Chamber and committees

Yes, indeed. The new deal for tenants consultation set out our vision for a rented sector that plays a part in ensuring that everybody has access to a warm, safe, affordable and energy-efficient home. In October, a report on the cost of living showed that some 46 per cent of households in the private rented sector will be in fuel poverty. That is double the rate of owner-occupier households in fuel poverty.

We want the rented sector, whether that is social or private, to provide tenants with good-quality homes that reduce their energy bills but also help to deliver our net zero aims. The regulations on which we are currently consulting will seek to achieve that.

As I said in my first answer, we have commissioned further research. I reinforce the fact that the proposals come as no surprise to anyone in the private rented sector. This has been policy for a long time, and the proposals not only allow an extra five years for compliance but propose an alternative means of meeting the standards by simply working through a standard checklist of applicable measures. That will make the approach flexible, easy, affordable and less disruptive to ensure that the energy efficiency standards are met.

The result will be an approach unlike elsewhere in the United Kingdom, where similar proposals were scrapped by the Prime Minister recently, adding some £300 extra a year on to the energy bills of private rented sector tenants. Mr Stewart might think that that is acceptable, but the Scottish Government does not think that it is. We will save private rented sector tenants money on their energy bills. That should be a natural expectation when people rent their homes.

I encourage Mr Lumsden to read the detail of the consultation documents that we have published today—

I am not sure whether the member wants to hear the response.

We engage with network operators and the Office of Gas and Electricity Markets on that. Ivan McKee is quite right that the application of electrification for heat and transport has implications for grid upgrades, but it also offers opportunities. As we create more storage, in relation to either vehicles or domestic energy through heat or electricity, there will be the opportunity for energy providers to use smart tariffs to ensure that we get the maximum benefit from low-cost renewables when they come on to the grid in large volumes. People will then be able to use that energy when they need it. There are therefore advantages to the issue, not just challenges in relation to grid upgrades.

As I said, we engage actively with network operators and Ofgem. We believe that there is capacity in the system to continue to develop in line with the trajectory that we are taking on heat decarbonisation. I am sure that the Net Zero, Energy and Transport Committee will continue to take an active interest in the matter in the months and years ahead.

It is important that we not only take account of the cost of living pressures that many people have faced in the past couple of years—that is one reason why we have to adapt our plans to cope with what people can realistically afford—but look through the implications of the UK Government climbdown on climate a couple of months ago.

Some of the direct impacts from Rishi Sunak’s bizarre speech announcing the scrapping of climate action will be felt more significantly in England. However, we already see the UK slipping down the league table of green investment, and that will have an impact if we do not counter that narrative here. As investors look across Europe and the wider world in considering where they want to put their money in investing in net zero, it is important that we send a crystal-clear signal that Scotland is serious about getting the job done and about making this an attractive place for the investment to come to make that possible.

On the commitments that we have already made, Sarah Boyack is aware that we have committed £1.8 billion over the course of this session of Parliament. More than £1 billion of that has already been committed through the budget process, at the halfway point in this session. We will continue to build on that strong track record.

I am sorry that Rhoda Grant got that impression. In my statement, I addressed the issue of energy efficiency standards in the private rented and owner-occupied sectors. There is also detail on that in the consultation documents.

The work that we have done prior to the current consultation on reform of energy performance certificates addresses how we give people the information that they need to invest in their homes in order to reduce energy demand. The work that we have done to extend the fabric-first measures—the energy efficiency-only measures—in the social rented sector is also important. The social rented sector asked us to extend the funding for that type of investment, and we have responded positively to that.

The reality is that, as a result of the decisions that I have announced, Scotland will have far and away the most ambitious programme of heat decarbonisation of any part of the UK. That is a very sharp contrast with the UK Government’s announcements on scrapping important measures on energy efficiency. In a pantomime bit of rhetoric, it announced that it was scrapping some non-existent policies, but it scrapped significant policies on heat decarbonisation as well. The Scottish Government is taking the opposite approach—an approach that is achievable and affordable but also ambitious—and is ensuring that we offer the most generous package of grants and loans to householders in Scotland to ensure that it is achievable.

Absolutely. I have been clear in my statement about the 2028 target that we intend to bring forward on minimum energy efficiency standards for the private rented sector. Mark Ruskell rightly highlights the cumulative impact across the whole UK of the UK Government’s decision to scrap that policy. On the household-by-household impact, some £300 a year has been added to the bills of PRS households because of that decision by the UK Government to scrap its policy. We will not impose those additional costs on people. If the UK Government was remotely serious about making the transition to net zero affordable, it would have broken the link between electricity and gas prices, rather than adding even more to the energy bills of people in the PRS. That is not the approach that Scotland will take.

The climate crisis is, of course, the greatest challenge of our age. Scotland has halved its emissions since 1990, but the most challenging part of the journey lies ahead. The First Minister and the Cabinet Secretary for Transport, Net Zero and Just Transition will be at the 28th United Nations climate change conference of the parties—COP28—this week to share our experience and learn from others about how we can secure a future for people and planet.

We have a legal obligation to make that journey to which all parties in Parliament signed up. However, we are making that journey not just because the law says that we must and floods and fires show us that we have to act. It is not even just because of the huge economic opportunity for Scotland, which we have set out as one of the Government’s three defining missions. Fundamentally, doing so is in the interests of the people whom the Parliament represents. That is true of the way that we heat our homes and buildings. There is the opportunity to free people from dependence on fossil fuels and the volatile prices that drive fuel poverty, and to free the world from reliance on the brutal and authoritarian regimes that control so much of the global fossil fuel market.

That is why today I am publishing consultations on proposals that, if Parliament approves them, will give the leadership and clarity that Scotland needs to make the transition to clean heat by 2045.

I have had the great fortune in this job to see at first hand the countless examples of the heat transition that is already under way. A retired man told me about how clean heating had transformed the comfort of the suburban bungalow that he and his late wife had shared for decades. A family in Lochaber were amazed by the reduction in their bills after moving from liquefied petroleum gas heating to a heat pump. New homes from Shetland to the centre of Edinburgh are being built to a zero emissions standard by developers who are choosing to act well ahead of our new build heat standard, which will come into force next April. I visited a heat pump manufacturer in Glasgow that is investing in the new jobs and skills that Scotland needs, and I have listened to how Argyll Community Housing Association already has more than a quarter of its 5,000 homes using heat pumps. It is one of many social landlords that are leading the way in some of Scotland’s most rural settings. Just yesterday, I visited the new heat network at Edinburgh’s waterfront, which is one of a rapidly growing number of heat networks in Scotland.

The move to clean heating is not just for tomorrow; it is already here today. Our role, for which all parties in Parliament share a responsibility, is to provide the certainty and long-term time horizon that will accelerate that growing trend, which will give households the information that they need to plan and give businesses the confidence to invest. We will do that by providing the most generous package of financial support in any of the UK nations. Just last week, I welcomed “Green Heat Finance Taskforce Report: Part 1”, which outlined the enormous appetite from private funders to support such work.

We do this in stark contrast to the UK Government, which seems more interested in exploiting climate as a political dividing line than in rising to the challenge. The Prime Minister’s climate U-turns in September may have a bigger direct impact in England, but his signals have a profound impact on what consumers hear and what businesses need throughout the UK.

Today, we take our approach forward by setting out a clear framework of regulation that takes us from now to 2045 and works with the gradient of consumer demand and industry capacity. First, to tackle fuel poverty, reduce energy bills and increase home comfort, we intend to regulate to ensure that Scotland’s homes meet minimum energy standards. Privately rented homes are to meet a minimum energy efficiency standard by no later than 2028, and owner-occupied homes are to meet the same minimum energy efficiency standard by 2033. A new net zero standard will apply to homes in the social rented sector, which will mean meeting a new and higher energy efficiency standard between 2033 and 2040 and all homes moving to clean heat by 2045.

Secondly, I want to help heat networks to grow to meet their full potential of supplying up to a third of heat demand. There are more than 1,000 heat networks in Scotland, but many are small. That is why we are consulting on new powers to safeguard locations and circumstances where heat networks are most attractive and to ensure that heat networks are viable in those places.

Thirdly, we are consulting on all homes and non-domestic buildings ending their use of polluting heating by 2045, with staging posts along the way to avoid a bottleneck as we approach that deadline. If that approach is agreed to, in the first instance, people who buy a home or non-domestic property before 2045 will end their use of polluting heating systems within a specific and reasonable period following that purchase, with a set of exemptions and abeyances to reflect different circumstances.

Fourthly, to demonstrate public leadership, we intend to set an earlier target of 2038 for all public buildings to have clean heat.

I will now address issues of timing, scale and pace. I have confirmed that the key dates in our 2021 “Heat in Buildings Strategy—Achieving Net Zero Emissions in Scotland’s Buildings” remain in place—they are 2028 for minimum energy standards for privately rented homes, 2033 for minimum energy standards for other private homes, 2038 for public buildings to be zero carbon and 2045 for all buildings to be zero carbon.

Our intention is to have in place by 2025 the main legislative foundation for the heat transition. I have worked through stakeholder feedback, detailed evidence and the very significant changes in the cost pressures that households and businesses have faced in the past two years, and I can now set out a more detailed timescale for the current decade.

If Parliament has, by 2025, passed the bill that I intend to introduce, detailed secondary legislation will be required, and it will be the next parliamentary session before those regulations have an impact. To ensure that we are fair, just and proportionate, it might be 2028 at the earliest before the first home or building owners are required to act under those regulations.

In turn, that timeline has two implications. First, the position that we set out in our 2021 strategy of starting the heat transition at different times in off-gas and on-gas areas—in 2025 and 2030 respectively—is no longer our intended approach. A single timeline that takes effect from 2028 will be fairer and clearer. We will still take account of the different contexts in urban and rural areas, but we will do so through our delivery programmes, our funding and our use of exemptions rather than through primary legislation.

Secondly, our intention for clean heat to play the maximum possible role in our 2030 climate plans would have meant more than 1 million homes decarbonising by 2030, but the single timeline that I have now set out from 2028 means that that scale of change is not achievable by that date, and more of the transition to clean heat shifts into the early 2030s instead. That approach allows us to gain the full benefits of the technological innovation that is already taking place to build the workforce capacity, consumer demand and economies of scale that we will need.

The timeline that I am outlining today will place Scotland on by far the most ambitious path within the UK, with the deployment of clean heating systems at scale and at a pace that is very much faster than the prevailing take-up rate. Coupled with our pioneering work on the new build heat standard, on standards for social housing and on energy efficiency, it is clear that, by driving the development of heat networks into the next decade and beyond, and—to repeat—by providing the most generous package of funding support in the UK, Scotland can have the most ambitious zero carbon programme for buildings that has ever been seen in the UK.

I know that some people in this chamber and beyond regard clean heating merely as the latest front in a climate culture war. They can expect to be disappointed. The days of heating our homes and buildings with fossil fuel and polluting systems are numbered. However, during the consultation, I intend to take an open and constructive approach with any MSP or party that chooses to take the issue seriously. That approach extends beyond political parties to a wide range of stakeholders, from businesses investing in clean heat to fuel poverty campaigners, and from private landlords to funders. Bring forward positive ideas and I will listen. The consultation and our final proposal will be shaped by those views.

However, those who wish to pretend that the heat transition is not necessary, who want to treat it as a shallow political game or who trade in vague promises with nothing to back them up will not only be abandoning the commitments that they made when they voted for the climate targets and betraying the clear majority of the public who want ambitious climate action; they will be undermining Scotland as we seek the maximum social, environmental and economic opportunity from this ambitious transition. That would serve no one.

Today is the next big step in meeting our climate ambitions and embracing a warmer and cleaner future. Let us all rise to that challenge.