Official Report 598KB pdf
Energy Performance of Buildings (Scotland) Amendment Regulations 2026 [Draft]
Agenda item 4 is consideration of an affirmative instrument. I refer members to paper 6. I welcome back to the meeting Stephen Gethins, the Minister for Europe, External Affairs and Energy. I also welcome his Scottish Government officials: Ross Loveridge, head of the heat in buildings assessment unit; Patrick Mason, head of the heat in buildings assessment policy and technical team; and Mark Stewart, head of the heat in buildings assessment operational delivery team. I give a reminder that Scottish Government officials can participate during this evidence session, but, when we move to the next item, only MSPs can participate.
I invite the minister to make a short opening statement.
I did say that I am always keen to come back to engage with the committee, but that was slightly less of a break than we were perhaps all expecting. It is a pleasure to be here, however.
I am pleased to present the draft Energy Performance of Buildings (Scotland) Amendment Regulations 2026. They amend the Energy Performance of Buildings (Scotland) Regulations 2025, which were approved by the Parliament last December. The amendments revise the implementation timeline for Scotland’s reformed energy performance certificates from October 2026 to April 2028. The amendments are necessary to reflect the UK Government’s decision in March 2026 that its timeline for EPC reform would move from October 2026 to the second half of 2027. That UK Government decision had a direct impact on the timeline for our Scottish regulations, given that they rely on UK-wide shared technical and operational infrastructure, including the UK Government’s new home energy model.
The EPC assessor industry, represented by the Property Energy Professionals Association, supported the delay to allow additional time for the home energy model to be finalised and for assessors to be trained to use it.
I have engaged closely with representatives of PEPA this summer—I thank them for their engagement—and with my UK Government counterparts, Baroness Blake of Leeds and Martin McCluskey from the Department for Energy Security and Net Zero, through our memorandum of understanding on energy performance and buildings, to agree a new timeline for implementation of EPC reform across the UK to begin in the second half of 2027.
I have taken the decision to implement reform in Scotland from April 2028. That is a precautionary approach to provide additional contingency for any further delays and to allow the UK Government to confirm its final in-force date in England and Wales. PEPA supports that timeline, and my officials have engaged with impacted stakeholders in the property market.
The amending regulations do three things. First, they move the full in-force date of EPC reform from 31 October 2026 to 30 April 2028. Secondly, they adjust the start date for the transition periods, which give the market time to adjust to the new regulations, to 30 April 2028. Thirdly, they maintain the increase in EPC lodgement fees from 31 October 2026, as the Parliament agreed last December, which will allow us to fund work that is already under way to finalise the new digital EPC register, the Scottish version of the home energy model and the new on-site audit regime to drive up quality for consumers. The amendments do not change the substance of the EPC reforms that the Parliament agreed last December. The Scottish Government remains fully committed to those reforms, as does the EPC assessor industry.
Our objective remains to deliver a modern EPC system that provides better information for consumers through better-quality assessments. Officials will continue to work closely with industry representatives and the UK Government as the work progresses.
The revised timetable that I have set strikes the right balance between providing the industry and the UK Government with the extra time that is needed to complete preparations and providing certainty to the property market on the delivery of the reforms that have been approved by the Parliament.
I thank the committee for its scrutiny of the draft regulations, and I ask members to support them. I am happy to answer any questions.
I will start with the obvious, daft-laddie question. The fees are increasing, but the implementation has been delayed. You mentioned that the increase is to fund the work. What will fee payers get for that increase in fee?
I will pass over to Ross Loveridge in a moment. There has not been an increase in fees in some time. Obviously, the increase is needed to pay for the work more broadly. However, as I understand it, we have landed on an increase that is lower than an increase based on inflation. Ross Loveridge can give you a fuller answer.
I appreciate that the committee wants to understand this in detail. We have moved on since the Parliament approved the regulations last year. At the start of 2025, we consulted on increasing the fees. As was set out in clear detail, the increase is to fund three new areas of work that we have to take forward as part of the reform, because we share infrastructure with the UK Government, as the minister has said.
The first of those three things will be the building of the new digital EPC register, as the minister mentioned. That work is under way and the register will go live next year, before the new regulations come into force, because we were already committed to building it. Staff who previously managed the system in the Energy Saving Trust have now transferred into the Scottish Government, so that is part of the costs that we are bearing.
Secondly, there are costs associated with the development of the new calculation methodology that the minister mentioned—the home energy model. Things are not as expensive for the Scottish Government, because we are sharing the infrastructure with the UK Government, but we have to make a contribution towards the cost of the model’s development when it comes to refining it for Scotland. Work is under way to procure that this autumn, and that is part of the cost.
Finally, as the minister said, other costs will go towards developing the new audit and inspection regime.
The fees are charged in return for the benefits that the market gets from the development of the new infrastructure. As the minister said, they would have had to rise anyway, over time, because of inflation. They have not been adjusted since 2017.
That is helpful. I have a question on a different matter. In the EPC framework—I am trying to get my head around it—how do we distinguish between a building’s heat retention and the emissions from its heating system?
That is an important point. As the minister said, we are not consulting the committee on the substance of the regulations, because that is what the Parliament agreed to last year; the minister has come today with a very narrow set of amendments that relate to when the regulations come into force.
When the Parliament considered the regulations last year, we talked at length about the need to move to a new rating system, the extensive consultation that we had done and the public feedback about making a clearer distinction between the fabric of the building, including how well insulated it is, and the emissions from the heating system.
At present, our rating system does not make that distinction, which means that we can end up with perverse outcomes. For example, people might have invested in fitting heat pumps, but their EPC rating could worsen if they have switched from gas to a more expensive fuel such as electricity.
The distinction comes with the new rating system. There is a clear articulation of the emissions and efficiency of the heating system in one rating and a clear articulation of how well insulated the building is in the heat retention rating. That is the distinction between the two.
I do not oppose the draft instrument, but I want to clear something up. Some of the businesses that were consulted said that there should be a review within two years. Is the Government still open to that?
I also note that there would be an impact on older and listed buildings, and there was mention of exemptions. How can the Parliament ensure that, when the new methodology is introduced in 2029, those concerns are addressed?
Today, we are looking primarily at the timing, but there will be a review. I am happy to continue to engage with the committee on that. Given your representation of rural areas and some urban areas, I know that there will be areas that you will want to pick up on. We will look at the fees in two years’ time, and there will be some exemptions. I invite Ross Loveridge to chat about those.
11:45
Certain buildings have always been excluded from the regulations. It is quite technical, but they do not apply to, for example, unheated buildings or agricultural buildings. In England and Wales, there has been a different approach to EPCs. Historic buildings have always been covered in Scotland. That has not been the case in England and Wales, although I understand—Patrick Mason can correct me if I am wrong—that UK ministers are now considering that.
I remind the committee that, as we will have said in the materials that we prepared last year when the Parliament agreed to the regulations, the EPC regime is, ultimately, for information only. We want as many buildings as possible to receive a certificate, so that the owners, buyers or tenants of a building can understand its current and future energy performance. That is not the same thing as standards being set to require improvement in a building’s energy efficiency. Those are not matters that we are discussing today or on which we have taken decisions. However, in such circumstances, it would be important that we had consulted previously on the need for exemptions, and we would want to make sure that we had considered those fully, as the minister said.
Given the discussion that we have just had on increasing energy challenges for households, I make the point that individuals might put off decisions about energy efficiency because they do not have the disposable income to invest in, for example, insulating their home or installing a ground-source heat pump. As politicians, we should be very concerned about that, because, as we move forward with increasing global challenges, we might consider pausing that piece of work.
In the previous session, which, thankfully, is still fresh in our memories, I talked about the heat in buildings strategy and aligning some of the work in that regard. The new regulations are able to take into account things such as heat pumps, which you mentioned, in a way that they were not able to do previously if home owners had made that investment or been assisted to make that investment. The whole point is in trying to keep the regulations as up to date as possible.
There are no more questions, so we move to agenda item 5, which is formal consideration of motion S7M-00959. I invite the minister to move the motion.
Motion moved,
That the Economy, Tourism and Energy Committee recommends that the Energy Performance of Buildings (Scotland) Amendment Regulations 2026 [draft] be approved.—[Stephen Gethins]
Members have no points to make, so I invite the minister to wind up.
Convener, I put on the record my thanks to you and other committee members for their engagement on this topic. There are areas on which we will continue to engage, but I am grateful to you for your work.
I also put on the record my huge thanks to civil service colleagues for putting in a huge amount of work. It might have seemed to be a straightforward process for me, but these guys put in an awful lot of work on it, especially with the industry.
The question is, that motion S7M-00959 be agreed to.
Motion agreed to,
That the Economy, Tourism and Energy Committee recommends that the Energy Performance of Buildings (Scotland) Amendment Regulations 2026 [draft] be approved.
Do members agree to delegate authority to me, as convener, to approve a short factual report on the instrument?
Members indicated agreement.
I thank the minister and his officials for their time, and I suspend the meeting to allow them to leave.
11:49
Meeting suspended.
11:50
On resuming—