund commits £34 million for projects at industrial sites for energy efficiency or deeper decarbonisation and the £26 million Low Carbon Manufacturing Challenge Fund will support innovation in low carbon technology, processes and infrastructure. We are investing £100 million to help businesses create new, green jobs via the Green Jobs Fund. Update to the Climate Change Plan | Executive Summary 13 In waste, Scotland’s progress in reducing emissions in the waste and resources sector over the past 20 years has been striking, but we know there is still progress to be made. We will continue to embed circular economy principles in to the wider green recovery and take steps to reduce food waste through the Food Waste Reduction Action Plan delivering against our ambitious target to reduce food waste by one third by 2025 (against a 2013 baseline). We are committed to ending landfilling of biodegradable municipal waste by 2025 and recycling 70% of all waste by 2025. We will develop a route map to outline how we will deliver our waste and recycling targets in a way that maximises carbon saving potential, and are investing £70 million to make the right option the easy option for household recycling. We are currently consulting on banning a number of single use plastic items and will continue to work with the UK Government and other devolved administrations on reforms to the packaging extended producer responsibility regime.
We will introduce measures to encourage people to shift toward reusable products and encourage more sustainable consumption. We will work with partners to develop a post 2025 route map to identify how the waste and resources sector will contribute towards Scotland’s journey towards net zero in the period to 2030 and beyond. 14 Update to the Climate Change Plan | Executive Summary Land use, land use change and forestry Our landscape and natural environment is one of our greatest national assets and has a vital role to play in meeting our ambitious climate change targets. Through significant increases in forestry and widespread peatland restoration in particular, we can reduce greenhouse gases and other pollutants and increase the levels of carbon dioxide being absorbed and locked up in timber products. We will continue to expand forest cover in Scotland, building on the success of creating 22,000 hectares of new woodlands in the last two years. We will increase new woodland creation from the current target level of 12,000 hectares annually in 2020/21 up to 18,000 hectares in 2024/25. Scottish Forestry and Forestry and Land Scotland will work with investors, carbon buyers, landowners and market intermediaries to increase private investment in new woodlands in order to increase the woodland carbon market by at least 50% by 2025. As of March 2020 over 25,000 hectares of peatland have been put on the road to restoration, and earlier this year we announced a £250 million ten-year funding package to support the restoration of 250,000 hectares of degraded peat by 2030. To deliver on the 2032 emissions reduction envelope annual peatland restoration needs to be far higher than the current 20,000 hectare annual target and we will work closely with delivery partners, land owners, managers, farmers and crofters to continue to encourage more restoration of peatland, both traditional bog but also land that offers the highest emission

Update to the Climate Change Plan | Executive Summary 15 In agriculture, we know that we must continue to produce high quality food, but also deliver high environmental standards and emissions reductions. How we use our land will evolve as we respond to climate change with more woodland, restored peatland as well as potential increase in land for growing biomass. We also know it is important that our soils and grasslands are managed appropriately, and that technology is deployed as innovatively as possible to reduce emissions. The Update provides a route map for agricultural transformation, having started in 2020 and working in partnership through farmer led groups, with the introduction of environmental conditionality, piloting Sheep on Ben Tianavaig mountain, Isle of Skye enhancing advice for farmers, crofters and land managers to meet Scotland’s goal of having food production of world leading sustainability. We will ensure that rural support enables, encourages and where appropriate requires the shift to low carbon sustainable farming. We will scale up the Agricultural Transformation Programme across all policies, including to enable farmers and crofters to purchase equipment that should assist in reducing emissions and support practice change. We will explore options for land- use change to optimise uses beyond traditional farming and food production to multi-faceted land use including forestry, peatland restoration and management and for biomass production, including provision of advice for farmers and crofters who wish to step back from agricultural businesses by providing an opportunity to consider alternative land- uses or alternative agricultural uses. Negative emissions technologies (NETs) We know that NETs will play an important role in emissions reductions during the 2030s and 40s; this has become clear from the detailed modelling and evidence building that we have undertaken to identify pathways to meet our net zero and our interim targets. While this update lays out the scale of the contribution required, we need further work to establish the way in which those emissions might be spread across the sectors to meet our annual targets in the early 2030s. While there are opportunities in several sectors, establishing the most effective and efficient way to use NETs will need a focus on developing technologies, identifying options, and the early stage development of potential projects. This update includes urgent measures in this area, designed to ensure that concrete proposals are brought forward in the next few years. By the time of our next Climate Change Plan, we will be in a position to reallocate negative emissions to specific sectors. 16 Update to the Climate Change Plan | Executive Summary initiated, concluding in 2024. Heat Networks (Scotland) Bill,

Update to the Climate Change Plan | Executive Summary 17 Acorn Project Development begins, concluding with Direct Air Capture

18 Update to the Climate Change Plan | Executive Summary By 2032, our energy system will be in the midst of a major transformation, integrating new ways of producing, with existing technologies. This transformation will be planned and developed through a systems-led approach, ensuring that decisions take account of the benefits across all of the energy sectors as well as the economic and social benefits they create for everyone in Scotland. By 2032, we will generate at least the equivalent of 50% of our energy across heat, transport and electricity demand from renewable sources. Scotland will have benefitted pioneering infrastructure such as that used for CCUS, hydrogen and green hydrogen production. The process of developing this world leading, sustainable energy system will have created secure and well paid jobs, and supported sustainable economic growth across all regions of Scotland. Our electricity system will have deepened its transformation for the better, with over 100% of Scotland’s electricity demand being met by renewable sources. More and more households, vehicles, businesses and industrial processes will be powered by renewable electricity, combined with green hydrogen production. There will also be a substantial increase in renewable generation, particularly through new offshore and onshore new technologies will help ensure and maintain the resilience of our electricity systems, and local electricity generation will be commonplace.
The costs and benefits of the growth in our electricity demand and systems will be shared fairly across all members of society, with vulnerable groups and fuel poor households protected at We will ensure a just and managed transition for Scotland’s industrial sector, and by 2032 Scotland’s industrial sites will be highly competitive, embracing sustainable growth and low carbon technologies. The necessary infrastructure will be in place to enable the deployment of Carbon Capture, Utilisation and Storage (CCUS),and the production and utilisation of hydrogen. With these evolving technologies will come significant opportunities for investment and employment, as well as sustainable industrial innovation. Decarbonising, diversifying and expanding our industry into a range of low carbon markets, such as technology and sustainable manufacturing, will also mean that we attract financial investment and talent from all over the globe. We will manage this transition to ensure that Scottish businesses and industries benefit from these opportunities, and our Climate Emergency Skills Action Plan will support reskilling and retraining skilled workers so that they can access new, good quality jobs that become We will also deliver a step-change in our transport system and how we consider the need to travel. By 2032, there will be no need to buy a new petrol or diesel car, and almost all of our passenger railways will be decarbonised. Our innovative and well-connected public transport network will mean more individuals choosing sustainable transport as their first choice. We will have reduced

Update to the Climate Change Plan | Executive Summary 19 the kilometres driven by car by 20%, complemented by our commitment to develop a Work Local Programme, supporting flexible, remote and local working to drive the establishment of walkable and liveable 20 minute neighbourhoods. Our £500 million investment in active travel will have transformed the way we move around, ensuring accessibility to bikes and e-bikes, and delivering high- quality walking, wheeling and cycling We will feel the benefits of climate change action in our homes, and by 2032 our homes will be better insulated, have lower demand for heat, and will be more energy efficient. The benefits of our landmark investment of £1.6 billion in zero emissions heating will be widely felt, both in our homes and workplaces, and will have levered in the private investment required for roll out across Scotland. We will have made considerable progress to remove poor energy efficiency as a driver of fuel poverty, and we will be continuing to work in close partnership with energy retailers to ensure a good deal for consumers. Delivering a just transition will be at the heart of all of these decisions, and we will seek to ensure that decarbonisation does not disadvantage those already struggling By 2032, the natural environment and landscapes around us will have undergone significant restoration, with a sustainable land use system that prioritises nature and biodiversity. 21% of our land will be covered by forest, following increased funding of £150 million as well as our target of planting 18,000 hectares per year by 2024/25. We will also have restored over 250,000 hectares of peatland with £250 million of investment over 10 years, protecting this significant carbon store, and restoring wetland habitats. The prioritisation of these “nature-based solutions” and restoration projects will deliver multiple benefits, not only in terms of carbon sequestration, but also enhanced biodiversity, improved air and water quality, and landscapes and ecosystems that are more resilient to Meanwhile, the agricultural sector will have supported these changes in land use, through the use of appropriate land for afforestation, including further integration of woodlands on farms, and peatland, while continuing the important role of food production. Farmers and crofters will continue to be supported for their key roles of producing high quality food and environmental stewardship while meeting conditionality for delivery of high environmental standards for emissions reduction and biodiversity. They will be adopting all available low-emission supported by the introduction of new approaches, alongside environmental conditionality. Through partnership working between government and industry, for example through the work of the farmer-led groups and realigned and enhanced advice, agricultural businesses will have the skills and tools they need to produce food more sustainably, while adopting new technologies and innovative By 2032 we will have transformed our relationship with waste and consumption in Scotland, meaning we’ll be well on the way towards a fully circular economy. Consequently, our economy will be designed to reduce, reuse, and repair materials

20 Update to the Climate Change Plan | Executive Summary and to recycle our waste more than ever. By 2025, we will have reduced the percentage of our waste going to landfill to 5%, and 70% of our waste will be recycled. Pending consultation, it’s likely that we will have introduced charges for single use items such as disposable cups, as well as a ban on Finally, by 2032 Scotland will benefit from Negative Emission Technologies (NETs) underpinned by developing carbon capture, transport and storage infrastructure. These world leading projects will deliver clean energy while removing emissions from our atmosphere. A well-developed evidence base will have been combined with learning from trial and demonstration projects which came online during the 2020s to ensure that we are focusing on the most suitable applications and Throughout all of these transformations, the Scottish Government’s priority will be to ensure that the costs of the transition are distributed fairly and that our economy is benefiting from opportunities for the creation of highly skilled and secure jobs. Our approach will be led by science and the people and places who are already helping us to generate new and innovative ideas. This place-based and “learning by doing” approach, recommended by the Sustainable Renewal Advisory Group, will ensure that people and communities are involved in the transition and the benefits are shared by all as part of a

Update to the Climate Change Plan | Executive Summary 21 The Scottish Government’s vision for 2045 is one of a society that prioritises the environment and the wellbeing of its people2.
Crucially, we will have reached net zero in a way that is fair and just to all and involves people and communities so everyone can benefit from the widespread, positive changes we will have experienced. These include changes to how we live, work and travel, our energy system, industries, natural environment, our agriculture sector and how we use and process materials. Significant technological advancements, building on current pilot projects, such as negative emissions technologies, zero emissions heat and zero emission vehicles will undoubtedly have helped to accelerate our transition to net zero and for Scotland to benefit from the economic opportunities that these developments bring, including jobs It’s clear that the impact of our measures will go further than ending our contribution to climate change, with widespread benefits for our environment. A sustainable economy will be built upon innovative green jobs, providing reliable, and skilled, employment for many. Nature and biodiversity will also have benefitted significantly from our transition, with nature-based solutions helping to restore and protect our ecosystems. Our places and communities will support the wellbeing and healthier lifestyles for people, while driving regional inclusive and sustainable economic growth. Changes to how 2 This will support the 2045 vision of Scotland’s Environment By restoring nature and ending Scotland’s contribution to climate change, our country is transformed for the better - helping to secure the wellbeing of our people and planet for generations to come. travel, for example, will have helped to improve wellbeing and tackle fuel poverty alongside wider equalities issues as part of a just transition. Scotland will continue to be seen as a world leader in climate change technologies, processes and services mean we’ll have been able to attract skills and investment from all over the globe, and create new export and trade opportunities. Even when we’ve reached net zero, our part in tackling the climate emergency will by no means be over. We will continue to work with other countries, share our practices and drive emissions reduction

22 Update to the Climate Change Plan | Executive Summary The transformation of Scotland’s society and economy to net zero emissions can by no means be delivered by Government alone. It will require a national effort across all sectors - public, private and third – and from communities and individuals across Scotland. We must therefore ensure that our transition to net zero is collaborative and delivered in partnership. Each of the sector chapters in Part 3 set out in detail how we will work with the public sector, individuals, businesses, industry, the UK Government and other countries as we pursue net zero emissions by 2045. Leadership in the public sector Scotland’s public sector bodies have a strong leadership role in delivering the transition to net zero. Strengthened legislation requires public bodies to report on their targets for achieving zero direct emissions and reducing indirect emissions, and to report how spending aligns with COSLA recognises the climate and biodiversity crisis and all 32 of Scotland’s local authorities signed Scotland’s Climate Change Declaration in 2007. Between 2005 and 2018 end-user CO2 emissions fell by 35% across all 32 local authorities in Scotland. The NHS in Scotland has cut buildings’ emissions by over 60% since 1990 and committed to net zero by 2045. Some public bodies have cut emissions by up to 50%, with Scottish Water and Zero Waste Scotland launching new net zero The Scottish Government has pledged at least £95 million to decarbonise the public sector estate and will implement a Net Zero Carbon Standard for new public buildings. We are working to decarbonise the public sector car fleet by 2025. We are 3 [Reference for Ipsos Mori Research] mobilising the £12.6 billion of public sector procurement and collaborating across the public sector on tools and guidance to support the green recovery and our wider climate and circular economy ambitions. We are committed to mobilising the £12.6 billion spent through public procurement to support our net zero ambition and have established the Climate and Procurement Forum to coordinate the procurement effort across the public sector, building on the existing sustainable procurement duties placed on public bodies through the Procurement Reform (Scotland) Act 2014. We have targeted programmes underway to underpin traction on a green recovery and wider climate and circular economy ambitions. This includes collaborating at national and sectoral levels to maximise collective purchasing power, for example to decarbonise buildings and vehicles, and we are also engaging with local leaders as key enablers, ensuring early procurement involvement in projects and working with public procurers to build climate change capability across the procurement Public buy-in and behaviour change is key to climate action. CCC research estimates that more than 60% of emissions reductions to meet net zero will need to come from societal change. The 2019 Scottish Household Survey figures indicated that 68% of the Scottish public believe that climate change is an immediate and urgent problem; a steady increase since first inclusion in 2013. In our most recent research, reaching out to a representative sample of 1000 people in October 2020, we found that This concern will need to be transformed into societal action if we are to achieve our goal to end Scotland’s contribution to climate change in a generation. Update to the Climate Change Plan | Executive Summary 23 To help achieve this, we will have developed our ‘Net Zero a Draft Public Engagement Strategy for Climate Change’, which has been published alongside this update for public consultation. It sets out our vision and guiding principles for future engagement, while detailing how we will communicate our climate change policies, enable participation in policy design and encourage action. It complements the actions set out in this document that individuals and Scottish households need Working with business and industry We recognise the leadership role that many businesses are already playing and the action they are taking to reduce carbon emissions. Businesses from all sectors and in all parts of Scotland have an integral role to play in the transition.
They can join government in investing in skills, infrastructure and innovation to deliver the growth and employment opportunities that a just transition to net An example of this is the Grangemouth Future Industry Board, which will provide a forum that brings together key decision makers across the Scottish Government, Scottish Enterprise and Falkirk Council, with a focus on Scotland’s key manufacturing cluster. It will strengthen alignment and co-ordinate activity to ensure the significant opportunities for low carbon economic growth are maximised at Grangemouth. The board will focus on specific and agreed work streams that will inform and shape efforts to unlock potential investment and identify policy levers that can support sustainable growth at Grangemouth, with decarbonisation, longevity, competitiveness and just transition at the The move to a net zero economy provides an opportunity to build thriving, competitive Scottish businesses and supply chains and associated employment. Our investment in transformational projects such as the Michelin Scotland Innovation Parc and the National Manufacturing Institute Scotland will support this. Furthermore, the Green Jobs Fund will provide £50 million through our enterprise agencies to help businesses which provide sustainable and/or low carbon products and services to develop, grow and create jobs; and a further £50 million to support businesses and supply chains across sectors to take advantage of public and private investment in low The Scottish Government will support businesses to set ambitious science- based emissions reduction targets and develop strategic, net zero transition plans to meet these targets. A number of Scottish Businesses are already doing this, for example Scottish Water has set a target for net zero emissions by 2040 by transforming the way they operate and invest, and have set out a route map for how they will achieve this. By Spring 2021, we will have worked with stakeholders across the business community to systematically map business needs in relation to transition planning. This is a an opportunity to demonstrate Scottish private sector ambition and action in the run-up to COP26. We will showcase the best of what Scottish businesses are doing to deliver a just transition alongside opportunities to attract investment to Scotland and

24 Update to the Climate Change Plan | Executive Summary Our Net Zero Transition Managers managerial roles into Energy Intensive Industries, tasked with recommending decarbonisation options. We will encourage businesses to take advantage of Scottish Government support to invest in energy efficiency measures and onsite renewable generation. We will support businesses and industry to promote a circular economy and tackle waste across their supply chains, for example by using the circular Economy Investment Fund to stimulate innovation. Support for retraining, upskilling and recruiting employees will be progressed through the Climate Emergency Skills Action Plan and the Fair Work agenda. National Planning Framework 4 will help to identify where new development can be delivered, ensuring that we make best use of our assets and opportunities to support net zero targets and maximise opportunities to draw in private finance. This update covers a number of examples of what Scottish business and industry are doing to promote a shift to net zero within their Working with Green Finance and Investors Private finance is vital to securing the level of investment required to reach net zero. The transition will in turn create a wealth of opportunities across the Scottish economy. Enhancing Scotland’s position as a destination for green investment will be crucial to achieving our targets and capitalising on these opportunities. We will work with institutions like City Of London Corporation and the Green Finance Institute to understand these markets, and with private sector stakeholders to understand and reduce the barriers to further investment. We will also work with regulators at the UK level to ensure that our financial system is resilient to the economic challenges that we face from a changing climate, increasing financial stability and investment in the green economy while The Scottish National Investment Bank has been set a principle mission to support a just transition to net zero and will act as a catalyst in de-risking both technology Michelin Scotland Innovation Parc, Dundee. Credit MSIP. Update to the Climate Change Plan | Executive Summary 25 and early stage roll-outs and crowd in investment. The Green Investment Portfolio, launched in September 2020, identifies low carbon investment opportunities to attract private capital and is built to expand, taking in both private sector-led opportunities around technology, industrial sites and energy generation, as well as public sector led projects around heat networks, electrification of transport, and the use of hydrogen where coordination is needed around supply, demand and regulation. The Scottish Government’s Inward Investment Strategy, published in October this year, is aimed at attracting investment from overseas and other parts of the UK and has renewable energy and low carbon transport as priority areas. Our Capital Investment Plan, due in spring 2021, will take a systematic approach to turning our sectoral ambitions into investable projects that can attract finance and deliver net We are working directly with investors to understand and address barriers to key net zero markets, such as natural capital and biodiversity and will explore and adopt innovative financing approaches to mobilise more private capital into Scotland’s net zero transition. Working with the UK Government As highlighted by the Committee on Climate Change in their 2020 progress report, UK Government action, in parallel to the decisions of the Scottish Government, is essential if Scotland is to meet its targets. The UK Government holds a number of key powers that will be vital to our net zero transition, including fiscal and pricing elements of emissions trading, decisions on the future of the gas grid, investment in electricity network infrastructure, regulation on energy networks, vehicle standards and regulation of renewable energy This Plan update sets out our specific requests of the UK Government on a sector-by-sector basis, emphasising the need for still more increased ambition and support as we work towards a green future, particularly as we recover from the COVID-19 pandemic.
These asks Ħ reform the Contract for Difference mechanism to deliver specific support for wave and tidal generation and investment and jobs in domestic Ħ accelerate the development of negative emissions technologies, carbon capture and storage, and hydrogen as essential components of our energy system; Ħ accelerate demonstration of the technological solutions to cutting buildings, and in particular set out clear timescales for taking strategic decisions about the future scale and pace of decarbonisation of the gas network to support delivery of our targets for heat Ħ update energy regulation by giving Ofgem a statutory objective to support the delivery of net zero and interim statutory greenhouse gas emissions targets and address the imbalance in pricing for electricity and gas to better incentivise the deployment of zero emissions heating technologies; Ħ commit to a UK Emissions Trading Brexit (which would respect the devolution settlement) and rule out implementing a reserved Carbon Emissions Tax over which devolved administrations would have no say; and Ħ review options on fuel duty and vehicle excise duty to help reduce

26 Update to the Climate Change Plan | Executive Summary International action and collaboration We are facing a global climate emergency, which affects us all. This plan is being published in the midst of a global pandemic. These challenges highlight the enormous importance of international cooperation; Scotland is determined to play its part. Through the COVID-19 crisis, Scotland has collaborated with international partners, using our networks to secure insights into best practice in reducing transmission and the other harms caused by the virus. We will build on this internationally networked approach and work collectively to keep Scotland open, connected and able to make a positive contribution internationally. This is true for both the COVID-19 effort and for climate change. In 2021, the UK will host the UN Climate Conference, COP26 in Glasgow. Just as COP21 led to the landmark Paris Agreement, this important international event must be a milestone in delivering increased collaboration and action needed for a global transition to net zero in a way that is fair and just. The Scottish Government is committed to working closely with the Glasgow City Council, the UK Government, the European Union, UNFCCC and all other partners to deliver a safe, successful and inclusive summit. We want to showcase the world-leading work we are doing in Scotland, both by the Scottish Government through, for example, our emissions reduction ambition, our renewable energy delivery and expertise, our knowledge and experience of afforestation and peatland restoration, and our scientific strengths and innovation expertise on nature based solutions; but also the innovation and expertise that exists in our academic institutions, industry and business, communities and people. We also want to work with and learn from others. We do not have all the answers but are committed to being an integral part of The First Minister was recently voted as European co-chair of the Under2 Coalition, a group of more than 220 governments representing over 1.3 billion people and 43% of the global economy. We will use our Ħ mobilise action ahead of COP26; Ħ work to imbed inclusivity at the heart of the coalition, ensuring responsible for the global climate emergency, but are being first and most severely affected by it, green recovery agenda with our We will build on the work to date with the Coalition which Transition Platform (ITP), which effective policies and strategies to achieve deep emissions cuts in traditionally heavy-emitting Ħ funding for the Future Fund, Ħ and taking a leading role in the inter-governmental peer learning

Update to the Climate Change Plan | Executive Summary 27 The people of Scotland voted decisively to remain within the European Union and Scottish Ministers continue to believe that EU membership is the best option for Scotland. At the time of writing, despite ongoing negotiations, No Deal remains a real possibility. Even if a deal is secured, the UK Government’s approach means it will be a very basic “low deal”. The impact on the opportunity to collaborate with other nations and EU programs, such as Horizon 2020, makes it all the more challenging to achieve our shared The Scottish Government is committed to maintaining or enhancing environmental standards in Scotland, and to seeking to keep pace with EU Directives and Regulations as far as possible. The Scottish Government’s Continuity Bill contains measures to bring EU environmental principles into Scots Law as the “guiding principles on the environment”. This will ensure that these principles continue to inform the development of our environmental law and standards. The Bill will also establish an environmental governance body, Environmental Standards Scotland, to secure full and effective implementation of environmental law. Under2 Coalition Steering Group Meeting, Madrid

28 Update to the Climate Change Plan | Executive Summary In a crucial year for the Paris Agreement, heading into COP 26 in Glasgow in November 2021, Scotland’s voice is more important than ever and we remain committed to collaboration with the EU institutions and at Member State level, across all the sectors covered by this plan and in line with the EU Green Deal. Indeed we also believe it is vital that the UK Government facilitates close collaboration and cooperation with the EU and Member States at every level. Scotland continues to be a committed, open, global actor, as evidenced by our European Co-Chair position on the Under 2 Coalition. This is not only about Scotland’s position in Europe, it is also about our ability to work with our friends and neighbours to achieve the targets and policies set out below. This Plan update includes a refresh of the monitoring framework from the 2018 Plan, with a revised set of policy outcome indicators to reflect the new and boosted underlying policies and, where possible, to improve the quality and robustness of the indicators themselves.
This updated monitoring framework will form the basis of statutory annual reporting on progress to delivering the Plan, at a sector by sector level, to the Scottish Parliament Scottish Parliament, Edinburgh

Update to the Climate Change Plan | Introduction 29

30 Update to the Climate Change Plan | Introduction How this document relates to the 1. In February 2018, the Scottish Government published the ‘Climate on Policies and 2018- 2032’ (the 2018 Plan). In response to the global climate emergency, the Scottish Government brought forward primary legislation to amend Scotland’s emissions reduction targets. In October 2019, the Climate Change (Emissions Reduction Targets) (Scotland) Act 2019 received Royal Assent and was commenced in March 2020, setting annual and interim emissions reduction targets for Scotland, on a trajectory to net zero emissions by 2045. These targets include the world-leading interim goal of a 75% reduction in emissions baseline). The Scottish Government recommendations from the Scottish Parliament, to updating the 2018 Plan, in order to account for these new targets. This update to the 2018 2. We had planned to lay this Plan update before Parliament earlier this year, and were on track for April 2020, however, its progress was necessarily postponed due to the COVID-19 pandemic. In light of the unprecedented circumstances we are faced with, this Plan update now demonstrates not only our pathway to meeting Scotland’s emissions reduction targets over the period to 2032, but is also a strategic document on our green recovery 3. It’s clear that, at time of publication, we are very much still in the midst of the pandemic and the lasting impact of this virus is not yet quantifiable. Our work on a green recovery will continue to evolve and develop beyond this Plan update towards our longer term vision to deliver a just transition to net zero by 2045. 4. It is also important to note that many elements of the 2018 Plan still stand and this Plan update should be read alongside that document. In addition to the new focus on green recovery, Ħ shows which of the emissions reduction policy outcomes, policies and policy proposals within the ‘boosting’ or accelerating actions), and what new policies have been chapters in Part 3 set out the detail Annex A provides a complete list envelopes for each sector which reflect the pathway to the new Ħ includes additional abatement in the updated emissions reduction pathway sufficient to make up the excess emissions of 5.5 MtCO2e targets having been missed. As such, the present document also fulfils the requirements of section 36 of the 2009 Act in relation to Ħ updates the monitoring framework now be used for annual, sector by sector, reporting on progress from

Update to the Climate Change Plan | Introduction 31 5. In Scotland we have a particular approach to policy-making, putting people and organisations at its heart and engaging those who live here in decision-making. Collaborating with stakeholders and the public is especially important when it comes to tackling climate change because of the scale of the challenge we are facing. decarbonise will transform all our daily lives and this transformation 7. To assess how public opinion on climate change may have changed in light of the pandemic, the Scottish Government commissioned research to address the current evidence gap on public views surrounding recovery in Scotland. When asked specifically about climate change, most respondents (79%) say it is an “immediate and urgent problem”, and the level of concern has increased over time, including since the start of the pandemic. All actions tested with the public received a majority level of support, with respondents 4 See ‘Research into public attitudes to climate change policy and a green report of findings’ as a supporting document highlighting the benefits that tackling climate change can have for jobs and the economy, as well as biodiversity. Actions tested included support for additional charges on the sale or provision of items that are harmful to the environment, reducing personal car travel, as well as regulations requiring low or zero emissions heating and increased investment in 8. These latest findings build on and complement those originating from the 2019 Big Climate Conversation, which offered citizens, businesses and public sector organisations the opportunity to have their say on Scotland’s transition to net zero emissions. A number of key been reflected in this Plan update, including the importance of a just transition, the need for a systemic conversations also highlighted a number of policy actions that we are taking forward in this Plan update, investment in home energy efficiency improvements; increased tree planting; switching to low-carbon methods of farming; and encouraging the switch from private car use to

32 Update to the Climate Change Plan | Introduction The establishment of a citizens’ part of our commitment to open government, where citizens are facilitated to contribute meaningfully to the policies that affect their lives both now and in the future. Scotland’s Climate Assembly is operates according to principles of transparency and inclusion. The Assembly comprises of around 100 members selected randomly to be broadly representative of the adult population. The Assembly has begun its meetings online due to current Coronavirus guidance and will meet over six weekends, beginning in in March 2021. The Assembly will provide a report of recommendations following its deliberations. The Scottish Government is required of receiving this final report. More details on the Assembly’s 9. In producing this update we have also engaged closely with experts, advisory bodies, businesses and other organisations. This engagement has come in a number of forms, including the Sustainable Renewal Advisory Group, advice from the Committee on Climate Change, the Scottish Science Advisory Council and the Just Transition Commission, as well as considering the green number of other organisations. In February 2020, the Scottish 200 stakeholders to consider our priorities for the Climate Change Plan update and our vision for a net zero Scotland.
Covering a wide range of views and interests, those in attendance were generally supportive and positive regarding the level of ambition demonstrated by the Scottish Government. There was acceptance that urgent action is required to meet our targets and maximise the opportunities from emissions reduction, acknowledging that businesses, organisations and the public have a fundamental part to play in this. There were a number of key, cross-cutting, themes identified from these conversations. These remain highly relevant and have helped to inform this Plan update and our green recovery work. They Ħ the importance of prioritising fairness, and a just transition; exacerbating inequalities, and Ħ prioritising the wellbeing of Ħ the need for a more coordinated government, business, industry and Ħ the value of setting clear and accurate standards and targets, (such as waste reduction, energy efficiency and goods production) to help those outside government Ħ the importance of influencing behaviours to implement policies

Update to the Climate Change Plan | Introduction 33 10. The Plan update recognises the continual need for learning by doing, review and further policy the limits of devolution, technical complexity of measuring emissions reduction, significant uncertainties and changing markets as well as emerging technologies and how they can be deployed at a commercial 11. As such, this Plan update does not, and cannot, contain all of the answers; it builds upon learning to date from a broad range of sources which are explored further in this document, but also needs to be further updated through future Climate Change Plans and a range of associated national policies and strategies. It has been created with, and aligned to, a range of publications and will be built on and adapted through future strategies and other publications. These Ħ ‘Net Zero Draft Public Engagement Strategy for Climate Ħ National Planning Framework 4 Ħ Infrastructure Investment Plan Ħ [Scottish Government] Housing Ħ Climate Emergency Skills Action Plan Ħ Previous monitoring reports on 12. The range of strategies and publications with which this Plan update interlinks demonstrates how firmly our climate change targets are embedded in decision-making across 13. Scotland’s statutory framework on climate change also ensures that strategic planning on emissions revisited on a regular basis, with progress each May and the next full statutory Climate Change Plan process due to be completed by early

34 Update to the Climate Change Plan | Introduction The transition to net zero emissions will transform our society and economy, therefore the manner of our transition will be crucial. If we plan and prepare, building consensus about our collective future through dialogue and engagement, then we can ensure Scotland benefits from the opportunities of net zero. The transition can realise green jobs, a better environment and a healthy economy that supports our wellbeing. Failure to plan risks abrupt shifts, the loss of key industries and jobs, and deepening inequalities. This is why Scotland has committed to a just transition to net zero. A just transition puts people, communities and places at the heart of our approach to climate change action. It ensures we work together in order to capture opportunities, tackle existing inequalities and exclusion, whilst anticipating and mitigating risks to those worst impacted so no one is left behind. As the pace of the transformation increases, the need for a collaborative just transition becomes ever more important. This approach is at the heart of Scotland’s ambitions to move to a wellbeing economy that prioritises society’s wellbeing as the core aim of our economy. The just transition concept features in the Paris Climate Agreement. It encompasses a range of social interventions to secure workers’ jobs and livelihoods and has often been closely aligned with particular industries or regions undergoing transitions, for example coal mining. Scotland’s just transition approach and decision to establish an independent Just Transition Commission was informed by the trade union movement as well as private sector, third sector and academia. In Scotland we have taken a broad approach to just transition, looking across the economy and the whole of Scotland. This recognises that the scale of the net zero transition will impact everyone, but not equally. We need a plan to ensure that the decisions we are making take into account different circumstances and enable everyone to access and benefit from the opportunities of net zero whilst supporting those potentially at risk from an unmanaged shift away from fossil fuels. The just transition principles in our Climate Change legislation emphasise the importance of taking action to reduce emissions in a way Ħ supports environmentally and socially sustainable jobs; Ħ supports low-carbon investment and infrastructure; Ħ develops and maintains social consensus through engagement with workers, trade unions, communities, non-governmental organisations, representatives of the interests of business and industry and such other persons as the Scottish Ministers consider appropriate; Ħ creates decent, fair and high-value work in a way which does not negatively affect the current workforce and overall economy; and Ħ contributes to resource efficient and sustainable economic approaches which help to address inequality and poverty. Update to the Climate Change Plan | Green Recovery 35

36 Update to the Climate Change Plan | Green Recovery 1.0.1 The COVID-19 pandemic has been an unprecedented global crisis which has fundamentally changed every aspect of our lives. While there are many challenges there are also important opportunities in this time of change. In our recovery from COVID-19, we can rebuild our society and economy 1.0.2 To deliver on that opportunity, from a recovery which sets us on a path to meeting our world-leading emissions reduction everyone in Scotland, ensuring no one is left behind. COVID-19 abrupt, unplanned shifts and how these exacerbate inequalities in to address these inequalities, create and maintain good, green jobs right across Scotland, and empower people and communities future through community wealth building.
A green recovery drives action to reduce our emissions and protect and restore our natural 1.0.3 While recognising the impacts are different, there are lessons to be learned from crises of the past, for example the 2008-10 financial crash. As the International Energy Agency noted earlier this year, a 5 6 7 8 consumers-cut-carbon-with-emissions-down-12-percent-on-20192.pdf 400 million tonne CO2 reduction in 2009 was followed by a rise of 1.7 billion tonnes in 2010, which is the 1.0.4 Analysis of the impact from COVID-19 on emissions, published pandemic could result in global emissions reductions this year of around 2 billion tonnes of CO2, or 5.5% of 2019 emissions, which would be the largest ever annual 1.0.5 However, the resurgence of 10 financial crash should make us treat anticipated emissions reductions with caution. Indeed, more recent evidence suggests that at least some of these gains may be temporary. One study tracking global emissions, using fossil fuels indicators, shows an increase of CO2 levels by late April7. Another study tracking emissions through and quarter three of 2020, likely related to loosening of lockdown policies8. It is critical for the future of our planet, and for Scotland’s contribution to tackling the climate emergency, that we do not repeat must secure this opportunity to lock-in as much of the emissions reductions as possible through a just and green recovery, setting us

Update to the Climate Change Plan | Green Recovery 37 1.1.1 Our approach to a green recovery 1.1.2 Our approach to a green recovery has been informed by the latest climate positive behaviour changes we have experienced since March commissioned research on public Scotland. The research findings representative telephone survey of 1,045 adults across Scotland, and provide robust data exploring support our recovery. The vast majority of respondents (79%) said climate change is an “immediate change as “urgent” is significantly higher than in the 2019 Scottish Household Survey. Over a quarter (26%) of respondents said they are more concerned about tackling climate change since the COVID-19 saying they are less concerned9. 9 See ‘Research into public attitudes to climate change policy and a green report of findings’ as a supporting document 10 COVID-19 Public Attitudes Survey Wave 10, published 19 November 2020, 1.1.4 The actions tested with the public received high levels of support and respondents highlighted the benefits that these measures can have for our jobs, the economy and wellbeing, as well as climate recovery, a majority would support replace their current gas or oil- fired boiler and radiators with a new type of heating system that is more environmentally friendly, although respondents did not feel homeowners should bear the cost of this. Most respondents also supported investing public money in low carbon companies, noting the co-benefits for the economy and our climate. Furthermore, in line with public attitudes data which shows that people intend willing to reduce the amount they travel by car. Among the minority most common reasons given were concerns about who might carry the cost, implications on jobs and perceptions of financial risk. We must continue to consider such factors as part of our commitment to a just transition, ensuring we reduce our emissions in a way that

38 Update to the Climate Change Plan | Green Recovery 1.1.5 We have also commissioned research via ClimateXchange to as a result of the pandemic. The research is following a cohort of 30 participants over approximately 8 months to explore participants’ experiences of behaviour change, including the factors influencing time. Participants were selected of attitudes to climate change, allowing for investigation of the factors influencing behaviours for people living in different circumstances. To complement this in-depth study, we are funding a nationally-representative random household survey of over 1,100 people in Scotland, which will behaviours relating to net zero and green recovery. There will be two rounds of data collection, with the first wave of results expected in 1.1.6 The findings of our public research public opinion on climate change and behaviours have changed in light of COVID-19. Despite the challenges we’ve faced as a result of the pandemic, it’s clear that Workshop at the 2019 Big Climate Conversation

Update to the Climate Change Plan | Green Recovery 39 levels of concern around climate change continue to grow and the public recognises the dual benefits of tackling climate change and an effective green recovery of the economy. We will continue to engage closely with the Scottish climate ambition. Further public engagement, including the Citizen’s Assembly on Climate Change, will provide an opportunity to further our insight into public attitudes, behaviours and recommendations Draft Public Engagement Strategy Alongside the publication of this document we have also published our Net Zero Draft Public Engagement Strategy for Climate Change for public consultation. This strategy outlines our new overarching framework for engaging the people of Scotland in the national effort required to successfully realise the ambition included within the Climate Change Plan Update. The draft strategy marks a step change in our approach to public engagement in climate change policy, moving from encouraging incremental changes in attitudes and behaviours, to supporting a society-wide transformation. We want to put people at the heart of everything we do have therefore structured our new approach around three strategic 1. People are aware of the action the Scottish Government is taking to tackle climate change and how it relates to their lives. 2. People actively participate in shaping fair and inclusive policies that promote adaptation to and mitigation of climate change. 3. Taking action on climate change is normalised and encouraged in communities Delivery of the strategy will require collaboration with a wide range of stakeholders, from community groups to local authorities and delivery bodies. We encourage interested parties to contribute to the consultation, here.
40 Update to the Climate Change Plan | Green Recovery 1.1.7 In April 2020, the Cabinet Secretary for the Environment, Climate Change and Land Reform, Roseanna Cunningham, requested advice from the Climate Change Group, recognising the importance of bringing experts together to consider the green recovery from In response to a request for advice, wrote to the Cabinet Secretary for Environment, Climate Change recommending that the Scottish Government, in partnership with Westminster, prioritises actions according to six principles for a 2. Lead a shift towards positive 3. Tackle the wider ‘resilience deficit’ 4. Embed fairness as a core principle 5. Ensure the recovery does not ‘lock-in’ greenhouse gas emissions 6. Strengthen incentives to reduce emissions when considering fiscal 11 1.1.8 The Sustainable Renewal Advisory Group brought together Members of the Scottish Parliament and stakeholders from across academia, industry, business, trade unions and environmental organisations. They were tasked with identifying COVID-19, as well as exploring the new challenges and opportunities in achieving our climate change targets. The Cabinet Secretary chaired the group, which met six 2020, thoroughly exploring topics informing this Climate Change Plan 1.1.9 The Scottish Government also recovery from the Just Transition Furthermore, we have considered Group (CERG), Stop Climate Chaos Scotland, Scottish Environment environmental organisations; from for Scotland; and from private sector stakeholders including the Scottish Council for Development and Industry, Scottish Renewables, Scottish Renewables, SSE and EON,

Update to the Climate Change Plan | Green Recovery 41 Just Transition Commission Recommendations The Just Transition Commission is an independent Commission tasked with providing Scottish Ministers with practical, realistic, affordable recommendations for action to deliver a just transition to net zero in Scotland. The Commission will run for two years and is expected to deliver its final report in March 2021. In July 2020 the group’s Recommendations for a Just, Green Recovery advised on immediate priorities in response to the pandemic. The report highlighted four “hot spot” areas that would require particular attention in the near (a) the particular risk to young people, (b) the uncertainty around changes in transport use patterns, (c) the rapid, unplanned transition unfolding in the oil and gas sector and (d) the fact that parts of the rural economy had been particularly hard hit. Specific recommendations for action can be summarised 1. Boosting measures that will help keep people warm, create jobs and save 2. Backing buses and boost the supply chain 3. Helping rural Scotland by helping Scotland’s nature 4. Maintaining jobs for workers in oil and gas while transitioning into jobs 5. Aligning skills development – for young and old – to the net zero transition 6. Giving business direction and attach conditions to funding 1.1.10 We have conducted an analysis of all of this advice, from which a number of key cross-cutting themes and creation, including reskilling and retraining of the workforce into investment initiatives such as into our recovery, ensuring that support for sectors aligns with in Scotland’s natural capital; Ħ Prioritising resilience in our Ħ Locking in positive behaviour, actions at a local level to ensure

42 Update to the Climate Change Plan | Green Recovery 1.1.11 Other recommendations are sector- Ħ Transport - Further commitment investment in electric vehicle affordability of public transport, transport and prioritisation of sustainable housing, for example efficiency, tackling fuel poverty, and higher carbon standards for energy, particularly onshore and Ħ Land Use, Land Use Change and Forestry - Focus on biodiversity the optimisation of land use such as restoration of peatland, tree planting, and “re-wetting” of bog 1.1.12 These recommendations have green recovery to date. Details on sector specific policies are included within the relevant sector chapters in Part 3; cross sector 1.2.1 Across all of the actions in this Climate Change Plan update, we are embedding a just transition, green recovery actions address inequalities and deliver wellbeing transition is key to our focus on Wealth Building. It also takes a place-based approach to policy will consider the detailed design of these policies and initiatives to deliver a just transition and they do not disproportionately disadvantage certain groups, places Investing to drive demand in the 1.2.2 The transition to net zero will projects, preserving and restoring Scotland’s natural environment, stressed, while government has a crucial role to play, the scale alone. Mobilising private sector and personal investment in the quantity and at the pace required will put Scotland in prime position to maximise the economic benefits economy, as well as on the path to Public investment and stimulus 1.2.3 The fiscal challenges posed by the COVID-19 crisis are considerable, but we have continued to prioritise action to reduce our emissions, to ending Scotland’s contribution public investment to create an environment where new industries, markets and innovations can thrive is key to securing a just transition

Update to the Climate Change Plan | Green Recovery 43 1.2.4 Since setting our new emissions (Emissions Reduction) (Scotland) Act 2019, the Scottish Government initiatives. Our 2020–2021 Budget brought our overall low carbon capital spend to £1.8 billion on an annual basis, while our 2020-2021 our draft Infrastructure Investment £2 billion capital investment to support the green recovery over the life of the next Parliament. 1.2.5 Those investments included the first tranche of the Low Carbon Draft Infrastructure Investment transformational projects which accelerate our just transition to net zero, provide a level of certainty needed to grow new markets for private investment, and create final tranche of the Low Carbon Fund is set out in this Plan update with £180 million for Emerging Energy Technology, including an emphasis on Negative Emissions million to drive forward a fully decarbonised future for buses, £50 million to transform vacant and derelict land to support our climate objectives, and a further £50 million uplift to active travel through the creation of “Active investment is crucial in helping prove a concept or an approach that could become central to our 1.2.6 The draft Infrastructure Investment details around £24 billion of major projects and national programmes, future years.
These investments will provide a near-term stimulus to support Scotland’s economic foundations for long-term green growth. The draft Plan provides a robust pipeline of low carbon projects, creating the conditions for new supply chains to develop, and for the creation of good, green jobs in areas such as construction and building retrofit, nature and transport and digital infrastructure. 44 Update to the Climate Change Plan | Green Recovery Infrastructure Investment Plan Infrastructure investment has a vital role to play in helping businesses and communities to adapt and recover from the economic, health and social harm arising from COVID-19. It cuts across all of the sectors included in this Climate Change Plan update, from our energy systems and how we heat our homes, to our transport links and green spaces. The Scottish Government’s investment in publicly-funded infrastructure has a critical role to play in supporting the transition. Committing to multiyear investments in this Plan update sends a clear signal to businesses and supply chains to invest in people and technology, and help us deliver the net zero transition. But it is only a share of the effort, and cannot deliver such targets on What we are We already invest £1.8 billion of capital each year in low carbon policies and programmes. Scottish Ministers have committed to increasing the level of spending by an additional £2 billion over the next 5 years. New schemes have already been announced in the 2020-2021 Programme for Government that will deploy £1.6 billion of this investment. Our draft Infrastructure Investment Plan (IIP)12 was published in September and we are committed to finalising the Plan alongside the forthcoming Budget and Medium Term Financial Strategy. The IIP is the key delivery programme for the National Infrastructure Mission which represents over £33 billion of Scottish Government investment in the next five years (from April 2021). The draft IIP sets a long-term vision of infrastructure supporting an inclusive, net zero carbon economy in Scotland. It also recognises the vital role that Scotland’s natural environment can play in our infrastructure system and highlights climate resilience as a key priority over the coming years. The proposed common infrastructure investment hierarchy emphasises making the most of our existing assets in order to increase sustainability and address the In passing the Climate Change (Emissions Reduction Targets) (Scotland) Act 2019, the Scottish Parliament agreed that a new methodology should be developed in order to assess the contribution made by the infrastructure investment plan to our new climate change targets. In order to respond to this new requirement, and in recognition of the limitations of the current approach, an independent research project was commissioned to explore alternative options. This research was facilitated by ClimateXChange, Scotland’s centre for expertise connecting climate research and policy. The Scottish Government plans to consider these research findings carefully and invited views on the approach within the consultation on 12 A National Mission with Local Impact - draft infrastructure investment plan 2021 2022 to 2025 2026:

Update to the Climate Change Plan | Green Recovery 45 1.2.7 As we invest in a green recovery, we will work in partnership with businesses to best align business recovery support with our long- ‘conditionality’ of business support Conditionality might be applied to a wide range of interventions and may carry risks of unintended consequences. For example real (or perceived) threats to business production is moved elsewhere. Therefore, as part of our response to conditionality. For example, support for high emitters would on credible, robust transition plans that align with Scotland’s those seeking support to publicly align with Scottish Government values, particularly those relating 1.2.8 We are mobilising the £12.6 billion of public sector procurement and collaborating across the public sector on tools and guidance to our wider climate and circular 13 Economic Recovery Implementation Scottish Government response to the Advisory Group on Economic Recovery - 14 For more information, go to the Utilities section at Scottish Government Frameworks and 15 Sustainable procurement 1.2.9 Our public sector leaders will need to encourage their organisations to work across boundaries to identify opportunities to procure in an environmentally-friendly way, and will need low carbon options to help them make sustainable choices. For example, this will include using the Non-Domestic Energy Efficiency Frameworks that provide public bodies with advice on and a route to retrofit public buildings to improve 1.2.10 The climate emergency is a very clear priority for higher emission products and services with key areas of focus outlined in the within this Climate Change Plan to decarbonise the public sector fleet and heat. There continues to be significant investment in upskilling public procurers to sustainable procurement duty and to deliver on our ambitions. The Scottish Government’s sustainable procurement tools15, available to all public bodies, already include indicators and guidance to support Scottish public sector buyers to consider and act on climate change considerations. These include the Sustainable Public Procurement Prioritisation Tool, designed to assist strategic planning and prioritisation of economic, environmental and social wellbeing considerations in public procurements to ensure commodity planning. All of this existing public procurement policy

46 Update to the Climate Change Plan | Green Recovery Mobilising private investment and 1.2.11 A central objective of Scottish and attract additional private net zero presents a considerable opportunity to position Scotland to benefit from increased, global private investment, as well as Scotland’s net zero investment investors, while identifying and reducing barriers to investment in the low carbon transition, will be vital to achieving the emissions targets outlined in this Climate 1.2.12 Scotland’s commitment to the net zero transition is already attracting significant investment, such as Scottish Power’s pledge to invest over £10 billion in North decade. The Scottish Government clear the value of investment in net zero to private actors, and attractive investment environment in Scotland. By providing clear guidance over future government policy, regulations, and the path of public investment, we are laying the ground for new sustainable markets in net zero products and services that will stimulate private investment over the coming years.
1.2.13 For example, to support the shift investing £30 million in an electric vehicle charging network, and we transport loans to used vehicles. only make investing in an electric vehicle more economically viable for Scottish households, but also provide a level of certainty to the private sector that demand for ULEV-supporting infrastructure will continue to grow, raising 1.2.14 The establishment of the Scottish National Investment Bank, and its capitalisation of £2 billion of public money over the next ten years, is central to driving net zero market investment for the transition. The Bank’s primary mission will be to support a just transition to net zero by 2045, and will work with public, private and third sector partners to channel and crowd in investment. In addition to co-investment, the Bank will also actively seek to develop and introduce further mechanisms to leverage its available capital and catalyse even greater investment

Update to the Climate Change Plan | Green Recovery 47 1.2.15 The Scottish National Investment Bank The Scottish National Investment Bank launched on 23 November 2020. Working in tandem with the business community and public sector partners, the Bank will be at the forefront of shaping an economy with the transition to a net zero economy, fair work, and inclusive growth at its heart. The Scottish Government has committed to capitalising the Bank with £2 billion over 10 years. As a mission-based investor, the Bank is in a unique position to influence the direction of Scotland’s economic recovery and growth. The Bank’s primary mission is to support Scotland’s climate change ambitions, ensuring the highest possible environmental, economic and social return on its investments. This work will contribute to Scotland’s Green New Deal, kick-starting investment and building the momentum needed to make a significant impact on reducing emissions and guaranteeing new, high quality jobs. The Bank will align with, complement, and wherever appropriate, consolidate existing investment activities provided by the Scottish Government and its agencies. Ħ Net Zero Achieving a Just Transition to net zero carbon emissions Ħ Place Extending equality of opportunity through improving places Ħ People Harnessing innovation to enable our people to flourish 1.2.16 We are also supporting the development of Scotland’s green project pipeline and promoting this to investors. The first phase of the Green Investment Portfolio, launched in September 2020, identified ten low carbon investment opportunities commercially viable propositions. This portfolio is built to expand, taking in both private sector-led opportunities around technology, generation, as well as public sector led projects around heat networks, electrification of transport, and the use of hydrogen where coordination is needed around supply, demand and regulation. Our aim remains to find, structure and present £3 billion worth of projects to market 1.2.17 In spring 2021, we will publish a Capital Investment Plan which aims to build market certainty in Scotland’s net zero transition. The Capital Investment Plan will build on sector climate change policies and set out investable projects. It will link these to investment into Scotland’s future competitive opportunities around infrastructure, innovation and net zero. Proactively supporting the greening of the financial sector, including by mainstreaming the standards, will also be key to reinforcing Scotland’s status as a place for global green investment. 48 Update to the Climate Change Plan | Green Recovery Scotland is inviting investment into a new Green Investment Portfolio. The range of opportunities within this portfolio will expand over time to include £3 billion of projects ready for green finance investment, covering sectors from environmentally sustainable commercial real estate to low emission transportation and Mossend International Railfreight Park is one of 10 market-ready projects featured in the Green Investment A major expansion of Scotland’s national railfreight terminal, MIRP is a game-changer for Scotland’s railfreight infrastructure and environmental ambitions, and will bring extensive commercial opportunities. MIRP will also take HGV freight off Scotland’s roads onto rail, directly contributing Additional investment in PD Stirling’s Mossend facility will drive ambition to be a leading provider of low carbon logistics, putting Scotland at the forefront of a Europe-wide network and transforming David Stirling, Director of Mossend International Railfreight Park operator “We are fully supportive of the Scottish Government’s target to achieve net zero emissions by 2045 and indeed are contributing to this by providing Scotland’s largest zero-carbon, multi- modal rail freight park. The Green Investment Portfolio is a valuable tool to help us reach out to global investors. “With future plans including Scotland’s first 775-metre electric rail terminal, businesses as well as those based

Update to the Climate Change Plan | Green Recovery 49 1.2.18 At the centre of our green recovery is a commitment to increase the number of good, green jobs and to enable people to access these jobs, including through training and reskilling. This is fundamental to the National Mission for Jobs set out in the 2020-2021 Programme Advisory Group, the CCC and the Just Transition Commission while also responding to stakeholder prominently in the green recovery and a just transition to net zero. 1.2.19 The 2020-2021 Programme for Government set out the key interventions that the Scottish labour market demand for green jobs; for example, our £1.6 billion invested in transforming heat and energy efficiency of buildings will stimulate 3,000-5,000 jobs in the coming years. We also committed to a £100 million Green Jobs Fund to help businesses which provide sustainable, low carbon products and services to grow and support green jobs. As part of the national supply-side interventions have scaled to support those at risk of scarring. This includes the £25 million National Transition Training Fund, which will support those losing their jobs due to COVID-19 to retrain to sustainable careers, and the £60 million Young Person’s Guarantee that includes support 16 Protecting Scotland, Renewing The Government’s Programme for Scotland 2020-2021 - gov.scot ( 1.2.20 To further align the skills system Emergency Skills Action Plan has Climate Change Plan update.
This Action Plan sets out the growing evidence base for the kinds of skills and jobs needed to deliver a just transition to net zero, as well as the actions we are taking to support these green jobs and skills. It sets out immediate actions to support a green recovery by aligning retraining and skills programmes with immediate green job opportunities. In addition the Action Plan sets out longer term actions to enable the skills system to become more responsive demands, supporting individuals information and skills or retraining support they need to thrive in the 1.2.21 Key to delivering our ambitious ensuring a just transition is how we transition Scotland’s labour Scottish labour market has world- leading expertise in industries, such as oil and gas, that will be critical to delivering net zero solutions like offshore renewable energy, carbon capture and storage (CCS) and hydrogen, all of which are opportunities in which Scotland is globally competitive. We are working with industry to plan how to support workforces to transition to these new job opportunities, ensuring no one is left behind. 50 Update to the Climate Change Plan | Green Recovery 1.2.22 The green recovery offers an opportunity to accelerate that retraining and bring much needed skills and labour into sectors scaling up for the transition to net zero, including where there is immediate demand for skills and labour such as in construction, creation and peatland restoration, and in energy. We will also lay the foundations to support people to shift to opportunities within sectors as part of the transition, such as ecotourism, green finance, consider where these opportunities support places to create good, green job opportunities, as the Energy Transition Fund is doing in the North East of Scotland. We must ensure everyone can access these jobs and the training and skills support they need. This range of backgrounds having the opportunity to develop careers and ensuring that women, single parents, people with disabilities and people from minority ethnic 1.2.23 Younger generations are at risk of being particularly impacted COVID-19. We will do all we can in this regard and want to help young people go on to reliable, rewarding career pathways. This generation is alive to the dangers transition to net zero. Through Person’s Guarantee, we will make sure they are able to access green them with a sustainable, resilient Building our resilience as part of a 1.2.24 The COVID-19 pandemic has embedding resilience and security this is also essential for our green recovery. Whilst reducing emissions towards net zero is the focus of the Climate Change Plan update, the Scottish Government importance of preparing for the climate changes which are already taking place. We are already seeing warming in Scotland, with more extreme weather events, increased rainfall, and rising sea levels. As changes caused by climate change and ensure that we are prepared 1.2.25 Adaptation and resilience are therefore also key components of our green recovery from COVID-19. for Government we committed to investing an extra £150 million for flood risk management over the next five years (in addition to the £42 million we spend annually), and £12 million in coastal change adaptation to help us adapt to the threat of sea level rise and protect our natural coastal defences from erosion. Adaptation investment is also a key driver of economic growth and jobs across Scotland for Scotland to attract inward 1.2.26 Adaptation is key to a just transition as we know the impacts poorest and most vulnerable in

Update to the Climate Change Plan | Green Recovery 51 society first and most acutely. impacts of climate change is vital in mitigating the risks to people and businesses and ensuring a just 1.2.27 The impacts of the COVID-19 pandemic on people’s lives and livelihoods have been enormously difficult. The restrictions on travel, to control the virus have been extremely challenging for us all. these restrictions has been to a net zero future might look like and the benefits of that future. there was a marked drop in air pollution17, as well as an uptake in active travel18, and that across the UK there was a reduction in food waste as households chose to cook 1.2.28 In its green recovery advice, the CCC recommended that actions that maintain these positive behaviours in the long-term are prioritised as part of a green recovery20. In doing so we will consider the impacts of behaviour change on different consequences as part of delivering a just transition. This document measures that we will introduce to embed positive changes, making them the easy and obvious choice 17 of%20air%20quality%20in%20Scotland%20-%2027-05-2020.html 18 19 20 CCC-to-Cabinet-Secretary-Roseanna-Cunningham-Covid-19-recovery.pdf (theccc.org.uk) 21 1.2.29 Our approach recognises that behaviours are interlinked and account of all of the factors that shape people’s the social, material, and individual. By considering the contextual factors influencing behaviours, we are more likely to implement policies 1.2.30 It is important to recognise societal change not only through specific behaviours, but also via acceptance and adoption of low- carbon technologies and support for policies. Our Draft Public Engagement Strategy, published alongside this update, sets out how we will continue to engage with citizens in developing and implementing climate policy that 1.2.31 “Place” is where people, location and resources combine to create a sense of identity and purpose. It is at the heart of addressing and realising their potential. encourage better collaboration adopted the “Place Principle”21. communities in order to improve

52 Update to the Climate Change Plan | Green Recovery inclusive and sustainable economic growth, and create more successful 1.2.32 We know that people and communities, particularly those inequality, face complex and often inter-related challenges. A place- based approach must therefore be at the heart of delivering a green recovery and a just transition in areas that need change, are undergoing change or are affected 1.2.33 Rethinking how our places are lived in, planned, delivered and adapted will help to futureproof our villages, towns, cities and regions from the more extreme and costly impacts of climate change.
The development of low carbon and resilient places through 20 minute neighbourhoods, will provide ready access to the facilities for our everyday lives, significantly reducing private car dependency and increase walking cycling and public transport use, economy. We will support and learn from those places across Scotland Credit, the SHRUB COOP, Edinburgh

Update to the Climate Change Plan | Green Recovery 53 lead in bringing together the key ingredients to create new ways of living and working locally; and in 2021 we will begin to share lessons locations, to promote good practice, facilitate conversations, and offer resources and a route map for other places pursue their own climate 1.2.34 Our Place Based Investment in 2021. This will bring together streamlining their delivery and increasing their collective impact. It will provide a framework for local characteristics, needs and opportunities. We will assess the totality of investments’ impact on improving the circumstances priorities such as reaching net zero emissions. We will build on and their partners on the ground to re-think our places with pace and ambition, To do this we will need to make best use of public resources now, redesign how and provided tomorrow, and facilitate behaviour change for the future. 1.2.35 We will establish a new £50 million Vacant & Derelict Land Investment sustained investment and effort is needed to unlock persistent appropriate reuses, and that we should prioritise such sites when seeking opportunities to develop the built environment and tackle climate change. In turn, this will promote the health, wellbeing, and resilience of communities across Scotland, particularly in deprived areas where the blight of vacant and derelict land is most prevalent. 1.2.36 As well as the National Planning development plans can guide our future development and help to deliver infrastructure in a way that responds to the challenges of climate change. Established tools such as the Place Standard and emerging local place plans will provide communities with the scope to set out how they see their places develop and improve in the future. Meanwhile, our commitment to working collaboratively across sectors, portfolios and partners to nurture 20 minute neighbourhoods will continue to prioritise quality of life and health, as well as our net 1.2.37 Further information on the cross- Planning Framework 4 to support green recovery are outlined in Part 1.2.38 We are also aware that rural and island economies are facing particular pressures as a result of the COVID-19 pandemic, given their greater reliance on micro and small businesses and self- employment, as well as availability of access to both export markets and domestic food service markets. Our approach to a green recovery, ensure that we work together with rural and island communities to collectively protect and deliver thriving, resilient communities. 54 Update to the Climate Change Plan | Green Recovery 14. Grangemouth Future Industry Board 7. Peebles CAN - the Road to Carbon Reduction 9. Community Wealth Building Strategy 3. Appleseed - Grow your own future 11. Meadowbank and North Maryhill – social housing and green infrastructure

Update to the Climate Change Plan | Green Recovery 55 Community and Place-based Climate Change Action Key 1. Warmer Greener Homes for This project, run by Shetland Islands Citizens Advice Bureau, is helping Shetlanders to tackle fuel poverty and the climate crisis. Individuals are offered free advice on improving home energy efficiency and opportunities are highlighted for installing renewables. 2. Thurso Thurso Community Development Trust’s Thurso Grows project runs a thriving community garden which educates about food growing and assists the community to reduce food miles. The project also offers support to help the residents of Thurso learn more about how to reduce food waste and the links between food choices and climate change. 3. Appleseed - Grow your own Applecross Community Company is developing a community allotment to promote local growing, recycling, healthy eating and minimisation of food waste in Applecross 4. Swapping The SHRUB Coop’s project offers free support to help Edinburgh residents to rethink their relationship with waste. They run a Swapshop and Food Sharing Hub in their Zero Waste Hub, plus reuse collections, repair workshops and carbon literacy events. 5. This project, run by Bike for Good, offers free support to enable people in west and south Glasgow to reduce their use of carbon emitting modes of transport, and instead cycle for short local journeys. Project activities include free access to cycle training, increased access to bikes, route planning rides, bike maintenance training and more. 6. One Planet Forth This community project, led by the Central Scotland Regional Equality Council, offers free support to help people from the Forth Valley to tackle waste and understand more about how purchasing decisions impact on climate change. 7. Peebles CAN - The Road to Carbon Peebles CAN (Community Action Network) are offering free support to people in Peebles and the surrounding area through carbon literacy education and community activities such as Skill Shares, active travel courses, Eco driving courses and community 8. Climate There is a network of Climate Cafes across Scotland, for example in Pitlochry, Birnam & Dunkeld, North Berwick and Aberdeen. Climate Cafes are informal, open spaces where members of the community can come together to have a cup of tea or coffee, chat and take climate action. 9. North Ayrshire Community Wealth Building North Ayrshire launched their “build back better” strategy in May 2020, including an emphasis on utilising public land and assets to tackle climate change. 10. 10k The 10,000 Raingardens for Scotland campaign is designed to promote and encourage the use of raingardens as a sustainable and natural way to manage water, particularly in urban areas. It will also support the creation of wildlife friendly, accessible greenspace, reduce pollution, and provide attractive places for people to visit. Over 950 raingardens have been recorded so far across Scotland in a range of settings from schools, to residential areas, offices, shopping centres, hotels, to Waverley Station. 11.
Meadowbank and North Maryhill - social housing and green These social housing projects are exploring how green roofs could create a sustainable neighbourhood. Green roofs can help to reduce the energy costs of cooling buildings in the Summer, as well as insulation in Winter. They provide greenspace for people and wildlife, and can also slow run-off of rainfall and surface water, helping the neighbourhood cope with extreme rainfall events. 56 Update to the Climate Change Plan | Green Recovery 12. Coire Glas Pumped Hydro Electric Storage This would be the first large-scale pumped storage scheme to be developed in the UK for more than 30 years, and has a potential capacity of up to 1500 MW1500MW. Both the construction and operation of this site will bring significant investment and associated job creation to the Scottish Highlands. 13. City of Edinburgh Carbon Scenario The Council has collaborated with the Edinburgh Centre for Carbon Innovation to develop an open source quantitative emissions calculation tool that enables the Council to better understand the emissions consequences of its decisions across a range of topics. Work has been commissioned to develop this tool further for all Scottish Cities as part of the Scottish Cities Alliance. 14. Grangemouth Future Industry The Grangemouth Future Industry Board (GFIB) has been established both in recognition of the economic strength of the industrial cluster, and in recognition of the fact that it accounts for 30% of industrial emissions in Scotland. A specific focus on Grangemouth is therefore key to delivering a just transition, and to achieving net-zero emissions by 2045. GFIB activity will take a ‘Team Scotland’ approach, co-ordinating public sector initiatives for sustainable economic activity across the Grangemouth industrial cluster, whilst supporting its transition to our low-carbon future. Future-proofing this key industrial hub for net-zero will help support a vibrant and sustainable future for the locality, and in turn significantly contribute to Scotland’s decarbonisation efforts * Projects 1-7 are some examples of projects funded through the Scottish Government’s Climate Challenge Fund (CCF). The full list of currently funded CCF projects is available Peebles CAN - the Road to Carbon Reduction

Update to the Climate Change Plan | Green Recovery 57 1.3.1 This Climate Change Plan update is the next step in delivering a The policies set out here are aimed key net zero markets, providing green jobs now and in the future. By acting now to deliver a green ambitious climate change targets in a way that is just and delivers Peebles CAN – the Road to Carbon Reduction

58 Update to the Climate Change Plan | Coordinated Approach

Update to the Climate Change Plan | Coordinated Approach 59 2.0.1 While a sectoral approach is useful in capturing the nuances of each sector, sectors cannot be treated in isolation. There are clear synergies and interdependencies across the sectors in Part 3 of this Plan update; what happens in one sector can have a knock-on effect upon another, and so we need to take a holistic, coordinated 2.0.2 This section summarises some a cross-cutting, systems-based approach to reducing greenhouse development, inclusive growth, jobs and wellbeing. It therefore material from the sector chapters (Part 3 of the Plan update) and sets this out under a series of the actions in this section span beyond the period covered by this Plan update, and our next Climate Change Plan, to be published by early 2025, will include further 2.1.1 Scotland’s energy system is central to our economy and society. We believe that everyone in Scotland has the right to an affordable, secure and increasingly low carbon supply of energy. The way energy is produced, transported and used will change dramatically along the pathway to net zero, and in ways that are difficult to predict. 2.1.2 Much of Scotland’s electricity generation has been successfully decade, with renewable generation equivalent of more than 90% of our electricity demand. We will need to replicate this success decarbonise buildings, transport and industry. We will need to learn from the past, and ensure that we capture the opportunities for a just transition, including high quality green jobs, thriving businesses and supply chains and positioning investment into the transition. successfully will depend on the approach across the whole energy system to complement our focus on reducing emissions within each

60 Update to the Climate Change Plan | Coordinated Approach 2.1.3 We will need to focus on harnessing Scotland’s potential, wind and marine resources, our substantial potential for carbon expertise and experience in driving forward innovation. This will mean aligning policy across government of these strengths and captures growing market opportunities. We must also bring different sectors ways in which we plan and deliver change take fully into account the impacts that decisions in one sector can have on decarbonisation in others. For example, today’s electricity sector is almost wholly energy to the transport sector, while gas networks deliver the vast majority of energy for heat to the domestic, industry and services sectors. A net zero energy system will see much greater interaction between each of these sectors, of heat and transport, and the growing opportunities provided by 2.1.4 Different low and zero carbon solutions will be appropriate in different sectors and for different solutions will depend in part on technology development, market solutions, for example in heat and transport, taking advantage of the large potential for growth need to repurpose parts of the gas network to deliver hydrogen, retaining some of the flexibility also be important in balancing generation and demand, providing flexibility that helps integrate the expected large increases in variable renewable generation into our energy systems. Policies and market mechanisms will have to be developed and aligned in ways that reflect this system need. 2.1.5 These pathways are not mutually taking a whole systems approach, solution, or combination of these, is most appropriate. A systems delivering a just transition, which takes into the account the different impacts that these decisions will have on individuals, places and sectors, and factors this into policy making.
For example, we need to consider the impact that decisions on how we decarbonise domestic heating will have on those in fuel poverty and the delivery of our target of eradicating fuel poverty, as far as is reasonably possible, by 2.1.6 What we are In 2017 we published Scotland’s first Energy Strategy in alignment with the whole system view of energy as one of its three core principles, along with an ‘inclusive energy transition’ and ‘a smarter local energy model’. We will update our energy strategy in 2021 to lay out a coordinated vision for the whole energy system. This will be based on our best understanding of the technologies and options available today, and focused on delivering

Update to the Climate Change Plan | Coordinated Approach 61 reduction targets, as well as just transition and wellbeing economy outcomes. The different energy system pathways we can take to develop greater certainty about the options that exist and how to deliver them. We will therefore scenarios for Scotland during 2021 which will explore the timelines and interdependencies in each of 2.1.7 The following subsections explore 2.1.8 A combination of improving electrification based on zero- Scotland’s whole energy system. However, energy efficiency and electrification alone is unlikely to 2.1.9 Producing hydrogen in zero-carbon and low-carbon ways, and showing challenging energy demands (e.g. for heat, transport and industry), will be part of the next stage of 2.1.10 Hydrogen can be a strong and can provide alternatives to the uses of carbon-based fuels across the energy system, helping sectors such as transport, heat provide flexibility to the whole energy system; unlike electricity, it is relatively easy to store, meaning that its production can be decoupled from its use. This means that hydrogen may provide a sustainable replacement for the energy storage that natural gas and petroleum products currently and store renewable energy from when it is available until when it is Ħ Hydrogen in hydrogen has an important potential role from industrial heat, especially in specialist processes such as hydrogen fuel cells could help decarbonise heavy-duty vehicles (e.g. buses, trains and lorries), ferries, aviation and commercial over £15 million of investment Ħ Hydrogen for depending on the future of the gas grid, heating solution for buildings, network demonstration in Fife. there are opportunities role of natural gas in providing back-up electricity generation, as well as playing an important role in energy storage. Large- scale green hydrogen production could also provide an essential function, helping to integrate the expected large increases in

62 Update to the Climate Change Plan | Coordinated Approach 2.1.11 The development of a hydrogen economy is a substantial economic opportunity for Scotland. During hydrogen assessment project to deepen the evidence base in order to inform our policies on hydrogen. From our assessment, it is clear that hydrogen offers energy and emissions reduction opportunities, and can help develop a sustainable 2.1.12 The assessment concludes supporting jobs and GVA growth, opportunities on a significant scale. By acting now, Scotland can position itself to take advantage of growing global hydrogen markets, businesses and jobs, supporting exports and attracting investment. Scottish hydrogen projects are investment and supporting local 2.1.13 UK policies, business models and market mechanisms will need to be developed to support hydrogen published in November 2020, set out a target to generate 5 GW of by 2030 for industry, transport, power and homes, with the aim of developing the first town heated entirely by hydrogen by the end of the decade. A full UK Government Hydrogen Strategy is expected in 2.1.14 What we are alongside this Plan update we are publishing a Hydrogen Policy Statement, setting out the strategic priorities of the Scottish Government regarding the various applications of hydrogen in our energy system in the context of the global climate emergency. This will be followed in Spring 2021 with a Hydrogen Action Plan. 2.1.15 Bioenergy is a flexible renewable energy resource that can be used to meet demand for electricity, heat, or to support industrial decarbonisation. This means that it will play an important role in our transition to net zero. Our policy promote small-scale combined heat with carbon capture and storage (CCS) to deliver negative emissions. Deploying bioenergy sensibly and sustainably may therefore be an important part of compensating for any residual emissions as move towards net zero emissions. We explore the role that bioenergy might play in developing negative emissions in Chapter 8 of this Plan 2.1.16 Deciding where bioenergy will be most effectively deployed will depend on which sectors will make domestically or import. The use of bioenergy resources in the energy system must also be compatible with a sustainable land use policy and our obligations to ensure a sustainable global transition. Update to the Climate Change Plan | Coordinated Approach 63 2.1.17 Some key levers in the expansion of bioenergy are reserved to the signals its intention to put in place market and regulatory frameworks to support the acceleration of negative emissions technologies. This will enable us to make the most appropriate decisions for our overall decarbonisation pathway, including a whole system approach 2.1.18 What we are We are Group to inform a more detailed which will urgently tackle these challenging questions as we begin the next stage of decarbonisation Negative Emissions Technologies 2.1.19 Negative Emissions Technologies part in the pathway to net zero, emissions in hard-to-decarbonise sectors, such as agriculture and 2.1.20 There are a range of different bioenergy, electricity generation, fuel and hydrogen production and industrial processes. We describe Chapter 8 in Part 3 of this Plan 22 Shaping Scotland’s inward investment plan - gov.scot ( 2.1.21 Many of the technology solutions required to support the energy system transition to net zero are relatively mature and competitive. However, the global tightening of emissions standards introduces a new set of opportunities, and space to further develop competitive advantage for Scottish business. 2.1.22 The Committee on Climate targets.
The Scottish Government leading innovators can play in decarbonising our energy system as well as delivering economic benefit as part of a just transition to net zero. Our recent inward energy transition and transport decarbonisation as two areas of strength in Scotland, including the strength of our innovation base in attracting investment. The skills which we are harnessing towards innovating solutions for the energy 2.1.23 What we are We have a strong track record of support for innovative low carbon technologies. maintained Scotland’s world leading position in the development of technologies such as wave and tidal energy. We have invested nearly £50 million since 2014 through our internationally recognised Wave

64 Update to the Climate Change Plan | Coordinated Approach to Scottish tidal energy projects through the Saltire Tidal Energy 2.1.24 In 2020, we announced eight technologies will receive a share of £1 million from the Scottish industry challenge areas in the deployment of innovative floating 2.1.25 We work closely with the Energy Technology Partnership (ETP), an alliance of Scotland’s world-class academic institutions. Our support of the ETP includes funding for the Knowledge Exchange Network, and the Energy Industry Doctorate PhD projects tackling innovation challenges across the energy sector. 2.1.26 To date we have made over £85 million of commercial investments in the energy sector through our Energy Investment Fund. This has supported innovative technology companies to develop ideas and deliver projects, alongside support for community energy projects. 2.1.27 As outlined in the Electricity and Buildings chapters in Part 3 of this Plan update, we are developing a new framework of support for energy innovation. To underpin this, we will launch a call for evidence in early 2021 seeking Scotland’s world-leading research talent and facilities for energy innovation. We will publish details of our new support framework in 2021, setting out details of the funding and support available. 2.2.1 Our land is, in many ways, the cornerstone of our society ensuring that it is used sustainably and that its benefits are shared more equitably. Not only is our land the bedrock of Scotland’s natural capital, but it provides us with food, timber, renewable energy, bioenergy (see above), nature-based solution to flooding), transport links and our settlements. Our land is also deeply linked to individual/community health iconic landscapes, enjoyed for recreational activities, our cultural prosperity; and it provides us with a range of further benefits, from clean air and drinking water to successful pollinator populations. Update to the Climate Change Plan | Coordinated Approach 65 2.2.2 We have a finite amount of land, and are making increasing demands upon it. We need to find the optimal balance between these in particular to find more space for trees, peatland and nature to thrive, if we are to deliver not only our emissions reduction targets but also our wider national priorities use. We need to maintain rural populations, support thriving rural economies and jobs and produce food on suitable land; if we do this by creating more localised and regionalised supply chains and lower food miles, we will be producing food more sustainably. various aspects of land use and actions of the Scottish Government come together to deliver on our overarching sustainable land use vision. We need to take people with us as our land use changes and we will initiate a conversation with communities, particularly those likely to be most impacted, to ensure people understand what 2.2.3 The Committee on Climate Change suggest that around a fifth of agricultural land in Scotland will which may include not farming on peatland or using farmland to plant trees. We must do this in a way that does not lead to ‘offshoring’; for example reducing domestic food production could lead to increased imports if domestic consumption and our exports stay the same. 23 zero-uk/ Again, ensuring a just transition in this context will be critical to developing a strategic plan that whilst safeguarding livelihoods and rural economies. Nature-based solutions to climate change, such as high nature value farming, offer a sustainable means of producing the products we all depend on such as 2.2.4 There is a wealth of evidence both on a global and a local scale that we are now in the midst of a global crisis in terms of biodiversity loss. Biodiversity loss reduces of ecosystems, weakening their ability to provide the benefits to people which we rely on and ultimately risking collapse. Our actions to restore biodiversity are intrinsically linked to many of the policies within this Plan update, and our Biodiversity Strategy. 2.2.5 Climate change is one of the main drivers of biodiversity loss, and nature-based solutions can also protect, sustainably manage, and help restore ecosystems. These solutions have the potential to enable climate change mitigation, resilience, adaptation and positive social change, providing benefits for both people and biodiversity. 2.2.6 What we are The Scottish deploying nature-based solutions date on peatland restoration and woodland creation (outlined in Part 3, Chapter 6 of this Plan update) peatland restoration and woodland

66 Update to the Climate Change Plan | Coordinated Approach by the CCC, and, when accounting for local ecological and social sensitivities, can bring benefits for carbon sequestration, biodiversity and natural flood risk management and job creation. Nature-based solutions will form a key part of our overall coordinated approach, infrastructure, planning, land use, marine and economic strategies. 2.2.7 We are also exploring and developing innovative approaches to financing nature based solutions including increasing the levels of private investment in these areas. This could include a greater use of carbon markets to support projects peatland restoration, but might also include a greater emphasis cooling services) which can be brought forward to finance capital 2.3.1 While Scotland’s statutory emissions reduction targets are based on emissions from sources wider carbon footprint associated with the goods and services we import is also very important. estimated 74% of Scotland’s carbon footprint24.
The move towards a circular economy is a crucial part of tackling this, with some studies 24 estimating that circular actions could eradicate up to almost a fifth of Scotland’s carbon footprint by 2050. One simple way to express the concept of a circular economy is it is designed to reduce the demand for raw material in products; it encourages reuse and repair of products; and it promotes products and materials to last as long as possible. This is relevant across all sectors of the Climate Change Plan update and in wider 2.3.2 What we are Actions we’re taking include encouraging more sustainable consumer purchasing, authority recycling collection infrastructure. More details are included in Chapter 5 of this Plan

Update to the Climate Change Plan | Coordinated Approach 67 The Scottish Government has a long standing commitment to the concept and reality of achieving our vision of Scotland as a Good Food Nation Ħ it is the norm for Scots to take a keen interest in their food, knowing what constitutes good food, valuing it and seeking it out whenever they can; Ħ people who serve and sell food, from schools to hospitals, retailers, cafes and restaurants are committed to serving and selling good food; Ħ everyone in Scotland has ready access to the healthy, nutritious food they Ħ dietary-related diseases are in decline, as is the environmental impact of our Ħ Scottish producers ensure that what they produce is increasingly healthy and The Good Food Nation ambitions cut across five key areas of health, social justice, knowledge, environmental sustainability and prosperity, and we are working hard to make a real and positive difference to the lives of the people of Scotland Ħ helping to improve their access to, and understanding of, the benefits of Ħ ensuring sustainability of our wonderful food industry; Ħ ensuring food companies are a thriving feature of the economy and places where people want to work; and Ħ looking to grow Scotland’s reputation as a Good Food Nation from which other COVID-19 means some work has been delayed, for example the Good Food Nation Bill will not be introduced in this parliamentary session as planned. However, the statutory provisions that were drafted for the Bill will be used to inform the development of a statement of policy on food, which was announced by the Cabinet Secretary for Rural Economy and Tourism on 18 August 2020. The statement will incorporate the experience gained in response to the COVID-19 pandemic, ongoing work under the umbrella of the Good Food Nation policy and, more widely, work such as the EU Farm to Fork Strategy and the UK Government’s National Food Strategy. This work will be led by the Ministerial Working Group on Food to ensure that the cross-cutting approach that is needed to take forward key aspects of national policy is in place. 68 Update to the Climate Change Plan | Coordinated Approach Food and climate change – Continued Work is ongoing to achieve other commitments set out in the Programme for Government. This includes working with business, the public and the third sector to develop guidance so that more people are encouraged to eat locally-produced, sustainable and healthy food that supports our aims to tackle climate change, and the development of a Local Food Strategy for Scotland. Scottish Government also provides support for the Climate Challenge Fund (CCF), allocating over £110 million across all projects in communities across Scotland. Many of these have had a food focus, and in 2019-2020 around a third of projects had food or reducing food waste as their focus. Current CCF projects include Forth Environment Link’s ‘Climate Kitchen Garden’ project and Sustainable Kirriemuir’s ‘Nourish Kirriemuir’. 2.4.1 Transport is Scotland’s biggest emitting sector, accounting for 35.6 per cent of emissions in 201825. It is also a particularly challenging sector to decarbonise, as it is a derived the way people live, work, learn and access goods and services are all key to the need to travel. We are committed to reducing car kilometres by 20% by 2030, but this vision will take a cross-sectoral effort going beyond transport, to reduce people’s need to travel with more local access to goods and services. Likewise, digital connectivity and flexible working approaches will play a key role. The Scottish Government is committed to exploring options driven as part of commuting, which accounted for 23% of journeys in 25 Scottish Greenhouse Gas Emissions 2018, published 16 June 2020, accessible greenhouse-gas-emissions-2018/ 26 Transport and Travel in Scotland 2019: Results from the Scottish Household Survey, accessible scot/media/48191/transport-and-travel-in-scotland-2019.pdf 27 2.4.2 What we are Alongside building on the Place Principle. We will establish a Place-Based Investment Programme to support building sustainable places, local access to goods and services, net zero carbon, and inclusive growth which complements the Localism, Town Centre, Work Local, and 20 (NPF4) will also take account of the need to refocus our existing transport policies to specifically draw out how land use planning can build in sustainable travel

Update to the Climate Change Plan | Coordinated Approach 69 2.5.1 The National Planning Framework is a long-term plan for Scotland that sets out where development and infrastructure is needed to support sustainable and inclusive growth. We expect to lay a draft of the fourth National Planning Framework (NPF4) in the Scottish consultation to be undertaken, expect to adopt the finalised NPF4 2.5.2 Planning is a key delivery policies within this Climate Change Plan update, across all sectors. By making the right choices about should take place in the future, emissions whilst improving the wellbeing of communities and the quality and resilience of places 28 29 National Planning Framework 4 and wider planning and place-based policies will be informed by recent work by Architecture and Design Scotland, 2020, Designing for a Changing Carbon Conscious wp-content/uploads/Carbon-Conscious-Places-Main-Report.pdf 2.5.3 What we are An NPF4 Position Statement28 was published areas of likely key policy change as a foundation from which the draft NPF4 will be prepared.
The Position Statement strongly signals a need to have climate change as a guiding principle for all plans and decisions. It signals key outcomes that planning policy can further building resilient communities and supporting the wellbeing economy. peatland protection, to emissions efficient design and town centres, generation of planning policy is a significant opportunity to work across the sectors of this Plan update to help deliver it, rapidly providing a coherent vision for

70 Update to the Climate Change Plan | Coordinated Approach 2.6.1 Scotland’s National Performance Framework (NPF) sets an overall purpose and vision for it seeks to create a country that’s success is not judged solely on the performance of our economy or on GDP, but instead on a wider Scotland’s ‘wellbeing framework’, recognising that Scotland becoming ‘a more successful country with opportunities for all to flourish requires progress towards all of the National Outcomes, and application social outcomes, environmental and democratic outcomes are all being delivered and are in balance. Wellbeing can be defined as ‘living collectively, as society. We view ‘living well’ in broad terms and see this as encompassing the key areas which form the focus of our We are a society which treats all our people with kindness, dignity and opportunities for all of Scotland wellbeing, and sustainable and

Update to the Climate Change Plan | Coordinated Approach 71 2.6.2 The NPF helps us understand, publicly and transparently, the progress we are making as a nation towards realising our long-term vision. Its data helps us understand the challenges in achieving our outcomes and to focus policies, services and resources on tackling systematically and objectively across a range of economic, social It’s clear that policies aimed at tackling climate change can have co-benefits for wellbeing and the delivery of our National Outcomes. recovery from COVID-19 alongside our transition towards a wellbeing economy. A ‘wellbeing economy’ is one that has social justice and environmental health as the top priority and asks what sort of economic activity is needed to 2.6.3 Scotland’s new Environment Strategy30 creates an overarching framework for our strategies and climate change. It sets out a 2045 vision for restoring nature and ending Scotland’s contribution to climate change, highlighting the wider benefits this will create for our wellbeing, economy and global citizenship. It maps the significant contribution that our action on climate and the environment will make towards achieving many of Scotland’s role in delivering the UN Sustainable Development Goals. 30 2.6.4 What we are The Scottish delivery of a wellbeing economy for Scotland is clearly articulated in our recent Economic Recovery to a range of actions that will ensure that our response to the to improve the resilience of our economy, and do so in a way that protects and grows our natural assets. The Plan is underpinned by a focus on equality, in terms of both opportunities and outcomes, to develop our understanding of the issues that are central to the delivery of a wellbeing economy Loch Brandy in Glen Clova, one of the Angus Glens

72 Update to the Climate Change Plan | Sector Chapters

Update to the Climate Change Plan | Sector Chapters 73 3.0.1 Having world leading emissions significant and sustained effort will be needed by all to end our contribution to climate change chapters contain the policies and policy proposals that the Scottish delivering, as well as what actions we need the public sector, private sector, individuals and the UK 3.0.2 Seven of the eight sectors below relate directly to the seven sector ‘Climate Change The Third Report on Proposals and Policies 2018-2032’31. An additional eighth chapter brings Negative Emissions Technologies (NETs) out of sector allowing us to be transparent with our assumptions of these evolving 3.0.3 As outlined in Annex Derivation of Sector Emissions Envelopes, a key element of this update is envelopes for each sector, which add up to the annual emissions reductions targets. In the 2018 plan, the Electricity and Industry chapters spoke of Bioenergy and Carbon Capture and Storage, and the sector envelopes contained 31 3.0.4 Annex A contains the full list of proposals for each sector. Any policies that are new since the marked as ‘new’ and any that have increased in scale or ambition are marked as ‘boosted’. In cases where these new or boosted policies are already announced, footnotes point to when this was. Any policies that are unchanged since the 2018 Plan 3.0.5 The emissions envelopes set out in the chapters below are based upon TIMES modelling with technical Though TIMES modelling provides approach to the envelopes, there is also inherent uncertainly in areas such as cost, technological development and energy demand. This uncertainty increases over accompanied the results of TIMES envelopes included in this Plan 3.0.6 The combined envelopes are each sector to meet the annual emissions reduction targets to

74 Update to the Climate Change Plan | Electricity

Update to the Climate Change Plan | Electricity 75 3.1.1 Scotland is widely recognised as a world leader in renewable reflect that. More than 83% of the electricity generated in Scotland during 2018 came from renewable or low carbon sources, nearly three times as much as was generated a 3.1.2 Over the same decade, the last (Cockenzie and Longannet) have closed, with the carbon intensity of Scottish electricity generation falling by close to 90% between Scotland’s renewable electricity generation has grown rapidly over the last twenty years. In 2019, a record year for renewable electricity generation in Scotland, over six times more electricity – 30.5 TWh – was generated from renewable sources compared to the year 2000. This is the equivalent of powering all households in Scotland for over three years. There is currently around 12 GW of renewable generation capacity installed across the country, while the carbon intensity of electricity generated in Scotland has fallen to less than 50 g CO¬2 /kWh in both 2018 and 2019.
76 Update to the Climate Change Plan | Electricity 3.1.3 The decarbonisation of Scotland’s electricity sector has been driven by our rich natural resources, planning, a drive to involve local affect them, supportive market frameworks, and rapidly declining prices of renewable technology globally - with wind and solar now the lowest cost forms of new 3.1.4 As Scotland transitions to net zero, a growing and increasingly decarbonised electricity sector is critical to enabling other parts of our economy to decarbonise – notably transport, buildings and 3.1.5 We also want Scotland to continue to export large amounts of clean electricity to England, Northern beyond, and maintaining Scotland’s 3.1.6 Our climate change targets mean progress, and move from a low to a zero carbon electricity system, with the potential for Negative Emission Technologies (NETs – see Chapter 8) to deliver negative emissions from our electricity sector, for example through the use of bioenergy for electricity generation combined with carbon 32 Electricity Generation Costs 2020 (UK Government) - uploads/attachment_data/file/911817/electricity-generation-cost-report-2020.pdf 3.1.7 In further decarbonising our electricity system, we also need to address the substantial challenges of maintaining security of supply and a resilient electricity system. Operating a zero carbon electricity system will mean finding new ways to provide a range of technical services and qualities currently provided by fossil fuel and nuclear generation. These include inertia, frequency response and voltage support services, which help keep the system stable. Pumped storage also has an important role to play, as it can release stored electricity the system needs it most (e.g. when there is less wind energy

Update to the Climate Change Plan | Electricity 77 Dersalloch Black Start Trial33 33 Photo of Dersalloch Wind Farm courtesy of Scottish Power Renewables. While there has never been a total black-out across the whole country, and the chances of one happening are small, its impact would be substantial. “Black start” services across Britain still rely heavily on fossil fuel power stations, along with some hydro and pumped storage capacity. The Scottish Government provided £550,000 to support a demonstration project delivered by Scottish Power Renewables at its Dersalloch Wind Farm looking at the potential for delivering black start from wind. The project delivered a global first during a test in October 2020 by delivering black start capability from wind power to re-start part of the electricity system. The project used “virtual synchronous machines” (VSM) to regulate the frequency and voltage of the power from the wind turbines to keep the local electricity system stable and balanced, throughout the process of restoring the part of the system that had been blacked out. This project shows that Scotland is developing expertise that will be critical to net zero both here and around the world. The Scottish Government will continue to support the development of technologies that can support sustainable security of supply, with renewable generation delivering technical services that currently depend on fossil fuel power stations. 78 Update to the Climate Change Plan | Electricity 3.1.8 Planning has been, and will rapid renewables deployment in Scotland. The position statement on our fourth National Planning Framework (NPF4), published in November, makes clear the Scottish Government’s intention to actively facilitate decarbonised electricity generation and distribution34. 3.1.9 Key energy infrastructure, including electricity generation, large scale storage such as pumped of the high voltage electricity transmission networks, and a CCS BECCS are all being considered in the preparation of the fourth 3.1.10 However, two of the key levers further renewable energy potential – electricity policy and regulation – are reserved. This means that achieving our targets critically taking the right decisions and 3.1.11 The electricity sector has continued and secure supply of electricity 3.1.12 Meanwhile, the need to invest in renewable generation, networks reduce greenhouse gas emissions is also critical to creating good, green jobs as part of our green recovery and longer term energy transition 34 35 zero/net zero-energy-workforce 36 Green recovery and just transition 3.1.13 A number of stakeholders and advisory bodies, including the Just Transition Commission, the provide a range of opportunities 3.1.14 In 2018, the low carbon electricity sector directly supported 7,800 full time equivalent jobs across Scotland, and contributed more than £3.6 billion to the Scottish 50,000 jobs in Scotland will be required in the Net Zero Energy 3.1.15 The economic opportunities are huge and wide ranging. Our Offshore Wind Policy Statement36, published in October 2020, sets out our assessment of Scotland’s offshore wind capacity to 2030 and, together with the Sectoral Marine Plan and ScotWind leasing rounds, provides the market with an understanding of the available 3.1.16 Floating wind is an emerging technology, and, with the first large scale floating wind farm off the coast of Peterhead, and Scotland’s huge resource potential, there are significant opportunities here, for both development and innovation

Update to the Climate Change Plan | Electricity 79 in installation and maintenance. The Carbon Trust’s Floating Wind Joint Industry Project, which the Scottish Government has helped fund, published a report37 this much as 70 GW of floating wind 3.1.17 Offshore wind has an important role to play in supporting the transition from oil and gas to low and zero carbon renewables. Scotland’s decades long experience across the oil and gas industry, developed, can be brought to bear in the development of offshore and storage. It is also evident that many of the skills, expertise and technologies held within the oil and gas industry will be crucial in the development of net zero solutions at scale. The Scottish Government’s £62 million Energy summer 2020, will aid this process. 3.1.18 Approximately £1 billion is spent developing electricity networks, leading to substantial work for local supply chains.
Both Scottish transmission networks (SSE and Scottish Power) included potential investments totalling around £2.5 billion in their recent business plan submissions to Ofgem – comprising investment to maintain the existing 37 38 electricity_network_upgrade.pdf 3.1.19 SSE and Scottish Power, along with National Grid, have also announced plans in November 2020 to take forward a multi-billion subsea link between the east coasts of Scotland and north east England. to help connect Scotland’s huge offshore wind potential, with the companies forecasting that the project could support “hundreds of green jobs” during construction 3.1.20 Recent work from the University of Strathclyde highlights that investing in our electricity system to support the uptake of electric vehicles (EVs) can deliver sustained into our economy38- for example, the report says that there could be up to 3,000 new jobs associated with 20% EV penetration by 2030. 3.1.21 We also aim to take full advantage of new and developing hydrogen can play a major role in a net zero electricity system, directly complementing renewable ways and opportunities to use, transport and store that energy. This isn’t just true for Scotland, but is likely to be part of the global solution to Climate Change. Scotland has the opportunity to be at the forefront of global change, developing and exporting expertise 3.1.22 The Scottish Government has a strong track record for supporting competitive advantage, such as wave and tidal power. Recent work

80 Update to the Climate Change Plan | Electricity by the Offshore Renewable Energy Catapult39 suggests that the tidal stream industry could generate a net cumulative benefit to the UK of £1.4 billion and support 4,000 jobs by 2030 and wave energy could add a net positive contribution to the UK economy of £4 billion and support 8,100 jobs by 2040. However, both these technologies remain at an early stage of development, with the key levers required to commercialise the technology reserved to the UK 3.1.23 We will continue to do all that we can to maximise the opportunities for Scottish businesses in our green recovery and longer term transition, supporting jobs, skills the correct support is in place to strengthen Scotland’s renewable electricity supply chains, and 3.1.24 There is already substantial published in October this year, decarbonised transport as two key priority areas and seeks to attract global companies to Scotland from 3.1.25 We collaborate with the energy industry to ensure that we develop and use Scotland’s potential and expertise. The First Minister’s Scottish Energy Advisory Board (SEAB) and its Strategic Leadership develop our understanding of the challenges and opportunities on skills and expertise in Scotland, 39 need to support our workforce in the transition towards net zero, including supporting delivery of the ongoing work of the Energy 3.1.26 The Scottish Government is working closely with the Energy Skills Alliance, a newly created and cross energy collaborative group whose focus is to develop an integrated skills strategy for a strong, net zero energy industry. The work streams include mapping future energy skills demand, taking to 2030, and ahead to the 2050 Career Programme, delivery of an integrated energy apprenticeship scheme by 2022, and longer term aligning all energy training and Scotland is also progressing a Climate Emergency Skills Action Plan, published alongside this plan update, which will focus on the provision of green skills necessary 3.1.27 In our 2017 Energy Strategy we were clear about the need for a smarter, local energy model, one that supports local solutions to meet local need, and links local generation and use. To support the development of local energy, we will publish a Local Energy Policy Statement that sets out key principles, that the Scottish Government wish to see adopted transition - one that has people strong partnership working and collaboration at a local level. Update to the Climate Change Plan | Electricity 81 3.1.28 We will also ensure that the transition, building on the success over recent years of our Community and Renewable Energy 3.1.29 The costs of moving to a fully decarbonised electricity system must be shared fairly and shouldn’t fall disproportionately to those who can least afford to meet them. The Scottish Government remains determined to protect vulnerable consumers, consistent with our commitment to ensure that those who are least able to make the transitions are not forced to pay higher costs. We are committed to eradicating fuel poverty, with our statutory and ambitious targets setting out that by 2040 no more than 5% of households are in fuel poverty and no more than 1% in Consumers Commission has a role will continue to advise on how the transition to a decarbonised this, can work for all consumers 3.1.31 Many of the levers needed to ensure a fair distribution of costs systems are reserved to the UK. We will work with BEIS, Ofgem, consumer groups and industry to push for the changes that will be required for consumers in Scotland. 40 3.1.32 Renewable generation will increase 2032, and we expect to see the period, helping to decarbonise our transport and heating energy 3.1.33 Our recent Offshore Wind Policy Statement40 describes the potential offshore wind capacity to come forward by 2030. Our first Scot capacity, with a second round to 3.1.34 This renewables growth will lead to a more diverse and renewable electricity system, with a range of generating technologies and local / flexibility and smart networks to ensure that consumers have access to reliable and affordable power. 3.1.35 Our current dependence on fossil system stability and security will change radically over the next demonstrated new ways to deliver sustainable security of supply, with mechanisms in place which value and reward these new services. 82 Update to the Climate Change Plan | Electricity 3.1.36 Renewable electricity will also combine with hydrogen to provide businesses, large transport fleets and a range of industrial processes.
The development of carbon capture and storage (CCS) and NETs will mean that the electricity system in 2032 could potentially deliver negative emissions, compensating for residual emissions elsewhere in 3.1.37 Electricity demand will have grown and electric vehicles commonplace across Scotland. This means that electricity will play a much greater role across our wider energy system, economy and society than it did in 2020. The costs and benefits will be shared fairly across all members of society, with vulnerable groups and fuel poor households protected at 3.1.38 Scotland’s economy will benefit from the growth and manufacture of new renewable generation out to 2045, with a new, skilled and innovative workforce including many who have made a fair and just transition from other parts of today’s energy sector 3.1.39 Greater interconnection across the rest of the UK and to other parts of Europe will benefit our system and enable the export of renewable electricity across the continent. Consumers of all sizes will be with electric vehicles and other household devices rewarded for consuming and supplying power to Emissions Reduction Pathway to 2032 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032

Update to the Climate Change Plan | Electricity 83Route map to 2032

84 Update to the Climate Change Plan | Electricity 3.1.40 We will continue to review our making further improvements and efficiencies where possible, and seeking to reduce determination timescales for complex electricity infrastructure applications. Faster determinations will enable any develop more quickly, which will benefit onshore wind in particular. 3.1.41 The interaction of wind turbines with aviation radar can sometimes present a barrier to development. 41 Announced in Offshore Wind Policy Statement, October 2020 practice for collaboration through Taskforce, tackling the technical, regulatory and financial barriers which will ensure that all radars are wind turbine tolerant/neutral, and freeing up much more capacity 3.1.42 We will deliver the actions Statement, published in October41. support for supply chain, planning, innovation and skills, will support the development of between 8 and 11 GW of offshore wind capacity

Update to the Climate Change Plan | Electricity 85 3.1.43 We will complete the first ScotWind leasing round, granting commercial scale offshore wind second round to follow by 2023. 3.1.44 We will review and publish an updated Electricity Generation Policy Statement (or “Clean Power Plan”) by 2022. In line with the do so; this work will reflect an assessment of the contribution that renewable electricity generation is likely to have to make to achieving 3.1.45 We will also continue our efforts to ensure a sustainable security of electricity supply, enabling renewable electricity to provide including this component within future Scottish Government energy innovation funding programmes. 3.1.46 We will work with our Enterprise Agencies to support the required infrastructure improvements to our ports and harbours to ensure that Scotland’s supply chain companies can benefit from the continued 42 Included in Climate Change Plan 2018 3.1.47 We will continue to fight hard for in Pumped Storage Hydro (PSH), Highlands, and Glenmuckloch in Dumfries and Galloway in south west Scotland. We have asked the UK Government to bring forward mechanisms, potentially similar to those available for interconnectors, which will enable the substantial investment needed to develop PSH; we will work with the developers to ensure that this can deliver sustainable and secure jobs and supply chain benefits to Scotland’s 3.1.48 The following policies will benefit all sectors, and are related to the whole system actions described in the Coordinated Approach chapter. 3.1.49 We will launch a call in 2021 technologies that can transform our electricity system, including technologies, and technologies to deliver sustainable security of supply. This will help ensure that support world leading activity in

86 Update to the Climate Change Plan | Electricity Scotland is a world leader in marine renewable energy innovation, as a result of consistent and committed funding and support from the Scottish Government. Initiatives such as the Saltire Tidal Energy Challenge Fund and our Wave Energy Scotland programme have supported projects at the cutting- edge of the marine energy sector, demonstrating key innovations while utilising the Scottish supply chain. In 2019, Orbital Marine Power received £3.4 million of support through our Saltire Tidal Energy Challenge Fund to build and demonstrate the O2 2 MW tidal turbine, due to be launched in 2021 at the European Marine Energy Centre in Orkney. The 72-metre long device uses turbine rotors which can be turned 360 degrees so that power can be extracted from the tide as it moves in and out. This innovation significantly increases the potential renewable energy generation, with the O2 capable of powering more than 1,700 homes per year. Key parts of the device were fabricated in Fife and Orkney, using steel from Motherwell, and assembled

Update to the Climate Change Plan | Electricity 87 3.1.50 We will carry out detailed research, understanding of the potential to deliver negative emissions from 3.1.51 The Bioenergy Update will be published early next year to be followed by the development of a Bioenergy Action Plan44. This will consider the role of bioenergy for electricity generation (as well as others sectors) including its potential combination with CCS to deliver negative emissions from the electricity sector, ahead of the next climate change plan in 2024. Developing Scotland’s Hydrogen 3.1.52 We will support the development 2020s, building on the outputs of the Hydrogen Assessment Project and hydrogen policy development renewable electricity generation integration of new wind, solar and 3.1.53 Electricity policy covering distribution, supply and regulation achieving the electricity sector 43 Announced in 2020-2021 Programme for Government 44 Announced in Scotland’s Energy Strategy, 2017 we would develop a bioenergy action plan 45 Announced in 2020-2021 Programme for Government policy outcomes contained within this Plan update will depend to a large extent on policy decisions and actions from the UK Government.
3.1.54 We are already working with the UK Government to ensure that it understands the scale and context of our ambition for Scotland, as well as the importance of renewable electricity in Scotland for wider UK 3.1.55 In order to help decarbonise the electricity sector at a pace targets, we are calling on the Ħ Radically reform the Contract for Difference (CfD) mechanism eligibility for onshore wind and from floating and remote island wind, which we believe will make competitive in future allocation to make targeted and effective support available for wave and tidal generation. We have also to the CfD which strengthen the requirement to use Scottish and UK supply chains, with measures further consultation. We believe there may also be a role for the CfD in supporting the production

88 Update to the Climate Change Plan | Electricity Ħ Fully explore the options for direct power generation itself, potentially displacing natural gas as a provider of back–up or and hydrogen in the electricity sector as well as others – the electricity sector has substantial potential for these technologies, of CCS urgently requires a stable suitable incentives, regulatory The use of electricity support negative emission technologies Ħ Ensure security of supply and address the matter of regional security of supply. For example, has failed to deliver investment in new dispatchable electricity generation in or near Scotland. start provision, and to unlock investment in critical ancillary services. This is especially true of pumped storage hydro, where the plans and potential for huge new investments in Scotland will delivering a clear route to market. detail in the Industry chapter) that, together with the reserved Carbon Price Support, provides Ħ Deliver better regulation – we, called on the UK Government to give Ofgem an explicit statutory objective to support the delivery of net zero. This will ensure that decisions are fully consistent Scotland’s 2045 net zero goal, and flexible enough to meet the across Scotland, as well as in 3.1.56 In our Vision for Scotland’s Gas and Electricity Networks, we committed to supporting local authorities and other organisations to engage more strategically on issues related to the electricity system. We are working in partnership with local authorities to develop Local Heat and Energy Efficiency Strategies (LHEES), aiming to have these in place across all local authorities by the end of 2023. LHEES will local authority engagement with electricity network companies on future investment in Scotland’s net zero electricity infrastructure. Update to the Climate Change Plan | Electricity 89 3.1.57 We will engage with partners on the new Net Zero Carbon Standard for new public buildings and we are accelerating efforts to use 100% renewable electricity on the 3.1.58 We are already seeing ambitious and encouraging leadership in the public sector, and we will support others to follow suit. Scottish a zero carbon user of electricity by 2040, five years before the national net zero target, while Forestry and Land Scotland has installed over 1 GW of wind and hydro capacity across the land it Scottish businesses and industry 3.1.59 Scotland has a host of companies with impressive and innovative track records in renewables and network development, as well as in the growing market for flexibility services. We also have a financial sector, which includes the new Scottish National Investment Bank, in place and ready to work with the electricity sector to deliver new and inward investment across 3.1.60 The challenges facing Scottish businesses and industry will vary according to an organisation’s ability to explore or invest in onsite generation or flexibility measures. Changes and investment in the electricity grid, including regulatory decisions affecting the way in which charges are levied, have the potential to encourage Scotland’s industrial sites to switch towards low carbon and renewable electricity. This makes it all the more urgent that Ofgem’s decisions clearly reflect the need to support 3.1.61 In an electricity system with generation, businesses should have more incentives to be flexible. This means considering when they use electricity, for instance, looking for ways to reduce or increase their demand at certain times depending opportunities for large users who can vary their use at particular certain signals / circumstances. These provide opportunities to reduce costs and earn additional revenue, while helping maintain 3.1.62 The starting point for all of us, as individuals in our households, and across communities, should be to continue to invest in and follow energy efficiency measures electricity demand. Home Energy Scotland provides advice to all their energy use and improve the energy efficiency of their homes. 90 Update to the Climate Change Plan | Electricity 3.1.63 Improved networks, renewable generation and smarter local energy systems can provide opportunities for a more flexible and resilient system, offering more attractive choices for consumers, for example, household devices to respond to network and market signals about the need to use more or less energy. Individuals as well as businesses should be able to benefit from being 3.1.64 We know that these opportunities Scottish Government and others have a huge part to play in helping promote and increase accessibility amongst the widest possible range of consumers. This is especially true for consumers in vulnerable circumstances who are often more reliant than others on a safe and 3.1.65 The Scottish Government is poverty, with our statutory and ambitious targets setting out that households are in fuel poverty and no more than 1% in extreme fuel poverty. A key driver of fuel poverty is the cost of energy; the way in which our electricity system develops, in particular how it is paid for, will be central to 3.1.66 We will continue to work with the UK Government to urge it to reform levies so that they are fairer and that the burden does not fall disproportionately on those in or at risk of fuel poverty.
Ofgem, electricity network companies and suppliers also have a crucial role to play in ensuring that changes can help lift households out of fuel area, recognising the importance that this can make to sustainable economic growth as we transition to a net zero economy. Scotland partners, strengthening existing opportunities in new innovations 3.1.68 We will prioritise activity and build upon Scotland’s reputation and increase our attractiveness to international partners to ensure a

Update to the Climate Change Plan | Buildings 91

92 Update to the Climate Change Plan | Buildings 3.2.1 The scale and pace of the buildings will be nothing short of transformational. Emissions from heating all buildings across Scotland need to reach zero by 2045 and demand for heat in buildings must be significantly reduced, with poor energy efficiency removed as a driver of fuel poverty. Currently, heat in buildings accounts for 20% of Scotland’s greenhouse gas emissions46. By 2040 our statutory fuel poverty targets that are fuel poor; that no more than 1% of households are in extreme fuel poverty; and the fuel poverty gap is reduced to £250 (adjusted for 2015 prices). We also have interim targets for 2030 and 2035. Currently 24.6% of households are fuel poor, and 12.4% are in extreme fuel poverty47. We will deliver upon these targets in a way that carefully coordinates the dual challenges of decarbonisation and tackling fuel poverty to ensure a fair and just 3.2.2 The zero emissions heat transition will involve changing the type of heating used in over 2 million homes and 100,000 non-domestic buildings by 2045, moving from high emissions heating systems, reliant on fossil fuels, to low and zero emissions systems such as potentially hydrogen. Our interim statutory target of a 75% emissions reduction by 2030 means we must rapidly accelerate heating system 46 Scottish Energy Statistic 47 Scottish House Condition Survey, 2019 48 Scottish House Condition Survey, 2019, SAP 2012 (RdSAP v9.93) conversions during this decade, from the current rate of around 0.1% of homes converting per year to a rate in the region of 5-10% (over a hundred thousand) homes 3.2.3 These changes will involve households and businesses across with new heating technologies, and seeking to adopt them. The associated with transforming our heating systems will need to be balanced in a fair way that neither exacerbates fuel poverty rates nor allows the burden of paying for the transition to fall on those least able to pay. Vital to Scotland’s transition will also be very significant policy action from the UK Government in 3.2.4 We have made good progress on upgrading the energy efficiency of Scotland’s building stock, with Energy Performance Certificate Band C or better. We are supporting emissions heating systems through a range of schemes, as well as supporting an increasing number of heat network projects where these are appropriate and help with our 3.2.5 We still have a considerable challenge ahead in order to deliver a net zero emissions buildings sector. Currently, only around 11% of households have a low carbon heating system and just over half

Update to the Climate Change Plan | Buildings 93 3.2.6 We will need to see a mass switch away from high emissions heating in homes and buildings (e.g. gas and oil central heating), as well as further expansion of renewable electricity production and stronger electricity grid infrastructure, to support the delivery of highly efficient and affordable electric heating at scale. This transition will also require further development of heat networks and, dependent upon successful demonstration and positive decisions on the future of hydrogen in the gas grid, the 3.2.7 We estimate that around 50% households, will need to convert to a low carbon heating system statutory targets are met. Our initial focus will be on off-gas-grid buildings and those most suitable for connection to a heat network. further with some conversion of the remaining on-gas-grid stock. Furthermore, up to an additional 50% of non-domestic buildings will need to be converted to low and zero emissions heating by 2030. 3.2.8 Achieving a good standard of buildings will continue to have a critical role to play. This will buildings using fossil fuel heating systems, enable the roll out of low and zero emissions heating towards our fuel poverty targets. 3.2.9 This is a journey that will affect people right across Scotland in their homes and workplaces, and will require rapid growth of our domestic supply chains. There are many local economic opportunities to be captured that will support good quality local jobs, and there is a great deal of potential to improve quality of life, including with comfortable, well insulated homes. We must also ensure a just transition, allowing consumers to easily access affordable low and 3.2.10 The long-term impact of COVID-19 uncertain, but the pandemic may have a sustained effect on the ways we work and how we use our buildings. Increased homeworking workplace heating patterns. We are yet to see whether this trend for homeworking will continue into the future, and how that might affect how buildings are heated. at present, along with reduced incomes for many, has increased of fuel poverty and potentially increased energy debt. We need to mitigate these effects and design decarbonisation policy in a way that does not exacerbate them. 94 Update to the Climate Change Plan | Buildings 3.2.11 A number of key stakeholders, including the Climate Emergency Response Group, the Just Transition Government prioritises investment in zero emissions buildings as part of a green recovery from COVID-19. Reflecting this, we put investment in decarbonising and modernising our buildings at the core of the Programme for Government, with £1.6 billion committed over the course of the next five years.
3.2.12 We will maximise the opportunities that arise from this building quality and inefficiency as a driver of fuel poverty; driving investment in improved insulation and affordable heating; developing a skilled workforce based on high- quality jobs; and creating a strong domestic supply chain that builds upon the experience and expertise 3.2.13 Currently, around 13,000 people in Scotland are employed in the low and zero emissions heat and energy efficiency sectors, and of that 8,200 people are estimated to work in the design, manufacture and installation of energy-efficient products such as wall insulation and energy efficient doors and windows49. Zero emissions heating estimated to employ around 2,000 49 Low carbon and renewable energy economy, UK - Office for National Statistics (ons.gov.uk) 50 Based on Scottish Government understanding of the sector. 3.2.14 Taken together, our policy policies and investments, delivered as part of Scotland’s green recovery from COVID-19, will build the scale of the zero and low emissions heat market, which should then deliver new jobs, skills and retraining opportunities. We expect to see industry develop expertise, and for costs to reduce through economies of scale and product improvement. This should ultimately bring cost benefits to consumers. We will also prioritise a just transition for the heat sector and tackle fuel while energy efficiency measures can help to offset some of the increased costs of heating, we need to ensure that decarbonisation does not disadvantage those already struggling to heat their home. 3.2.15 Our policies will deliver very significant expansion of heat pump deployment in the coming years. For example, Scottish Government investment through our enhanced

Update to the Climate Change Plan | Buildings 95 cashback schemes, and our advice and support services that leverage funding from UK schemes should boost our domestic manufacturing 3.2.16 Our investment in, and regulation of, heat networks will stimulate existing networks. This will provide high quality, sustainable green jobs across Scotland’s towns and cities, such as in specialist design manufacturing, civil engineering, and maintenance. Furthermore, our direct investment and regulatory interventions will see increased rates of installation of energy efficiency measures, potentially supporting 1,200 jobs for every support for further demonstration network innovation will create ripple effects across the wider energy system supply chain; and our targeted support for innovation high growth potential, boosting the economy and creating jobs. Overall, we estimate that as many as 24,000 jobs could be supported in Scotland by the roll out of low 3.2.17 We will publish a Supply Chain Strategy for energy efficiency and heat in buildings in 2021. programmes of support for skills and retraining, cluster building, 51 Type 1 construction sector employment effects multiplier from the Scottish Government input-output tables, applied to 52 The jobs estimate is derived by taking a Scottish household share of the UK capital spend on heat decarbonisation projected by the CCC (P99 of the CCC’s Net Zero Technical report) and applying the type 1 construction sector employment effects multiplier from the Scottish Government input-output tables. maximise the impact of city and sector deals as well as UK Research Fund funding. We are also working with Skills Development Scotland to ensure that heat and energy efficiency skills sit at the heart of the Climate Emergency Skills 3.2.18 By 2032, through the scaling of targeted support, a substantial majority of Scotland’s homes will efficiency rating, meaning that have lower demand for heat. The number of socially rented homes achieving a high energy efficiency rating will be maximised, due to the investment of social landlords. As a result, we will have made significant progress in removing poor energy efficiency as a driver for fuel poverty in the majority of 3.2.19 In addition, we will have heating, particularly in off gas-grid areas, and we will have seen a significant expansion of low carbon heat networks in heat dense areas. consented from 2024 will use zero emissions heating and be highly energy efficient. This process will see Scotland’s economy and society benefit from new jobs and

96 Update to the Climate Change Plan | Buildings 3.2.20 Properties connected to the gas grid will be supported to decarbonise through the electrification of heat and connection to heat networks, progress that will have been made to decarbonise the gas network. heating market, with a wide range installing and innovating zero and low emissions heating products. As these companies prosper in this transition, they will be exporting and commercialising their expertise. 3.2.21 Buildings across Scotland will have been supported to reduce their energy demand, making it easier and more cost effective to install and operate low carbon heating systems. We will seek to ensure that support is coordinated and managed where possible to deliver 3.2.22 Through all of this, individuals participants in the transition. we will do so in an appropriate range of languages and formats to ensure that everyone is able to and standards, supporting a just transition and reliable market. 3.2.23 Our vision for 2045 is that our buildings will be much greener and more energy efficient. We will have reduced emissions from, and demand for, heat, so that virtually all buildings are zero emissions. Renewable sources of energy will supply our heating, cooling and lighting needs. People will feel comfortable in their homes all year round, and we will have met our statutory targets for fuel poverty. 3.2.24 Delivering these changes requires further technology innovation, businesses. They also mean our to transform to be able to supply emissions electricity at scale. the right market and pricing signals and regulations being in place. Update to the Climate Change Plan | Buildings 97 Emissions Reduction Pathway to 2032 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032

98 Update to the Climate Change Plan | BuildingsRoute Map to 2032

Update to the Climate Change Plan | Buildings 99

100 Update to the Climate Change Plan | Buildings (CCC), we will set out a clear, long- term vision and policy direction for heat in buildings in the Heat in Buildings Strategy.
This will include a comprehensive set of significantly scale up deployment energy efficiency in Scotland. This Climate Change Plan update provides a summary of the policies and actions that will be set out Buildings Strategy. During 2021 we will set out the key elements of how the housing sector will drive towards net zero emissions in the context of the 20 year Housing to 3.2.26 Our early actions to 2025 will focus on increasing deployment rates of zero and low emissions 3.2.27 Principles for action a) taking a whole systems view; ensuring a just transition, including towards meeting our targets on c) working closely with citizens, 53 Energy Efficient route d) driving innovation to secure efficiency improvements and cost e) exploring innovative finance and f) using tax based incentives to Ħ creating the conditions to secure Ħ Local Heat & Energy Efficiency Strategies for all of Scotland by the end of 2023 to ensure a 3.2.29 These key actions, principles are outlined below. The Heat in Buildings Strategy will set out in more detail how we will achieve 3.2.30 The Heat in Buildings Strategy will update the Energy Efficient standards and regulation for heat it is within legal competence, to ensure that all buildings are energy efficient by 2035 and use zero emission heating and cooling 3.2.31 We will ensure the alignment and coherence of wider policies and regulations so that these support the reduction of emissions from 3.2.32 As far as is within our legislative competence, we will put in place a new, appropriate framework by

Update to the Climate Change Plan | Buildings 101 3.2.33 Our initial focus for action before introducing a standard requiring all domestic private rented sector; 3. introducing regulations for all buildings to achieve a good level of 4. establishing a new net zero carbon standard for new public 5. taking steps to facilitate common 3.2.34 We will also work with social landlords to bring forward the Efficiency Standard for Social to strengthening and realigning 3.2.35 The forthcoming Heat in Buildings Strategy will set out the steps we will take to develop proposals for a future regulatory framework for zero emissions heating, to be put in place to drive very significant accelerated market growth from 2025, subject to the limits of the 3.2.36 We will invest £1.6 billion54 in heat and energy efficiency over the next Parliament. This will leverage additional UK Government funding and private household financing to deliver against our ambition to 54 Announced in 2020-2021 Programme for Government see, as a minimum, the rate of zero emissions heat installations in new and existing homes and buildings double every year out to 2025. 3.2.37 The investment will deliver against 1. Supporting those least able to pay, for example through increased Scotland and continuation of the within the successor to the Low Carbon Infrastructure Transition costs for zero emissions systems can in some instances be higher than current fossil fuel equivalents, priority funding theme in the LCITP successor programme, supporting communities to decarbonise their buildings (through schemes such as CARES, including dedicated support for islands and our most remote adoption by providing support for decarbonisation of the public sector estate, maximising spend through domestic and small and medium- sized business cashback schemes, programme for the self-funded. 4. Innovation and we will promote learning by doing, support technology and business

102 Update to the Climate Change Plan | Buildings as a priority theme within the and hybrid systems, and in the decarbonisation such as multi- 3.2.38 Investment commitments Funding Invitation to support low carbon and zero emissions heat projects in Scotland (already in efficiency of the public estate; 3. £25 million to support zero carbon energy infrastructure and heat networks for residential and commercial premises in the Clyde 4. up to £4.5 million over the next six months in a cashback scheme cashback for zero emissions heating efficiency measures, with a total of £13,500 available per home; 5. boosted and strengthened Energy Efficient Scotland delivery schemes to stimulate even greater take up buildings56 and a new commitment to increase zero emissions heating 6. continued support for affordable install zero emissions heating supply 55 Announced in the 2020-2021 Programme for Government, with further commitments included in this Climate Change Plan 56 Boosted both in the 2019-2020 Programme for Government, and in the 2020-2021 Programme for Government ahead of regulatory requirements in 2024, through our Affordable 3.2.39 We will use our investment investment and target deployment at no and low regret priorities in order to grow the customer base, emissions heat projects through Ħ publish a Local Energy Policy that has people at its centre, supported by strong partnership working and collaboration at a Protecting consumers and ensuring 3.2.41 We will establish clear principles no one being left behind, ensuring our approach neither increases the fuel poverty rate nor increases the depth of existing fuel poverty.
This will include a boosted commitment to effective design and targeting of our fuel poverty and heat in buildings programmes to ensure we manage the heat transition in a way that does not exacerbate fuel poverty, with policies that build in excellent consumer care and

Update to the Climate Change Plan | Buildings 103 boosted collaboration with energy retailers to ensure a good deal for 3.2.42 While our funding programme for 2021-22 is clear, we will consult in our Heat in Buildings Strategy on specific investment options for our programme over the following four years where it significantly 3.2.43 We will design future delivery programmes to ensure significantly accelerated retrofit of buildings, in place from 2025 in order to secure long term delivery against will ensure housing makes its full contribution to our national target of net zero emissions by 2045 by signalling our long-term objectives C. Supporting supply chain growth 3.2.44 Supply chain growth is essential ahead of the mass-rollout of zero and low emissions heating systems 3.2.45 In the coming 12 months, we will understanding of the potential for supply chain growth in order to target support effectively and start to ramp up skills requirements and 1. Develop a Supply Chain Strategy for energy efficiency and heat decarbonisation in partnership and including a specific Islands component. This will set out a range of wider actions to support supply ahead of mass-rollout from the 57 For example, through the work of the Energy Consumers Commission 2. Continue to work closely with Skills Development Scotland to develop the construction sector element of the Climate Emergency Skills Action Plan (CESAP) for transition, including investment skills development opportunities recovery announcements, including the National Transition Training Fund, Youth Guarantee and Green 4. Set out new skills requirements for installers, designers and retrofit co-ordinators in a Skills Plan for consultation under the CESAP. This will adoption of the installer skills matrix, developed by sector skills bodies and industry, and its integration into PAS 2030 and Scheme (MCS) installer standards; and development of qualifications for other roles in PAS 2035 wider qualifications currently exist in 5. Provide increased support for Scottish colleges for training and retraining for jobs in the energy heating sectors, including capital investment for colleges to buy demonstrator projects, particularly those hybrids and high temperature heat pumps; the use of hydrogen for space and water heating; projects to understand the impact of heat transition on

104 Update to the Climate Change Plan | Buildings project, which is developing a new housing and using it to build c. 1,000 homes to net zero standards across the Edinburgh City Region. 8. By the end of 2021, we will technology innovation framework, innovation in heat generation, storage and supply, as well as innovative methods for improving a) Taking a whole systems view 3.2.47 The energy system as a whole needs to be readied to support the delivery of an increasing proportion of electrical heat, and to ensure zero emission heating systems are ‘smart’ and can enable system flexibility. We are ensuring a whole system work with Ofgem and electricity network companies. This work will provide a well-developed evidence base to support network planning, ensuring that we have the networks needed to link electric heating in our buildings to wind farms and other sources of renewable electricity 1. the trial and demonstration of the integration of zero emission heating into the electricity system, storage and demand management, to better understand the capacity 58 For example, through the work of the Energy Consumers Commission Strategic Partnership to ensure that the Scottish Government can work closely with the electricity network capacity needed in the 3.2.49 We will establish clear principles a just transition, ensuring our approach neither increases the fuel poverty rate nor increases the depth of existing fuel poverty. This to effective design and targeting of our fuel poverty and heat in buildings programmes to ensure we manage the heat transition in a way that does not exacerbate fuel poverty, with policies that build in excellent consumer care and boosted collaboration with energy retailers, ensuring a good deal for 1. Continue delivery of energy efficiency investment to support fuel poor households. This will help remove poor energy efficiency as a driver of fuel poverty by making heat by reducing demand. It will be vital that the UK Government acts to reform the system of levies and charges on consumer bills, and promotes innovation in tariffs to remove the disproportionate burden these place on low income 2. Increase the number of zero funded through our fuel poverty programmes, targeting households

Update to the Climate Change Plan | Buildings 105 decarbonisation, avoiding those where there is a risk of detrimental outcome, and providing uplifted support where necessary to secure tariffs suitable for zero emission heat; to ensure that households are on tariffs suitable for their ensure that vulnerable consumers moving to zero emission heat are appropriately identified in network operators’ vulnerable customer 4. Increase Scottish Government microgeneration (solar/thermal PV) and storage systems, to support households to make maximum use of self-generated electricity. 5. Enable the installation of smart enabled zero emissions heating programmes) to ensure fuel poor energy tariffs. This will require considerable awareness raising and 3.2.51 We will also urge the UK social obligation costs on energy bills to make gas and electric Ħ increase levy funding for social costs, to ensure that progress is maintained in reducing fuel

106 Update to the Climate Change Plan | Buildings Warmer Homes Scotland (WHS) is the Scottish Government’s national fuel poverty scheme. It is focused on the installation of energy efficiency to improve the energy efficiency, warmth and comfort of properties occupied by those living in or at risk of fuel poverty. Since the scheme was launched in September 2015, it has helped more than 20,000 fuel poor households across Scotland become warmer and healthier in their homes, in addition to saving an average of £300 per year on their energy bills.
Warmer Homes Scotland includes an Employment and Skills Action Plan, with targets for job creation, apprenticeships, training and skills. The scheme invests in young people and apprentices across engineering, plumbing, electrical, construction and business administration skills and, as of October 2020, has supported 2,859 jobs and training opportunities. 3.2.52 We will build public support for the heat transition through extensive businesses across Scotland. The Scottish Government’s Draft Public Engagement Strategy for Climate Change, published alongside this Plan update, will raise awareness secure buy-in to the long-term 1. open up public dialogue and engagement on the heat transition, including through a commitment the heat transition with extensive support schemes to build public awareness and understanding of heat decarbonisation and energy 3. build public engagement into our 4. use the development of Local opportunity to ensure extensive heat decarbonisation choices; and, community low and zero emissions heat projects through our flagship

Update to the Climate Change Plan | Buildings 107 3.2.54 Our support for innovation in heat generation, storage and supply, efficiency will drive significant framework of support for energy innovation with a strong focus on e) Support innovative finance and 3.2.56 Innovations in finance and heat supply services can leverage and zero emissions heat and energy efficiency investment. In this Climate Change Plan update, we are announcing a new commitment to support innovative approaches with a view to these models being deployed from 2025, if appropriate and consistent with the developing 3.2.57 There is significant interest and capital available across the private sector to invest in decarbonisation. investment relates to the currently from building owners for investing will continue to promote demand signalling to the market, utilising ongoing capital incentives and support programmes, as well as committing to a phased regulatory and non-domestic sectors. This will provide certainty to private investors around long term returns on their investments, as well as demand for finance. The risk and cost of lending should therefore reduce, and the demand for the 1. Establish a short life working transition to consider and provide the use of guarantees with financing institutions to support de-risking of lending, such as guarantees for mortgage top- private sector institutions that investment; potential development of ‘heat as a service’ business models that promote private sector investment in the supply chain; collaboration and partnership with the private sector and Scottish National Investment Bank to invest long term, patient capital in key strategic projects; and longer term financing options such as green bonds, public-private partnerships and regulated asset base models of approaches that provide additional institutionally-provided finance, and therefore promote and support early stage ‘crowding in’ of low recommendations from the working group forward for deployment from 2023 if appropriate and consistent

108 Update to the Climate Change Plan | Buildings f) Tax based incentives to drive 3.2.59 We will consider how our local tax powers, such as council tax and non-domestic rates, could be used to incentivise or encourage the retrofit of buildings. We will commission further analysis to identify potential options, to be implemented from the middle of the decade where appropriate, subject to consultation secure growth of Heat Networks 3.2.60 Key enablers for the growth of heat networks in Scotland will be the passing of our Heat Networks (Scotland) Bill, the planning system, and the roll out of Local Heat and 59 Heat Networks (Scotland) Financial Memorandum, the Scottish Parliament, 3 March 2020. Page 12 sets out the Scottish Government’s estimate that it will take two years to implement the secondary legislation resulting from the Bill (i.e. by 1. Once passed, we will work with local authorities and developers to implement the provisions of Bill by 202359.This will see the creation of zones suitable for networks can be developed with assurances over demand, alongside continuing and strengthening the support available to support local authorities and private investors infrastructure is required, our planning system will support the Zoning and development planning

Update to the Climate Change Plan | Buildings 109 Framework 4 we will ensure that account of where a Heat Network stronger planning policies can help to ensure that future developments Rights (that remove the need to apply for planning permission) for zero-emission heat networks and Local Heat & Energy Efficiency Strategies for all of Scotland by the 3.2.62 These local strategies will identify heat solutions, to guide building replacement heating systems, and forming the basis for local delivery plans targeting heat and energy boosting our action by providing developing Strategies in early 2021, and will consider how to introduce new zoning powers to enable phased action to support regulatory standards, which will be set out in more detail in the Heat 3.2.63 We have established a new potential heat pump sector deal for Scotland. The deal will forge an important partnership between the Scottish Government and industry on sector-specific issues, creating opportunities to boost deployment, skills. The expert advisory group will report in 2021 and we will respond to its recommendations by 3.2.64 As set out by the CCC in their 2020 Progress Report, Scotland’s success in decarbonising heat is contingent upon urgent action from the UK on the steps it will take to ensure rapid gas grid decarbonisation, and we call on the UK Government to address the imbalance in pricing for electricity and gas, to better incentivise the deployment of zero emissions heating technologies. 3.2.66 Whilst recent announcements increase investment in innovation including enhanced support for targeted support for heat pump amend Ofgem’s remit to require the regulator to work to deliver on statutory climate change targets, including those of the Scottish Parliament, in order to secure the investment that is urgently needed 3.2.67 To protect consumers, we need a UK-wide legislative framework that is fit to deal with the scale

110 Update to the Climate Change Plan | Buildings decarbonise buildings, protecting installers or poor quality work. 3.2.68 We have identified a number of barriers to action to decarbonise heating.