In 2021, the Scottish Government published the Heat in Buildings Strategy which set out the actions they proposed to take to decarbonise Scotland's buildings in order to deliver their ambitious climate change targets. These included introducing minimum energy efficiency standards.
In England, minimum energy efficiency standards aren’t new - The Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015 require a minimum energy efficiency standard to be met before properties can be let.
Other than for social housing, there are currently no minimum energy efficiency standards in Scotland, and for a while it has been unclear the extent to which similar measures to those already in place in England would be introduced north of the border. The Scottish Government's proposals were recently clarified, when a consultation (the Consultation) on proposals for a Heat in Buildings Bill (the Bill) was published.
A new Heat in Buildings Standard
It is proposed that there will be a new "Heat in Buildings Standard" which will seek to reduce emissions from buildings by two means:
- First, by introducing a minimum energy efficiency standard; and
- Secondly by prohibiting the use of polluting heating systems.
Minimum energy efficiency standard
The table below summarises the position in relation to minimum energy efficiency standards:
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Sector |
Minimum Energy Efficiency Standards
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Private Rented Housing
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The Consultation proposes that a minimum energy efficiency standard will need to be met by private landlords before the end of 2028 and private rented properties which don't meet the required standard by this date will not be allowed to be leased to a new tenant.
The standard to be reached is not set out in the Consultation. Instead, it lists a number of measures (for example loft and cavity wall insulation, draught-proofing and heating controls) which, if carried out, would mean that a property would be considered to have reached a good level of energy efficiency and to have met the required standard. There is also a proposal that, as an alternative, the standard could be met based on the result of an EPC assessment.
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Owner Occupied Homes (and owners of all other private homes) |
The Consultation proposes that a minimum energy efficiency standard will need to be met by owner occupiers before the end of 2033. The current indications are that there would be no prohibition on the sale of properties which do not meet the minimum energy standard by, or after the backstop dates.
As above, the standard to be reached is not set out in the Consultation and instead it lists a number of measures which, if carried out, would mean that a property would be considered to have reached a good level of energy efficiency and to have met the required standard. As above, there is also a proposal that as an alternative the standard could be met based on the result of an EPC assessment.
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Social Housing |
The Energy Efficiency Standard for Social Housing 2 (EESSH2) set a milestone for all social housing to achieve minimum standards equivalent to EPC rating "B" or as "energy efficient as practicably possible" by the end of 2032. In addition, it provided that no social housing below EPC band D should be re-let from December 2025, subject to temporary specified exemptions.
The Scottish Government are currently reviewing the EESSH2 to ensure that it is consistent with net zero targets and a consultation on a new Social Housing Net Zero Standard in Scotland (SHNZS) to replace the EESSH2 closed in March 2024. The EESSH2 standards, which contained the 2025 and 2032 energy efficiency milestones noted above have therefore been put on hold. The Scottish Government expects that the new SHNZS will be introduced in 2025 at the earliest.
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Commercial Properties |
The Scottish Government have now stated there is no intention of introducing a minimum energy efficiency standard regime in Scotland for non-domestic properties. This is said to be due to the extreme variety of size, construction and business activity which would make it impractical to set a minimum energy efficiency standard that all of these disparate properties need to meet.
Currently, where The Assessment of Energy Performance of Non-domestic Buildings (Scotland) Regulations 2016 apply (generally to commercial buildings/building units with a floor area greater than 1000m2 which do not meet the 2002 or later Scottish Building Standards), when an owner wishes to sell or let their building, they must provide the prospective buyer or tenant with an "Action Plan" free of charge. An Action Plan identifies emissions and energy improvement targets for the building and sets out the improvement measures required to meet these targets. Where an Action Plan is required, owners must choose either to carry out the improvements (within 42 months) or to defer improvement by formally reporting annual energy use (operational ratings). As the Scottish Government have now confirmed that there will be no minimum energy efficiency standards for commercial properties it remains to be seen whether these Regulations will be broadened so that more properties are brought within scope.
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Clean heating systems - all buildings
Acknowledging that installing energy efficiency measures such as insulation will not of itself remove emissions from heating buildings, in addition to minimum energy efficiency requirements, the Scottish Government is proposing that the use of polluting heating systems in both residential and non-residential buildings is prohibited after 2045. For buildings owned by a Scottish public authority it is suggested that the prohibition will kick in earlier, at the end of 2038.
After these dates, all homes and commercial properties will need to use clean heating systems.
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Polluting heating systems |
Clean heating systems
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These are direct emissions heating systems in other words, heating systems that produce direct greenhouse gas emissions at the point of use.
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These systems do not produce any greenhouse gas emissions at the point of use.
Examples include heat pumps and heat networks. Modern, efficient electric storage heaters can also perform the same role, as can electric boilers and other direct electric heating technologies.
Note: In 2023, the Scottish Government passed the New Build Heat Standard which means that no new buildings constructed under a building warrant applied for from 1 April 2024 will be built with direct emissions heating systems.
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As a pathway to the prohibition in 2045, it is suggested that those purchasing a property (both domestic and commercial) will have to end their use of polluting heating systems within a fixed period following completion of a sale. Under this proposal, the purchaser of a property will be given time - known as a grace period (suggested as two to five years in the Consultation) - to have the work carried out.
In line with the Scottish Government's ambition to accelerate the development of heat networks, the Consultation also proposes that buildings within a Heat Network Zone may be required to end their use of polluting heating systems earlier.
The Consultation also mentions that consideration is being given as to whether to apply these requirements to all commercial long leases (leases > 20 years) however this is not further explored.
Potential "cost cap" and exemptions
Given the scope and variety of buildings and owners potentially affected by the proposals, it is pleasing to see that the Consultation acknowledges that the Bill will include some important mitigating factors that may affect the timing or extent of the changes required.
For example, there is discussion about a cost cap being applied to meeting the Heat in Buildings Standard with proposals for how the cap could be designed including a "flat cap" (a fixed amount for all homes and a fixed amount for all commercial properties), a "sized based cap" (a cap that varies by floor area) or a "purchase price-based cap" (a cap that varies by property value).
The Consultation also suggests that there could be exceptions and extra time allowed to meet the standard to take account of a building's characteristics or unique circumstances. For example, extra time to meet the standard might be needed for those living in properties for which clean heating options are currently limited.
Analysis and next steps
In the current climate change crisis, it is difficult to argue against the requirement to take action to make Scotland's buildings greener and it has been clear for a while that tough action is going to be needed to meet the Scottish Government's climate change targets. Whilst a lot of the detail is still missing the Consultation addresses some uncertainties in this space and it is a useful indication of the type of changes which are likely to be required and the potential timescales for implementing those changes.
The responses to the Consultation are currently being analysed and the Scottish Government have stated that they intend to pass the Heat in Buildings Bill by the end of this term of the Scottish Parliament (in May 2026). If the Bill is passed it is likely that secondary legislation will be used to fill in many of the details and to provide specific dates from which the new laws will apply.
The proposed changes involve a significant transformation to the way we heat our buildings, and we will follow the Bill and its developments as it makes its way through the Scottish Parliament. Whilst we can't yet be sure of the exact changes and timescales involved, what we can be sure of is that the changes will have a significant impact on all owners of properties in Scotland.
