Meeting of the Parliament

Meeting date: Thursday, December 15, 2022

Official Report 1190KB pdf

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Portfolio Question Time

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Net Zero, Energy and Transport

Good afternoon. The first item of business this afternoon is portfolio question time. On this occasion, the portfolio is net zero, energy and transport. I remind members that questions 2 and 6 are grouped together, so I will take supplementaries on those questions once they have both been answered. Members who wish to ask a supplementary question should press their request-to-speak button or type “RTS” in the chat function during the relevant question.

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Heat in Homes (Hydrogen)

To ask the Scottish Government whether it considers hydrogen, as an alternative to natural gas, to be a viable solution to decarbonising heat in homes. (S6O-01692)

Across the wider economy, we expect hydrogen to play an important role in achieving net zero ambitions, particularly in sectors that are otherwise hard to decarbonise. Although it is possible that hydrogen might play some role in reducing emissions from heating buildings in Scotland, we do not expect that to be a central role. If demonstration and safety trials prove successful, blending of hydrogen and the conversion and repurposing of parts of the network to carry 100 per cent hydrogen might take place. However, at present, those are decisions for the United Kingdom Government, and we urge it to make those decisions soon.

The very trial that the minister mentioned—the H100 project, which aims to showcase hydrogen as a green alternative to natural gas—has failed to entice enough Levenmouth residents to meet its target of 300 households, despite it offering residents £1,000 worth of free hydrogen appliances and promising the same bills as those for gas. I am sure that the minister will agree that only through effective trials can we ascertain whether new technologies can truly help our journey to net zero. What has the minister done in response to the reports? What action will he take to ensure that the possibilities of hydrogen as an alternative to gas are fully explored?

We are working with the operator that is taking forward the trial and we will continue to liaise with it in response to the reports that have been cited.

However, I go back to my first answer: we are very clear that, although hydrogen might play some role in decarbonising emissions from heating buildings, it is not likely to play a central role. That is in the context of the anticipated rise in demand for export and the significant demand for green hydrogen from other industries, which do not have ready alternatives for decarbonising. In short, we think that the promise of hydrogen tomorrow must not stop us from taking action now with technologies such as heat pumps and heat networks, which are much more likely to play a central role.

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Deposit Return Scheme (Drinks Producers)

To ask the Scottish Government whether it will provide an update on how many drinks producers have registered with Circularity Scotland for the new deposit return scheme. (S6O-01693)

The window for drinks producers to register with Circularity Scotland for the new DRS opened this week. The Scottish Government does not hold information on producer registrations, but the DRS regulations require that the Scottish Environment Protection Agency, as the independent regulator, maintain and publish a list of all currently registered producers. The first version of that list will be published in March 2023.

The DRS will be the first scheme of its kind in the United Kingdom and one of the most environmentally ambitious in Europe, but some businesses in my constituency have expressed concerns about the costs of participation at a time when the Westminster-imposed cost of living crisis is hitting hard. Can the minister advise on the action that the Scottish Government is taking to support businesses, especially smaller businesses, to help address their concerns?

As the DRS administrator, Circularity Scotland is responsible for implementation, but the Scottish Government has been engaging closely with industry to ensure that a pragmatic and efficient approach is taken to implementation.

For example, in direct response to feedback from businesses, we have now published updated guidance and support for those who are applying for exemption from the DRS. In turn, that has allowed Circularity Scotland to revise the producer fees. This week, it announced that producer fees will be 8 per cent, 30 per cent and 40 per cent lower, respectively, for glass, polyethylene terephthalate—PET—plastic and metal containers. Day 1 payments for producers that are using UK-wide barcodes will also be reduced by two thirds. That has been welcomed, particularly by the British Beer and Pub Association. We have also recently announced proposals to bring forward amendments to the DRS regulations, so that only the largest supermarkets will be obliged to provide online take-back. All others will be exempted and, even for the large supermarkets, there will be a phased approach. Lorna Slater communicated all of that to the Net Zero, Energy and Transport Committee this week. Those are all examples of how the Scottish Government is determined to proceed with that environmentally ambitious scheme but, equally, to implement it in a pragmatic way.

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Deposit Return Scheme (Launch Date)

To ask the Scottish Government what its response is to the open letter signed by over 500 businesses asking for the deposit return scheme to be delayed beyond next summer. (S6O-01697)

The Minister for Green Skills, Circular Economy and Biodiversity responded directly to the letter that the member refers to, addressed concerns raised and confirmed that there would be no change to the launch date of the scheme.

As I said in my previous answer, to Marie McNair, the Scottish Government continues to engage closely with industry to ensure a pragmatic and efficient approach to implementation. I mentioned the updated guidance for retailers and the intended changes to online take-back. We are keen to make the scheme work. We know the benefits that come from DRS. We are committed to the date of August next year for implementation and will work with industry and the Scottish Environment Protection Agency to achieve that.

The smaller drinks producers are especially worried. Earlier this week, I met Own Label Company Scotland Ltd, which is based in Edinburgh and, incidentally, produces whisky for the Parliament. The company wants the deposit return scheme to succeed but faces costs and administration that threaten its survival.

With only nine months until the supposed launch, small firms are still awaiting key information. Furthermore, the Scottish Government’s review team found that a

“fully functioning and compliant DRS cannot be in operation for the revised August 2023 schedule.”

Does the minister not see that, despite her stating that no change in the launch date is planned, it makes sense to let the large firms, which can manage the launch first, resolve the problems and then launch for smaller firms? Should August 2023 be the timeline to which businesses are working?

I recognise a lot of what the member narrated. In fact, some of the actions that the Government has taken over the piece and, in particular, this week—as communicated to the Net Zero, Energy and Transport Committee—have been about recognising that much of the action should fall on the larger bodies initially. That is inherent in the fact that exemption is available for certain small outlets and the changes that will be made to our regulations for online take-back. That is about targeting the measure at large supermarkets, and even then with a phased approach.

All that demonstrates that the Government is listening. We are committed to August 2023. We are committed to that because the scheme presents the opportunity to collect 90 per cent of containers for recycling, reduce the £46 million of public money that is currently spent on cleaning up litter and reduce CO₂ emissions to the equivalent of taking 83,000 cars off the road in the United Kingdom. That is why we must pursue the scheme but, as I have said, we will do so pragmatically, working with industry.

I have a number of members wishing to ask supplementaries. I will be able to take only some of them.

I call Maurice Golden, who joins us remotely.

Today, it was confirmed that key parts of the flagship deposit return scheme are being scaled back ahead of the launch. The Scottish Government’s approach to the secretive and scandal-hit scheme is shocking. It turns out that the Scottish National Party and Greens already knew that a fully functioning scheme was not possible by next August. They were told seven months ago in a report that they kept secret until they were forced to climb down.

Given that other countries have far more quickly launched successful schemes that are cheaper for producers, will the minister confirm how many people with experience of those systems the scheme administrator employs and whether the gateway reviews routinely interview international DRS experts?

Maurice Golden mentioned reviews. The Scottish Government commissions regular reviews of major projects to ensure that issues are identified and addressed. Those of us who are accustomed to delivery are used to that.

The gateway review was undertaken more than six months ago. Since then, significant progress has been made by industry. That, of course, is reflected in the improved position of the assurance of action report in October. Although the most recent report confirms that there are challenges to overcome, it demonstrates an improving picture and confirms the feasibility of the scheme being implemented and in place for August 2023.

Maurice Golden mentioned successful schemes elsewhere that have been implemented more quickly. Perhaps he should have a word with his colleagues in the United Kingdom Government whose scheme is not as ambitious as ours and will not be implemented as quickly as ours. In the meantime, we will get on with delivering this scheme.

I think that the minister has to recognise that the sector’s confidence in the Government’s ability to deliver this scheme is at rock bottom. People in the sector are really concerned about the expense and about whether it can still be done in August. What steps will the minister take to build that confidence back up when they are convinced that, far from being pragmatic and efficient, the scheme is in fact expensive and the Government is intransigent with the date? What is the minister going to do to improve confidence so the scheme can actually work?

I said in response to Maurice Golden that our most recent report confirmed that there are still challenges—nobody is denying that—but it demonstrates an improving picture and confirms the feasibility of the scheme being in place for August 2023.

In the meantime, we are committed to continuing to work with industry, the Scottish Environment Protection Agency and Circularity Scotland, not least in the ways that I have narrated a number of times this afternoon and as Lorna Slater set out to the Net Zero, Energy and Transport Committee this week.

There is updated guidance supporting those who are seeking an exemption in whole to the scheme. In turn, there has been a substantial reduction in producer fees—8 per cent, 30 per cent and 40 per cent reductions across the different container types—and a reduction in day 1 fees, which have been welcomed by the British Beer and Pub Association. There is also, of course, the significant commitment by Lorna Slater to look again at online take-back, to restrict it to the largest supermarkets only, and to introduce it on a phased basis.

I will take a brief supplementary from Colin Smyth, and a brief answer please, minister.

The gateway report is utterly damning. It makes clear that a fully functioning scheme cannot be introduced by the date of August 2023. If the minister is saying that a scheme will be introduced on that date, will it be fully functioning? If not, what will be missing that was in the original proposals?

In the spirit of brevity, I will just reiterate that our most recent report confirms that there are challenges to be overcome but demonstrates an improving picture and confirms the feasibility of a scheme being in place for August 2023.

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Heat in Buildings Strategy

To ask the Scottish Government what progress has been made on the delivery of its heat in buildings strategy, including decarbonising homes and workplaces. (S6O-01694)

We published a report in October setting out our progress against the heat in buildings strategy. Since publication of the strategy, we have published our heat networks delivery plan and legislation requiring all local authorities to produce a local heat and energy efficiency strategy in 2023. We have also introduced a grant to replace the cashback element of Home Energy Scotland loans for homeowners.

We intend in 2023 to publish a consultation on our proposals for a heat in buildings bill and to launch our public engagement strategy, to raise awareness and support among the public for this vital transition.

The latest report from the United Kingdom Climate Change Committee issued a stark warning about the Scottish Government’s plans to deliver low-carbon heating sources and improve the energy efficiency of buildings, calling them “wholly inadequate”. That criticism comes at a time when we also learn that the Scottish Government has cut £45 million from the heat in buildings capital grant scheme.

Given that the cost of what is in the Scottish Government’s heat and buildings strategy is estimated to be in the region of £33 billion, what impact does the minister think those cuts will have on the delivery of sustainable homes, and will that be reversed in today’s budget?

We continue to invest substantially in the energy interventions that we are making, including everything under the heat in buildings agenda.

In the climate change plan update that was published in 2020, it was acknowledged, including by the Government, that we have to go further and faster as we develop the new climate change plan; it is currently under development. In fact, the welcome acknowledgement in the Climate Change Committee’s report demonstrates the need for us to bring to that area the added ambition that we are bringing.

I refer Roz McCall to comments by the British Energy Efficiency Federation, which said in response to our work:

“My advice to Whitehall is simple. Whether you take the high road or you take the low road, you had best be copying Scotland’s initiatives.”

I have previously raised with the minister the option of modifying rule 3 of the Tenements (Scotland) Act 2004 to the effect that factors and people living in multi-owner properties—which describes 95 per cent of the housing in my Glasgow Kelvin constituency—be empowered to introduce, with the agreement of a simple majority of tenants, energy saving measures such as electric vehicle charging points, solar panels or anything else that is proven to have an impact on CO₂ emissions. That simple modification would produce immediate economic and environmental benefits, and there are no obvious downsides to there being no further delay. Would the minister give serious consideration to making that very simple modification, as a matter of urgency?

I am not sure whether I need to declare an interest as a resident in one of the tenements in Kaukab Stewart’s constituency that she referred to.

We are, of course, aware that stakeholders have raised valid concerns about the existing tenant management scheme, which is set out in the Tenements (Scotland) Act 2004. The independently chaired tenement short-life working group has been empowered to consider the issue and, as the member mentioned, we await its recommendations. I am sure that Kaukab Stewart will be keen to discuss that with the Government once the recommendations are available.

To meet what is in our ambitious heat and buildings strategy and in “Housing to 2040” we need communal work in tenements to be carried out in a way that is fair and effective. We will, therefore, fully consider any changes to the TMS before making legislative change.

Question 4 is from Rhoda Grant, who joins us remotely.

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Off-gas-grid Households (Support)

To ask the Scottish Government what steps it is taking to support off-gas-grid households during the cost of living crisis. (S6O-01695)

Minister, I am sure that you have the question in writing before you; it was a wee bit unclear.

Thank you, Presiding Officer. I have a note of the question.

The Scottish Government recognises that households, especially in rural and island areas that rely on unregulated fuels for their heating instead of gas, need both general and targeted assistance. Although the powers to support off-gas-grid consumers as regards the price that they pay for higher alternative fuel costs are primarily reserved, we are taking every action that we can with the powers that are available to us, including doubling our fuel insecurity fund to £20 million for the financial year 2022-23 and introducing the new £1.4 million islands cost crisis emergency fund.

People who live off the gas grid can access air-source heat pumps only through Government schemes for boiler replacement. The cost of retrofitting installation makes that unaffordable for the average household, and far less so for those that are in fuel poverty. Will the Scottish Government reconsider funding BioLPG boilers under the Home Energy Scotland grants for those properties, which will help in reaching net zero while ensuring that those households have adequate heating systems?

I think that the current economic circumstances justify the Government’s intention to move away from fossil fuels, because overreliance on fossil fuels is part of the problem for the very consumers whom Rhoda Grant is rightly concerned about.

The Government has also recently made the package of grants and loans that are available to people much more flexible and attractive, including by a specific rural and islands uplift for the energy efficiency and zero-emission heating elements of that package of grants and loans. I encourage the member to make her constituents aware of that and to encourage them to visit the Home Energy Scotland website for further information.

According to heating oil supplier J R Rix and Sons Limited, the average price of heating oil has seen a year-on-year increase of 60.5 per cent in 2022. Households that rely on alternative fuels including heating oil and LPG to heat their homes will receive only a one-off £200 payment as part of the alternative fuel payments scheme.

Does the minister share my concern that the United Kingdom Minister of State for Energy and Climate recently informed the Scottish Parliament’s Net Zero, Energy and Transport Committee that the UK Government has no plans to regulate the alternative fuels market in the UK?

I agree with the member, and I share her concerns. The UK Government’s unwillingness to regulate the alternative fuels market will lead to more Scottish households—especially in rural and island communities—being at risk of moving into fuel poverty. It is also of concern that the alternative fuel payment, which does not come close to meeting the rising cost of alternative fuels over recent months, has not even reached consumers yet, despite having been announced four months ago.

I say again that the whole issue highlights our overreliance on fossil fuels and why it remains absolutely essential that we accelerate our transition to zero-carbon alternatives for heating our homes.

We have a supplementary from Beatrice Wishart, who joins us remotely.

What pressure can the Scottish Government continue to place on the UK Government to support off-grid customers such as those in my constituency, where the market is less competitive? Will the Scottish Government join Liberal Democrats in calling for a price cap on heating oil to support households through the cost of living crisis and in the longer term?

As I said in answer to the original question, we call on the UK Government to regulate the alternative fuels market and to ensure that the support that has been committed to is actually made available to people.

However, given our experience over a number of years of trying to get the UK Government even to sit down and talk to us about the added flexibility that we could build in through schemes such as the energy company obligation—ECO—scheme, and given its refusal to negotiate and find better ways of doing things, I think that we will all share the member’s frustration at the UK Government’s unwillingness to work with us on those matters.

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Rail Services (North-east Scotland)

To ask the Scottish Government what consideration it is giving to reinstating rail services to the north east, in particular to Peterhead and Fraserburgh in the Banffshire and Buchan Coast constituency. (S6O-01696)

An option for a new rail line between Aberdeen and Ellon and onwards to Peterhead and Fraserburgh was assessed as part of the second strategic transport projects review but did not form part of the final strategic transport investment recommendations. However, I welcome the news that the Campaign for North East Rail recently secured just transition funding to conduct a regional study into the viability of a passenger and freight railway connecting Ellon, Peterhead, St Fergus and Fraserburgh.

The Scottish Government has an exemplary record in this area, having reconnected numerous communities throughout the country to the rail network. I am extremely passionate about the Campaign for North East Rail, and it has my full support, but I recognise the challenges that the current situation of extreme financial pressures poses to such a project. The campaign is currently working on getting its feasibility study up and running. What advice can the minister give the group to ensure that it can develop as strong a business case as possible?

Back in June, I travelled to Dyce with Karen Adam and members for other local constituencies to see for myself the difference that extending the rail link back to the north-east would make. It is worth reflecting that the historic Beeching proposals cut off many of Scotland’s communities from direct access to rail, including Levenmouth in my constituency, which in 2024 will be reconnected to the network for the first time in more than 50 years.

Because of the Levenmouth case, I very much recognise the role of rail campaigners and admire their commitment to improving transport connections in their local communities. The collaborative approach that was successfully undertaken on Levenmouth rail link is a good exemplar of building community support. I worked closely with that group as a constituency member, and Ms Adam might wish to meet it to understand the approach taken to build the momentum for its railway. Of course, the CNER is a well-established campaign group and works with local businesses, community organisations and local schools, which will be vital to developing the strong business case that the member speaks of.

The Aberdeen to Laurencekirk multimodal corridor study, which was published earlier this year by the north-east of Scotland transport partnership—Nestrans—shows significant public interest in reopening two local train stations in my north-east constituency. That would be a positive development for the local economy, the environment and our emerging renewables sector. What action is the Scottish Government taking in response to the study’s findings, given the commitment in the recently announced STPR2 delivery plan to enhance choice and access to public transport?

Transport Scotland officials are meeting Nestrans and its consultants this afternoon as part of the on-going appraisal process to inform its study, which is being funded through the local rail development fund. We will carefully consider the emerging outcomes of the appraisal in the context of our wider investment in Scotland’s rail network. The strategic priorities for rail, as set out in the recently published STPR2, are to decarbonise the remainder of the network, increase the amount of freight that travels by rail and improve connectivity between our major cities.

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Strategic Transport Projects Review 2

To ask the Scottish Government when the final recommendations of the strategic transport projects review 2 will be published. (S6O-01698)

The final recommendations of STPR2 were published, along with a full suite of reports, on 8 December. It represents a key milestone for transport planning in Scotland, setting out a 20-year framework for capital investment to drive the change that we need to meet our ambitious and essential net zero goals.

A delivery plan to provide further insight on prioritisation of the STPR2 recommendations will follow next year, when there is more clarity and greater certainty on the available capital budget and fiscal policy for the coming year.

To say that the final STPR2 report is a damp squib would be an understatement. It is simply a regurgitation of what we already know.

This week, more than 70 Crocketford residents attended a meeting to voice their fears and anger that no firm commitment has yet been given to road improvements, particularly in the light of a recent accident that could have caused multiple fatalities. Will the cabinet secretary let the good people of Crocketford and Springholm know when the construction of bypasses is likely to begin, because I know that, despite the cabinet secretary’s rhetoric to the contrary, positive talks between the Scottish and United Kingdom Governments are on-going to find a way for the UK to invest in the A75, which is a route of significant importance to the whole of the UK? Will he commit to exploring the option of installing, as a matter of urgency, average-speed cameras to protect the communities from speeding drivers?

I recognise the concerns of Finlay Carson’s constituents, given the recent incident, and my thoughts are with the people who were involved in it. It is important that we take forward the process through the STPR2 mechanism, which has identified improvements to the A75. It builds on the south-west Scotland transport corridor study that was carried out, which identifies a number of areas in which improvements need to be made.

As we have already stated, that will have to fit into our capital spending programme, and we must recognise that capital investment in public sector infrastructure is under considerable pressure for a number of reasons. One of the major reasons for it being under significant pressure is that the UK Government has not kept up with the inflation that it has caused in capital budgets, which means, in effect, that our capital budgets are cut.

If Finlay Carson is really keen to ensure that there is greater investment in the Scottish trunk road network, he should be speaking to his bosses in London and asking them for more capital budget to allow us to do that. I assure him that, if the UK Government, after it has finished wrecking the economy and pushing up inflation, gets round to providing additional capital expenditure to invest in our trunk road network, the Scottish Government will be able to do exactly that across the whole of Scotland.

The STPR2 makes commitments to realign the roads around Springholm and Crocketford and to realign the Cuckoo Bridge roundabout. It is a huge issue for us in the south-west of Scotland, and those are welcome commitments, but I press the cabinet secretary on whether it is likely that the Scottish Government’s budget will include funding for work on those recommendations to be carried out in the coming financial year. When can we see shovels in the ground?

The challenge has been the delayed budget from the UK Government, which has a direct impact on our ability to manage our own budget. We had intended to publish a delivery plan alongside STPR2 but, because of the economic and political chaos that was created by the UK Government, the whole process has been delayed, and it will be next year before we can publish the delivery plan that goes with STPR2. The delivery plan will set out the areas in which investment will be made, including areas such as the A75 and other parts of the trunk road network across Scotland.

I can squeeze in question 8 if we have brief questions and answers to match.

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CalMac Ferries (Meetings)

To ask the Scottish Government when the Cabinet Secretary for Net Zero, Energy and Transport last met with CalMac representatives. (S6O-01699)

As ferries sit in the Minister for Transport’s portfolio, I regularly meet CalMac representatives. I will next meet them this afternoon.

I thank the minister for that answer, and I put on record my thanks to CalMac staff, who are working incredibly hard in the toughest of conditions, with creaking infrastructure.

Through no fault of their own, CalMac staff are employed, through a very peculiar arrangement, as part of a subsidiary on Guernsey. Given that CalMac is a Scottish-owned company that is funded by the Scottish Government and the Scottish taxpayer, which is subsidised by the Scottish taxpayer and which operates in Scotland, the reasons for such peculiar arrangements are not entirely clear. In her response, will the minister please enlighten the chamber as to why CalMac staff are employed through a company in Guernsey and what financial benefit the company may be receiving from doing so?

I think that the arrangements in question are historical arrangements.

With regard to the specifics of the governance arrangements, Mr Greene will be aware that, in September, I published the project Neptune report. A few weeks ago, members from across the Parliament met Ernst & Young to talk about some of the changes that were proposed in that report. That report looks at a potential restructuring of the current governance arrangements, and I am sure that the issues that Mr Greene has raised will be addressed in due consultation with local communities, to ensure that they receive the services that they should expect to receive in relation to the delivery of CalMac’s services on the west coast of Scotland.