To deliver Scotland’s target of net zero emissions by 2045, the Scottish Government has set out a series of sector specific policies and measures, collated and summarised in the 2020 Update to the Climate Change Plan (CCPu).

This project has developed a set of Scotland-specific whole energy system scenarios, nested in and consistent with the wider UK transition. These scenarios demonstrate three qualitatively different routes for Scotland to meet its greenhouse gas (GHG) targets, allowing different choices and potential implications to be explored. 

The three scenarios met Scotland’s annual, interim (2030) and net zero (2045) GHG targets over the modelled period 2020-2050, through different combinations of technology innovation and societal change:

1. The Technology (TEC) scenario is able to remove significant amounts of CO₂ by direct air carbon capture and storage (DACCS) and bioenergy with carbon capture and storage (BECCS) used to produce hydrogen and electricity. This reduced the level of societal change necessary to meet targets thus minimising the impact on people’s lifestyles.
2. The lower energy demands assumed in the Societal Change (SOC) scenario meant targets were achievable with far lower amounts of biomass and engineered removals of CO₂. In addition, shifts in diet from red meat and dairy, combined with ambitious programmes of peatland restoration and afforestation, meant land use became a net GHG sink.
3. Balanced Options (BOP) combined some technology innovation with some degree of societal change to meet GHG targets in a more balanced way than TEC or SOC.

To meet Scotland’s 2030 GHG target, rapid decarbonisation of the energy system is needed in all modelled scenarios.

The Scottish Government is committed to ensuring that, from 2024, new buildings applying for a building warrant must use heating systems which produce zero direct GHG emissions at the point of use.

This analysis of direct, point-of-use greenhouse gas (GHG) emissions associated with zero carbon heating technologies considered a range of technologies, including:

• Zero direct emission technologies, including direct electric heaters, electric storage heaters, electric boilers, solar thermal and solar thermal storage, heat pumps and heat networks.
• Biomass combustion.
• Hydrogen combustion and fuel cells.

Key findings 

• Direct emissions from direct electric heaters, electric storage heaters, electric boilers, solar thermal technologies, heat pumps, heat networks and fuel cells are found to be negligible.
• Biomass combustion and hydrogen combustion offer significant emissions savings compared to fossil fuel-based heating, but with varying levels of direct GHG emissions that are important to be aware of.
• A common theme across different technologies is a lack of data and research on direct emissions from both manufacturers and independent researchers; therefore, further research is needed to fill gaps and improve understanding.
• For biomass combustion for heating, there may be an important role for education and awareness raising. Information could be provided to operators/users around types of fuel and fuel quality and how these impact emissions.
• As well as supporting improved air quality, controls on fuel quality are likely to result in reduced GHG emissions.

Erratum: Please note that one sentence in the executive summary of this report, related to the middle scenario, has been updated in June 2023 to reflect the data and conclusions.

To meet the Scottish Government’s ambitious climate change targets, there will need to be a significant increase in the deployment of energy efficiency and low carbon heat measures in domestic and non-domestic buildings in the next decade. To deliver this, the supply chain in Scotland needs to be fit-for-purpose in terms of having the capacity and skills to deliver this scale of technology deployment.

This report reviews the current capabilities and skills along the supply chain of the energy efficiency and low carbon heating technologies in Scotland, identifies the skills gaps and analyses the potential options to fill these gaps to meet the targets set out in the Heat in Buildings Strategy.

Future workforce requirements

• To meet the Scottish Government’s statutory climate change targets, we estimate that the peak full-time equivalent workforce required for energy efficiency and low carbon technologies by 2030 would be between 4,500 to 5,400 installers of thermal insulation, assuming a linear growth in the number of installations.
• The study explored three scenarios of heat network uptake, alongside heat pumps and direct electric installations. The middle scenario requires 4,600-11,400 heat pump installers, 320-4,000 heat network installers and 530-1,100 direct electric installers.

Other key findings

• The view of the respondents was that there are current shortages in the energy efficiency and low carbon heat workforce, which adds to the challenge of attracting the required future workforce numbers.
• Respondents considered the landscape of different funding sources to support upskilling / re-skilling in the energy efficiency area very complex to apply for. Smaller businesses reported finding it a considerable challenge to find the most appropriate funding for their needs and to pursue with the application process. 
• Employers will need to have the confidence to invest in their future workforce as they will need to play an important part by bringing in new workforce to this field. For certain roles the route in is to take on apprentices and offer them employment after completing their apprenticeships.
• There is also a need to attract and upskill new entrants for roles which do not have an apprenticeship route. Ways to bring in more new entrants will need to be looked at and companies need to be prepared to invest in training up these new entrants.

Scotland’s Fisheries Management Strategy 2020-2030 commits to taking action to understand and mitigate the impacts of climate change on Scotland’s seas, one key aspect being to establish a “baseline [emission] per fleet segment”. The information available prior to this project does not provide sufficiently up-to-date data to define this baseline. 

This study assesses greenhouse gas emissions by vessel type. The emissions of interest are constrained to those associated with energy use on the vessel. Emissions associated with onshore activities, from transport and refrigeration, are considered out of the scope.

Key findings

• In general, the longer a vessel is, the more fossil fuel is used to power the vessel and the more it emits per day of activity. The vessel types with highest emissions in the Scottish fishing fleet are composed of the largest trawlers: whitefish trawlers over 24 metres, pelagic trawlers and large Nephrops trawlers (over 300 kW).
• The vessels emitting lower GHG per kilogramme of fish landed are large vessels using efficient fishing techniques: demersal seine, pair trawl, pair seine, and pelagic trawl.
• The vessels emitting lower GHG per £ pound sterling landed are almost all in passive gear segment under 12 metres long, with the exception of large pelagic trawlers.

Biomass has an important role in achieving Scotland’s net-zero targets, particularly through negative emissions when deployed as Bioenergy with Carbon Capture and Storage (BECCS). These negative emissions can offset residual greenhouse gas (GHG) emissions from hard-to-decarbonise sectors such as aviation and construction.

This report updates previous estimates of Scotland’s domestic biomass supply; analysis of the demand for biomass within published decarbonisation pathways; and assesses the scale of BECCS required to achieve negative emissions in the pathway set out in the CCPu.

Key findings

Our estimate of the total current (c. 2020) bioresources produced in Scotland and used for bioenergy annually is 8.9 TWh. Of this, around 8 TWh/year are ‘dry bioresources’ (e.g. wood) suitable for combustion to generate power and/or heat, and 0.9 TWh/year are ‘wetter’ resources (e.g. wastes) more suited for anaerobic digestion to produce biogas, biomethane or more complex biofuels. An additional 3.6 TWh/year is currently available for bioenergy but is not used.

The Scottish TIMES model total annual demand for bioenergy increases from 8.4 TWh in 2020 to 27 TWh in 2030, and 26 TWh in 2045. The simulated bioenergy demand in Scotland in the Climate Change Committee’s 6th Carbon Budget ranges from 7.6 TWh in 2020 to 10.3 – 23.5 TWh in 2045.

Our analysis shows that bioenergy demand in 2030 and 2045 in the Scottish TIMES pathway is higher than our estimates for available domestic bioenergy resources.

Our analysis concludes that in order for Scotland to achieve both the 2030 and 2032 BECCS component of emission removal envelopes via BECCS power, the equivalent of two 500 MWe power plants will be needed.

This report reviews the scholarly literature and case study data regarding the role of public sector agencies in accelerating technological innovation. The aim is to inform heat decarbonisation policy discussions in Scotland, and the developing plans for a Scottish ‘low-carbon heat hub’.

The report is split into three main sections: design principles for innovation agencies; types of innovation agencies; and specific activities of innovation agencies.

Themes and conclusions

Persistent issues relevant to the Scottish policy discussion surrounding innovation agencies and energy sector transition heat decarbonisation are:

• The limits of general classification: the importance of tailoring an innovation agency to meet the particular policy goals, and the strengths and weaknesses of a given region.
• The need for a system-wide approach: while the design and function of a specific agency is important, it is vital to consider their complementary role within a wider innovation system
• The tension between autonomy and embeddedness: the need to consider the effect that close linkages between innovation agencies and public and private sectors can have on institutional autonomy, and the impact this can have on the balance between urgent policy implementation goals and more emergent and perhaps radical long-term innovations.

As set out in Scotland’s energy strategy, the Scottish Government has set targets for the equivalent of 50% of the energy for electricity, heat and transport consumption in Scotland to come from renewable energy by 2030 (estimated at 25.4% in 2020).

Access to high quality reliable data is essential in providing the evidence base to inform the development and implementation of effective energy policies and track progress. This project develops new and improved methodologies for collecting and assessing energy data in Scotland on some categories of electricity and heat demand.

For electricity, this involves: electricity use in properties; electricity use for heat pumps; and low-carbon energy use in transport.

For heat, this involves: weather correcting heat demand; heat demand across different fuels and sectors in Scotland; and emissions factors for different heating fuels and sectors.

This report investigates the potential for demand-side policy interventions to incentivise the decarbonisation of Scotland’s energy-intensive industries (EIIs). EIIs are a significant contributor to both Scotland’s economy and its environmental footprint, accounting for approximately 4% of economic output and 15% of greenhouse gas (GHG) emissions. Reducing emissions from these sectors will be a necessary condition for Scotland to meet its decarbonisation objectives.

The report provides an overview of the evidence relating to the design of demand-side policies to influence EII emissions – measures that influence the purchasing decisions of public sector organisations, private businesses and consumers to reduce their demand for emissions-intensive products. It includes two in-depth case studies of emissions measurement and benchmarking – the cement and whisky sectors.

The research aims to:

• identify and categorise the products currently manufactured by Scottish EIIs;
• understand the size and nature of these markets;
• summarise the main influences governing buyer decision-making in these markets; and
• identify relevant and impactful demand-side policy interventions for Scotland.

In doing so, it addresses four broad policy questions:

• What demand-side policies do other jurisdictions use to decarbonise EIIs?
• Which of these types of policies could be implemented in Scotland?
• How effectively could these policies influence purchasing decisions?
• Which EII sectors and products should demand-side policies prioritise?

It finds that:

• Two constraints affect the ability of the Scottish Government to implement such demand-side policy interventions: reserved matters which the UK Government has not devolved to the Scottish Government and international trade law. 
• The drivers of purchasing decisions vary by buyer type. 
• Demand-side policies are more likely to be effective if they target those EII sectors with the largest emissions-reduction potential and the largest share of domestic consumption as these policies primarily target domestic buyers. 
• Policymakers should account for a range of considerations when determining which policies to prioritise in the Scottish context. 
• Evidencing lower-carbon production is important regardless of the demand-side policy.  

Reducing emissions from our homes and buildings is one of the most important things we can do to help end Scotland’s contribution to climate change. Over the next 24 years Scotland’s homes and workplaces must transform, so they are warmer, greener and more efficient. This Heat in Buildings Strategy, which updates both the Energy Efficient Scotland Route Map and the Heat Policy Statement, sets out how we will achieve that ambition.

Ministerial foreword, Heat in Buildings Strategy, October 2021

Over a two-year period, ClimateXChange commissioned and coordinated a substantial body of research in heat decarbonisation, one of the most challenging areas for achieving net zero.

• Our research directly contributed to, and provided a solid evidence base for, the Scottish Government’s Heat in Buildings Strategy.
• The research was wide-ranging and accessible, highlighting ClimateXChange’s ability to access a breadth of expertise and our skill in communicating complex issues simply.
• As part of the research, we facilitated valuable knowledge exchange between academic researchers and policymakers.

Transforming every property

Decarbonising the heating of homes and non-domestic buildings is among the most significant challenges Scotland faces to achieve net-zero emissions by 2045. Homes accounted for 13% of Scotland’s greenhouse gas emissions with non-domestic buildings contributing a further 7%, according to 2019 Scottish Government figures used in the Heat in Buildings Strategy. As set out in the 2020 Climate Change Plan update, these emissions will have to fall by 68% by 2030, compared to 2020 levels – a substantial undertaking from both the technological and policy perspectives. By 2045, virtually every property will need to have a low-carbon heating system, together with considerable energy efficiency improvements.

The options for decarbonisation

The challenge of decarbonising heat requires changes across the sector – from replacing natural gas with hydrogen and re-using waste heat to installing heat pumps and stimulating the market for low-carbon heating. In all, in 2020 and 2021, ClimateXChange produced 13 pieces of heat-related research exploring the many different aspects of, and options for, decarbonisation. These fed into – and provided a solid evidence base for – the Heat in Buildings Strategy, released in October 2021. Six of our reports were published at the same time.

As a basis for the individual projects, we facilitated knowledge exchange between academic researchers and policymakers, including organising a Scottish and Danish Government workshop, over two half-days, to consider policy-relevant lessons from research on heat decarbonisation for off-gas grid residential buildings.

“The portfolio of commissioned research through CXC has been a valuable resource to draw on in developing the Heat in Buildings Strategy. We have been able to access a wealth of evidence and research insight across a range of technology, economic and social issues – from questions on the potential use of hydrogen for heating to lessons from transition policy approaches in other countries. It would be very difficult to get this solid and accessible evidence base to inform heat in buildings policy without support from a centre like CXC.“

– Ragne Low, Head of Heat Strategy, Scottish Government

There are a number of environmental and social policies in the GB energy market. Some of these are funded through commitments placed on energy companies. As part of their bills, domestic and non-domestic energy consumers face a number of levies intended to support measures such as the deployment of low-carbon and/or renewable sources and the installation of energy efficiency measures.

This review seeks to understand whether rebalancing of levies and charges between electricity and gas supplies might impact the deployment of low-carbon and renewable heat in both domestic and non-domestic settings.

Findings

• Evidence suggests that energy pricing is not the main consideration in the use of heating technologies by domestic or non-domestic consumers; other considerations including upfront costs are significant.
• Under current energy tariff structures, heat pumps are unlikely to offer running cost savings compared to gas boilers as a result of the electricity demand associated with running a heat pump. Indicative analysis highlights that the removal of levies in the current energy tariff structure would bring the running costs of heat pumps and gas boilers considerably closer together in a typical domestic situation.

There are a number of different potential options for reform that could potentially address this issue, subject to further consideration of their wider impacts. These include:

• Moving levy cost recovery to a non-energy volumetric basis. This could include a flat per household charge, or linkage to specific metrics such as location, income, or heating fuel.
• Splitting the recovery of levy costs between gas and electricity tariffs.
• Introduction of a ‘heating allowance’ to remove the levying of policy costs on energy used for heating purposes.
• Encouraging voluntary actions by suppliers to rebalance levy cost recovery away from electricity.
• Moving levy costs from energy bills to general taxation.