The next item of business is a statement by Alasdair Allan on the heat in buildings bill. The minister will take questions after the statement, so there should be no interventions or interruptions.
15:27
I am pleased to update Parliament on the next steps that the Scottish Government will be taking regarding a heat in buildings bill.
In 2019, the Parliament agreed that Scotland will end its contribution to global emissions as soon as possible and by no later than 2045. Our commitment to that ambition is unwavering.
As outlined to Parliament on Tuesday, the Government is also committed to reducing fuel poverty through the limited devolved powers that we hold. It is vital that we find the right balance to both reach net zero by 2045 and reduce fuel poverty.
We have already achieved a great deal when it comes to our transition to net zero. In 2023, 91.2 per cent of electricity generated in Scotland was from zero or low-carbon sources. Specifically, 70.3 per cent of electricity generated was from renewable sources. Our target for 6,000 public charge points was met two years ahead of schedule, and more than 2 million children, young people, disabled people and older people are now benefiting from free bus travel, making sustainable travel more accessible for everyone in Scotland. We have created almost 75 per cent of the United Kingdom’s new woodland since 2019, and an estimated 56 per cent of homes are now rated energy performance certificate band C or better, which is an increase of 11 percentage points since 2019.
Those are just a few of the many examples of tangible progress and Scottish Government actions that have taken us halfway to net zero. However, we all need to do more. We need to see climate action in all areas, by individuals, households and businesses, and by all parts of Government.
The way that we heat our buildings accounts for around 19 per cent of our country’s total emissions. Scotland depends greatly on gas and other fossil fuels for heat. Nearly 90 per cent of our homes use those fuels. In Europe, only the Netherlands has a similarly high dependence on gas as we do. Meanwhile, for communities that are off the gas grid, fuel poverty is even more prevalent—a subject that I will come to in a moment.
I raise all that to underline just how significant an impact decarbonising our buildings will have. That is why the heat in buildings bill is so important. As members know, we consulted on a range of proposals, and that consultation closed last year. It received more than 1,600 responses, and I thank everyone who engaged in that process. We received a diverse range of views. Many people supported the need for legislation requiring energy efficiency standards and prohibiting certain types of heating in buildings; others questioned that need.
Having carefully considered those views and having listened to a range of stakeholders since the consultation concluded, I am today charting a new course that is, I believe, consistent with our goal of removing emissions from buildings by 2045. Our plan to deliver a revised bill responds to the legitimate reservations and concerns that have been raised since our consultation was completed, including the risks of exacerbating fuel poverty and of burdening every individual householder with an overly onerous responsibility as we decarbonise.
Parliament is more than aware that many households, families and businesses across the United Kingdom are facing difficult circumstances. Despite promises from the new UK Government that energy bills would be lowered by £300 a year, since October last year they have risen by almost £300. A unit of electricity presently costs around four times more than a unit of gas, and up-front costs for installing clean heating systems remain higher than those for fossil fuel systems.
A combination of all those factors, combined with a severe cost of living crisis, makes it simply unaffordable for many building owners to make great changes in the near future. I believe that those challenges could be particularly pronounced for those in rural and island locations, whose needs and circumstances we must continue to consider carefully.
All those factors merit important changes in our approach—changes that demonstrate that we are listening and responding to the important concerns that people have raised. Our approach moves away from penalising individuals, and instead commits to collective action. Instead of placing prohibitions on every homeowner, we will establish targets for Government to reach. Rather than looking at action through the lens of decarbonising alone, we will also commit to doing everything within our power to reduce costs for people.
I am confirming today that we will introduce a heat in buildings bill, in this parliamentary session, that will create a target for decarbonising heating systems by 2045. It will send a strong signal to homeowners, landlords and other building owners about the need to prepare for change, while outlining collective actions to help do that, and that will give the supply chain confidence to invest. The bill will underpin our existing work to progress to net zero through the range of support measures and interventions that are already available to households seeking to transition their homes to non-polluting heating systems.
The most obvious way that the bill will do that is by boosting heat network development, by creating particular requirements for large, non-domestic premises and including powers to require public sector buildings to connect to district heating when it is available. We will, of course, work with those building owners to ensure that appropriate safeguards are developed. Those powers will help to make more heat network projects investible, which will lead to greater choice for households and businesses in how they reach net zero.
My intention is that our bill will enable and support flexibility. It will be technology neutral. Different properties and people will require different solutions; for example, the clean heating solutions in some remote and rural areas may vary from those in urban areas. Reaching our target is likely to need a range of technologies, including bioenergy.
Our bill will also include powers to set minimum energy efficiency standards for owner-occupier and non-domestic properties, as part of a plan to reduce greenhouse gas emissions that are caused by heating systems.
In the meantime, to improve the standard of rental properties and to help to reduce fuel poverty, we will make regulations under existing powers to introduce a minimum energy-efficiency standard in the private rented sector. Those regulations would mean all privately rented properties, as far as possible, reaching the equivalent of EPC rating C. That would improve those homes, reduce energy costs for tenants and support the transition to clean heating.
My officials are working to prepare the bill for introduction in year 5 of this session of the Parliament. It will accompany our related work on a social housing net zero standard and EPC reform under existing powers. The bill will affect everyone, but it will differ markedly from earlier iterations in that it will not be a prohibition but a target and rather than placing all the onus on individual action it will emphasise a collective response. The opportunities that it will present for Scotland are significant.
The proposed legislation will build on the Climate Change (Emissions Reduction Targets) (Scotland) Act 2019 that the Parliament came together to pass, so I am confident that we share its overall intent. Following its introduction, I will work with members from all parties on the points of detail that underpin it to ensure that it works for consumers, home owners, businesses and rural and island communities.
Progress towards decarbonisation in housing depends on action in reserved areas from the UK Government, too. The UK Government could take several vital actions that would accelerate buildings decarbonisation and support the legislation that I propose. That is why I hope that members will join me in calling for the UK Government urgently to clarify its intentions on phasing out gas boilers in existing homes and the future role of the gas grid in heating our buildings, on rebalancing policy costs from electricity to gas bills to incentivise the installation of clean heating in a way that alleviates fuel poverty and on reform of the Great Britain energy markets to support a reduction in the cost of electricity more generally. Without those and other changes, we are severely hampered as we attempt to deliver this societal and economic transformation.
I began by reflecting on the scale of the challenge that faces us. The framework of targets and regulation that I have described can provide certainty to building owners and confidence for investors and supply chains. We will, of course, continue to provide advice and financial support to those who need it most. We are investing a further £300 million in our heat in buildings programmes this year, including support to more than 20,000 Scottish households to save up to £500 a year on their energy bills. Therefore, I ask members to work with me when we introduce our heat in buildings bill to Parliament and to support our calls for the UK Government to take similar action. The actions that I have described can cut carbon and help to reduce fuel poverty at source. They are essential to achieving the goal of net zero, for which the Parliament voted.
The minister will now take questions on the issues raised in his statement. I intend to allow around 20 minutes for that, after which we will need to move on to the next item of business. I would be grateful if members who wish to ask a question could press their request-to-speak buttons if they have not already done so.
I thank the minister for advance sight of his statement. We warned the Scottish Government and the Scottish Greens time and again that the proposed heat in buildings bill was an absolute farce, but they refused to listen. Patrick Harvie was adamant that his heat pump proposals were the right call, despite warnings from stakeholders, investors and other parties. Expecting people to pay more than £14,000 for a heat pump that might not be suitable for their home shows how out of touch the Scottish Greens are with ordinary hard-working Scots.
The Scottish National Party has announced a rehashed heat in buildings bill with no further details about how much it will cost the public. More net zero targets have been missed and more net zero targets have been announced. When will the Government realise that Scotland deserves an affordable, just transition—one that works with industry, protects jobs and is affordable for people to make changes to their homes and lifestyles?
The SNP has announced that the new heat in buildings bill will be introduced next year, in the same year as the next Scottish Parliament election. Will the minister be up front with the public and tell them, right now, how much the new bill’s provisions will cost them? Will he confirm that, when the bill is introduced, he will announce to Parliament the timescales that the SNP will work towards?
The bill will be introduced to Parliament this year. The timescales that we are working towards aim for it to receive royal assent by the time of dissolution, so it will be introduced in the present session of Parliament.
I am disappointed that Meghan Gallacher regards the proposed bill as simply a rehashed version of the previous proposal. I had expected her to point to the areas that are different from those covered by the consultation on the original bill, some of which I mentioned earlier. The fact that we are talking about targets rather than prohibition is a fairly significant change. It will not be one that everyone will agree with, but it reflects the fact that the Scottish Government has listened to the people who came to us during the consultation rather than merely going through the motions. I hope that she will come to want to work with the Scottish Government, because we should seek to work together towards an aim for which the whole Parliament voted.
I thank the minister for advance sight of his statement. I draw members’ attention to my entry in the register of members’ interests.
I welcome the commitment to finally introduce a heat in buildings bill in this parliamentary session, because we urgently need people to have warmer and more affordable homes. We are still way behind our European neighbours on the provision of energy-efficient homes and we need effective solutions. Reform of our electricity markets is under way. Instead of hiding behind the fact that it does not control energy prices, the Scottish Government should exercise its devolved powers to support the provision of better insulation and renewable heat solutions in Scotland now.
I have three questions for the minister. He mentioned the growth in Scotland’s renewables. There are existing projects across our urban and rural communities that could see us having community heat networks, if we learn lessons from our Nordic neighbours about supporting and empowering local authorities to deliver their ambitions. Will the Scottish Government announce what it is doing to support local authorities to deliver projects through the local heat and energy efficiency strategy plans, which were submitted in January 2024? Does the minister agree that our constituents need more support to make their homes affordable to heat—
Briefly, Ms Boyack.
—whether it be through insulation, solar batteries or heat pumps, given the cut to the solar funds? For local authorities and housing associations, where is the support that they will need now, because it is not—
Minister, please respond.
I thank Ms Boyack for raising several questions, which I will try to address.
On her first point, Ms Boyack rightly said that we should do everything that we can, within our existing devolved powers, to address the twin problems of fuel poverty and the climate crisis. The Scottish Government is already putting £300 million a year into seeking to address those issues, and specifically to address the problem of houses that need better insulation.
Ms Boyack made a point—which I accept was rhetorical—about the Government hiding behind the division between powers that are reserved and those that are not. I realise the importance of her point, but I genuinely think that the two Governments can work together here. I hope that there would be an ambition at UK Government level to see a better balance being achieved between the prices of gas and electricity. We certainly make that argument and we wait for action on it. Such an outcome would dramatically transform the ability of people across the UK to electrify the systems in their homes and move away from using fossil fuels.
On community heating and district heat networks, we can learn from the example of Denmark. I have met people from that country to discuss various issues in that context. The authorities there are obviously a long way ahead of us, but we can learn a lot from them. I have been speaking to representatives of the Convention of Scottish Local Authorities about some of those aspects, too.
Like many rural representatives, in the run-up to the bill’s introduction, I made a number of inquiries about support for alternative heating methods. I am glad that the Scottish Government has recently been clear about its on-going support for, and commitment to, people who live in areas such as the Highlands and Islands and who rely on alternative heating methods, which is an important consideration regardless of the high rates of fuel poverty in those places. Will the minister say how getting the balance right on that can include ensuring that worsening rural and island poverty is not an accepted side effect of the progress that we must make towards achieving net zero?
The member is right about that particular issue, which exists in rural areas such as the ones that she and I represent. As I mentioned earlier, the best clean heating solutions for some remote and rural areas might, in fact, vary from what is best for our towns and cities. We will take a technology-neutral approach, which will enable building owners in all areas to choose technologies that are right for them and their homes. In some rural and remote areas, that might include bioenergy and biofuels. We need to recognise the differences that exist across the country and the particular problem of fuel poverty, which we in no way wish to exacerbate through that process.
I have a similar question. The minister mentioned that rural households will often use alternative heating systems to urban ones, and I am glad to see that the Government is now recognising that. Will the minister confirm that the new heat in buildings bill will not try to phase out heating systems such as wood-burning stoves and heating oil, which are a lifeline for so many rural communities?
The member will appreciate that wood-burning stoves and heating oil open up two very different sets of questions. I made it clear from the outset that we are seeking to move people on to clean systems of heating their houses by 2045.
The member will be aware that I responded to the issues that were raised about wood-burning stoves and the regulations that surround the building of new houses around rural Scotland. I sought to respond to those concerns and to ensure that communities’ voices were heard, given that, in many areas, those forms of heating remain not only the most suitable but, in some cases, the cleanest form of heating that is available.
With electricity prices being so high and the efficiency of alternative heating systems not yet fully accepted or understood, if we are to make real progress on the transition of our residential homes away from fossil fuels, more will need to be done to persuade a sceptical public. Will Scotland’s councils play an important role in becoming a trusted partner to help to lead the transition and provide the assurance and long-term support that people will need if they choose to make the transition in their homes?
Local authorities are a trusted partner in that. As I said, I recently met COSLA about some of the issues that arise here. All 32 local authorities have recently completed their local heat and energy efficiency strategies, which are a useful tool for all of us, locally and nationally, in setting out how the building stock in each area of the country can be decarbonised. As numerous members have pointed out, housing stock is radically different in different parts of the country.
We will continue to provide support through our delivery schemes. As I mentioned, we are investing £300 million in the heat in buildings programme this year. Local authorities have a key role to play, and we certainly want to maintain that dialogue with them.
The principles in the heat in buildings bill were almost the only thing that the Climate Change Committee praised the SNP Government for in what was a damning indictment of the lack of progress on net zero. There is still much risk in the bill and much detail that needs to be understood. Indeed, the minister said that what the bill establishes is not a prohibition but a target. Much remains to be seen with regard to that.
Given that the Government has failed to deliver on its climate change targets and literally broke its own legislation on them, how can the people and industries of Scotland have faith that it will deliver on and meet its heat in buildings targets?
The Scottish Parliament endorsed the legislation to which the member refers.
I think that the member would be justified in saying what he did if, despite the lengthy consultation and all the issues that had been raised on fuel poverty, I had come to the chamber today with a bill that was unchanged from what was initially consulted on and took no account of the question of how much burden could possibly be put on an individual householder.
Having said all that, I think that we all have to recognise—I am keen to point this out at every opportunity—that the task ahead of us of decarbonising housing in Scotland over the next 20 years is not one that can be borne by the Government alone or by all householders alone. It is a collective effort that we will all have to work towards, but we have to get started on it in a way that commands public support. I believe that the bill that we are proposing does that.
The warmer homes Scotland programme can help to fund not only small changes but transformative whole-house retrofits if that is what is required to combat fuel poverty. Can the minister say more about how, since it was relaunched in 2023, warmer homes Scotland has gathered pace in its work to ensure that all homes in Scotland have access to green, affordable heating? Will he provide an update on funding in the 2025-26 budget to support warmer homes Scotland or similar schemes?
Warmer homes Scotland will be 10 years old soon, and it continues to grow in scale, with an expectation that we will support—I noticed recently—our 50,000th customer sometime very soon. To meet the strong demand for the scheme, we allocated an extra £20 million to it in 2024-25, bringing funding to a record £85 million. It is a very important scheme, and the funding has enabled us to support the largest number of households in one year since the scheme began. Each eligible household is offered a bespoke package of measures that takes account of the needs of their property and their household.
The new approach is clearly going to fail. This was one of the few areas of climate policy that the independent Climate Change Committee had praised, and it is being gutted. If there is one thing that we have learned about climate policy in recent years, it is that setting targets without decisive action to meet them is meaningless. The loss of the property purchase trigger will clearly result in a dramatically slower uptake of clean heating in Scotland. Given that the Government has chosen the slower path to heat decarbonisation, will the Acting Minister for Climate Action tell us which other sectors will work faster to cut emissions in order to make the new climate plan remotely plausible?
I very much respect Patrick Harvie. I am not entirely surprised that, in the course of the questions on my statement, I have been told both that the bill is a rehash of what was in the consultation and that it represents the gutting of what was in the consultation.
Patrick Harvie had a deep involvement in this area of Government and has a great knowledge of it. He had to acknowledge that Government can do only what is possible, and he, along with the rest of us, had to acknowledge that, for instance, decarbonising 1 million homes by 2030 was not possible.
I will not make the mistake of bringing a bill to the Parliament that I know not to be feasible or possible. That would not be fair to the Parliament or the public. I have sought to come forward with a bill that has targets. Patrick Harvie is right about that and in saying that targets mean something only if there is a plan to get to them. There will, indeed, be plans to get to those targets, and that is the next job of work.
If we had a little bit less rhetoric and a bit more action, we might be a wee bit further forward on this programme. The thing that I am concerned about is the Home Energy Scotland grant scheme—the minister knows that I have a deep interest in that. Industry tells me that it is the biggest barrier to retrofitting in existing homes. The system is so bureaucratic that it is resulting in businesses losing millions of pounds of contracts because customers get fed up of waiting for answers. Will the minister make the reforms that are essential to incentivise the retrofitting of existing homes?
I was glad to get the chance to meet Willie Rennie and industry representatives from his constituency—or people whom he has been working to represent—on some of these issues. I am keen to try to incorporate any possible improvements to the scheme to reduce bureaucracy and the wait that people experience. The indications are that we are getting through a powerful number of house retrofits in Scotland under the schemes that we run, but I am very happy to work with Willie Rennie and those whom he represents to find any possible improvements.
It is essential that we strike the right balance between our net zero obligations and ensuring energy affordability, particularly in communities with older, colder homes in rural areas such as Dumfries and Galloway and the Borders. Will the minister say a bit more about how the Scottish Government is engaging with stakeholders and local communities, including rural ones, to ensure that the balance is struck?
A number of members have, rightly, made the point about the different situations that pertain in many rural areas, where there are distinctive housing types—poured concrete is one that is prevalent in my part of the world. Unless we take account of that, we will not succeed. We must have a scheme, and a piece of legislation, that will work for all of Scotland. I agree that striking the right balance between meeting our net zero obligations and ensuring energy affordability will mean that we must take account of those crucial differences across the country.
Heat pumps are not mentioned in the statement, perhaps because the number of installations is well off target. The households that are buying heat pumps are generally older, more affluent and off the gas grid. If heat pumps are taken up more widely in urban areas, it risks the gas grid becoming a stranded asset and increasing costs for those who are unable to afford electrification. Why are heat pump installations failing, and what is the Scottish Government’s position on utilising biomethane in the gas grid?
The member asks a number of questions. The first one was about the future of the gas grid. The Scottish Government makes no apology for saying that we will have to move people off gas heating and, indeed, oil heating by 2045 if we are to be able to say that we have reached our environmental targets.
The member also raises a point about air-source heat pumps. In my constituency, I have seen a new generation of air-source heat pumps being installed in people’s houses, to the great satisfaction of those people. The heat pumps are working in a much wider variety of houses than they did previously and they are proving very popular. However, the member is right that we will have to dramatically increase the number of such installations in the years and decades ahead.
I welcome the fact that ground-source heating has been spoken about. However, for densely populated urban constituencies such as mine, in which there is no ground-source heating or for which individual heat pump installation is challenging, there will need to be reform of the Tenements (Scotland) Act 2004. I have emphasised that to the minister and the Government before. Can the Government give an update on how it is working with the Scottish Law Commission to update the 2004 act and on how changes to that act will be required so that those targets can be met in the coming decades?
I understand that the Government is working with the Scottish Law Commission on some of those issues.
The member represents Edinburgh Northern and Leith, a constituency that is virtually entirely comprised of Victorian or pre-Victorian tenements. Challenges are faced in an urban landscape like that one that may not be faced in other parts of the country, not the least of which is the challenge of trying to get all eight—or however many—households in a close to act at the same time.
I mention that not to deflect attention to the UK Government but because examples like that point to the need to open up the debate about the price of electricity. Many a heating engineer has told me, when I have been visiting their training in colleges around the country, that they would love to install large numbers of electric boilers in places such as Leith—if the price of electricity were such that it would be an attractive prospect to do so.
That concludes the item of business. There will be a brief pause before we move to the next item of business, to allow members on the front benches to change.
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