Research completed March 2026

DOI: https://doi.org/10.7488/era/7089

Executive summary

Background and aims

The Scottish Government has made successive commitments to delivering a just transition to a net zero and climate resilient Scotland. As part of this, it is important to understand, as far as is practicable, the extent to which transition processes and outcomes are just. Recent years have seen proactive efforts by the Scottish Government and others to develop monitoring and evaluation (M&E) frameworks for a just transition in Scotland. These made progress but the Scottish Government found they were not yet ready to be implemented in practice.

ClimateXChange commissioned this research on behalf of the Scottish Government to deliver a proposal for a just transition M&E framework that prioritises rigour and practical applicability. The project was led by the University of Edinburgh and delivered by a ClimateXChange Research Fellow embedded in the Scottish Government.

This report is independent: it is not Scottish Government policy, nor does it reflect Scottish Government policy positions.

Results – The framework

This project developed an M&E framework for a just transition to a net zero and climate resilient Scotland, informed by a Theory of Change approach. The proposed framework is made up of four outcomes, each with a set of indicators (number of indicators in parentheses):

• Communities and Places (12),
• People and Equity (13),
• Jobs, Skills and Economic Opportunities (17),
• Environment and Biodiversity (8).

There are 50 outcome indicators in total. The framework also identifies 15 summary indicators which are selected from the 50 outcome indicators. These are intended to provide a high-level overview of progress that can be more easily communicated than the full indicator set.

Figure 1 provides an overview of outcome indicators in the M&E framework. These are categorised by outcome, target population, summary indicators and data availability. Some of the proposed indicators cannot be monitored with existing data.

In addition to outcome indicators, this framework proposes a set of 23 indicators for monitoring key sites of transition, or ‘hotspots’. Hotspots are defined as places directly impacted by industrial change or by net zero developments. This project also examines possible anticipatory approaches for early warning identification and monitoring of hotspots, transition risks and opportunities.

Stakeholder engagement is identified as fundamental for just transition M&E. It is presented as a tool for qualitative data collection, an approach for monitoring and indicator interpretation, a real-time tool for risk mitigation and a method for the anticipation of potential transitions.

Framework limitations

• Data availability, timeliness and scale: There are data gaps for some key just transition concerns. Data availability, quality and coverage also vary at local, regional and national scale. In addition, they do not always match the scale of concern (e.g., local authority data does not represent the sub-local authority Grangemouth and Falkirk towns). Most indicators are published with a time delay and will not reflect transition impacts in real time.
• Framework structure, design and development: This project provides a detailed approach to monitoring a just transition in Scotland and to interpreting outcome indicators. Further work is needed to support evaluation of why a just transition is / is not being achieved.
• The proposed M&E framework emphasises the essential role of regular stakeholder engagement to inform all dimensions of M&E. Effective stakeholder engagement in resource constrained contexts can be challenging and may limit implementation.

Recommendations for just transition M&E

• Start now: test and refine the proposed approach through data collection and indicator interpretation across outcome and hotspot indicators. This will enable an assessment of the practical applicability of the framework and its ability to capture just transition concerns in the Scottish context.
• Identify the conditions necessary for just transition delivery and develop approaches to evaluation. This will include attention to issues of governance, responsibility and policy responsiveness to just transition M&E.
• Develop qualitative engagement tools and analytical approaches as part of just transition M&E, to support the identification of transition risks, indicator interpretation and evaluation.
• Implement more integrated approaches to data collation and sharing across Scottish Government and with external stakeholders.
• Fill critical data gaps, including but not limited to (i) workforce transitions in high emitting sectors, (ii) business vulnerability and adaptation to climate change and net zero, (iii) household vulnerability and resilience to climate change and (iv) land use change implications for a just transition.
• Test and refine anticipatory uses of just transition M&E to identify and monitor sites of transition before transitions are underway. This can support the anticipation of risks and opportunities and inform responsive policymaking.
• Use M&E to improve communication with external stakeholders about transition efforts towards net zero and climate resilience, including successes and challenges. Consider the use of data management and visualisation tools such as dashboards, websites and reports for data management, communication and reporting.

Figure 1. Outcome indicators in the just transition M&E framework. Categorised by outcome, target population, summary indicators and data availability.

Glossary

Abbreviations

List of figures and tables

Figure 1. Structure and parts of the full Just Transition M&E framework. 12

Figure 2. Visualisation of the four outcomes of a JT to a net zero and climate resilient Scotland. 14

Figure 3. Outcome indicators in the JT M&E framework. Categorised by outcome, target population, summary indicators and data availability. 15

Table 1: Methods used in the development of the JT M&E framework. 7

Table 2. Outcomes, M&E framework for a JT to a net zero and climate resilient Scotland. 13

Table 3: Summary indicators for the JT M&E framework. 18

Table 4: Communities and Places outcome for the JT M&E framework. 21

Table 5: People and Equity outcome for the JT M&E framework. 23

Table 6: Jobs, Skills and Economic Opportunities outcome for the JT M&E framework. 25

Table 7: Environment and Biodiversity outcome for the JT M&E framework. 27

Table 8: Hotspot indicators, by hotspot ‘type’ and data source. 36

Introduction

The Scottish Government has made successive commitments to integrating Just Transition (JT) into its policymaking processes and outcomes. JT principles were integrated into the Climate Change Act (Scottish Parliament, 2019) and the Just Transition Commission (JTC) was established with an independent scrutiny role. The Government also published a National JT Planning Framework (2021); draft sectoral JT plans for energy (Scottish Government, 2023), transport (Scottish Government, 2025a) and agriculture and land use (Scottish Government, 2025b); and the Grangemouth Industrial JT Plan (Scottish Government, 2025c). Most recently, JT indicators were included in the Climate Change Plan (CCP) published in March 2026 (Scottish Government, 2026b). The Government also committed support for a JT through the Just Transition Funds for Grangemouth and for the North East and Moray (Scottish Government, 2025c; Scottish Government, 2026c).

JT monitoring and evaluation (M&E) approaches remain in their infancy for various reasons. Defining what is captured within the scope of JT is challenging. In addition, there are difficulties in developing national-level frameworks which also reflect the experiences and needs across people and geographies. There are challenges around the temporal nature of the transition, including the ways in which responsibilities, costs and benefits are spread across generations. The transition to net zero and climate resilience also faces uncertain impacts and unintended consequences, including from unpredictable economic, geopolitical and climatic shocks. From a practical perspective, there are clear data weaknesses and gaps for JT monitoring in Scotland (e.g., Drabble et al. 2024). Finally, there are limited examples of applied frameworks for JT M&E worldwide.

Scotland is embarking on the transition to net zero and climate resilience from a baseline of inequality and existing, legacy injustices (Drabble et al. 2024). The cumulative impacts of climate change, climate adaptation and decarbonisation risk entrenching injustices and creating new ones. At the same time, the systems-wide net zero transition is also an opportunity to correct historical injustices while improving equity, wellbeing and justice in Scotland; goals aligned with the Scottish Government’s JT outcomes in the National JT Planning Framework (2021). It is essential that the Scottish Government can understand, as far as is practicable, how the transition is unfolding, and whether the associated processes and outcomes are just.

Recent years have seen proactive efforts to develop JT M&E approaches in Scotland. Research by the Just Transition Lab in Aberdeen and Aberdeenshire advanced understandings of place-based JT monitoring grounded in local priorities (Shapovalova et al. 2023). The second JTC published various place-based reports (e.g., in Shetland (Voar, 2024), Dumfries and Galloway (2025a) and Aberdeen and the North East (2025b)), showcasing the unique characteristics of net zero transitions in different parts of Scotland. The JTC also published a national JT Theory of Change (ToC) and M&E framework (Drabble et al. 2024). The latter was subsequently translated into the Grangemouth local context (Jenkins et al. 2025). While these works took JT M&E further and provided a broad overview of JT and M&E concerns, the Scottish Government found they were not yet ready to be implemented in practice.

This project was commissioned by ClimateXChange on behalf of the Scottish Government. The aim was to develop a rigorous and pragmatic JT M&E framework that could be made operational by the Scottish Government. As such, it builds on existing work and departs from it, informed by additional empirical stakeholder engagement and a review of the most recent evidence.

The project was led by the University of Edinburgh and delivered by an independent ClimateXChange Research Fellow embedded in the Scottish Government. This report sets out a proposed JT M&E framework and recommendations for JT M&E implementation for the Scottish Government. The report is independent: it not Scottish Government policy, nor does it reflect Scottish Government policy positions.

Conceptualising JT ‘Monitoring and Evaluation’

The term ‘Monitoring and Evaluation’ (M&E) encompasses a range of practices for tracking, measuring and assessing progress towards identified goals. M&E also analyses the degree to which implemented actions supported the delivery of those goals (HM Treasury, 2026; HM Treasury, 2020; Adindu, 2010; Estrella and Gaventa, 1998). The use of M&E frameworks is widespread, often to assess the impact of specific delivery programmes or interventions (e.g., Adindu, 2010).

A ‘JT’ is often not contained to a single policy or project and for some, is an overarching societal goal. Responsibilities and influence over a JT are spread across a variety of stakeholders and its achievement is often conditioned by a broader, shifting context. In this way, it can be comparable to the Sustainable Development Goals (United Nations, n.d.) or aspirational visions of national wellbeing, as reflected in Scotland’s National Performance Framework (currently archived and under revision) (Scottish Government, n.d.).

In Scotland, both Scottish Government policy (e.g., Scottish Government, 2021a) and JTC published reports (e.g., Just Transition Commission, 2024, 2025a, 2025b; Voar, 2024; Drabble et al. 2024; Jenkins et al. 2025) define the JT in expansive terms. This includes a spread of intersecting concerns including employment; community participation and empowerment; the distribution of benefits; industrial change and existing socio-economic inequalities, across scales and sectors. Further increasing complexity, the JT is characterised both as a “process” and “outcome” (Scottish Government, 2021a, p.5; e.g., Jenkins et al. 2025, p.27). So, a JT is as much about the just-ness of how the transition develops, as about the impacts it creates.

In the context of specific delivery programmes, policies or interventions, ‘monitoring’ is the “process of continuously tracking the progress and performance of an intervention, to provide data on whether it is being delivered as intended” (HM Treasury, 2026, p.72). It involves tracking specific data points over time that relate to the overall goal. The cross-cutting, multi-dimensional and multi-stakeholder nature of JT makes such an approach challenging. In the Scottish Government, many policy areas relate to, impact and condition JT delivery, from economic development through to poverty, agriculture, planning or technological development (e.g., Scottish Government, 2021a). Although there is a central JT Unit within the Scottish Government, there is no single, neatly bounded programme for JT delivery.

In a policy context, evaluation can be defined as: “a systematic assessment of the design, implementation and outcomes of an intervention. It involves understanding how an intervention is being, or has been, implemented and what effects it has, for whom and why” (HM Treasury, 2020, p.5). Evaluation is also broader, however, referring to “the process of judging or calculating the quality, importance, amount, or value of something” (Cambridge dictionary, n.d.). It is possible to evaluate what happened, how it happened and/or why it happened. These three types of evaluation are different, require different approaches and all apply in the context of assessing progress towards a JT.

This project understands ‘monitoring’ and ‘evaluation’ as interdependent practices necessary to comprehend the just-ness of the transition to net zero and climate resilience in Scotland. This interdependent approach underpins the conceptualisation and structure of the proposed JT M&E framework. Indicators were selected based on key, monitorable areas related to JT outcomes. Indicator selection was also underpinned by the framework’s evaluation objectives, based on a dual understanding of evaluation as assessing what is happening, and why. Said another way, the framework was designed to enable both an assessment of the just-ness of the transition, and an assessment of why particular impacts have come about.

The framework takes inspiration from ‘Theory of Change’ (ToC). In simple terms, ToC can be defined as “the hypothesis about the way that a program brings about its effects” (Dhillon and Vaca, 2018, p.65). ToC has been identified as a useful tool to design transformational social interventions (Simeone et al. 2023) and has been used by the Scottish Government to inform M&E frameworks for complex, multi-dimensional phenomena. Examples include the third Scottish National Adaptation Plan (SNAP3) M&E framework (Scottish Government, 2024a), and the Grangemouth Industrial JT Plan (Scottish Government, 2025c). Drabble et al. (2024) also used a ToC approach to inform their development of a JT M&E framework for Scotland.

ToC informed M&E frameworks often contain two key dimensions: outcomes and mechanisms. Outcomes are medium term goals, or ‘what success looks like’; while the mechanisms or enablers are the ‘conditions for success’ (Drabble et al. 2024, p. 42). Because mechanisms focus on the conditions for successful delivery of the outcomes, they can support evaluation of why progress is being made.

Drawing on ToC and the JT M&E framework developed by Drabble et al. (2024), the proposed M&E framework is designed to include both outcomes and mechanisms. Within this structure, this project has prioritised (a) outcome identification and refinement and (b) indicator development for monitoring. As currently developed, the framework therefore enables JT monitoring and supports evaluation of what is happening in relation to JT outcomes, but not how or why. The framework’s design enables the future integration of mechanisms to support evaluation of why JT progress is underway. This responds to the project specification to develop:

1. High-level quantitative metrics for JT M&E in Scotland,
2. Qualitative evaluation proposals to support indicator monitoring, including attention to place-based activity and the experiences of the most vulnerable to negative transition impacts, and
3. A proposal for an integrated and practical approach to JT M&E that combines quantitative and qualitative approaches in a coherent theoretical framework.

Project methods and report structure

Methods

The methods used to inform the proposed M&E framework and related recommendations are summarised in Table 1.

Table 1: Methods used in the development of the JT M&E framework.

The Research Fellow was embedded within the Scottish Government Climate Change Analysis Team in close collaboration with members of the JT Unit. This enabled engagement across government teams, attendance at relevant internal webinars and workshops and direct involvement in discussions on a variety of relevant JT topics. It also informed the methods detailed in Table 1, including through access to support on policy and data identification, workshop design and facilitation, or iterative discussions on M&E framework development. A full list of interviewees, workshop attendees and areas engaged across the Scottish Government is included in Appendix A.

Report structure

Section 2 outlines the evidence reviewed, focusing on Scottish Government policy and JT M&E proposals across policy and academia worldwide. Section 3 presents the key findings from this research. Sections 3.1 and 3.2 detail the core of the proposed M&E framework including JT outcomes, indicator and data selection methods, and outcome indicators. Section 3.3 presents a ‘hotspot’ monitoring approach and indicators, integrating place-based JT M&E within a national M&E framework. It also proposes anticipatory approaches to monitoring as part of JT M&E. Section 3.4 includes detail on interpreting framework indicators. Section 4 sets out framework limitations and reflections on JT M&E. Section 5 presents a set of recommendations and concludes this report.

Evidence review

The Scottish Government published a National JT Planning Framework in 2021 (Scottish Government, 2021a). This included eight JT outcomes focused on empowering communities; skills development and fair work; addressing existing socio-economic inequality; supporting a strong and productive economy; supporting climate adaptation; protecting the environment; ensuring decarbonisation, and furthering human rights while avoiding the creation of new injustice (Scottish Government, 2021a, p.31). The Government also committed to developing sector-specific JT plans for four ‘net zero sectors’: energy (2023), transport (2025a), agriculture and land use (2025b) and buildings and construction (not yet published). In tandem, the Grangemouth Industrial JT Plan was published in 2025.

The National JT Planning Framework, draft sectoral JT plans and the Grangemouth Industrial JT Plan are structured differently and vary in detail and level of indicator development. The sectoral plans and Grangemouth industrial plan all refer to four themes which cluster JT concerns in Scotland: Communities and Places; People and Equity; Jobs Skills and Economic Opportunities, and Environment, Biodiversity and Adaptation^[1][2].

In parallel, the second JTC has focused on JT M&E, including through recommendations in their Annual Report (2024) and in their final report in 2026 (Just Transition Commission, 2024, 2026a). They have published numerous JT M&E reports, including by Drabble et al. (2024) who developed a ToC for a JT in Scotland and a national JT M&E framework. The authors detailed JT priorities in the Scottish context, articulating both outcomes (what success looks like) and mechanisms (how to get there). They developed indicators, identified data sources and data gaps and provided a baseline assessment of indicator progress on a traffic light scale (improving – maintaining – declining).

The national JT M&E framework by Drabble et al. (2024) was translated into the Grangemouth local context by Jenkins et al. (2025). This reiterates the importance of place-specific transitions and accordingly, contextualised M&E. Shapovalova et al.’s (2023) work on monitoring a JT in Aberdeen and Aberdeenshire also focused on place-based transitions. Through stakeholder engagement, the authors identified four JT themes and an accompanying suite of indicators, which were analysed in relation to the local context.

The Scottish Government has also commissioned ClimateXChange projects to review and learn from the evolving JT M&E landscape and inform sectoral JT plans. These include a summary of existing approaches to JT M&E (Bergseng, 2023) and three reports by SYSTRA (2023a, 2023b, 2023c). The SYSTRA reports provide JT perspectives into sectoral areas of energy, transport and the built environment and construction.

Drawing boundaries around what is/ is not JT policy is an ongoing challenge. Climate change impacts and actions relating to the transition are cross-cutting issues, as are considerations of justice. Beyond explicit JT policy, there are various Scottish Government policy areas directly relevant to issues of JT. Illustrative examples of strategies and monitoring frameworks which overlap with JT considerations include: the National Performance Framework, the CCP (2026), the SNAP3 M&E framework (2024), the Public Engagement Strategy for Climate Change (Scottish Government, 2021b), the draft Environment Strategy (Scottish Government, 2025e), the Biodiversity Strategy M&E framework (Scottish Government, 2024b), the National Transport Strategy 2 (2020) and related M&E frameworks (Transport Scotland, 2021, 2022, 2024), the National Strategy for Economic Transformation (2022) and the Green Industrial Strategy (Scottish Government, 2024c).

Across Scottish Government JT policies, reports and related policy arenas, there is some convergence around ToC informed approaches to M&E. Most clearly, the Grangemouth Industrial JT Plan includes JT outcomes and ‘transition levers’ (the mechanisms), which capture ‘how the Just Transition will be delivered’ (Scottish Government, 2025c, p.11). In the space of climate adaptation, SNAP3’s M&E framework uses a ToC informed approach with outcomes, objectives and indicators, including a monitored annual baseline and identified climate adaptation ‘enablers’. The ToC has also been mobilised in JT M&E efforts beyond Scotland.

Beyond Scotland

Efforts to monitor and evaluate progress towards a JT are emerging worldwide. The diverse models reflect varying interpretations of the JT both conceptually and in a policy context. In the European Union (EU) context, for instance, JT M&E is proposed in relation to environmental policy (Heyen et al. 2021). The authors present a suite of output, result and impact indicators including measures linked to EU social domains and environmental impacts. More broadly, the EU defines ‘JT regions’ as carbon intensive regions currently supported by the Just Transition Fund (EU, 2024). This contrasts with the more expansive understanding of JT by the Scottish Government.

Kelly et al. (2025) developed a JT M&E approach for the Irish government based on JT ‘domains’. These are broadly sector-oriented (electricity; agriculture and land use; buildings; transport and connectivity, and environment) along with two cross-sectoral domains: skills and employment, and participation and community engagement. The sectoral approach echoes sectoral JT plans under development in Scotland. In Kelly et al. (2025), these are integrated into the core structure for a nation-wide JT monitoring framework for Ireland. The framework is funded by the Environment Protection Agency and sits in relation to environmental policy, as per the EU.

The Spanish Government’s understanding of JT is primarily focused on economic and employment aspects of the transition, alongside additional social concerns (Spanish Government, 2020). In addition, Spain takes an ‘at-risk area first’ approach to JT, which prioritises attention to declining coal and emissions-intensive dependent regions through the implementation of place-based ‘Just Transition Agreements’ (Spanish Government, 2020). From an M&E angle, Spain has been reporting on JT progress for circa five years. Their monitoring and reporting approach is output oriented and focuses primarily on whether policy commitments have been delivered (yes/no), and on data such as the amount of funds invested into different projects (Spanish Government, n.d.). There is lesser attention to Spain’s progress towards a JT overall from an outcome-oriented perspective. Their reports provide detailed, qualitative case studies about place-based ‘Just Transition Agreements’ implementation and delivery (Spanish Government, 2023).

Although not specifically a JT framework, the National Wellbeing Framework for Wales provides an applied example of monitoring multi-dimensional, complex phenomena on an outcome basis, as it has been reported against since 2017^[3]. This framework is made up of seven high-level goals (or outcomes) and identifies a suite of 50 indicators which map across the different goals. In this framework, a single indicator may be used to monitor progress across various goals. From these 50 indicators, 16 are selected as milestone indicators to provide a high-level overview of how Wales is doing in relation to wellbeing goals (Welsh Government, 2022a, 2022b). The cross-cutting approach to indicator relevance, along with framework visualisations and reporting experience make this a useful example for JT M&E framework development.

The Taranaki region in New Zealand used a ToC approach to identify JT outcomes for a vision of Taranaki in 2050 (Venture Taranaki, 2020). This framework includes monitoring, causality analysis, policy tracking and evaluation. It is conceptualised in detail but appears at an early stage of implementation, with limited indicator development. Tarfa et al.’s (2024) Monitoring, Reporting and Verification framework for a Just and Gender Inclusive Transition in Nigeria also used a ToC approach. The authors present an overarching JT goal, a vision and eight high-level outcomes, the latter of which are broken down into actions, intermediate outcomes and ultimate outcomes. Indicators cover environmental dimensions like emissions or chemical spillage and pollution, and social dimensions ranging from positive community impacts, reducing social inequalities or the redistribution of oil and gas revenues to social projects.

The Monitoring, Evaluation and Learning framework for tracking a JT in South Africa (ICAT, 2024) is also grounded in a ToC. The authors include restorative justice, procedural justice and distributive justice as underpinning their understanding of JT. This framework incorporates enabling conditions, outputs, milestones and outcomes through which to reach overall JT impact. It identifies 54 priority indicators across these categories. Outcome indicators are focused on fossil fuel consumption, emissions reductions, training and employment creation, and participation measures, at times reporting at smaller geographical levels or by demographic groups.

Research by Oliver et al. (2025) into JT M&E in the Welsh context offers a different approach to ToC and outcome-based frameworks. Drawing on concepts of resilience and vulnerability, the authors identify what would affect a person’s ability to prepare for, respond to, benefit from, and recover from different climate change policies and scenarios. On this basis, they conceptualise a composite, weighted vulnerability index focused on vulnerability to climate change mitigation and rank Welsh local authorities accordingly.

JT M&E has also been explored in academia, often in collaboration with policy or industry. Examples include Htitich et al.’s (2024) methodology for developing a Just Transition Score tool in collaboration with the Social Progress Index, or Kelly et al.’s (2020) composite indicator to identify households at risk of energy poverty. From a policy development and evaluation perspective, Bird et al. (2024) developed a tool to assess ‘Just Energy Transition Plans’, while Kaljonen et al. (2024) set out an approach to combine policy mixes to support JT delivery. McCauley et al. (2023) suggested a JT ranking method through a suite of indicators which they related to theoretical justice tenets. Live, industry-based examples of JT monitoring include the World Wildlife Fund’s tool and scorecard to rank national JT plans (World Wildlife Fund, n.d.); the World Benchmarking Alliance’s JT Methodology (2025) which uses a ‘scoring and weighting’ approach that provides a very high-level numerical score on JT; or the Transition Plan Taskforce’s (2024) review of 13 existing disclosure frameworks that are relevant to transition planning and disclosures.

Summary

The evidence reviewed illustrates a variety of approaches, models and frameworks for JT M&E. These emphasise the use of overarching goals/aims/outcomes, and the different types of monitoring approaches available. Monitoring may be focused on outcome/impact, policy delivery or output tracking. Justice theory (e.g. Heyen et al. 2021; Kelly et al. 2025) and conceptual structures like the ToC explicitly and implicitly underpin several of the reviewed examples. Others, like Oliver et al. (2025), take a composite index approach instead.

Various sources highlight the importance of quality data gathering and indicator development (e.g. Kelly et al. 2025; Tarfa et al. 2024) along with attention to demographic data breakdowns and to the distributional implications of the transition (e.g. Hayen et al. 2021; Oliver et al. 2025; Kelly et al. 2025). The evidence also emphasises the value of M&E and reporting for communication with stakeholders (e.g., ICAT, 2024). In this vein, Kelly et al. (2025, p.25) also recommend the development of a dashboard as a ‘suitable destination framework for communicating and presenting indicators and trends’.

Various reports also refer to the dynamic nature of climate change and the transition. They emphasise the importance of reviewing JT M&E frameworks alongside broader contextual trends over time (e.g., ICAT, 2024). Reports also stress the importance of harnessing an M&E framework and tools for prospective analysis (Oliver et al. 2025), equipping JT M&E and policy with foresight – or anticipatory – capacity (Kelly et al. 2025). This includes anticipatory attention to key ‘at risk’ areas (e.g. Hayen et al. 2021; Spain, 2024; Lázaro Touza et al. 2025).

The Framework

The full structure of the proposed M&E framework (‘the framework’) is illustrated in Figure 1. The objectives of the framework, informed by the evidence, Scottish Government and stakeholder input are to:

• Monitor impacts of the transition across Scotland and provide a stocktake of how Scotland is doing from the perspective of justice,
• Support policy tracing and causality evaluation across mechanisms and policies, in relation to JT outcomes,
• Support anticipation of risks and opportunities of the transition before they happen, including in ‘hotspot’ areas,
• Through the three objectives detailed above, inform policy development,
• Communicate progress in relation to a JT, to (i) hold the government to account and (ii) improve communication of the impacts of the transition.

Figure 1. Structure and parts of the full Just Transition M&E framework.

As illustrated in Figure 1, the framework structure is informed by a ToC approach and includes both outcomes and mechanisms, as well as hotspots. Hotspots are defined as places directly impacted by industrial change or by net zero developments, further detailed in section 3.3.

The remainder of this section focuses on outcomes, hotspots and their indicators, as outlined in section 1.1. Section 3.1 details outcome development, followed by outcome indicators in 3.2. Section 3.3 presents the hotspots approach, anticipatory methodologies for hotspot identification and hotspot indicators, followed by recommendations for indicator interpretation in Section 3.4.

Outcomes

This project understands outcomes as ‘what success looks like’ or what characterises a JT in the Scottish context. Within JT policy in Scotland, the definitions and language surrounding JT (and JT M&E) have iteratively evolved since the publication of the National JT Framework in 2021. There have been varying definitions of what outcomes embody a JT in Scotland and for the Scottish Government, and there are arguably inconsistencies. The Scottish Government’s draft sectoral JT plans, for instance, do not refer to the eight outcomes in the National JT Framework (2021)^[4]; and neither does the JT section within the CCP (2026). Draft sectoral JT plans, the Grangemouth Industrial JT Plan and the Draft CCP (2025) all refer to four themes: Communities and Places; People and Equity; Jobs, Skills and Economic Opportunities and Environment, Biodiversity and Adaptation. These themes are described as relating to, or grouping JT outcomes (e.g., Scottish Government, 2023; Scottish Government, 2025a)^[5].

This project reviewed and mapped references to outcomes, outcome clusters, proxy outcomes, objectives, themes and priority areas (whichever way defined) within existing JT publications by the Scottish Government and in Drabble et al. (2024). Appendix B summarises the terminology and categorisations used in the documents reviewed. This highlighted clear convergence in JT policy and Drabble et al. (2024) around the four themes outlined above. On this basis, this project developed a refined set of four overarching outcomes characterising a JT to a net zero and climate resilient Scotland. These are named according to the four themes and are introduced in Table 2.

The four outcomes below synthesise the key JT areas of concern in Scotland. They were identified and refined based on the evidence review, stakeholder feedback and internal engagement with Scottish Government teams.

Table 2. Outcomes, M&E framework for a JT to a net zero and climate resilient Scotland.

There is inevitable overlap across outcomes. In this framework they are positioned in relation to each other and with no hierarchy (Figure 2). At the same time, each outcome signifies a distinct focus area which enables the thematic grouping of certain indicators per outcome (for a similar approach, see Shapovalova et al. (2023)).

Figure 2. Visualisation of the four outcomes of a JT to a net zero and climate resilient Scotland.

Outcome indicators

Figure 3 provides a visual overview of proposed outcome indicators grouped by outcome, including their target populations for data monitoring. It also signposts the summary indicators (intended to provide a high-level overview of the transition), and identifies the indicators with no data currently available. The remainder of this section presents the indicator development approach followed by an overview of summary indicators and outcome indicators. Additional information on indicators including their desired trend, data timeframes and a quality assessment can be found in Appendix C.

Figure 3. Outcome indicators in the JT M&E framework. Categorised by outcome, target population, summary indicators and data availability.

Indicator development and data selection

Indicator selection was guided by the following priorities: conceptual rigour, relevance and representativeness of a JT in Scotland, data availability, timeliness and responsiveness to the project specification.

Drawing on the evidence review, outcomes were defined first. This established high level JT priorities in the Scottish context. A long list of indicators was developed from policy, reports and academic literature, with attention to their relevance across the four outcomes. This list was complemented with stakeholder input. The workshop and semi-structured interviews were specifically designed to focus on indicator development. To support discussions during these engagements, the four outcomes were sub-divided into descriptive focus areas (available in Appendix D). Informal conversations and meetings with external stakeholders and the Scottish Government further informed indicator development and data identification. The indicator long list was queried and refined to merge, move and remove indicators based on relevance and data availability^[6]. Full indicator details and a quality assessment can be found in Appendix C. Further detail on the indicator selection process is available upon request.

The final list of indicators was also informed by data availability. The search for available data involved desk-based research and stakeholder engagement across government teams and with external stakeholders. Tables 1, 2 and 3 in Appendix A summarise the stakeholders and different government areas engaged throughout. Drawing on Taranaki Venture (2020) and SNAP3 (Scottish Government, 2024a), criteria influencing indicator development and data selection included:

• Relevance to the outcomes to be measured,
• Timeliness,
• Sample sizes for Scotland (when data is collected at UK scale),
• Possible breakdowns by socio-economic and geographic scales (where relevant),
• Data availability and accessibility.

Reporting for most indicators is recommended at a ‘Scotland-wide’ target population level. Additional target populations are included for some indicators based on an understanding of their relevance for specific geographies or groups. Target populations for data monitoring (relevant across all outcomes and indicator tables) include:

• Scotland-wide: Data for Scotland as a whole,
• Demographic groups: Age, sex, gender, ethnicity, disability, income (as relevant/ available per data source),
• Scottish Index of Multiple Deprivation (SIMD): By SIMD percentile (e.g., locations identified as the 20% most deprived areas of Scotland) (SIMD, 2020),
• 6-fold urban-rural classification and islands: Geographical data breakdown according to the Scottish Government’s Urban Rural Classification. This distinguishes between large urban areas, other urban areas, accessible small towns, remote small towns, accessible rural and remote rural areas (Scottish Government, 2024d). Alongside the rural-urban classification, this target population group includes monitoring islands separately,
• Local Authorities as relevant to the indicator.

Data identification and indicator refinement were undertaken simultaneously. Efforts focused on identifying indicators where data was readily available, to ensure the feasible implementation of the framework and avoid further delays to JT monitoring. The framework also includes some indicators for which data is currently not available, yet which cover key JT areas of concern. Possibilities for indicator refinement and data collection were also explored for these indicators, the details of which can be found in Appendix E.

Finally, indicators within the framework both draw on and at times, depart from existing Scottish Government JT M&E publications. Appendix F details the parallels and differences between this framework and in particular, JT indicators in the CCP (2026).

Summary indicators

The proposed 15 summary indicators provide a high-level overview of the just-ness of Scotland’s transition across the four JT outcomes. As a small set of indicators, they offer cross-cutting insight into the JT. This may also be useful at reporting stage and for JT communication with internal and external stakeholders.

Summary indicators are selected from across the four outcomes and should be reported on at a Scotland-wide level. Additional reporting by demographic groups is also recommended for three indicators in the list: those about policy influence, opportunities for young people in Scotland and about individuals’ ability to adapt to climate change. These three indicators are selected as proxies for issues of participation, recognition and distribution of impacts and opportunities across groups in Scotland, today and in the future. Table 3 sets out the proposed 15 summary indicators.

Table 3: Summary indicators for the JT M&E framework.

Communities and Places

Table 4 provides an overview of proposed indicators to monitor progress towards the Communities and Places (CP) outcome. This table includes indicator number, indicator, target population (which may include more than one population, indicated as ‘population #2, population #3’) and the data source. Indicators with no currently available data are clustered at the end of the table (CP 9-12). Summary indicators are marked with an asterisk in the CP column (e.g., CP1*). The same approach is used for all outcome tables presented in Sections 3.2.3 – 3.2.6.

Table 4: Communities and Places outcome for the JT M&E framework.

People and Equity

Table 5 provides an overview of proposed indicators to monitor progress towards the People and Equity (PE) outcome. Earlier versions of the framework included absolute poverty, relative poverty and the GINI coefficient as indicators within this outcome (in keeping with Drabble et al. (2024) and the JTC’s Annual Report (2024)). Following discussions with Scottish Government analysts, these were removed from any one outcome. Instead, they are identified as high level, contextual trends against which to analyse JT progress across all four outcomes. Further detail on the value of using poverty and inequality data as contextual trends for indicator interpretation is provided in Section 3.4.2.

Table 5: People and Equity outcome for the JT M&E framework.

Jobs, Skills and Economic Opportunities

Table 6 provides an overview of proposed indicators to monitor progress towards the Jobs, Skills and Economic Opportunities (JSEO) outcome. Indicators dependent on UK Sectoral Industrial Classification (SIC) codes may be subject to change and refinement following the revision of UK SIC codes currently underway (Office for National Statistics, 2026). This may result in new sectoral categorisations and sub-categories by activities directly related to ‘net zero’ (e.g., renewable energy) which could support targeted sectoral breakdowns for indicators such as JSEO8, “proportion [%] of employees earning less than the Real Living Wage”.

Table 6: Jobs, Skills and Economic Opportunities outcome for the JT M&E framework.

Environment and Biodiversity

Table 7 provides an overview of proposed indicators to monitor progress towards the Environment and Biodiversity (EB) outcome.

Table 7: Environment and Biodiversity outcome for the JT M&E framework.

Monitoring local transitions: hotspot indicators and anticipating risk

In parallel to monitoring indicators for the four, high-level JT outcomes for Scotland, the proposed framework includes a focus on key locations identified as ‘sites of transition’, or transition ‘hotspots’. This is grounded in the inherently spatial nature of (in)justice (Bouzarovski and Simcock, 2017) and the recognised importance of contextualised, placed-based approaches to transitions (e.g., Jenkins et al. 2025; Shapovalova et al. 2023). The hotspots approach integrates attention to specific places experiencing change because of or influenced by^[9] the net zero transition.

The definition of ‘hotspots’ as used throughout this report is as follows:

• Places reliant on a high-emitting industry and undergoing industrial change
• Places hosting net zero developments and their aggregated impacts

Some hotspots are already known, while others will need to be identified and may become hotspots over time. Examples of identified hotspots include Aberdeen City, Aberdeenshire and Grangemouth in Falkirk from the perspective of industrial change. Shetland, Dumfries and Galloway or Caithness in the Highland Council are examples of hotspots hosting significant net zero developments (e.g. Voar, 2024; Equitable Energy, 2025; Mountain, 2024; Just Transition Commission, 2025). Two additional hotspot criteria have been identified but remain underdeveloped in this report: (i) places of legacy unjust transitions and aggregated effects and (ii) places facing high levels of climate change risk.

Alongside the importance of place-based transition monitoring, there is growing attention to the need for future-facing, anticipatory approaches to justice (e.g. Santos Ayllón et al. 2025; Trueworthy et al. 2024; Rodhouse et al. 2024). This was also mentioned by stakeholders during the workshop, with reference, for instance, to the known closure of Petroineos oil refinery operations at Grangemouth and a perceived failure to act in a timely fashion. The need for anticipatory, or “early warning” indicators and approaches to JT has also been emphasised in letters and consultation responses to the Draft CCP (2025) (e.g., Just Transition Commission, 2026b).

It is intended that anticipatory approaches to hotspot identification and monitoring as part of JT M&E can help mitigate risks of injustice – and pursue opportunities for more just outcomes – before transitions are locked in (Santos Ayllón et al. 2025).

The hotspot approach developed for this framework draws on existing work on place-based JT M&E. It presents an approach to monitoring place-specific sites of transition and proposes methodologies to anticipate potential transitions. In this vein, sections 3.3.1 and 3.3.2 set out approaches for hotspot identification, not monitoring. These approaches are exploratory and untested in practice and require further analytical development and pilot application. They were informed by support from Scottish Government analysts and by insight from stakeholders such as the Scottish Trade Union Congress (STUC).

Section 3.3.3 details the hotspot monitoring approach and a set of indicators. These indicators are proposed to monitor readily identified hotspots or known sites of transition. The development of the hotspots approach and hotspot indicators integrates place-based JT M&E within the proposed national JT M&E framework for Scotland.

Throughout these sections, this report reiterates the value of formalised and regular stakeholder engagement. Direct engagement with project developers, employers, planning authorities, local councils and sector-specific institutions will be invaluable to understand ongoing transition plans and decisions. This may be one of the most fruitful methods for anticipating potential transitions overall.

Identifying potential hotspots of industrial change

Locating potential industrial transition hotspots will involve identifying places hosting the types of industries which the low carbon economy is expected to move away from. These may include specific sectoral activities (e.g., oil and gas production or domestic vehicle combustion engine construction) and high emitting industrial sites which can be expected to undergo some form of decarbonisation over time.

To identify potential areas of industrial change using available data, the Scottish Government could pre-select a group of high-emitting sectors (e.g., heavy industry, manufacturing, energy, construction, or transport) using UK SIC code classifications. Although SIC code classifications do not precisely match distinctions between emitting and low-carbon activity, industry statistics by SIC code can be broken down to granular sector levels and small-scale geographies across Scotland.

A variety of statistical approaches could be then used to identify potential hotspots in relation to pre-identified sectors. ‘Location quotients’, for example, show the proportion of total employment in a place from a particular industry, compared to the national share. This can show sectors of dependency (or strength) for different local authority areas and at smaller scales. Location quotient data shows Aberdeen City as having a high location quotient in ‘mining and quarrying’ (SIC sector B) of 12.7, and Aberdeenshire of 3.2. This means that the proportion of jobs in ‘mining and quarrying’ in Aberdeen City and Aberdeenshire are 12.7- and 3.2-times the Scotland-wide share respectively (where 0.98% of Scottish jobs are in ‘mining and quarrying’)^[10]. The data is sourced from the Business Register and Employment Survey and is available via NOMIS, and used by the Scottish Government, for example, in the Industry Statistics Database. 

The Scottish Government could also identify key locations of industrial activity in identified sectors (determined according to SIC codes) based on the following indicators: (i) number of employees and (ii) proportion of employment in the local area dependent on these industries. Data for these measures is available in the Scottish Government’s industry statistics (Scottish Government, n.d.). This proposal takes a slightly different approach to location quotients by recognising the relative importance of industries in places, regardless of their proportional comparison to the rest of Scotland. If a given location is particularly dependent on an industry relative to its local employment levels and economic scale, then a change in this industry could have a significant impact locally (even if the facility is relatively small compared to the Scotland-wide sectoral workforce). Possible geographical scale for these analyses (as advised by analysts in the industry statistics area in government) include, for example, ‘travel to work’ areas, which are based on commuting patterns. Some of these are larger than local authorities, while others are smaller and based around specific towns. The Scottish Government could also use data on ‘anchor firms’ as the largest place-based employers across Scotland to further support hotspot identification.

A sector-based approach could also support the identification of potential net zero ‘growth’ areas, again, using tools such as location quotients or proportion of employment in a local area. The pre-selection of opportunity net zero sectors could be based on existing government strategies and analysis (e.g., the National Strategy for Economic Transformation (2022) and the Green Industrial Strategy (2024)). This will also be conditioned to some extent by available SIC code breakdowns. The current review of SIC code classifications (UK Government, 2026) may enable improved analyses of net zero sectors in the future. There could be overlap between industrial change hotspots and growth areas.

In parallel to sector-based analyses, the Scottish Government could use data sources like the Scottish Environment Protection Agency’s (SEPA) Scottish Pollutant Release Inventory (SPRI), to identify the most emitting industrial sites across Scotland (SEPA, n.d.). This dataset is annually updated and includes an extensive list of pollutants, including key greenhouse gases such as carbon dioxide and methane. As an example, journalist investigations have previously used this data to identify what authors labelled “Scotland’s top 20 climate polluters” with a focus on carbon dioxide emissions (Edwards and Dobson, 2022). The authors identified the single most polluting sites (e.g., SSE’s gas-fired plant at Peterhead) and the most polluting companies (e.g., Ineos). A cement works plant, waste incinerators, a glass manufacturing plant and a whisky distillery were also in the ‘top 20’, highlighting potential transition sites outside of the known industrial transition sectors. This proposal is inspired by similar analyses shared by STUC.

There may also be value in using the regularly updated data and maps from the North Sea Transition Authority (NSTA). NSTA datasets include regularly updated, long term decommissioning plans by well (North Sea Transition Authority, n.d.). Alongside these, the Scottish Government’s Marine Directorate produces spatially mapped data of onshore and offshore oil and gas infrastructure (e.g., MarineScotland, 2020). A spatial, infrastructure-based approach hyper-localises the identification of potential sites of transition and may also support identification of key employers and operators across sites and wells. Additional analysis of the Marine Directorate and NSTA data to identify field names, operators and their employee base could provide further insight into oil and gas transitions more broadly. This project has identified this as a critical area requiring new data collection for JT monitoring.

Identifying potential net zero development hotspots

Scholarships focused on energy, justice and JT have demonstrated the potential negative implications of net zero developments in the places where they are deployed (e.g., Mejía-Montero, 2025; Kalt et al. 2023; Healy et al. 2019). As such, the Scottish Government should also anticipate potential sites of net zero development. This includes both the deployment of renewable energy and related infrastructure (e.g., transmission lines, subsea cables, power stations, and green hydrogen production plants). It also includes sites of land use change like woodland creation and peatland restoration (e.g., for carbon offsetting purposes).

In the case of renewable energy and adjacent energy infrastructure developments, the most comprehensive data source identified is the UK Renewable Energy Planning Database. This is updated multiple times a year (UK Government, n.d.). It tracks the progress of UK renewable electricity projects over 150kW (onshore and offshore) through the planning system across technology types^[11]. This data is available in spreadsheet format and as an interactive map, and projects can be filtered by development stages (UK Government, n.d.). The Scottish Government could filter by projects at inception and planning stages as a starting point for anticipatory JT analysis of potential developments.

There is extensive research regarding the justice implications of energy. Data collection associated with renewable energy benefits and ownership distribution is already underway by the Scottish Government. In contrast, this project identifies natural capital projects resulting in land use change for net zero as an important and underexplored area from a JT perspective. The Scottish Crofting Federation, for example, voiced a clear concern regarding land purchase and accumulation through natural capital development opportunities. Conversations across natural capital and Woodland Carbon Code (WCC) areas of government recognised existing concerns about land ownership concentration and the establishment of ‘green lairds’ (McMorran et al. 2022) yet also suggested that ownership concentration is not happening to date. This contrast in stakeholder perspectives demonstrates the relevance of this arena for further research, data collection and anticipatory hotspot attention.

Stakeholder engagement during this project shed light on the limited data available in relation to natural capital projects and their impacts from a JT perspective. Existing data includes publicly available lists of projects registered with WCC and Peatland Code (PC) (Woodland Carbon Code, n.d., Peatland Code, n.d.). In addition, Peatland Action hold and map data regarding completed and in-progress peatland restoration across Scotland (NatureScot, n.d.). Their map includes data on conducted ‘feasibility studies’ which can show sites of future restoration (however, these areas will not necessarily see the development of peatland restoration projects). A similar map was not identified for woodland creation projects. Like energy developments, land use change projects need to obtain consent (e.g., Scottish Forestry, 2025). The Scottish Government could explore avenues to access planning applications for woodland creation and peatland restoration as a step towards understanding planned landscape change for net zero and climate resilience.

Net zero developments are happening at a fast pace and across all of Scotland. This project proposes that the Scottish Government visually map and regularly update related data to enable a more comprehensive understanding of (i) the degree of change across different areas in Scotland and (ii) aggregated effects in a single place. Additional criteria to inform identification of potential hotspots facing net zero developments are (i) considerations of project scale and expected impact and (iii) the local context. This is applicable to both energy and land use change hotspots.

Hotspot indicators

The following section sets out the list of 23 indicators recommended for monitoring hotspots. Various indicators for hotspot JT M&E were selected from the four outcomes in the full M&E framework. Alongside these, additional indicators were identified which provide relevant information regarding transition processes in specific contexts. The selection of indicators was also informed directly by the dual hotspot definition above.

There are known and predicted similarities in the concerns created by specific transition impacts. In the case of industrial change, for example, concerns include worker participation in decision-making processes, unemployment and worker mobility, reskilling, socio-economic wellbeing of the local community, local identity and cohesion and levels of deprivation (e.g., Mayer, 2018; International Labour Organisation, 2015; Walsh et al. 2016; Santos Ayllón and Jenkins, 2023; Shapovalova et al. 2023; Jenkins et al. 2025). For places hosting net zero developments, concerns include transparency and participation in decision-making, stakeholder recognition and decision-making power hierarchies, impacts on identity and place attachment, the distribution of socio-economic impacts and risks of extractivism (Jenkins et al. 2016; Shejale et al. 2025; Raymond et al. 2023; Kalt et al. 2023; Healy et al. 2019; Morrissey, 2023).

Known and predicted concerns informed both the definition of hotspots and the selection of hotspot indicators. As an example, industrial change hotspot indicators include workforce experiences and local economy fluctuations. They also include indicators monitoring alcohol and drug use hospitalisations. While not directly connected to net zero activity, the latter serve as early warning measures of deprivation. Their inclusion draws on Shapovalova et al. (2023) and on the SIMD. Given the SIMD is produced every four to five years, they provide advanced insight into deprivation (SIMD, 2020).

The selection of indicators is further informed by the fact that hotspots directly experiencing industrial or net zero transition impacts (e.g., from the closure of an industrial plant or the deployment of transmission lines), are also impacted by broader transition dynamics captured across the four JT outcomes. In this way, place-specific transitions are layered upon broader JT issues, such as fuel costs, transport accessibility, fair work or participatory capacity in net zero policy-making processes.

Hotspot indicators are proposed as a useful starting point and guide for monitoring hotspot areas. They are not a blanket approach that will apply equally in every site of transition or consistently through time. While hotspots may share characteristics regarding the types of transition underway (e.g. industrial change or decline), each will be unique. Indicators may illustrate similar trends for different hotspots, but this will not necessarily demonstrate that the same transitions are occurring, nor similarities in their just-ness.

Attention should be given to unique, place-based realities including through complementary analytical tools such as the SIMD, existing climate change risk maps and data (e.g., SEPA, 2025; Climate Just, n.d.) and qualitative engagement with stakeholders. This follows recommendations in Jenkins et al. (2025) regarding the importance of bespoke approaches and indicators grounded in the most relevant concerns per place. For the purposes of national-level implementation and taking a national perspective, this report provides a set of indicators as a starting point for hotspot JT monitoring. Table 8 provides an overview of hotspot indicators and their data source. Appendix G provides further detail on hotspot indicators including their desired trend and rationale.

Table 8: Hotspot indicators, by hotspot ‘type’ and data source.

All hotspot indicators share two characteristics: they are all available at local authority level and data is updated on an annual basis (except for the Scottish Climate Survey and fuel poverty data, for which local authority data is available every 3 years). The local authority level is the smallest area for which data is available across all identified indicators. This allows comparability. This scale is also recognised as a limitation to the hotspots approach, given transition impacts may be contained to smaller local areas within local authorities. Highland Council data will not necessarily reflect realities of wind farm and transmission line installations in Caithness, for example, and centralised Orkney Islands level data may be insufficient to understand the just-ness of transitions underway on individual islands within the archipelago.

Annual data collection for most indicators is common and is the most frequent data update period (with some exceptions e.g., labour market trends, which are updated monthly). Given that hotspots are already undergoing transformational change, regular, timely monitoring is critical to understand the implications of the transition. Annual indicators could also serve as early warning indicators for hotspot locations over time. At the same time, this annual updating cycle is recognised as a limitation, given that data will never be available in real time. The limitations of the hotspots approach are returned to in Section 4.

Hotspot indicator monitoring should incorporate regular stakeholder engagement. This will be necessary to better understand both (i) where impacts are localised within each local authority and (ii) to obtain regular, near real time updates while indicator data is unavailable. Regular engagement will also triangulate monitoring with qualitative lived-experience data. The role of stakeholder engagement in JT M&E is expanded on in Section 3.5. A key recommendation for Scottish Government is the further development of effective approaches to engagement as a qualitative monitoring tool.

Interpreting indicators

The sections above have presented a set of proposed indicators across four JT outcomes, a selection of ‘summary indicators’ for these, and an additional set of hotspot indicators. Together, these indicators make up the core for monitoring a JT at a Scotland-wide level and for specific sites of transition in Scotland. The indicators are selected based on their relevance and representativeness of the outcomes and hotspots they relate to, alongside data availability.

The identified indicators are partial. Together, they support an understanding of progress towards JT outcomes, yet they are unable to capture every dimension, nuance and implication of the transition from a JT perspective. The transition itself is underway within a broader landscape of social, economic and planetary change, at local, national and international scales. For improved understanding of the just-ness of the transition, the indicators should be interpreted (i) as interrelated features of a JT within the framework, and (ii) in relation to broader contextual trends. This section addresses each of these points in turn.

Interpreting outcome and hotspots indicators

A JT to net zero and climate resilience is a dynamic, multi-layered process. As an example, an individual may face issues of transport affordability due to the shift towards electric vehicles, gain health benefits from reduced air pollution and be employed in peatland restoration while feeling disenfranchised from decisions about the installation of wind turbines near their home. This understanding of the JT was foundational to the conceptualisation of the proposed JT M&E framework.

A multi-layered and dynamic M&E framework was deemed too unwieldy for feasible implementation. As such, the core of the proposed framework is structured according to a linear logic in which high-level outcomes are monitored by a set of indicators, each with an individual desirable trend. If every indicator in the Communities and Places outcome is progressing in the desired direction, then the Scottish Government could interpret this as progress towards this JT outcome.

A review of individual indicator trends alone, however, is insufficient to assess the just-ness of the transition and may obscure experiences of injustice. As an example, an increasing trend in community energy ownership may not show differences in access to community energy ownership opportunities. These considerations also apply to interactions across indicators, and across outcomes too. Increasing community land ownership, for example, is deemed positive from the perspective of community empowerment and access to net zero opportunities. Yet changes in land ownership could also have negative distributional impacts on people previously employed on the land. The increase in marine protected areas is deemed desirable from the perspective of the Environment and Biodiversity outcome yet may also create additional pressures on fishers and coastal communities in relation to the Communities and Places outcome. Critical inquiry into the indicators, what they do not show and how they relate to each other will improve assessment of JT progress. This critical attention draws from methods developed by the field of responsible research and innovation (e.g., Stilgoe et al. 2013) and has also been proposed in anticipatory justice approaches (e.g., Santos Ayllón et al. 2025). It should be complemented with qualitative, stakeholder engagement, returned to in Section 3.5.

The hotspots approach is designed to capture the multi-layered, cross-cutting nature of the JT more effectively. This is made possible by the narrower scope offered by the hotspots approach. Thus, while hotspot indicators have an indicative desired trend (see Appendix G), they should be interpreted in their local context and, to the extent possible, in relation to each other.

Interpreting indicators against contextual trends

Indicator trends can provide the Scottish Government with an overview of progress towards (or away from) a set of desired outcomes. However, these indicators should be interpreted (i) in the context of climate change mitigation and adaptation actions and (ii) as part of a wider socio-economic landscape. The importance of interpreting indicators within context was emphasised by NatureScot team members, alongside Scottish Government analysts in the industry statistics area. The importance of context to understand quantitative indicators is also clear in Shapovalova et al.’s (2023) narrative interpretation of indicators for a JT in Aberdeen and Aberdeenshire. Contextual interpretation recognises the unpredictability of climate impacts and responses to these, and the ways in which wider trends can impact the ongoing transition (e.g., ICAT, 2024).

This report proposes an initial set of trends which can support the interpretation of monitored indicators. The first two relate to climate change mitigation and adaptation, followed by broader socio-economic trends:

1. Greenhouse gas emissions in Scotland: To assess a JT in the context of progress towards climate change mitigation. Greenhouse gas emissions are reported on annually in the CCP (2026) with a time lag of circa two years.
2. Climate risk (and adaptation) in Scotland: To assess a JT in the context of changing climate risk. A comprehensive assessment of climate change risk for Scotland is conducted every 5 years by the Climate Change Committee (CCC). Climate adaptation research and policy team members have used the CCC assessment to inform their M&E framework for SNAP3. The CCC presents a set of risks and evaluates these on a scale of high-medium-low. The recommendation is to use this (the number and type of risks per category) as a baseline for climate risk and adaptation (e.g., Climate Change Committee, 2021).
3. Land ownership concentration in Scotland: To assess a JT to net zero and climate resilience in the context of evolving land ownership trends in Scotland. Changes in land ownership and land use could have a variety of impacts including potential job losses, landscape change and new distributions of benefits and harms. Land ownership was recognised by stakeholders as key to accessing opportunities from net zero and climate resilience. While data is currently unavailable to monitor land concentration trends, the annual Rural Land Market insights report by the Scottish Land Commission can provide a high-level overview of trends (Scottish Land Commission, 2025). This can be supplemented with insight from relevant Scottish Government teams and stakeholders like Community Land Scotland and the Scottish Land Commission.
4. Economic trends in Scotland: To assess a JT to net zero and climate resilience in the context of the health and resilience of the Scottish economy at any given point in time. This can include particular attention to sectoral composition by % of GVA, to support high-level analyses of the direction of the economic transition. Economic statistics are updated annually across Scottish Government. Business and industry surveys are regularly conducted with the least regular surveys taking place on an annual basis.
5. Poverty and inequality trends in Scotland: To assess a JT to net zero and climate resilience in the context of structural vulnerabilities and inequity. Relative and absolute poverty statistics, along with GINI coefficient and Palma ratio analyses of inequality are updated annually by Scottish Government.
6. Global events: To assess a JT to net zero and climate resilience in the context of global affairs, including geopolitical shocks, economic crises, pandemics or accelerating commitments to climate action. Scotland is part of an interconnected economic, institutional and ecological global landscape. Developments in this landscape will undoubtedly impact on – and could be impacted by – Scotland’s progress towards a JT.

These trends are relevant for JT indicator interpretation across the four outcomes and hotspots^[12]. Falling fuel poverty and increasing transport affordability indicate positive advances to address fuel and transport inequities. However, in a context of increasing greenhouse gas emissions these would not necessarily be associated with a net zero transition. A continued increase in poverty levels in a context of falling greenhouse gas emissions and increasing low carbon jobs and economic activity (JSEO1, JSEO4) may signal failings in securing JT objectives. Geopolitical shocks (such as the coronavirus pandemic, Russia’s invasion of Ukraine in 2022, or USA and Israel strikes on Iran in 2026) can impact fuel prices and the cost of living, change government policy priorities and affect public concerns. Analysis of indicators in relation to global affairs can thus support improved interpretation of indicator trends and any sudden shifts these may present.

Stakeholder engagement

The proposed framework is grounded in an underpinning commitment to formalised, regular stakeholder engagement. This is seen as fundamental to supporting JT monitoring. Workshop participants emphasised the value of stakeholder engagement and stakeholder participation both for JT delivery, and specifically to support JT M&E. They explained that building trusted and regular networks with key stakeholders could support data collection, fill data gaps, and improve communication about the transition. This focus on engagement also echoes Mechanism 3 in Drabble et al. (2024, p.47), which identified ‘stakeholder participation in Just Transition decision making’ as one of the conditions for JT success.

Stakeholder engagement is envisaged to enable qualitative data collection for relevant indicators and as a supplement to quantitative data. It is also deemed crucial for indicator interpretation, both to triangulate and contextualise indicators with experience on the ground. Importantly, stakeholder engagement can also provide insight into transition impacts before indicator data is available. Finally, engaging with key stakeholders is also suggested as an anticipatory tool for the Scottish Government to identify potential future hotspots.

Stakeholder engagement can provide granularity, nuance and qualitative case studies grounded in lived experiences of the transition. This can improve understanding of what is and is not captured by indicators, and therefore the multiple implications of the transition. As examples, a Poverty Alliance team member referred to instances in which heat pump installations in social housing had resulted in inhabitants falling into energy debt. During the workshop, a representative from CEMVO explained the difficulties often faced by ethnic minorities in accessing opportunities such as the Community and Renewable Energy Scheme (CARES) funding. Fuel poverty and community energy ownership indicators in the framework (PE3 and CP7) do not reflect these risks and inequalities relating to heat pumps and renewable energy. While indicator data does not capture these experiences, qualitative feedback can.

Some indicators in the framework suggest a combination of quantitative and qualitative data, the latter collected as ad hoc stakeholder insight or case studies. Examples include CP3 on community groups involved in climate and sustainability related activities. Climate Action Hub teams can provide qualitative insight into where community-led action is particularly strong. Conversely, this engagement can also show where it is struggling to take off and offer reasons why. Organisations like the Scottish Community Development Centre and the Scottish Communities Climate Action Network can provide further insight into community-led climate action. Recommendations for stakeholder engagement in indicator JSEO16 (on workforce participation) was informed by a discussion with STUC. This shed light on the legal and practical barriers to worker-involved transitions in high emitting industries.

Some indicators in the framework are fully qualitative. One example is CP9, which monitors engagement experiences of the fishing sector with offshore energy developments. Fishing was discussed not only as an economic activity but a way of life, with strong impact on coastal and island local economies and identities (as explained by the Regional Inshore Fisheries Group and Scottish Government team members). The Regional Inshore Fisheries Group reflected on power and resource hierarchies between offshore energy developers and the fishing sector, and on the different types of fishing and potential diverse impacts. Questions of sectoral coexistence, decline and change in the offshore economy are too complex to be captured in a single data point. Engagement with key stakeholder groups directly involved is therefore key.

The Scottish Government can explore different forms of engagement for JT M&E. These may range from individual meetings to establishing a regular stakeholder forum. There may be opportunities for the Scottish Government to complement these efforts with JTC support, which is to be renewed in 2026 (Scottish Government, 2025f). From the perspective of national JT M&E, the Scottish Government already has extensive knowledge and networks with stakeholder groups and organisations across many JT areas of concern. Internal and external stakeholders engaged with throughout this project are also deemed valuable contact points.

Alongside sector-specific stakeholders, and for national JT monitoring, the Scottish Government can engage with Scottish Government teams working on related Scotland-wide monitoring (e.g., the National Performance Framework or the Wellbeing Economy Monitor) to support contextualisation of indicators into Scotland-wide trends. In addition, the Scottish Government could explore existing connections to local authorities to contrast national-level JT monitoring with local concerns. Stakeholders such as the Convention of Scottish Local Authorities (COSLA) and the Scottish Climate Intelligence Service offer potential to connect nationwide JT monitoring to more local priorities. Local authorities could provide qualitative input to complement indicator monitoring, for example, and could report back on which indicators reflect local priorities at a given point in time.

In the case of hotspots monitoring, the Government could establish regular communication and feedback loops with a bespoke set of stakeholders on the ground. This may include local authority representatives, developers, employers, trade unions and local third sector organisations. Such arrangements could also be used as an anticipatory tool to identify future hotspots facing industrial and net zero change. In addition, existing partnerships and stakeholder networks including the eight Regional Economic Partnerships, for example, or the Sub-Scotland Economic Statistics Group, may be useful to support hotspot indicator interpretation.

While this section has focused on engagement with institutional stakeholders, this does not preclude engagement with individuals directly exposed to and experiencing transition impacts. In some cases, this could be the most direct way to access, listen to and integrate lived experience (e.g., Jenkins et al. 2025). Research into justice in energy transitions has explored the role of intermediaries in translating lived experiences such as of fuel poverty, including both their value and potential risks (e.g., Lacey-Barnacle and Bird, 2018; Santos Ayllón and Jenkins, 2023). This section recommends engagement with institutional stakeholders first for reasons of feasibility, and to ease potential burdens on directly affected groups.

Engagement with individuals experiencing transitions may in some cases be necessary to better understand and evaluate transition impacts. Where needed, the Scottish Government should build in opportunities for ad hoc qualitative research and engagement. The Scottish Government may also explore possible avenues for more formalised engagement approaches to reach lived experience, including through participatory citizens assemblies or ‘experts by experience’ panels (e.g., Elstub et al. 2022; Poverty and Inequality Commission, 2023).

Limitations and reflections

The proposed JT M&E framework has several limitations. Some of these relate to the practicalities of framework implementation, and others to the specific constraints affecting this project. Some limitations reflect the complexity of monitoring a JT itself.

Data availability, temporality and scale

Data availability has played an important role in the final shape of the proposed M&E framework. Broadly speaking, core areas of JT concern are included in the framework across outcomes and hotspot indicator lists. However, for many of these indicators, the data available is partial. For example, ‘adults within 5-minute walking distance of greenspace’ does not provide information on the quality or accessibility of this space. In addition, data for all indicators in the framework is retrospective. While many indicators in the framework are available on an annual basis, others are only available every two or three years. The current lack of real time data is arguably a limitation of any M&E framework aiming to monitor and assess a JT in Scotland.

More broadly, data limitations relate to their collection and categorisation parameters. Two clear examples are industrial classifications by SIC codes or the geographies of data collection, which do not necessarily match geographies of transition. This is particularly key in the case of hotspots. Although data is available at local authority levels, sites of transition often sit within local authorities. Transition dynamics may not necessarily be captured by local authority level data. As discussed in Section 3.5, close engagement with relevant stakeholders will be essential to better understand localised transitions. Engagement will provide as close to real-time data as possible and can triangulate and nuance indicator data. It may also be one of the most effective tools to anticipate future hotspots before transitions begin.

Finally, important data gaps remain. While the framework was developed with feasibility of implementation in mind, it also includes critical areas of JT concern for which both understanding and data is lacking. These gaps suggest areas for further research and data collection. These areas are summarised below:

• Geographic and demographic breakdowns of low carbon and renewable energy jobs (often referred to as ‘green jobs’),
• Education, training and skills development for the economy of the future (in ‘green’ jobs and more broadly),
• Regular data collection on individuals’ sense of influence at smaller geographical scales (Scottish Climate Survey data is only available by local authority every 3 years),
• Worker transitions, including the processes, distributional impacts and lived experience of workers in high-emitting sectors and on retraining pathways,
• Exposure to climate change risk and the ability to access and adopt climate adaptation measures across people and places,
• Climate change and net zero transition impacts on business, with attention to vulnerability, resilience and opportunities for different business types and scales. This includes direct attention to sole traders, who make up 71.9% of businesses in Scotland (Scottish Government, 2025g),
• Implications, benefits and harms of land use change for natural capital projects,
• Opportunities and risks relating to land ownership, access and distribution, with attention to stakeholders such as crofters, farmers and gamekeepers,
• Land and coastal place-based identities and the implications of safeguarding or losing generational occupations and skills (e.g. crofting and fishing),
• The spatial and demographic distribution of environmental degradation, pollution and hazardous sites across Scotland.

The list above relates to all indicators in the framework, including those with available data. For example, although there is an indicator focused on net zero skills development through apprenticeships, this is insufficient to capture the array of skilling and reskilling processes relating to net zero.

Alongside identified data gaps, stakeholder input spotlighted four key areas for further attention. These are not currently captured in the framework because they cut across various outcomes and are affected by extensive data gaps. The Scottish Government could explore (i) how these issues relate to JT delivery in Scotland and (ii) how they may be monitored and evaluated over time:

• Distribution of responsibility, overconsumption and polluter pays considerations: Policy narratives often focus on distributing the benefits of the transition fairly and reducing the burden on disadvantaged households. However, less attention is given to responsibility, overconsumption and polluter pay considerations (at individual, business or industry levels). Participants in the workshop voiced concerns about how ‘climate policy is regressive’. Drabble et al. (2024, p.17) also briefly reflected on these considerations in their reference to ‘assessment of disproportionate benefits’. Most stakeholders engaged in this project and the evidence reviewed did not focus explicitly on issues of historical, international, intergenerational and intragenerational responsibility, often captured by the term ‘climate justice’ (e.g., Roser and Seidel, 2016). Overall, issues of distribution and responsibility are underexplored within a policy context in relation to JT and invite closer attention.
• Intersections between food production systems, stakeholder power, food security, ecosystem and human health, and land use change: Interviews with NatureScot and the Scottish Crofting Federation pointed to the intersections between food production systems, power hierarchies and land use change in the transition to net zero. Concerns were also related to issues of food security, resilience and health. These insights invite further attention into how net zero and climate adaptation actions interact, if at all, with food production, food security and land use, and the risks and opportunities from the perspective of ensuring a JT.
• Intersections between land prices, housing prices and availability and land use change in rural areas: The relevance of land ownership has been highlighted throughout, particularly in relation to distributional justice and access to net zero opportunities. The Scottish Crofting Federation also highlighted issues of land prices, housing prices and the ways in which land use change can affect these, particularly in rural and island areas. This may be directly affected by net zero and climate adaptation developments. In other cases, this may be adjacent to the transition underway and part of broader trends. Improved understanding of how land and house prices interact with the transition will support improved assessment of a JT.
• Implications of human/nature relationships for the planetary crises and JT: There is growing attention to human-and-nature relationships from the perspective of justice, climate change, the energy transition and JT (e.g., Tafon et al. 2023; van Vugt et al. 2025; Tschakert et al. 2020; Stanley et al. 2025). This relates to beliefs, values and ethical systems, similarly to issues of justice (e.g., van Uffelen et al. 2024; Roser and Seidel, 2016). NatureScot interviewees emphasised the importance of assessing the JT within the current, exploitative relationship with nature (in industrial contexts) and its underlying causes. Disconnection from and domination over nature has also been recognised by the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES) as an underlying cause of biodiversity loss and nature’s decline (IPBES, 2025, p. 28 Figure SPM.1). In the workshop, indicator discussions for the ‘Environment and Biodiversity’ outcome highlighted diverse perspectives on the role of ‘nature’ within a JT. This included questions about the ways in which the climate and biodiversity crises (also known as the twin-crises) are interlinked; and the implications of this for a JT in Scotland. Overall, the space for nature within understandings of a JT and within JT policy in Scotland is unclear and would benefit from further attention.

Framework structure, design and development

The proposed framework is broadly structured according to a linear logic: outcomes inform the development of indicators which in turn, serve to assess progress towards the outcome. This enables targeted consideration of key areas of concern, along with an opportunity to monitor a suite of indicators providing detail into specific outcomes. At the same time, a linear approach clusters and to some extent, siloes areas and indicators. Indicators captured under ‘People and Equity’ or ‘Environment and Biodiversity’ may also be relevant to monitor progress towards ‘Communities and Places’, for example, but are not easily interconnected in the framework. In contrast to outcomes, a cross-outcome use of indicators is proposed for hotspot monitoring. An example of a cross-cutting indicator approach to M&E is the National Wellbeing Framework for Wales, in which each indicator is relevant to more than one outcome (Welsh Government, 2022b).

Secondly, this framework is designed with in-built stakeholder engagement and qualitative analysis as two fundamental tools for its effective use and delivery. Qualitative approaches are often deemed resource intensive and challenging to implement in practice. Their effectiveness also depends on diverse stakeholders with their own interests and agendas. Emphasis on the role of qualitative approaches also partially moves away from many M&E frameworks that focus predominantly on monitoring quantitative indicator trends over time. Innovation into policy tools and approaches to engage in this feasibly and effectively is a recommendation for the Scottish Government going forward.

Constrained resources for this project resulted in the prioritisation of conceptualisation, outcome and indicator development for monitoring, with less attention to mechanism identification and evaluation proposals. The mechanisms are a key dimension of a full ToC and are important to support evaluation of why a JT is happening, and what actions have driven change (e.g., Drabble et al. 2024, p.42). They allow for “a deeper understanding of what is necessary, and what must be avoided for a ToC to successfully achieve its impact” (Dhillon and Vaca, 2018, p.70). It is recommended that the Scottish Government elaborate on the mechanisms presented by Drabble et al. (2024) to subsequently explore effective and feasible ways for mechanism monitoring. This will also enable more comprehensive evaluations of JT progress.

Finally, the framework has not been ‘tested’ in practice. While indicators have been researched, identified and in some cases, developed, a baseline of data collection has not been undertaken. This report recommends that the Scottish Government collate data across outcome indicators alongside example hotspots such as Aberdeen City or the Shetland Islands. In doing so, it is anticipated that some indicators may evolve, others may be removed and new ones added. This will enable refining of the outcomes and hotspots approach.

Reflections on the temporal nature of (just) transitions

The net zero and climate adaptation transitions, alongside climate change impacts themselves, are by nature fluid, uncertain, and spread over time. Plans such as SNAP3 (2024) and the CCP (2026) set out long term goals to 2045, in keeping with Scotland’s target to reach net zero emissions. This is also reflected in Drabble et al.’s (2024) conceptualisation of a JT ToC for Scotland.

The groups and locations vulnerable to climate change impacts and affected by transition risks and opportunities will change over time. In the case of hotspots, new locations will become focal sites of transition over the next 20 years. The long-term, live and uncertain nature of the transition has implications for any effort towards JT M&E. This requires that the framework be kept live as new issues emerge and new data becomes available. In addition, identifying and defining when sites of transition become hotspots and when their transitions ‘start’ and ‘end’, will be an important consideration for the effective implementation of this framework.

It is recommended that places identified as ‘hotspots’ with known imminent transitions (such as the closure of the Mossmorran chemical plant in Fife (e.g., BBC, 2026)) or those with transitions already underway are monitored as early on as possible. In the case of anticipated hotspots, this becomes a more challenging question relating to pre-empting transitions and the implications of doing so, given that there is no clear cut, pre-determined list of sites of decline or opportunity. Further research into anticipatory policymaking, risk mitigation and future-facing M&E could inform decision-making in this arena.

Reflections on defining the scope of JT

It is also worth reflecting on learnings from this project’s efforts to develop an M&E framework for a JT. Understandings of a JT vary widely. For the development of this M&E framework, this project has understood a JT to be the just-ness of the process and outcomes of the transition in response to climate change through ‘net zero’ and ‘climate adaptation’ in Scotland. Even within these boundaries, issues of JT concern are wide-ranging and incredibly complex. They are also not always comfortably attributable to climate change impacts nor transition actions alone. Instead, they are interwoven with broader local, national and global political, economic and ecological networks, changes and shocks.

The value of tools such as M&E frameworks for a JT should be understood in the messy context of delimiting the scope of JT. Although M&E frameworks will struggle to capture every single aspect and lived experience relating to a JT, they can inform policymaker and societal understanding. They can provide insight into the ways in which the net zero transition and climate adaptation are unfolding and their just-ness. They can also inform interventions and importantly, hold actors in roles of influence and responsibility to account, including the Scottish Government.

Conclusion and recommendations

This project has developed an M&E framework for a JT to a net zero and climate resilient Scotland. The proposed framework supports monitoring of a JT for Scotland as a whole, while integrating attention to specific regions, places and to vulnerable and affected groups. The body of this framework is made up of quantitative indicators alongside recommendations for the development of qualitative indicators. It also integrates qualitative engagement, analysis and interpretation as necessary tools for effective JT M&E.

The proposed framework also builds in a place-based, hotspots monitoring approach. This recognises that specific places will be directly and significantly affected by processes of industrial change and net zero developments. Through the development of the hotspots approach, this framework also presents the future-facing potential of M&E in a JT context, to anticipate and inform transitions towards more just outcomes while mitigating risks (e.g., Santos Ayllón et al. 2025).

This framework is developed within severe constraints on data availability. It offers a step forward towards what is pragmatically possible now. The Scottish Government should keep the framework live and adaptable as the transition unfolds.

The next step is to test the proposed approach through data collection across outcome and hotspot indicators. This will assess how well the framework can be used in practice and its ability to capture JT concerns. In parallel, this report recommends that the Scottish Government develop a set of mechanisms and their monitoring along with approaches to JT evaluation. The identification and development of qualitative engagement tools and analytical approaches for risk mitigation, indicator interpretation and JT evaluation is also encouraged.

Based on stakeholder input and learnings throughout this project, the report closes with a set of key recommendations to Scottish Government for effective M&E of a JT in Scotland:

• Start now: The urgency of understanding transition impacts is clearly felt by stakeholders and within government. The inclusion of JT indicators within the CCP (2026) recognises the centrality of a JT to climate action. In this vein, the Scottish Government should begin to systematically monitor, evaluate and report on progress towards a JT. Implementation of existing (albeit imperfect) frameworks and iterative learning is the next step.
• Data collation and sharing avenues within and beyond government: Data collection and collation in databases, dashboards and reports is underway across teams and directorates in Scottish Government. There is an opportunity to develop cross-team mechanisms to collect and collate this data. There is also an opportunity to put the necessary infrastructure in place for data sharing by non-governmental actors (and to require this, where relevant) with the Scottish Government, to begin to fill data gaps.
• Fill key data gaps with new data collection: Arguably, one of the most pressing data gaps relates to experiences and outcomes of the transitioning workforce in high-emitting sectors. Additional data gaps which require further research from a JT perspective include (i) land use change from natural capital projects, (ii) business vulnerability to climate change and net zero transitions, and (iii) vulnerability to climate impacts and access to adaptation solutions.
• Governance, responsibilities and policy responsiveness: M&E frameworks in other areas of government (such as for SNAP3 (2024) or the Biodiversity Strategy (2024)) have developed governance structures for M&E delivery. It is recommended that the Scottish Government explore questions of JT governance and responsibility, including for JT M&E. This may increase attention and accountability of JT delivery. Relatedly, attention to what bounds JT interventions from a Scottish policy perspective can also support efforts towards governance and attribution analyses, alongside mechanism identification.
• Trial anticipatory approaches to JT M&E: The Scottish Government can use M&E to support proactive JT planning in ways which mitigate risks and pursue opportunities for more just outcomes, particularly in place-specific contexts. The Scottish Government should also identify available tools for policy responsiveness to insights from anticipatory analyses and JT M&E across outcomes and hotspots more broadly.
• Investigate qualitative tools and approaches for M&E: Despite the widespread use of quantitative data for M&E, this project has highlighted the key role of regular stakeholder input, qualitative data and analyses for effective JT M&E. Further development of qualitative engagement tools and analytical approaches is a key recommendation both for indicator monitoring, interpretation and JT evaluation. The implementation of a qualitative-strong JT M&E approach will also require the development and use of strategic analysis capabilities to interpret and evaluate progress towards a JT.
• Use M&E to communicate about the JT and about the transition more broadly: There is value in using JT M&E as a tool for improved communication about climate change, climate action and the impacts of net zero and adaptation. This gains relevance in a political context that is shifting towards anti-climate change and net zero narratives. Monitoring JT indicators and communicating these in relation to net zero and climate adaptation (through dashboards, reports or other tools) is identified as a key avenue for dissemination.
• Identify tools for data management and communication: The breadth and multi-dimensional nature of JT invite the development of digital visualisation tools. These might include websites or dashboards for ease of monitoring, reporting and broader communication purposes. It is also possible to use programmes like Excel to organise data and begin monitoring. This will enable framework implementation in the short-term with readily available tools. It is recommended that transparent internal and external reporting is prioritised.

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Appendices

1. Methods – Stakeholder engagement

The following tables detail (1) engagement with external (non-core Scottish Government) stakeholders through semi-structured and unstructured interviews and informal exchanges; (2) a list of workshop participants and (3) a descriptive list of areas across government that have engaged with and supported this work. Varying levels of detail on stakeholders reflect participant consents.

Table 1 (Appendix A): External stakeholder engagement list (by method and in alphabetical order)

Table 2 (Appendix A): Workshop participants (17 November 2025)

Table 3 (Appendix A): Scottish Government areas (in alphabetical order)

1. Evidence review: JT M&E terminology

The following table provides an overview of key Scottish Government JT policies and JT M&E publications by the JTC. It illustrates areas of overlap and difference in the use of M&E terminology and categorisation.

Table 1 (Appendix B): Overview of key JT policies and M&E framework terminology and categorisation approaches

1. Outcome Indicators – Quality assessment

This appendix provides a summary of each indicator, including target population, desired trend, data source and timeframe. It also provides a data quality assessment based on three key criteria: relevance, representativeness and data availability. These criteria were selected from SNAP3 (Scottish Government, 2024a) as the most relevant for this project. Each is categorised according to assessed indicator quality. They are colour coded red for low quality, amber for moderate quality and green for high quality. This is aligned with the approach in used in the SNAP3 M&E framework (2024a, p.35) and in the CCP (2026) (Scottish Government, 2026e). Table 1 below describes each quality assessment criterion and its rating. The table is amended from the CCP (2026).

Table 1 (Appendix C): Criteria used to evaluate indicators (amended from the CCP (2026) (Scottish Government, 2026e).

Communities and Places 

CP1: Indicator quality assessment

CP2: Indicator quality assessment

CP3: Indicator quality assessment

CP4: Indicator quality assessment

CP5: Indicator quality assessment

CP6: Indicator quality assessment

CP7: Indicator quality assessment

CP8: Indicator quality assessment

CP9: Indicator quality assessment

CP10: Indicator quality assessment

CP11: Indicator quality assessment

CP12: Indicator quality assessment

People and Equity

Indicators PE1 and PE2 are covered by the quality assessment in Communities and Places and are not repeated below.

PE3: Indicator quality assessment

PE4: Indicator quality assessment

PE5: Indicator quality assessment

PE6: Indicator quality assessment

PE: Indicator quality assessment

PE8: Indicator quality assessment

PE9: Indicator quality assessment

PE10: Indicator quality assessment

PE11: Indicator quality assessment

PE12: Indicator quality assessment

PE13: Indicator quality assessment

Jobs, Skills and Economic Opportunities

JSEO1: Indicator quality assessment

JSEO2: Indicator quality assessment

JSEO3: Indicator quality assessment

JSEO4: Indicator quality assessment

JSEO5: Indicator quality assessment

JSEO6: Indicator quality assessment

JSEO7: Indicator quality assessment

JSEO8: Indicator quality assessment

JSEO9: Indicator quality assessment

JSEO10: Indicator quality assessment

JSEO11: Indicator quality assessment

JSEO12: Indicator quality assessment

JSEO13: Indicator quality assessment

JSEO14: Indicator quality assessment

JSEO15: Indicator quality assessment

JSEO16: Indicator quality assessment

JSEO17: Indicator quality assessment

Environment and Biodiversity

EB1: Indicator quality assessment

EB2: Indicator quality assessment

EB3: Indicator quality assessment

EB4: Indicator quality assessment

EB5: Indicator quality assessment

EB6: Indicator quality assessment

EB7: Indicator quality assessment

EB8: Indicator quality assessment

1. Outcome ‘focus areas’ for indicator development

The following table illustrates the breakdown of the four outcomes into more granular focus areas. These were used as prompts during the workshop held on the 17 November 2025 and in semi-structured interviews, to stimulate discussion about possible indicators.

Table 1 (Appendix D): Four JT outcomes and focus areas, prompts for discussion.

1. ‘No data’ outcome indicators: rationale and recommendations

The four outcomes include indicators for which data is currently not available. These indicators represent key areas of JT concern. Stakeholder engagement and desk-based research have helped to identify possible avenues for further refinement and data collection. These indicators, their relevance for a JT in Scotland and possible avenues for data collection are expanded on below, categorised by outcome.

Communities and Places (indicators CP9-CP12)

CP9: Engagement experiences of the fishing sector with offshore energy developments

The fishing sector is experiencing cumulative pressures in part, because of the energy transition. This includes from marine surveying, subsea cable developments and the installation of offshore wind farms. Fishers face high levels of uncertainty regarding the cumulative impact of developments, both due to varying timelines for different projects and uncertainties around the long-term impacts of offshore energy production on the marine environment. The fishing sector is small in capacity and resource in comparison to large scale offshore wind developers, creating hierarchies of power and influence over decision-making. Often, the just-ness of engagement and decision-making processes depend on each individual developer’s approach. This project has not found quantitative data able to communicate this complexity. The recommendation is for the Scottish Government to monitor a qualitative indicator informed by iterative stakeholder engagement with key fisheries representatives (e.g. Regional Inshore Fisheries Group and others). Various forums involving marine stakeholders and the Scottish Government readily exist and could be a possible avenue for qualitative data collection.

CP10: Distribution of marine space across activities, including % available for fishing

Fishing stakeholders often refer to the experienced ‘spatial squeeze’ by the sector. This refers to the accumulating pressures of new blue economy activities, environmental protection and others and the overlap with – and shrinking of – traditional fishing grounds. Stakeholder insights suggested that potentially relevant indicators like ‘employment in fishing’ will be influenced by too many variables beyond the transition to net zero to be useful for JT M&E. However, monitoring available marine space for fishing over time should be able to increase understandings of ongoing spatial trade-offs in the marine environment, including in direct relation to fishing. The Scottish Government’s Marine Directorate publish an interactive website illustrating the distribution of marine space in Scotland. These visual maps are informed by backend data which could support trend analysis regarding % change in marine space available for fishing over time.

CP11-12: Land use change for net zero and climate resilience: ‘natural capital’ engagement processes, participation and distributed benefits

Research on the types of land use change activities and their implications as part of the transition to net zero and climate resilience illustrated the challenges of defining and monitoring these from a JT perspective. Stakeholders explained the difficulties in setting boundaries around the term ‘natural capital’ and what interventions do/ do not fall into the scope of net zero and climate adaptation efforts. Woodlands may be created for carbon offsetting purposes, for example, for social uses or for other economic productive uses like timber production or tourism; all of which could be considered ‘natural capital’. In addition, many of the benefits from natural capital are considered public goods. In this context, indicators CP11 and CP12 focus on issues of ownership and socio-economic benefits, based on insight from stakeholder discussions and identified avenues to trial data collection. Project ownership will largely be conditioned by land ownership. The benefits and costs of owning woodland creation or peatland restoration as a community will likely differ from those of community owned energy. This suggests the need for continued research in this area. Engagement key stakeholders such as Community Land Scotland and their Natural Capital Community Partnerships project will be important to better understand the implications of these projects from a JT perspective. This can enable qualitative data collection for monitoring alongside refinement of land use change JT indicators.

People and Equity (indicator PE13)

PE13: Premature deaths due to exposure to fine particulate matter (PM2.5)

This indicator draws attention to improved air quality and the health implications of existing pollution levels for Scotland, across different groups and in the most deprived areas. This indicator is available in England (Department of Health and Social Care, n.d.). It reflects distributional justice concerns associated with the unequal distribution of negative impacts from environmental pollution in the current, high carbon economy. This unequal distribution should be addressed throughout the transition to a low carbon one (Farrell, 2012; Shen et al. 2020; Sun et al. 2024). This includes attention both to the geographical distribution of premature deaths by air pollution, to different demographic groups and by levels of deprivation across Scotland. Drabble et al. (2024) included various indicators focused on the spatial distribution of pollution exposure (see p.26, p.28, p.42, p.46). Although this data is not published in this form at present, engagement with Public Health Scotland advised that the development of this indicator would be feasible.

Jobs, Skills and Economic Opportunities (indicators JSEO13 – JSEO17)

JSEO13: Number of renewable energy supply chain businesses in Scotland.

The development of a domestic renewable energy industry has been identified by the Scottish Government as a key economic opportunity from net zero for Scotland (e.g., in the Green Industrial Strategy, Scottish Government, 2024c). The growth of existing supply chain businesses in Scotland and development of new ones as renewable energy is installed would reflect a level of distributed benefit, in contrast with the UK experience with onshore wind in the 20^th century (Smith, 2011; Brunt and Spooner, 1998). This indicator is not currently developed. Using UK SIC codes, the Scottish Government could first, identify sectors under which renewable energy supply chain activity would be categorised. It could then monitor business growth and business startups in these sectors, to assess whether there is a developing renewable energy supply chain.

Proxy: £ value of ScotWind projects committed to Scottish-based suppliers

The proxy indicator was identified with support from Scottish Government analysts. It is focused solely on ScotWind, the offshore wind leasing rounds led by Crown Estate Scotland. While offshore wind is not representative of the full renewable energy supply chain, the scale and breadth of expected offshore wind projects justify its use as a proxy (Crown Estate Scotland, n.d.). Developers bidding in ScotWind leasing rounds are required to detail their supply chain spend plans in Scotland. This is a suggested avenue for data collection.

JSEO14: Business resilience and ability to adapt to climate change and the transition

Businesses across Scotland will be affected by climate change and will need to adapt to these changes. They will also be affected by the transition to net zero and may benefit from or be harmed by related impacts. The evidence review alongside stakeholder engagement has highlighted an evidence gap regarding the vulnerabilities, risks and opportunities faced by different business types and scales in Scotland, in the context of climate change and the net zero transition. There are a variety of available, regularly updated data sources about businesses in Scotland (including: the Scottish Annual Business Statistics, Small Business Survey Scotland and Business Insights and Conditions in Scotland, amongst others). While some of these surveys ask businesses about climate change impacts or adaptation measures, this data is currently insufficient to convey business transition, vulnerability, risk and opportunity pathways from a JT perspective.

Proxy: Proportion of small businesses in Scotland reporting the level of energy prices as an obstacle

It is important for the Scottish Government to understand the ways in which energy prices are affecting business success. The proposed framework includes the JT indicator which was included in the CCP (2026) as a proxy. However, business energy costs may be affected by many variables, and is only one of a suite of dimensions reflecting business vulnerability and resilience to climate change and the transition. In addition, engagement with Scottish Government industry analysts suggested there are limited surveys for data collection on sole traders. Sole traders make up over 70% of Scottish businesses (in Businesses in Scotland, Scottish Government, 2025g). This suggests a clear opportunity for targeted data collection on the impacts and experiences of climate change and the transition across business types and scales.

JSEO15-17: Indicators relating to worker transitions

Evidence collected throughout this project has spotlighted the lack of data available/ accessible to understand ongoing industrial transitions and the processes, impacts and experiences of the workforce. Employment and skills development indicators included by Drabble et al. (2024) in their framework already highlighted this data gap, given that data could not be categorised e.g., by specific sectors. The framework proposed by this project includes indicators focused on support and participation experiences alongside a broader sense of uncertainty amongst high emitting industry workers. It recommends the development of a targeted survey alongside qualitative methods to understand what is happening in transitioning industrial sites on the ground. Stakeholders such as STUC recognised the challenges of reaching many workers, particularly those working offshore. Suggested methods include in person surveying in key sites of mobility, such as, for instance, Aberdeen Airport. All three indicators (JSEO15-17) can be supported with qualitative case study and experience data from key stakeholders such as STUC, who are involved in day-to-day experiences on the ground. This new data collection could be complemented with case study data from (i) workers accessing the Oil and Gas Transition Training Fund, (ii) workers experiencing redundancy in Grangemouth accessing skill support, and (iii) any other initiatives by Scottish Government to support managed transitions away from high emitting industries.

Environment and Biodiversity (indicator EB8)

EB8: Carbon and social footprint of materials used for net zero developments in Scotland

This indicator recognises that infrastructure developed for the purposes of net zero will also have social and environmental impacts. These impacts are spread throughout renewable energy technology and projects’ supply chains and lifecycles, from material extraction through to decommissioning and waste. This indicator targets responsible renewable energy developments and addresses procedural risks of greenwashing renewable energy production. Developers are increasingly conducting social and environmental lifecycle assessments as part of their project planning applications. The Scottish Government could explore the extent to which this data is accessible and collatable as a starting point for indicator data collection and monitoring. This data would allow for better understanding of net zero developments in Scotland at local and global scales, including the risks of offshored injustice (e.g., Healy et al. 2019).

1. JT indicators in Scottish Government policy

This appendix details how this framework relates to existing JT indicators in the CCP (2026), the Grangemouth Industrial JT Plan and draft sectoral JT plans. Detailed attention is awarded to the JT indicators in the CCP (2026) given that it is the first Scottish Government publication to include a set of JT indicators for Scotland within statutory annual reporting.

Climate Change Plan (2026)

The CCP (2026) includes 12 JT indicators. This project developed in parallel to proposals for JT indicators in the Draft CCP (2025). However, this framework’s development process was separate. The proposed framework has parallels with, and at times departs from the JT indicators published in the CCP (2026). Table 1 below presents indicators in the CCP (2026) (Scottish Government, 2026e, p. 14) which are not included in the outcome indicator list in the proposed framework and provides a brief explanation as to why.

Table 1 (Appendix E): JT indicators in the CCP (2026) not amongst the outcome indicators of this JT M&E framework.

Draft sectoral JT plans and the Grangemouth Industrial JT Plan

This project has delivered an M&E framework at a Scotland level and is thus less focused on granular assessment of the JT in the four net zero sectors identified by Scottish Government (energy, transport, agriculture and land use, buildings and construction). Similarly, the indicators in the Grangemouth Industrial JT Plan are directly relevant to the place and site-specific transition underway in the Grangemouth industrial cluster and will not apply to all transitions underway in Scotland as a whole.

The Jobs, Skills and Economic Opportunities outcome in the proposed framework includes fair work indicators. These focus on gender pay gap for energy, agriculture and land use, transport and buildings and construction. This selection was informed by indicators in the Draft Transport JT Plan (2025) and insight from the Fair Work Convention Secretariat. Additional sectoral breakdowns for other indicators in the Jobs, Skills and Economic Opportunities outcome (such as for trade union density/ access, or green jobs) are not possible with currently available data.

Some JT indicators relevant in the Grangemouth industrial cluster context (such as access to greenspace, attention to derelict sites or satisfaction with opportunities to influence decisions) are also reflected in indicators across the four outcomes in the proposed M&E framework. More broadly, draft sectoral JT plans, the Grangemouth Industrial JT Plan and their indicators were reviewed as evidence to inform this framework.

1. Hotspot indicator list – rationale

How to cite this publication:

Santos Ayllón, L. M., Jenkins, K. E. H., (2026) ‘Monitoring a Just Transition to a net zero and climate resilient Scotland’, ClimateXChange. DOI:

© The University of Edinburgh, 2026
Prepared by The University of Edinburgh on behalf of ClimateXChange, The University of Edinburgh. All rights reserved.

While every effort is made to ensure the information in this report is accurate as at the date of the report, no legal responsibility is accepted for any errors, omissions or misleading statements. The views expressed represent those of the author(s), and do not necessarily represent those of the host institutions or funders.

This work was supported by the Rural and Environment Science and Analytical Services Division of the Scottish Government (CoE – CXC).C

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Edinburgh Climate Change Institute

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1. 
   

   These themes were also referred to in the Draft CCP (2025), though they do not feature in the final CCP (2026). ↑

   
   
2. 
   

   These four ‘themes’, now widely used across Scottish Government JT policy, are different in focus and definition to four ‘themes’ in the National JT Planning Framework (2021). The latter have not been returned to since. ↑

   
   
3. 
   

   The National Performance Framework for Scotland is currently archived and under review. ↑

   
   
4. 
   

   The draft Energy Strategy and JT Plan (2023) refers to the eight national JT outcomes in its Annex F to translate them into energy sector outcomes. ↑

   
   
5. 
   

   The four themes are not referred to in the final CCP (2026). ↑

   
   
6. 
   

   Some indicators such as ‘employment’, for example, were removed from the full outcome indicator list and integrated into the hotspots monitoring approach instead. ↑

   
   
7. 
   

   With ‘net zero infrastructure and/or land use change’ this report refers to the installation of renewable energy production and related infrastructure (power stations, transmission lines), alongside projects of woodland creation and peatland restoration for net zero and adaptation purposes. ↑

   
   
8. 
   

   JSEO indicators 9-12 focus on the gendered dimension of fair work in the four net zero sectors identified by the Scottish Government, following advice from the Fair Work Convention Secretariat and indicators in the Draft Transport JT Plan (2025). This framework prioritises gender pay gap as a measure of structural inequity. ↑

   
   
9. 
   

   This caveat recognises that while the net zero transition will impact industries such as oil and gas, their declining activity in Scotland is also a result of various factors other than the response to climate change. These have been affecting these industries for some time (e.g., Shapovalova et al. 2023). ↑

   
   
10. 
    

    Location quotient calculations were provided by the industry statistics area in Scottish Government, January 2026. ↑

    
    
11. 
    

    The minimum threshold for installed capacity was 1MW until 2021, at which point it was lowered to 150kW. This means that projects below 1MW that were going through the planning system before 2021 may not be represented. ↑

    
    
12. 
    

    For hotspots, trend three ‘economic trends in Scotland’ should also be complemented with economic trend data in the specific local authority monitored. ↑

    
    

The Scottish Government has made successive commitments to delivering a just transition to a net zero and climate resilient Scotland. The Scottish Government and others have made progress in developing monitoring and evaluation (M&E) frameworks to consider the fairness of transition processes and outcomes. However policymakers have found that these were not ready to be implemented in practice. 

On behalf of the Scottish Government, ClimateXChange commissioned a research fellow, embedded in the government’s Climate Change Analysis team, to develop a just transition M&E framework that prioritises rigour and practical use.  

This research is independent and should not be consider Scottish Government policy. 

The framework  

The proposed framework is made up of four outcomes, each with a set of indicators – Communities and Places, People and Equity, Jobs, Skills and Economic Opportunities, Environment and Biodiversity. 

There are 50 outcome indicators in total. 15 of these are identified as summary indicators intended to provide a high-level overview of progress that can be more easily communicated than the full indicator set. 

IIn addition to outcome indicators, this research includes 23 indicators focused on key locations, or hotspots, where the transition to a net zero and climate resilient Scotland is likely to have significant impact.  

Hotspots are defined as places either experiencing significant industrial change, for example Aberdeen and Grangemouth, or hosting major net zero developments, such as Shetland and Dumfries and Galloway. 

This project also examines possible anticipatory approaches for early warning identification and monitoring of hotspots, transition risks and opportunities. 

The proposed framework emphasises the essential role of regular stakeholder engagement to inform all dimensions of M&E.  It can be used as a tool for qualitative data collection, an approach for monitoring and indicator interpretation, a real-time tool for risk mitigation and a method for the anticipation of potential transitions. 

Recommendations 

The research report includes a number of recommendations to further develop the framework and just transition monitoring and evaluation. These include testing and refining through data collection, developing qualitative engagement tools, filling critical data gaps and using communications tools such as data visualisation tools to engage with external stakeholders on just transition progress.  

For detailed recommendations and next steps and to learn about the development of the proposed framework, please read the report.  

If you require the report in an alternative format, such as a Word document, please contact info@climatexchange.org.uk or 0131 651 4783. 

Reducing emissions from Scotland’s tourism sector is a crucial part of reaching the Scottish Government’s target of net zero greenhouse gas (GHG) emissions by 2045.

Emissions from tourism cut across passenger transport, accommodation, food and drink, culture, retail and outdoor recreation, so reliable data is required. Current data, however, only reports over broad categories such as ‘transport’ or ‘buildings’ and does not isolate the contribution from visitor activity.

In this report, researchers explore how they can measure GHG emissions from Scotland’s tourism sector in a way that is credible, repeatable, and trackable over time. The primary aims of this research were:

• To identify a practical methodology for a reliable, national-level estimate of tourism-related GHG emissions.
• To examine the potential for separating results by factors such as geography, visitor or accommodation type to support place-based policy
• To ensure the chosen approach aligns with established GHG measurement practices and can be maintained through routine updates while balancing coverage, granularity, cost, and capacity.

Findings

• Scotland’s tourism sector has distinctive characteristics, including geography, rural tourism, transport emissions, seasonal workforce, and post-COVID behavioural changes.
• There is broad consensus on definitions of “tourism” across the literature, with studies organising indicators according to the United Nations World Tourism Organisation’s (UNWTO) Measuring the Sustainability of Tourism (MST) framework.
• Tourism Satellite Accounts (TSAs) – data sets providing economic analysis of a country’s tourism industry – are critical for defining the economic boundary of tourism, separating visitor-driven activity from resident activity, and enabling reporting.
• Four major methodology types for assessing GHG emissions in tourism are identified:
  • Environmentally‑Extended Input-Output (EEIO) analysis is suitable for establishing a robust, repeatable national baseline.
  • Life Cycle Assessments (LCA) provide detailed insights for operational decision-making.
  • Hybrid models can combine the strengths of both approaches.
  • Survey-based methods are useful for capturing regional behaviour and supplementing other models.

Recommendations

The report’s headline recommendation is to take a proportionate, staged pathway that matches effort to ambition. It suggests: 

• Conducting a comprehensive audit of Scotland’s available data, including Input-Output tables, environmental accounts, and surveys such as the International Passenger Survey (IPS) and the Great Britain Tourism Survey (GBTS).
• Establishing an EEIO baseline as the analytical backbone, updated regularly using repeated survey data.
• Developing a Scotland-specific Tourism Satellite Account to enable greater precision, sector splits, and geographical disaggregation.
• Running LCA pilots for selected assets or services to provide operational insight and validate baseline assumptions.

Over time, these elements could be integrated into a hybrid framework under formal governance and quality assurance, reporting both production- and consumption-based perspectives. A staged, proportionate approach provides a clear, low-risk path to a credible baseline and repeatable evidence base, supporting policy and industry efforts to track and reduce tourism-related emissions.

Further recommendations

The report also outlines steps that should be taken in development of the methodlogy, regardless of the final methodology chosen:

• Adopt the IRTS definition of tourism and structure the GHG account within the UNWTO MST framework.
• Main active links with those that are further advanced, such as Denmark, to learn best practice.
• Build the methodology around a mix of data sources and keep data management central to project governance.
• The approach should be designed for regular repetition, and to secure the resources needed for scheduled updates.

For further information, please read the report.

If you require the report in an alternative format, such as a Word document, please contact info@climatexchange.org.uk or 0131 651 4783.

Community benefits are additional benefits offered by renewable energy developers to support communities. Examples include community benefit funds and in-kind benefits provided by developers such as investment in local infrastructure improvements or funding for education programmes. Community benefits currently operate on a voluntary basis in Scotland.

The Scottish Government has published Good Practice Principles for onshore and offshore energy in Scotland, which are currently under review. Within the context of that overarching review, the primary aims of this research were: 

• To help identify any necessary adjustments to Scotland’s current voluntary community benefits approach for onshore and offshore to better support communities and industry as part of a just transition.
• To understand how different renewable energy technologies affect the provision of community benefits. 
• To understand how mandating community benefits could work in practice for onshore renewable energy technologies.

The research incorporated an evidence review, qualitative interviews and the design and testing of a socio-economic analysis framework.

Findings

• No obvious adjustments need to be made to Scotland’s current community benefit approach.
• Financial aspects of a renewable energy project (costs, revenue and financial viability) are key factors impacting community benefit levels. Projects with higher amounts of revenue, and more robust and predictable financial returns are better positioned to offer significant community benefits.
• It is easier to offer community benefits for projects involving more established technologies like onshore wind, compared to newer technologies like hydrogen.
• The literature reviewed did not allow for a satisfactory comparative analysis of the in-practice impacts of mandatory versus voluntary approaches.
• Further development and more complete data is required to make a functional framework that could inform policy decisions on the appropriate levels of community benefit for different renewable energy technologies.

For further information, please read the report.

If you require the report in an alternative format, such as a Word document, please contact info@climatexchange.org.uk or 0131 651 4783. 

Research completed: July 2025

DOI: http://dx.doi.org/10.7488/era/6396

Executive summary

Research background and aims

Community benefits are additional benefits offered by renewable energy developers to support communities. Examples include community benefit funds and in-kind benefits provided by developers such as investment in local infrastructure improvements or funding for education programmes. Community benefits currently operate on a voluntary basis in Scotland. The Scottish Government has published Good Practice Principles for onshore and offshore energy in Scotland, which are currently under review.

Within the context of that overarching review, the primary aims of this research were:

• To understand how different renewable energy technologies affect the provision of community benefits. This included developing and testing a socio-economic analysis framework to understand the factors that influence the nature and level of community benefits associated with different renewable energy technologies.
• To understand how mandating community benefits could work in practice for onshore renewable energy technologies.
• To help identify any necessary adjustments to Scotland’s current voluntary community benefits approach for onshore and offshore to better support communities and industry as part of a just transition.

The study methodology incorporated an evidence review, qualitative interviews, and the design and testing of a socio-economic analysis framework. This research focused on the factors influencing how different renewable energy technologies affect developers’ provision of community benefits, rather than on the experiences and perspectives of recipient communities. Interviews were therefore conducted with renewable energy developers.

The Scottish Government is gathering other non-industry perspectives on community benefits, including the views of community members, through a public consultation on the Good Practice Principles.

Understanding the ability of different technologies to offer community benefits

One of the ways this research explored how renewable energy technologies affected developers’ ability to offer community benefits was to develop and test a socio-economic analysis framework. This framework set out the parameters assumed to influence the level and nature of community benefits. An initial set of seven draft parameters were developed by the Scottish Government and the research team. Following an assessment of the feasibility of measurement and feedback from renewable energy developers, four parameters were recommended for further consideration (and which are subsequently referred to as “the framework”). These were:

• Technology maturity (i.e. more mature technologies, with well-established supply chains and business models, may better allow developers to build community benefit provision into their project plans compared to newer technologies).
• Market maturity (i.e. maturity may influence investor confidence, competition between developers, and certainty in supply chains which may in turn determine predictability of financial plans and therefore ability to deliver community benefits).
• Deployment and operating costs (i.e. the costs associated with developing and operating different renewable energy technologies may impact the financial capacity to provide community benefits).
• Revenue and profit (i.e. a project’s revenue and profit will impact on its overall financial viability which may impact on its ability to delivery community benefits).

This study identified significant challenges in developing a single framework to assess how different technologies affect developers’ provision of community benefit. For such a framework to work as a practical, decision-making tool, quantitative data on the economics of different renewable energy technology projects would be required. However, existing public data is sparse and of inadequate quality and many developers were unable or unwilling to share commercially sensitive data about their projects. A further limitation was that existing data (e.g. on the value of community benefits from individual renewable energy projects) is based on actual provision rather than an assessment of potential. Additionally, data available is largely historical and therefore challenging to use when anticipating new technologies and emerging economic and regulatory models.

However, it was clear from interviews with developers that the financial aspects of a renewable energy project (costs, revenue and financial viability) were key factors impacting community benefit levels. They noted that projects with higher amounts of revenue, and more robust and predictable financial returns are better positioned to offer significant community benefits. Conversely, if the financial viability of a development is low, then it is unlikely it can offer monetary community benefits without the project becoming non-viable. Developers noted that both technology maturity and market maturity can have an impact on a project’s financial viability and are therefore, indirectly, also linked to a project’s ability to deliver community benefits. However, this was based on qualitative interviews and was not possible to measure using quantitative data.

Developers also reported that it is easier to offer community benefits for projects involving more established technologies like onshore wind, compared to newer technologies, due to the latter’s comparatively lower profit margins. Less mature technologies (e.g., floating offshore wind, hydrogen) can have higher risks, higher delivery costs, less predictability in cost and performance, and lower investor confidence which can impact on their ability to offer benefits.

Although not necessarily directly impacting the level of benefit offered, developers identified community engagement as key factor for effective delivery. Developers emphasised the importance of levels of community engagement and capacity to effectively manage and deliver benefit funds. Interviewees highlighted the importance of community engagement, consultation and feedback in moulding community benefit initiatives, ensuring more meaningful and tailored contributions. This is difficult to quantify and would therefore be challenging to include in a socio-economic analysis framework.

How mandating community benefits could work in practice (for onshore renewable technologies)

The available literature does not enable a comparison of the real-world impacts of mandatory, as opposed to voluntary, provision of community benefits. Mandatory community benefits as part of renewable energy infrastructure development exist in Denmark and Ireland, specifically for wind projects. However, the literature reviewed does not allow for a satisfactory comparative analysis of the in-practice impacts of mandatory versus voluntary approaches.

Existing onshore developers felt that the following factors should be considered:

• clear guidance on what the financial expectation attached to mandating is to avoid any potential for confusion;
• allowing for the differences between individual onshore technologies to be taken into account;
• retaining a degree of flexibility, particularly in terms of allowing for community benefits to be designed around the needs of communities;
• avoiding overly burdensome processes. For example, in relation to restrictions on how communities should spend the money.

The power to mandate community benefits is reserved to the UK Government. In May 2025, the UK Government published a working paper seeking views on a mandatory community benefits scheme for low carbon energy and mechanisms for shared ownership of onshore renewables^[1]. This includes the option to utilise existing powers to mandate offering shared ownership.

Any necessary adjustments to Scotland’s current voluntary community benefits approach for onshore and offshore

This research has not identified any obvious adjustments that need to be made to Scotland’s current community benefit approach.

The literature highlights that the Scottish Government is leading the way across the UK in highlighting the role of communities in the development of renewable projects. While there are examples in the literature of other approaches to community benefit provision outside of Scotland (e.g. in Ireland and Denmark), there is limited evidence directly comparing how different approaches have impacted the level of community benefits delivered. Therefore, there are no clear lessons from these international approaches suggesting a need to change the current approach in Scotland.

Guidance from the Scottish Government, in the form of Good Practice Principles and a recommended community benefit contribution of £5,000 per installed MW per year for onshore projects, was highlighted in interviews with developers as being a strength of the current process. They felt it provided a degree of predictability while also allowing for flexibility in application. However, for projects of emerging and/or non-generative technologies, developers noted that more targeted guidelines would be beneficial, noting that there is no established industry standard approach.

Conclusion and recommendations

The intention was that the framework examined in this study could inform policy decisions on the appropriate levels of community benefit for different renewable energy technologies. However, further development and more complete data is needed to be functional for this purpose. Collating the required data would need considerable resources and rely on information that developers perceive to be commercially sensitive. Considering data gaps, collection challenges, the difficulty in sourcing data specifically focused on future ability to offer benefits (rather than actual performance), further research and/or alternative approaches would be required. For these reasons, the approach explored here does not provide a robust enough evidence base to underpin a framework for use as a decision-making tool.

The report highlights existing measurement tools and guidance that can be used to understand where a project sits in relation to certain parameters, such as technology and market maturity. Further data collection work would be needed to make the most of these tools for robust socio-economic analysis. This would involve collecting relevant data for a large number of projects across metrics with established measurement tools. This would require a significant time and resource commitment and may not be a practical option.

To better understand how different renewable energy technologies affect developers’ provision of community benefits further research, beyond the financial indicators highlighted, would be needed. Considering the challenge of sourcing quantitative data on project economics, further qualitative research may be the most feasible option. Ideally this would be with a larger selection of developers across the full technology spectrum (including those that had not been able to deliver community benefits), direct engagement with communities, and wider stakeholder engagement (e.g. project investors, funders and other partners that have assisted in project development). This type of engagement would add to and build on the insights from developers gathered in this study.

Introduction

This report presents findings from research exploring opportunities for providing community benefits from renewable energy projects using different technologies in way that is fair and consistent. The research was carried out by Ipsos on behalf of ClimateXChange and the Scottish Government.

Background to the project

The Scottish Government has set ambitious targets for achieving net zero emissions by 2045, emphasising the importance of renewable energy technologies in this transition. The Climate Change Plan update (2020)^[2] sets out Scotland’s ambition of a transformed energy system, which supports sustainable economic growth across all regions of Scotland.

Communities are at the heart of the energy transition in Scotland. Community benefits are additional benefits offered by renewable energy developers to support communities, offering them an opportunity to work with renewable energy businesses to secure long-term benefits. They provide an opportunity to share in the benefits of the energy resource and can have lasting social and economic impacts^[3].

The Scottish Government published Good Practice Principles for the onshore^[4] and offshore^[5] energy sectors to outline how they can achieve a positive legacy for local communities. The approach and nature of community benefits operates on a voluntary basis in Scotland, with the guidelines allowing for flexibility in benefits arrangements offered by industry. Decisions on mandating community benefits are reserved to the UK Government. In May 2025, the UK Government published a Working Paper on community benefits and shared ownership for low carbon energy infrastructure, seeking views on whether mandating is the right approach and if so, to inform the design of future policy proposals.

Good Practice Principles have been widely adopted, but the approach to community benefits has not been wholly consistent across developments. In recognition of this, and of the rapidly changing sectoral and policy landscape, the Scottish Government is undertaking a review of the Good Practice Principles to ensure that guidance continues to help communities and developers get the best from community benefits.

This research sits within that overarching review. It was designed to help the Scottish Government understand more about different approaches to providing community benefits and to explore the opportunities for providing community benefits in future in a way that is fair and consistent for industry and communities. The findings from this research will help to inform a refresh of the Good Practice Principles.

Aims and objectives

The primary aims of this research were:

• To understand how different renewable energy technologies affect developers’ provision of community benefits. This included developing and testing a socio-economic analysis framework to understand the factors that influence the nature and level of community benefits associated with different renewable energy technologies.
• To understand how mandating community benefits could work in practice for onshore renewable energy technologies.
• To help identify any necessary adjustments to the Scottish Government’s current voluntary community benefits approach for onshore and offshore to better support communities and industry as part of a just transition.

The findings aimed to support policy development and further refinement of guidelines and frameworks to help ensure that community benefits are effectively and fairly integrated into Scotland’s net zero energy system and strategy.

Methodology

The research involved a mix of desk research, qualitative interviews with developers and data analysis, as outlined below (detailed methodology is in Appendix A):

• A desk-based evidence review that explored examples of community benefits from onshore and offshore renewable energy technologies in the UK and other countries. Literature sources reviewed included 12 peer reviewed academic papers, 20 reports, 2 guidance documents from grey literature (e.g., renewable energy developers, private consultancies) and 1 policy document. These were all published between 2011 and 2024, with 22 documents from the last 5 years.
• Initial scoping interviews with four industry representative bodies to understand their views on current community benefit approaches and to explore options for sourcing data that could support socio-economic analysis on community benefits.
• Design of a socio-economic analysis framework to help understand the factors which are likely to affect the level and nature of community benefits.
• In-depth interviews with 21 industry developers from a range of renewable energy technologies (see Appendix A). As the focus was on how different renewable energy technologies affect provision of community benefits, qualitative research with developers was carried out to help understand the views of those with direct experience of working with projects and benefits. Interviews helped to understand industry perceptions towards community benefits arrangements, collect feedback on the proposed analytical framework, and to understand availability of relevant data for socio-economic analysis.
• Assessment of the suitability of a framework to act as a tool for the Scottish Government to understand what type and level of community benefit may be suitable for different renewable energy technologies, based on data availability and feedback from interviews.

Definitions

Community benefits are defined in this research in line with the Scottish Government’s Good Practice Principles:

Community benefits are additional benefits, that are currently voluntary, which developers provide to the community. The Scottish Government does not currently have the power to legislate for community benefits, which lies with the UK Government. A community benefit fund is considered to be a fundamental component of a community benefit package, though other measures may be considered such as in-kind works, direct funding of projects, or any other voluntary site-specific benefits. Community benefits are not compensation for impacts on communities or other interests, including commercial interests, arising from renewable installations and they are not taken into account in a decision over whether a consent for a development is granted.

Community benefit in Scotland is distinct from shared ownership. Shared ownership provides community groups or members of a community the opportunity to make an investment in a commercially owned renewable energy project. This includes any structure which involves a community group as a financial partner benefitting over the lifetime of a renewable energy project. As shared ownership is not considered a form of community benefit in Scotland, it has not been included within this research.

In this report renewable energy technologies have been interpreted as the range of technologies outlined in the Scottish Government’s draft Energy Strategy and Just Transition Plan^[6]. This includes onshore wind, offshore wind (both floating and fixed), solar, hydro, pumped hydro storage, battery energy storage system (BESS), hydrogen, and carbon capture, utilisation and storage (CCUS).

Limitations

This study was limited by data availability. Existing public data (for example on community benefit values, project costs and revenue) is sparse and of inadequate quality to effectively measure the parameters within a socio-economic analysis framework. Many developers were unable or unwilling to share commercially sensitive data about their projects. A further limitation was that existing data (e.g. on the value of community benefits from individual renewable energy projects) is based on actual provision rather than an assessment of project’s potential capability. Additionally, existing data are largely historical and therefore challenging to use when anticipating new technologies and emerging economic and regulatory models. Consequently, data gaps mean it was not possible to develop a fully functioning socio-economic analysis framework as part of this study.

A further limitation is that this research draws on the views of a relatively small sample of developers. These represent one group of perspectives on community benefits, albeit from different organisations, working with different technologies. Non-industry perspectives, including those of community members themselves, were not included in the remit of this study and would not be expected to fill the data gaps highlighted above.

Current community benefit arrangements

This chapter details the current arrangements for delivering community benefits, based on findings from the literature and from the qualitative interviews with renewable energy technology developers. At various points, examples of community benefit projects identified in the literature are shown to help illustrate the findings.

Key findings

• The literature highlights that the Scottish Government is leading the way across the UK in highlighting the role of communities in the development of renewable projects and in providing good practice guidelines.
• Community benefits from renewable energy projects in the UK mainly involve community benefit funds^[7], but there are also examples of in-kind benefits such as investment in education and infrastructure programmes. Community benefit funds are not as extensively adopted outside of the UK.
• Onshore wind has more established community benefit practices than other onshore and offshore technologies. However, a key similarity is that all projects, regardless of technology, tended to adopt both community benefits funds and in-kind contributions.
• There is limited evidence directly comparing how different approaches in the UK and in other countries have impacted the level of community benefits delivered.

Guidelines for community benefits

According to the reviewed literature, the Scottish Government is leading the way across the UK in highlighting the role of communities in the development of renewable projects. The Good Practice Principles for Community Benefits from Onshore Renewable Energy Developments (updated in 2019) and the draft Good Practice Principles for Community Benefits from Offshore Renewable Energy Developments (2018) outline how the energy sector can achieve a positive, lasting legacy for local communities, and a range of successful community benefit projects have been implemented to date.^[8] These guidelines have been widely adopted across the renewables industry, providing best practice for the sector.^[9]

The voluntary guidelines suggest practices like conducting impact studies to identify affected communities, engaging in consultations, and tailoring benefits to local context and needs. These principles aim to ensure benefits are well-targeted and meet community expectations, which could be seen as markers of a well-designed scheme.^[10]

Example 1.

Beatrice Offshore Windfarm’s Community Benefits Fund used the Scottish Government’s Good Practice Principles to guide the development of the fund. The Beatrice Community Benefits Fund also undertook innovative analysis of the potential wider impacts of the community benefits funding, using a Social Return on Investment methodology.^[11] This illustrates the ability of the Good Practice Principles to be applied alongside other models and approaches.

In Scotland, the Scottish Government also established the Community Benefits Register,^[12] managed by Local Energy Scotland. It can be viewed online and offers a form of third-party reporting and public recognition.^[13] Best practice guidance also exists in England, Ireland, the Netherlands and Germany (see Table 2 in Appendix B).

Approaches used in the UK and elsewhere

The literature provided examples of different approaches to designing and implementing community benefits schemes. However, most examples are from onshore wind farms, with some examples given from offshore wind technologies. There is very little to no reference to other renewable technologies such as hydrogen, hydro, solar, wave, thermal, or BESS.

Community benefit mechanisms referred to in the literature included^[14]:

• Financial contributions to a community benefit fund, to be used as directed by the community to invest in local initiatives^[15];
• In-kind contributions to local infrastructure, facilities, or services^[16];
• Grants, scholarships, or donations to support community initiatives^[17];
• Electricity discounts or subsidies for local residents^[18];
• Provision of environmental or recreational amenities.^[19]

While these approaches share many similarities, there are some notable differences and ambiguities. These include varying interpretations of what constitutes the “local community” (especially for offshore projects)^[20] and differing emphasis on the rationale for providing benefits (e.g., impact mitigation).

This section describes the different approaches to community benefits in more detail. Differences between the UK and other countries are noted, where available.

Community benefit funds

Community benefits from renewable energy projects in the UK are primarily delivered through community benefit funds. The UK onshore wind industry, in particular, has well established approaches for this.^[21] Through this mechanism, developers voluntarily contribute a certain amount of funding to local communities. In some cases, the level of funding is linked to the amount of installed capacity of the project or the amount of energy produced. For example, in Scotland, it is the industry norm for onshore wind projects to typically deliver £5,000 per megawatt (MW) of installed capacity per year in alignment with the Good Practice Principles for Onshore Renewable Energy Developments.^[22] However, the per MW model is not the only approach used and the total amount provided is based on the agreement between the developers and the community.

Example 2.

Crossdykes Wind Farm near Lockerbie, Scotland (developed by Muirhall Energy) offered an industry-leading £7,000 per MW per year for a community benefit fund, well above the industry standard of £5,000 per MW per year. The project provided an Initial Investment Fund of £100,000 to support community projects during the wind farm’s construction phase, showing a proactive effort to deliver early benefits.

Example 3.

Brechfa Forest West Wind Farm in Wales (owned by RWE Renewables), is an example of a community-administered community benefit fund which is expected to provide £11 million in community benefit funding, administered by the local enterprise agency and a volunteer panel of residents.^[23]

Regarding offshore wind, the concept of community benefits in the UK is relatively newer and more flexible than for onshore, reflecting the evolving nature of the industry.^[24] Some, predominantly near-shore English and Welsh wind farms (e.g. North Hoyle and Rhyll Flats off the North Wales coast) have followed the pattern of the onshore wind farms, with benefits pro rata to MW size, although at a much lower rate.^[25] However, in many cases, and for some of the large North Sea distant offshore wind farms, the benefits packages have been more ad hoc and much smaller (pro rata) than for onshore projects.^[26] Several challenges have been identified with providing community benefits funds for offshore wind projects, including defining the relevant community to be targeted.^[27]

Example 4.

The Hornsea/Race Bank East Coast Community Fund, off the Norfolk coast, is managed independently by a specialist grant-making charity, GrantScape, on behalf of the developer Orsted. This enables an arms-length, transparent allocation process.^[28]

According to a number of the literature sources, allocation and spending of community benefit funds are usually determined by developers, in collaboration with the local communities, often through local trusts or organisations. Developers often strive to tailor the benefits based on local priorities identified through community engagement.^[29] Community benefit funds can take different forms, ranging from local funds – investments in communities nearest to developments to enhance services, assets and activities of residents – to regional funds – investment in transformational projects to provide socio-economic growth for wider communities.^[30]

The evidence reviewed suggests that community benefit funds are not as extensively adopted outside of the UK. There are some instances of community benefit funds in Europe. Notably, in Denmark, from 2008-2018, the state-run “Green Scheme” mandated payments per kilowatt per hour of production to host communities. As of 2020, Danish developers must pay fixed amounts per MW installed into green funds for affected municipalities under the “Green Pool” scheme and make annual payments to neighbouring residents under the “VE-Bonus” scheme, with amounts determined by the Danish Energy Agency.^[31] In Ireland, renewable energy auctions require developers to contribute €2 per MW hour to a community benefit fund, with defined spending allocations.^[32]

Among the developers interviewed for this research, flexible community benefit funds were the most common approach being taken to community benefits in Scotland. The exact sum delivered through these funds varies project-by-project. Onshore wind developers said that they follow, and often exceed, the Good Practice Principles guidelines of £5,000 per MW per year. For other technologies, which developers said often have greater financial uncertainty and/or smaller margins than onshore wind, the levels of community benefit are less predictable. Developers said that the level of benefit is often closely linked to the project’s costs and financial returns, which varies.

“We typically work backwards from what we think the returns in the scheme are going to look like. And that’s very site specific, dependent on abnormal costs, grid costs, land rights costs…Depending on what that looks like, we’ll then generate a number to determine what we can reasonably offer local communities.” – BESS developer

In a number of cases, these funds are administered by Foundation Scotland, a charitable organisation that helps to support communities to set up, manage and distribute their funding. This has particularly been the case where local communities may lack the capacity to manage significant financial resources independently. Some projects also have established their own governance arrangements, involving boards constituted of local community members to determine the allocation of these funds.

Other community benefit mechanisms

Other examples of community benefits mechanisms that appeared in the literature include tax revenues or fiscal contributions from wind farm developers, which go directly into funding local infrastructure and community services. From the documents reviewed, this is common practice in Germany, Poland, Croatia, France and Italy. ^[33]

Example 5.

The Block Island offshore wind farm development in Rhode Island, USA, is an example of fiscal contributions being made to support local infrastructure. In this case, a formal Community Benefit Agreement was developed in which the wind farm company pays for improvements to town infrastructure where the cable comes ashore. This project was also highlighted in the literature as an example of community engagement resulting in locally appropriate community benefits and high levels of support for the development from the local community. As part of the public consultation on the project proposals, the developer, Deepwater Wind, collaborated with the town council to invite stakeholders and hired consultants from the local community to represent local interests. This helped establish trust and perceptions of fairness in the process.^[34]

The literature also identified Australian examples of neighbourhood benefit programmes.^[35] These programmes aim to address concerns around fairness that can arise when local residents receive no direct benefits from a renewable energy project which affects their experience of their place and community.^[36] Examples of the types of benefits provided via these neighbourhood benefit programmes include support towards home energy efficiency measures, the installation of residential solar PV, and contributions to electricity bills for neighbours or neighbourhood community facilities (e.g. local hall, local fire-fighting facilities).

The reviewed literature suggests that the involvement of local authorities in the delivery of community benefits varies by country. In some European countries (including Denmark, Germany, France, Italy and Spain), the local municipality plays a significant role and often decides funding priorities of community benefits. In the UK and Ireland, local authorities generally decline involvement to avoid conflicts of interest in the planning process. However, Highland Council recently set out plans for a different approach to community benefit decision making and fund distribution and Shetland Council approved a new set of principles around community benefit.

Developers interviewed also described the types of in-kind benefits they offer communities. Examples included:

• Employment and education programmes. This includes providing funding towards training in green technologies, especially in areas that are reliant on traditional energy industries rather than renewable energy.
• Electricity discount schemes, with money coming off local residents’ bills.
• Investment in environmental and net zero initiatives, including activities designed to reduce carbon footprint and support biodiversity in communities, along with awareness-raising around these issues.
• Infrastructure improvements such as broadband access, roads and pathways, and community recreational facilities.

Impact of different approaches on the level of community benefits delivered

Based on the literature reviewed, there is limited evidence directly comparing how the different approaches in the UK and in other countries have impacted the level of community benefits delivered.

Among the documents reviewed, the only source that explicitly offers comparative analysis between approaches in the UK and European countries was the Department of Trade and Industry report conducted by the Centre for Sustainable Energy, which involved detailed case studies of major wind farms in the UK, Germany, Denmark, Ireland and Spain. The following points are drawn exclusively from this report:

• The overall levels of benefits accruing to communities from wind projects in Denmark, Spain and Germany tend to be higher than in the UK. However, it is important to note that in such countries, community benefits are mostly associated with shared ownership practices, and therefore economic and financial benefits are linked to those practices. Shared ownership is not included in the Scottish Government definition of community benefits and it is also worth noting that developments outside of the UK will have different policy contexts and market conditions to those in the UK, making it difficult to directly compare.
• While the authors do not find robust evidence that higher benefits directly lead to higher levels of support for developments, they suggest that they are likely an important factor in sustaining long-term acceptance of projects.

Lessons from community benefits projects

Common themes emerged from the literature and interviews around what constitutes good practice in community benefit:

• Early community engagement. Establishing trust, building relationships with local residents and identifying concerns and priorities early on can lead to smoother running of the project and help dispel fears of community members early on. ^[37]
• Ensuring community representation in the co-design and administration of community benefits^[38] as this can help establish trust and lead to higher levels of sustained support for the project.^[39]
• Providing broad and flexible community benefit. Literature and interviews highlighted the value of funds being used to support a wide range of community priorities like infrastructure, schools, housing, elderly care, environment, etc. that improve quality of life for residents. ^[40]
• Community capacity was noted by developers as a factor that can impact on their ability to deliver community benefits. Not all communities were seen to have the resources or expertise needed to administer funds efficiently. They noted that the existence of strong community councils or Community Development Officers to help generate ideas have helped contribute to successful community benefit funds.
• Ensuring transparency of communication and providing full information to communities through trusted messengers is seen in the literature as a crucial step in securing support from communities.^[41]
• The reviewed literature also suggests that formalising benefit commitments and monitoring progress can promote accountability and sustainability over the long-term. It helps ensure developers deliver on promises made to communities.^[42]
• There is also evidence that partnering and aligning with local government, NGOs and other companies allows projects to leverage additional resources and maximise the scale and impact of their community investments.^[43]

Understanding how different renewable energy technologies affect the ability to offer community benefits

One of the ways this research explored how renewable energy technologies affect the level of community benefits offered by developers was to develop and test a socio-economic analysis framework. This framework set out the parameters assumed to influence the level and nature of community benefits provided. This chapter outlines the steps taken to develop and test a framework and the extent to which this tool could help to understand how different renewable energy technologies affect the level community benefits provided by developers.

Key findings

• Within the scope of this study, the available evidence did not support a single framework to robustly determine how different technologies affect the provision of community benefits. For such a framework to work as a practical, decision-making tool, quantitative data on the economics of different renewable energy technology projects would be required. However, existing public data is insufficient to effectively measure the parameters in the framework, and it was not possible within this study to gather the level of quantitative data that would be needed for robust socio-economic analysis.
• However, it was clear from the interviews with developers that the financial aspects of a renewable energy project (costs, revenue and financial viability) were key factors impacting community benefit levels.
• Developers’ feedback also highlighted that it is easier to offer community benefits for projects involving more established technologies like onshore wind, compared to other technologies (e.g. offshore wind, solar and battery storage) due to the latter’s comparatively low profit margins.

Original framework parameters

The initial parameters identified at the scoping phase of the project are outlined in Table 1. The following section sets out the feedback received from developers in response to this framework, and the extent to which these parameters are measurable within a framework.

Table 1 Initial list of identified parameters affecting provision of community benefits

Community benefit value

There is a lack of data on the level of community benefits offered by renewable energy projects. The Local Energy Scotland Community Benefits Register is currently the most comprehensive data source for capturing the community benefits monetary measures. However, this is not exhaustive and does not cover the full range of renewable energy technologies.

Further steps were therefore taken to identify additional and more up-to-date data for this research. Firstly, data was requested from developers taking part in interviews, but not all were willing or able to share this (either because they could not access the data, or due to commercial sensitivities). Secondly, online searching for publicly available information on monetary values of community benefits was carried out. While data for some projects is available publicly, this requires a significant time commitment to source since it is not held in a central source nor in a consistent format. Therefore, data gaps remained after taking these steps. For the framework to be robust, a more complete set of data on community benefit value is required.

Technology maturity

Technological maturity is a widely used metric for gauging a technology’s development and readiness for deployment.

Developers generally felt that this could have an impact on the viability of a project, and as a result affect the level of community benefits. Some agreed that, compared to mature technologies (e.g., onshore wind), technologies such as floating offshore wind, BESS and hydrogen can have higher risks, higher delivery costs, less predictability in cost and performance and lower investor confidence. However, some onshore wind developers argued that more mature technologies do not always have more secure financial models because recent cost increases in their supply chains have made viability harder to predict.

Technology maturity is suitable for quantitative measurement using the NASA Technology Readiness Level (TRL) scale (see Appendix E for details). To accurately assess a technology’s TRL, it is recommended that individual projects are approached directly for scoring, as they may employ different versions of the technology. If direct assessment is not possible, it would be possible to utilise the International Energy Agency’s ETP Clean Energy Technology Guide, which evaluates and provides comprehensive information on each technology’s current development stage across the energy system.

This parameter could be included in a socio-economic analysis framework, provided there was sufficient data available or one of the existing guides outlined above could be used.

Market maturity

Factors influencing market maturity include established supply chains, business models and supporting physical and regulatory infrastructure (ports for deployment of offshore wind, standards for solar farms, etc.).

Developers felt that emerging technologies and immature markets face difficulties determining an appropriate level of community benefits because of uncertainty around securing investment and finances. However, some onshore wind developers also noted that their more mature market can still experience challenges with supply chains, especially in relation to costs of deployment (e.g. turbine costs have increased).

Market maturity could be measured using existing tools. The Adoption Readiness Level (ARL) framework, developed by the U.S. Department of Energy, is a tool for assessing the commercialisation risks of new technologies. It helps identify potential roadblocks to market adoption, such as cost-competitiveness, regulatory landscape, public perception and infrastructure availability. It also helps evaluate market demand by identifying the target market, understanding customer needs, and assessing the competitive landscape.

The ideal approach to understanding this parameter would involve project-level assessments via direct engagement with project owners, using the scoring framework available online^[44]. However, given the large number of projects, this endeavour would be challenging. The decision to pursue this should weigh the uncertainties about the parameter’s significance in determining community benefits, with the time commitment needed to collect this information.

This parameter would be suitable to include in a socio-economic analysis framework, but the ability to source the level of data required is challenging.

Project size or energy yield

This measure is quantifiable, based on the level of energy capacity installed for each project expressed in MW. This data is available on the Local Energy Scotland’s Community Benefit Register and the Renewable Energy Planning Database (REPD). To enable a comparison between different technologies, it is important to convert installed capacity to expected energy yield as each technology has different levels of efficiency.

Capacity and energy yield are both inputs in the estimation of gross revenue. Therefore, inclusion of these metrics as stand-alone parameters in the framework would be duplicative and would correlate very highly with any revenue estimations. For this reason, these metrics would not need to act as stand-alone parameters in an analysis framework but could be used as inputs to the revenue estimation.

Deployment and operating costs

The total costs of developing and operating a renewable energy project captures an important financial aspect assumed to influence the level of community benefit commitment.

Developers noted that the developmental and operating costs impact the financial capacity for a project to provide community benefit. As with revenue, obtaining precise cost figures would involve direct input from project owners. Again, due to commercial sensitivities and challenges in accessing this data, estimating total cost of production might need to rely on publicly available sources. This can be done for a selection of technologies using the Department for Energy Security and Net Zero’s Levelised Cost of Electricity (LCOE) estimates.^[45] It is worth noting that not all REPD project technologies are included in this resource, and hence, some projects will require mapping to the closest matching technology category. Despite this challenge, a basic methodology for estimating LCOE from generation technologies is outlined in Appendix D.

When looking at non-generation projects, i.e. storage projects, it is important to reflect the differences to generation projects in the calculation of costs. An analogous version of the LCOE is the Levelised Cost of Storage (LCOS), which uses charging cost as fuel cost and uses the discharged electricity instead of generated electricity. Given the lack of access to the necessary data it is not possible to accurately estimate LCOS for storage projects.

Given that project costs provide a direct link to the financial aspects that are assumed to influence community benefits, it is recommended to include this parameter in a socio-economic analysis framework.

Revenue and profit

Developers agreed that the amount of revenue generated by a project has an impact on their ability to deliver community benefits and the level of community benefits that can be offered.

Ideally, obtaining precise revenue figures would involve direct input from project owners. However, due to commercial sensitivities and challenges in accessing data, estimating revenue might need to rely on publicly available sources. It is important to note that this approach is based on significant assumptions that might not hold true over time. Estimating future revenues is particularly challenging because it depends on projected electricity prices, which are notoriously difficult to predict with accuracy or extend into the future. Despite these challenges, a basic methodology for estimating revenues from generation technologies is outlined in Appendix D.

When it comes to non-generation projects, revenue estimation becomes even more complex and uncertain. These types of projects may involve diverse sources of income and variables, requiring a more nuanced approach to estimation. Battery storage projects generate revenue through a variety of mechanisms, often stacked together to maximise returns. Key revenue streams include arbitrage (buying electricity when prices are low and selling it back to the grid when prices are high), grid services (e.g. frequency regulation, voltage support), capacity market participation and ancillary services (e.g. black start capability). The lack of publicly available data for each of these revenue streams make it challenging to estimate revenue for non-generation projects.

Given that revenue estimation provides a direct link to the financial aspects that are assumed to influence community benefits, it is recommended that consideration is given to including this parameter in a socio-economic analysis framework.

Land use, visual and environmental impacts

There are several challenges associated with quantitatively measuring land use, visual, environmental and social impacts:

• Quantifying land use involves assessing the physical footprint of a project, which can vary significantly based on the type and scale of the renewable technology employed. Further challenges arise in comparing land use impacts across different technologies, such as wind farms versus solar arrays, as each may occupy land differently (e.g., spacing between wind turbines versus solar panel coverage). These differences between technologies were also noted by developers.
• Visual impact assessments are inherently subjective and can vary depending on individual perspectives and local landscape characteristics. Moreover, accurately quantifying visual impacts requires sophisticated modelling tools and surveys that consider factors like visibility range, landscape context, and viewer sensitivity.
• Comprehensive environmental impacts involve a multitude of factors, including potential effects on local wildlife, ecosystems, water resources, and biodiversity. Data collection for environmental impacts may be inconsistent and require long-term monitoring to capture seasonal or cumulative effects accurately.
• Social impacts can include effects on local communities, employment opportunities, and cultural shifts, which are difficult to measure quantitatively and may require qualitative research approaches. In addition, assessing social impacts often involves engaging with communities and stakeholders, which can introduce variability and complexity in data collection and interpretation.
• Each of these aspects often interacts with others, making it challenging to isolate and assess impacts individually without considering cumulative or synergistic effects. Variability in methodologies and data availability can also lead to inconsistent measurements and comparisons.

For these reasons, this parameter is not suitable for a socio-economic analysis framework.

Wider economic impact of the project and its distribution

Renewable energy projects, especially large-scale ones, often generate significant economic benefits. For example, they may create high-value jobs through operation and maintenance, enhance the local supply chain and attract inward investments. These contributions can lead to substantial regional development and improved economic resilience.

However, there are notable challenges in confining these benefits strictly to the local communities most directly impacted by the projects. Economic effects often extend beyond the immediate vicinity. Moreover, quantifying these impacts presents difficulties, often necessitating self-reported data from projects. Such data can be subject to bias and may not fully capture the comprehensive economic changes occurring in the region. These challenges were reflected in interviews with developers. They noted that projects can add a lot of value to an area through high-value jobs, contribution to the supply chain and driving inward investment. However, they noted that it would be difficult to define this parameter, since the economic impacts may not be contained to the specific community in question. Projects can also incur wider costs, such as seabed option fees and rental fees for offshore wind renewable energy developments and these funds can have a wider economic impact.

Additionally, this metric’s applicability varies with different project types. For instance, projects involving CCUS often repurpose existing infrastructure, without necessitating a new workforce. As a result, the direct local economic impacts of such projects might be limited, underscoring the need for careful consideration when using this metric to assess community benefit commitments.

Wider economic impact provides a valuable lens for understanding potential benefits. However, the challenges and variability associated with measuring and applying this parameter across project types should be carefully evaluated to ensure fair, accurate and consistent community benefit determinations. For these reasons, this parameter is not suitable for a socio-economic analysis framework.

Community involvement and capacity

During interviews, developers suggested that community involvement and capacity influence the ability to provide community benefits and should be considered as part of a framework. This parameter focuses on the role of communities in both shaping and managing the benefits derived from renewable energy projects. Interviewees highlighted that placing community needs at the core is essential for ensuring that the type and level of benefits align with local priorities. They emphasised the importance of community engagement, consultation, and feedback in moulding these initiatives, arguing that this involvement leads to more meaningful and tailored contributions.

Additionally, while not directly impacting a developer’s ability to offer community benefit, the capacity of communities to effectively manage and deliver agreed benefits was seen as important. Interviewees pointed out that variations in the size and organisation of community councils or other community groups can significantly impact their ability to administer benefits. Hence, recognising these differences allows developers to support and enhance the local capacity, fostering increased participation and benefit realisation from the projects.

However, there are several challenges to quantitatively measuring these aspects. Quantifying community engagement and feedback is subjective, as perceptions of effective engagement vary among stakeholders. Communities often have diverse and evolving needs, making standardisation difficult. Additionally, while the number of consultations can be counted, assessing their quality requires qualitative data, which is harder to quantify. Asking the community to accurately capture and record this data would put significant burden on individuals who quite often are volunteers in the community. Moreover, community needs can change over time, necessitating ongoing updates and flexible metrics.

Due to these challenges, it is not recommended to include this parameter as a stand-alone element in a socio-economic analysis framework.

Conclusion

Following the assessment outlined above, four parameters were deemed suitable to be considered in a socio-economic analysis framework. These were:

• Technology maturity
• Market maturity
• Deployment and operating costs
• Revenue and profit.

To demonstrate how a framework could be used in future, socio-economic analysis has been carried out based on a sample of data on renewable energy projects (see Appendix C). The parameters in scope of this analysis are restricted to those which have been deemed feasible to measure and for which a suitable method to measure them has been identified. This analysis is based on data available from the Community Benefits Register Database, supplemented with additional data sourced through desk research. Due to the data sources available, it only includes onshore wind, offshore wind and hydro technologies.

Key findings from that analysis are:

• Industry alignment and policy influence: While many onshore wind and hydro projects in Scotland are clustering around the recommended annual £5,000 per MW capacity for community benefits for onshore technologies, more than half of the onshore wind and hydro projects analysed in the available data set commit less than the recommended amount.
• Revenue-benefit correlation: A positive correlation exists between gross project revenue and total community benefit commitments, with larger projects providing bigger packages. However, this relationship weakens for high-revenue projects, suggesting a potential plateau effect.
• Costs and benefit packages: There is a positive correlation between total cost of production and total community benefit packages across all project sizes, suggesting that as total costs increase, so does the size of the overall commitment to community benefits. While this may appear contrary to the views of developers shown earlier (i.e. those who said that high costs can impact on financial viability and therefore their ability to offer community benefits) it should be noted that this data analysis is based only on projects already providing monetary benefits. It excludes those that had not yet provided any community benefits. It can therefore be assumed that the dataset excludes those projects that were deemed not financially viable enough to enable community benefit provision.

In interpreting these findings and considering next steps it is important to acknowledge the distinction between the willingness of projects (measured by actual provision) to provide community benefits and their ability to provide community benefits. The analysis above is based on actual provision of community benefits. It could be assumed that these commitments are indicative of both willingness and some inferred level of ability, but the data does not allow for an assessment of the capability of projects (and different technologies) to offer these benefits. The UK Government’s Contracts for Difference (CfD) scheme is the main support mechanism for renewable energy projects. It is important to acknowledge that although community benefit funds are not recognised costs in the CfD framework, they are often treated as part of a project’s overall cost base and priced in to CfD bids.

Robust analysis of the capability to provide community benefits would require detailed project-level data. To collate the data needed will require considerable resources and will also require renewable energy technology developers to share data they perceive as commercially sensitive, which may be unrealistic. This work has highlighted considerable data gaps, challenges collecting data in the future and difficulty in sourcing data specifically focused on future ability to offer community benefits rather than actual performance. Therefore, the approach explored here does not provide a robust enough evidence base to underpin a framework for use as a decision-making tool.

To better understand the capacity for projects to provide community benefits, it is suggested that further research and / or alternative approaches may be needed. This could take the form of qualitative research with a larger selection of projects across the full technology spectrum, to understand perceived barriers or enablers of moving from willingness to ability. This should offer insights into the practical challenges faced by projects. Longitudinal case studies may prove beneficial to understand how changes in policy, economic conditions or market incentives could have influenced both the willingness and perceived capacity to make these commitments.

Exploring mandatory community benefit arrangements

This chapter looks at current approaches to mandating found in the evidence review and the views of the industry on how mandating community benefits for onshore technologies could work in practice, based on qualitative research with developers.

Key findings

• Mandatory community benefits approaches exist in Denmark and Ireland, as part of renewable energy infrastructure development for wind projects. However, the literature reviewed does not allow for a satisfactory comparative analysis of the in-practice impacts of mandatory versus voluntary approaches.
• Existing onshore developers felt that the following factors would need to be considered for mandating to work in practice:
• clear guidance on the financial expectation attached to mandating
• accounting for differences between individual onshore technologies
• retaining a degree of flexibility, particularly in terms of the ability for community benefits to be designed around the needs of communities
• avoiding overly burdensome processes.

Current approaches to mandating community benefits

Mandatory community benefits as part of net zero energy infrastructure development exist in Denmark and Ireland, specifically for onshore and offshore wind projects. Other countries have mandated approaches for shared ownership, special taxes, energy subsidies, or monetary compensations, but not community benefits as defined here. This includes Germany, France, Taiwan, and the Philippines ^[46].

Denmark has a history of various mandates relating to community benefits. For example, until 2018, the “Green Scheme” required the Danish state to pay hosting communities a fixed amount per kWh of production from new turbines. This applied to offshore wind farms built outside the tender process and within 8km of shore.^[47] More recently, as of June 2020, regulations require offshore wind developers to pay fixed amounts per MW installed into green funds for affected municipalities. The payment is DKK 115,000 per MW (around €15,500).^[48] Additionally, in Ireland, renewable energy auctions mandate that developers contribute €2/MWh to a community benefit fund, with defined criteria for how the funds must be spent.^[49]

Other mandated approaches similar to community benefits include special taxes imposed on developers, that are distributed to local authorities, and electricity subsidies for “host communities”. The former approach has been implemented in France and Germany. The French Maritime Wind Turbine Tax is imposed on offshore wind farms, and is allocated to local authorities to finance local projects, per a defined formula. Germany requires that tax revenue generated from offshore wind farms in the Exclusive Economic Zone is distributed to coastal states. Energy subsidies for host communities have been implemented in the Philippines and Taiwan. Since 2008, the Philippines has required that 80% of money generated from royalties, or government shares in renewable projects, must be used to subsidise the electricity costs of communities affected by these projects.^[50] In Taiwan, the Electricity Assistance Fund (EAF) is distributed to communities affected by power plant projects (including, but not limited to renewable energy) according to a pre-defined formula. For example, in the case of offshore wind, 30% of EAF funds are provided to “local project fund pools” for the benefit of residents, community groups, and civil society organisations, and 70% is provided for councils and fishery associations.^[51]

Although shared ownership is seen distinct from community benefits in Scotland, some other countries have mandated shared ownership or compensation payments. For example, in Denmark, the 2008 Renewable Energy Act mandated developers to offer at least 20% of shares in wind projects for sale to local households within 4.5km of a turbine.^[52] Similarly, in Germany, several states have required that between 10% and 25% of wind farm shares be offered to local residents and municipalities. Mandated compensation payments to nearby residents and community funds have been implemented in Denmark and Ireland. Since 2020, Irish legislation obliges wind farm developments to provide an annual contribution to nearby households and communities.

While some of the literature reviewed implies that mandated approaches are more robust,^[53] no clear evidence is provided of their outcomes and impact compared to voluntary approaches. The literature does not allow for a satisfactory comparative analysis of the in-practice impacts of mandatory versus voluntary approaches.

Developers’ perspectives on how mandating community benefits could work in practice

Industry stakeholders shared their views on the potential for mandating community benefits for onshore technologies. Mandating was explored in both the scoping interviews with representative bodies and in the main interviews with developers. Developers highlighted some key considerations that they felt should be borne in mind for how mandating could work in practice.

For mandatory community benefits to work in practice, developers felt that there would need to be clear guidelines on what the financial expectation is to avoid any potential for confusion. It was suggested that the community benefit value attached to any mandated approach should be realistic and determined in collaboration with industry to help clarify what the expectations are for developers and for communities.

To work in practice, it was felt that mandatory community benefits would need to take into account the differences between different technologies. For example, by having different levels of benefits that technologies are expected to contribute. Specifically, some interviewees highlighted the different operating contexts and economies (e.g. different capital costs) between some technologies. Further, it was suggested that hydrogen and CCUS should be treated differently because they are designed to complement renewable technologies by operating only when needed. Therefore, it was argued that it is difficult to tie community benefits to specific metrics for these.

“[If] it would be used to set an X amount per megawatt, [then] that would need to be split into different technologies because it’s not a clear cut case for all technologies. It has to show this is what it is for BESS, what is for wind, what is for solar. Because if you get that number wrong, you can make the scheme unviable or unattractive and therefore it will not come forward.” – BESS stakeholder

It was also felt that for mandating to be practical, the approach to community benefits should retain some degree of flexibility and the ability to be designed around the needs of individual communities. For example, one onshore and offshore wind developer said if mandating were to happen it should be around the amount of funding that should be provided and not how communities spend the money. This view echoes findings of a report by BiGGAR Economics (2023) that states that the current voluntary system has allowed communities and developers to be flexible in their arrangements, and has enabled the “formation of mature, collaborative relationships” between parties. ^[54]

Related to the point above, some developers felt that, in practice, mandates could mean a more bureaucratic process which could slow things down, in turn impacting developers’ ability to deliver benefits. Stakeholders made contrasts with the current system, which was perceived as “fairly simple” and “flexible”. Therefore, it was suggested that approaches to mandates should avoid overly burdensome processes and bureaucracy. For example, it was suggested that it should avoid having too many restrictions around timescales or conditions on how communities should spend the funding.

Another view from developers was mandating might impact on the existing relationships between developers and communities, as it could move away from a collaborative process to one where there is a firmer expectation around what developers are required to give. Therefore, the approach would need to consider the relationships between developers and communities. Developers particularly felt it important to avoid community benefits appearing like compensation. For example, it was felt that creating a mandated system through which a certain amount is paid made directly to homeowners could lead to the system feeling like a form of compensation.

“If it’s mandated, it absolutely can’t be attributed as compensation to the community. If money had to be paid to compensate people for the effects of a wind farm, then the wind farm shouldn’t be being built.” – Multi-technology stakeholder

Aside from practicalities, a key concern raised was that mandating community benefit provision could risk investor confidence. Some developers felt that mandatory community benefits would have an impact on financial viability of projects, which could make investors less confident to invest. It was suggested that they may choose to invest in projects in other countries that do not have a community benefit mandate or in which they feel the approach is more straightforward.

“The danger with [mandating] is that it creates investor concerns. There’s a lot of competing geographies around the world that want money for renewable energy projects…If one country becomes difficult or the risks are harder to understand, they’ll move that investment to another country where they understand it. And the UK, and especially Scotland, runs a real risk of upsetting investor confidence, which is already very delicate because of the situations with the grid at the moment.” – Solar PV stakeholder

As the scope of this research was focused on understanding how different renewable technologies influence the level of community benefits offered by developers, interviews were conducted with a sample of renewable energy developers. A wide range of other stakeholders will have views.

Adjustments needed to Scotland’s current voluntary community benefits approach

This chapter sets out the extent to which any adjustments are required to the current voluntary community benefits approach based on findings from the literature review, interviews with developers and the design and testing of a socio-economic analysis framework.

Key findings

• This research has not identified any obvious adjustments that need to be made to Scotland’s current community benefit approach. Developers felt that the current system could better acknowledge the different realities of different technologies, but they were not specific about what the best future approach should be.
• Developers felt that guidance from the Scottish Government, in the form of Good Practice Principles and a recommended level of community benefit for onshore projects was a strength of the current process. However, for projects of emerging and/or non-generative technologies, developers noted that more targeted guidelines would be beneficial, noting that there is no established industry standard approach.
• The intention was that the framework in this study could be used by Scottish Government to determine an appropriate expectation of the level and types of community benefit required for different renewable energy technologies. This work identified significant data gaps, challenges collecting data in the future, and the difficulty in sourcing data specifically focused on future ability to offer community benefits rather than actual performance. For these reasons, the framework explored here is not robust enough to use as a decision-making tool.

Lessons from literature and developers’ views

Based on the literature reviewed, there is limited evidence directly comparing how the different community benefit approaches in the UK and in other countries have impacted the level of community benefits delivered. Similarly, there is limited evidence to compare the impacts of mandated and voluntary approaches. International examples do not therefore provide any obvious lessons for the current approach in Scotland.

Onshore wind developers interviewed as part of this study were largely satisfied with the current arrangements. They felt that having a recommended standard (of £5,000 per MW per year for onshore) works well, helping them to predict what the cost associated with each project will be. Since it is a recommended, rather than compulsory standard, they also felt that it also allows for a degree of flexibility, meaning that the community benefit contribution can be responsive to both project and local community needs.

“That financial outlay [£5,000 per MW per year] is much more predictable in our models that we bake in during development…we actually really try to make sure that we can deliver it and protect it.” – Multi-technology developer

Developers of some less well-established technologies (e.g. hydrogen and pumped hydro storage) expressed a desire for clearer guidance from government on the appropriate levels of community benefit for these technologies. They suggested that new guidelines around levels of community benefit should take into consideration the differences in scale and impact between projects like pumped storage and hydrogen generation, which can be more expensive and less visible than wind projects. Those from non-generative technologies (e.g. BESS) felt that it is more difficult to determine the amount of community benefits (funds) that can be delivered from these projects because they have lower level of return (they do not yield energy) and serve a different function in the energy market than generation projects.

Developers also suggested that further structure and support for communities could help them to manage funds more effectively. They felt that community-led decision-making was vital for ensuring the funds meet local needs, but that this should be balanced with adequate administrative support to prevent the misuse or underutilisation of funds.

“There is also a misconception that communities are underspending this funding. Our analysis shows that if we invest and empower communities, then they are very capable of delivering impactful projects.” – Multi-technology developer

Lessons from testing a framework approach

As noted earlier, to effectively measure parameters identified in the proposed framework, project-level data would be required on costs, revenue, technology readiness levels and market maturity. Data on these metrics is not currently available and collecting this data would be a significant task.

Developers felt that certain parameters (see chapter 4) were considered suitable for a socio-economic analysis framework. However, their limited testing means that the framework would need more comprehensive data to fully model these parameters’ effects on community benefits. This is especially true for community benefit commitment data (£/MW/yr) which currently is only reported in the Community Benefits Register Database for onshore wind and hydro projects.

When discussing the idea of such a framework, developers noted that community benefits should not have a one-size-fits-all approach and should be reflective of specific circumstances of each technology and each project. Concerns were raised by some interviewees that a framework might lead to overly prescriptive approaches which could risk stifling development and deterring investment.

“Each [parameter] is relevant and I can see why they have been captured as things that would influence the value and viability of community benefits […] It all depends on an individual project basis, depends on what else is happening in terms of landscape and development.” – Multi-technology developer

Interviewees also questioned whether sufficient data would be available to support the framework and there was some concern about using historic data to understand future community benefit levels. A few interviewees also highlighted concerns about data sensitivity and need for any information to be carefully handled.

Considering the data gaps, challenges collecting data in the future, and the difficulty in sourcing data specifically focused on future ability to offer community benefits rather than actual performance, a single framework may not be the most appropriate approach.

Conclusions

This research looked at current and future approaches to community benefits to help inform decisions around future provision of community benefits in a way that is fair and consistent. This chapter draws conclusions around the three broad research aims:

• To understand how different renewable energy technologies affect the capacity of developers to provide community benefits, including developing and testing a socio-economic analysis framework.
• To understand how mandating community benefits could work in practice for onshore renewable energy technologies.
• To help identify any necessary adjustments to the Scottish Government’s current voluntary community benefits approach for onshore and offshore to better support communities and industry as part of a just transition.

Understanding how different renewable energy technologies affect community benefits

Within the scope of this study, the available evidence did not support a single framework to robustly determine how different technologies affect community benefits. For such a framework to work as a practical, decision-making tool, quantitative data on the economics of different renewable energy technology projects would be required. However, existing public data is sparse and of inadequate quality to effectively measure the parameters within a framework and many developers were unable or unwilling to share commercially sensitive data about their projects. A further limitation was that existing data (e.g. on the value of community benefits from individual renewable energy projects) is based on actual provision rather than an assessment of project’s potential ability. Additionally, data available is largely historical and challenging to use when anticipating new technologies and emerging economic and regulatory models.

However, from data that was available, it was clear that the financial aspects of a renewable energy project (costs, revenue and financial viability) were key factors impacting the developers’ offer of community benefits. Projects with higher amounts of revenue and more robust and predictable financial returns are better positioned to offer significant community benefits. Conversely, if the financial viability of a development is low, then it is unlikely developers can offer community benefits without the project becoming non-viable. Developers noted that both technology maturity and market maturity can have an impact on a project’s financial viability and are therefore, indirectly, also linked to a project’s suitability to deliver community benefits. As discussed above, while there are existing tools for measuring technology and market maturity, data gathering is challenging.

Developers’ feedback also highlighted that it is easier to offer community benefits for more established technologies like onshore wind, compared to other technologies (e.g. solar and battery storage) due to the latter’s comparatively low profit margins. Less mature technologies (e.g., floating offshore wind, hydrogen) can have higher risks, higher delivery costs, less predictability in cost and performance, and lower investor confidence which can impact on their ability to offer benefits.

While not directly impacting on the level of community benefits offered, developers noted the importance of community engagement and capacity to effectively manage and deliver benefit funds. Interviewees highlighted the importance of community engagement, consultation and feedback in moulding community benefit initiatives, ensuring more meaningful and tailored contributions. However, this is difficult to quantify and would therefore be challenging to include in a socio-economic analysis framework.

How mandating community benefits could work in practice (for onshore renewable technologies)

The literature reviewed does not allow for a satisfactory comparative analysis of the in-practice impacts of mandatory versus voluntary approaches. Mandatory community benefits approaches exist in Denmark and Ireland, as part of net zero energy infrastructure development for wind projects. While the literature provides examples of where this was happening outside of the UK, it was less clear on the extent to which mandating had an impact on the level and nature of community benefits when compared with voluntary approaches.

Developers felt that for mandating to work in practice, a number of factors would need to be taken into consideration. It was felt that any future mandating approach should allow for the differences between technologies to be accounted for by setting, for example, different recommended levels of community benefit fund value. For mandating to work in practice, it was also felt that flexibility was key, particularly in terms of how communities could make use of the funding provided. Practicalities aside, there was some concern that mandating could potentially pose a risk to projects, by placing a financial burden on some projects (particularly those with smaller financial returns such as solar and BESS technologies) which could pose a risk to investors.  

Any necessary adjustments to Scotland’s current voluntary community benefits framework for onshore and offshore

This research has not identified any obvious adjustments that need to be made to Scotland’s current community benefit approach.

Guidance from the Scottish Government, in the form of best practice principles and a recommended level of community benefit for onshore projects was highlighted in interviews with developers as being a strength of the current process. However, developers’ feedback suggests the current system needs to better acknowledge the different realities of different technologies. Developers of emerging and non-generative technologies suggested that more targeted guidelines for these newer technologies would be beneficial, noting that there is no established industry standard approach. However, while they suggested some areas for consideration, they were not specific about what the best future approach should be.

The intention was that the framework in this study could be used by the Scottish Government to determine an appropriate expectation of the level and types of community benefit required for different renewable energy technologies. The parameters that were considered suitable for the framework could provide a useful understanding of the factors that influence ability to offer community benefits. However, this would be dependent on data gaps being addressed. Ideally, it would have up-to-date data on community benefit value covering the full range of renewable energy technologies, with at least 50 projects for each technology.

This study has identified data gaps, challenges collecting data in the future and the difficulty in sourcing data specifically focused on future ability to offer community benefits rather than actual performance. The approach explored here does not provide a robust enough evidence base to underpin a framework for use as a decision-making tool.

Recommendations and next steps

The report highlights existing measurement tools and guidance that can be used to understand where a project sits in relation to certain parameters, such as technology and market maturity. To make the most of these tools, further data collection work would be needed before they could be used for robust socio-economic analysis. This would involve collecting relevant data for a representative sample of projects across the metrics that have already established measurement tools. This would require a significant time and resource commitment and may not, therefore, be a practical option.

To better understand the factors influencing the level of community benefit, beyond the financial indicators highlighted in this study, further research would be needed. Considering the challenge of sourcing quantitative data on project economics, further qualitative research may be the most feasible option. Ideally this would be with a larger selection of developers across the full technology spectrum (including those that had not been able to deliver community benefits), direct engagement with communities, and wider stakeholder engagement (e.g. project investors, funders and other partners that have assisted in project development). This type of engagement would add to and build on the insights gathered from developers in this study.

Glossary / abbreviations table

References

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Appendices

Appendix A – Methodology

Evidence review

Aims and objectives

The aims of the evidence review were to:

• Explore best practice on community benefits in the UK and internationally in relation to renewable energy technologies.
• Explore how community benefit schemes operate and examine their funding arrangements in the UK and internationally.
• Provide examples of where community benefits have been mandated and what impact this has had on industry, communities and the delivery of renewable energy technologies.
• Inform the socio-economic analysis in terms of identifying key parameters and contexts that impact the propensity to supply community benefits at varying scales.
• Identify data sources for the socio-economic analysis.

Defining the research questions

To ensure the evidence review is useful in summarising best practises and informing the socio-economic analysis the following research questions were defined:

• Research Question 1 – What is the best practice on community benefits from onshore and offshore renewable energy technologies internationally?
• Research Question 2 – How does the UK differ from international counterparts on the processes on the provision of community benefits? How does this impact the level of community benefits?
• Research Question 3 – Which (if any) countries mandate community benefits as part of net zero energy infrastructure construction? What impact has this had on the provision of community benefits? What impact has this had on communities and the delivery of net zero energy policies?
• Additional Scoping – What data is available on the levels of community benefits, and their corresponding technologies/market maturities/technology maturity and other hypothesised parameters which influence the provision of community benefits?

Scope of the literature search

The literature search included the identification of relevant sources from:

• Existing research into/evaluations of community benefit schemes
• Academic literature
• Grey literature
• Policy documents
• Media publications

The search for literature was primarily done through using Google and Google Scholar but also used sources such as JSTOR, Scopus, and organisational websites where necessary. Whilst we did not take a strict view on the geographical scope of our search, we favoured countries which are contextually similar to the UK (European countries, US, Australia) as it is likely these findings will be more relevant to the UK.

We explored literature relevant to onshore and offshore renewable energy technologies. This included, but was not limited to, wind, solar, hydro, wave, thermal, pumped hydro storage, bioenergy, battery storage, hydrogen, Negative Emission Technologies (NETs) and transmission infrastructure. The ability to look at these internationally was dependent on the context and energy mix of the countries in question. It was decided that it would also be useful to assess levels of community benefits for technologies which may be emerging in the UK but are more established elsewhere, bringing in the Three Horizons approach featured in the proposal.

Search Terms

Some initial search terms for covering the aforementioned specifications and research questions were developed and are presented in the table below:

Prioritisation approach

A long list of 86 sources were initially identified which were then prioritised using the prioritisation criteria set out below:

• Based on existing evidence: Does the document focus on existing practice/examples of renewable projects/developments?
• Focus on community benefits: Is the main focus of the document around the provision of community benefits (as opposed to for e.g. broader discussions of social acceptability of renewable energy developments OR community engagement)?
• Policy guidance: Does the document include policy recommendations/best practice guidance/reflections on lessons learned?
• Geographical scope: Does the geographical scope of the document include Europe, the UK or US?
• Peer reviewed / grey literature: Peer reviewed sources were prioritised over grey literature sources.

Additional considerations:

• Ensuring the inclusion of evidence on a wide spread of renewable technologies.
• Ensuring the inclusion of evidence from both voluntary and mandatory community benefits schemes.
• Ensuring the inclusion of evidence from a wide spread of types of community benefits.

Additional sources were added to the short-list of literature as suggested by Scottish Government and stakeholders in the scoping interviews. A total of 35 sources were reviewed in-depth. The final list of literature sources reviewed included 12 peer reviewed academic papers, 20 reports, 2 guidance documents from grey literature (e.g., renewable energy developers, private consultancies) and 1 policy document. The publication years of the reviewed documents ranges from 2011 to 2024, with 22 documents from the last 5 years.

Evidence extraction

The prioritised literature sources were then reviewed and findings relevant to the research questions were extracted into an excel sheet. Ipsos Facto, a Large Language Model, was used to assist with identifying and summarising relevant data.

Scoping interviews

In parallel to the evidence, we conducted four in-depth scoping interviews with industry bodies, trade associations, and members of developer groups to enhance the findings from the evidence review.

The aim of these interviews was twofold:

• to understand their views on different types of community benefits and their perceptions of current / best practice arrangements related to community benefits;
• to explore options for sourcing data from the industry, including the types of information they think businesses will / will not be prepared to share with us.

Learnings from the scoping interviews were used specifically to inform the design of the subsequent stakeholder engagement and framework development.

Developer interviews

In-depth interviews were conducted with 21 industry developers. Interviewees covered a range of technologies including onshore wind (7), offshore wind (7), solar PV (5), battery storage (6), grid stability (1), hydro (3), pumped hydro storage (3), hydrogen (6 including 2 green hydrogen) and carbon capture, utilisation and storage (2). Among interviewees, 11 were mostly multi-technologies developers and 10 were single-technology developers.

The objectives of the interviews were threefold:

1. To gather qualitative data on the types of community benefits they have delivered/plan to deliver, views on current arrangement for community benefits and potential different approaches (including mandating for onshore), and what factors have contributed to the provision/ success of their community benefits (i.e. to help inform what parameters are most important in informing potential future community benefits). This will help contextualise the socio-economic analysis and the findings in the report.
2. To gather quantitative data that we will then use in our analysis, using the parameters set out in the framework (these will be developed further based on CXC/SG feedback). This will include information such as the cost of developing the project(s), value of community benefits, proportion of those values in comparison with turnover/profit, employment impacts etc.
3. To help reframe/revise the socio-economic analysis framework as required, based on their views on what parameters/variables are important
4. Ahead of the interview, stakeholders were also requested to complete a ‘Data request sheet’ that aimed to gather data for the socio-economic analysis (see below).

Framework development

The development of the framework to assess the influence of various parameters on community benefits involved a systematic approach following stakeholder interviews. Each initial parameter underwent a comprehensive evaluation to determine the feasibility of its measurement and potential impact on community benefit commitments.

• Assessment of measurement challenges. Initially, each parameter was scrutinised to identify any inherent challenges or limitations in its measurement. This involved examining the complexity, availability of data, and any factors that could hinder accurate quantification.
• Identification of pre-existing measures. For parameters where it was determined that measurement challenges were minimal or non-existent, existing methodologies and measures were sought. This step involved a thorough review of established metrics and tools already in use.
• Development of proxy measures. In cases where no established measures were applicable, proxy measures were devised. This involved identifying the closest available data that could serve as a stand-in to approximate the parameter’s influence on community benefits. These proxies were selected based on their relevance and potential to offer meaningful insights.

Throughout this process, each parameter’s potential to influence community benefits was evaluated. This iterative methodology ensured a robust and nuanced framework, capable of effectively guiding future assessments and decisions concerning community benefit commitments.

Socio-economic analysis

To illustrate the application of the framework, a socio-economic analysis was conducted using a sample dataset of renewable energy projects. This analysis examined the relationship between the parameters detailed in Section 5 and the levels of community benefits, employing the methodologies outlined in the framework.

The analysis focuses on parameters deemed feasible to measure with available methods, specifically revenue and costs, along with technology type. Technology type was used as a proxy for technology maturity, given the current uniformity of maturity levels within each technology. The analysis relied on data from the Community Benefits Register Database, supplemented by additional information obtained through desk research.

For this analysis, the scope included onshore wind, offshore wind, and hydro technologies. These were chosen based on their data availability and relevance to the parameters evaluated.

Appendix B Examples of community benefit-sharing initiatives

Table 2 Examples of community benefit-sharing initiatives and related guidance for renewable technologies in selected European countries (from O San Martin et al. (2022)

Appendix C Socio-economic analysis results

To demonstrate how the framework could be used in future, socio-economic analysis was carried out based on a sample of data from net zero energy projects. This analysis explores the relationship between the parameters outlined in chapter 4 and the levels of community benefits, using the methods outlined in the framework.

The parameters in scope of this analysis are restricted to those which have been deemed feasible to measure and for which a suitable method to measure them has been identified These include revenue and costs, as well as technology type (which serves as a proxy for technology maturity, as maturity levels do not vary within technologies currently). It should be noted that this analysis is based on data available from the Community Benefits Register Database, supplemented with additional data sourced through desk research. Due to the data sources available, it only includes onshore wind, offshore wind and hydro technologies.

The subsequent analysis in this chapter presents the relationships between the measurable parameters for which data is available and the level of community benefits.

Key findings

• Industry alignment and policy influence. Many onshore wind and hydro projects in Scotland are clustering around the recommended annual £5,000 per MW capacity for community benefits for onshore technologies. However, a significant number of onshore wind and hydro projects (more than half of those analysed in the available dataset) commit less than the recommended amount.
• Revenue-benefit correlation. A positive correlation exists between gross project revenue and total community benefit commitments, with larger projects providing bigger packages. However, this relationship weakens for high-revenue projects, suggesting a potential plateau effect.
• Costs and benefit packages. There is a positive correlation between total costs and total community benefit packages. For projects costing less than £25 million, when comparing onshore wind and hydropower projects of the same energy capacity and with equivalent community benefit budgets (£5,000 per MW annually), onshore wind offers greater community benefits per pound spent on energy production.

Analysis of community benefit commitments

Many onshore wind and hydro projects in Scotland are aligning with the recommended community benefits package of £5,000 per MW capacity. The clustering of commitments around the recommended amount suggests that policy guidelines are influencing industry behaviour, but full compliance among onshore projects has not yet been achieved. This is observed in Figure 1 by the number of projects committing less than the recommended amount. Of the 282 onshore wind and hydro projects analysed, 177 were committing less than the recommend amount.

There exists a small but notable group of projects that have committed to providing community benefits from onshore renewable energy developments above the recommended £5,000 per MW capacity. These projects may be setting new benchmarks for corporate social responsibility. The strong concentration around the £5,000 figure could indicate an opportunity for standardising community benefit packages across the industry, potentially simplifying expectations for both developers and communities.

Figure 1 Distribution of Annual Community Benefit Commitments per MW – Onshore Projects

Source: Community Benefits Register Database

Figure 2 below illustrates where most of the data points are concentrated and the variation in the data. There are distinct patterns in community benefit commitments across the two different onshore renewable technologies shown. Figure 2 shows that hydro projects commitments range between £456 and £5,000 per MW per year, while onshore wind commitments range between £60-£20,000 (the upper end of this range is not visible in Figure 2 below as this distorted the shape and scales of the figure).

There is a concentration of commitments around the £5,000 figure for both hydro and onshore wind which aligns with the recommended amount (as demonstrated by the width of the violin plot), indicating a level of industry-wide acceptance of this guideline for land-based projects.

Figure 2 Distribution of Annual Community Benefit Commitments per MW by Onshore Technology

Source: Community Benefits Register Database

Figure 3 below shows the distribution of community benefit commitments among offshore projects. It should be noted that there was very low coverage of offshore wind projects captured in the register, and hence efforts were made to manually collect benefits data through desk-based research. This may have resulted in some discrepancies in actual provision versus what projects would have reported through the register. Figure 3 shows offshore wind projects notably committing lower amounts compared to onshore wind and hydro projects, with a range between c.£20-£2,000 per MW per year. It is acknowledged here that this analysis is based on 21 projects out of a possible 47 operational offshore wind projects in the UK^[55] and therefore figures should be treated with caution.

Figure 3 Distribution of Annual Community Benefit Commitments per MW – Offshore Projects

Source: desk research

There are several reasons why offshore wind projects might be committing lower amounts than their onshore counterparts. Most importantly, onshore renewable energy projects in Scotland are encouraged to offer community benefits, typically around £5,000 per megawatt of installed capacity annually. This is a voluntary guideline, not a requirement, specifically for onshore projects, and does not apply to offshore projects. Beyond this, offshore wind farms, being located further from communities, might be perceived as having less direct impact on local populations, potentially justifying lower community benefit packages. The offshore wind sector in Scotland is also at an earlier stage of development compared to onshore technologies, with community benefit standards still being defined. This technological and market immaturity means standards for community benefits are still evolving within this sector. In contrast, onshore wind technologies are more established and benefit from years of development and market experience. The advanced state of onshore wind technology may allow for greater efficiency and cost reduction, enabling more substantial community support relative to their offshore counterparts. Moreover, the scale of offshore wind projects may mean that while there are lower per-MW commitments, the overall total community benefits package may still be substantial.

Analysis of community benefit parameters and their impact

Revenue and profit

Figure 4 below illustrates the relationship between estimated gross revenue and total community benefit commitments over the project lifetime. The relationship is split and visualised by revenue levels due to the variation in the strength of the relationship as revenue changes. Blue dots represent projects that have committed £5,000 per MW per year, while red dots represent any figure other than the recommended £5,000 per MW. There is a clear positive correlation between gross project revenue and total community benefit commitments across all renewable energy projects in Scotland. This suggests that as projects become more financially substantial, they tend to provide larger community benefit packages. As project size increases in revenue terms, there is a widening range of community benefit amounts. This indicates that larger projects have more diverse approaches to community support. The relationship between gross revenue and community benefits appears to weaken for larger revenue projects. This suggests a potential plateau effect where community benefit increases do not keep pace proportionally with revenue growth beyond a certain point.

Small (under £35m gross revenue) and medium-sized (£25-250m gross revenue) projects frequently demonstrate commitment to the recommended £5,000 per MW amount, suggesting strong guideline adherence among projects of these scales. Across these sized projects, there are few instances of commitments exceeding the recommended amount relative to their revenue, suggesting a general reluctance to exceed standard guidelines.

Figure 4 Community Benefits Package by Gross Revenue Bucket (Under £25M, £25M-£250M and £250M+ Gross Revenue)

Source: See appendix F (Recommended data sources)

Deployment and Operating Costs

Figure 5 below shows the relationship between estimated total cost of production, expressed as the average cost of producing one unit of energy (LCOE – £/MWh) multiplied by total expected production over the project lifetime, and total community benefit commitments over the project lifetime. As above, the relationship is split and visualised by total cost of production levels due to the variation in the strength of the relationship as total cost changes. There is a positive correlation between total cost of production and total community benefit packages across all project sizes, suggesting that as total costs increase, as does the size of the overall commitment to community benefits. The correlation between total cost and total community benefit are relatively strong (Pearson correlation coefficient^[56] = 0.56) at lower total cost levels (under £25M total cost). This increases to 0.62 for mid-sized projects (£25-250M total cost). However above £250M total costs, there is no correlation (Pearson correlation coefficient=-0.002), indicating that total cost plays less of a role in determining community benefits at large cost levels.

While this may appear contrary to the views of developers shown earlier (i.e. those who said that high costs can impact on financial viability and therefore their ability to offer community benefits) it should be noted that this data analysis is based only on projects that were already providing monetary community benefits. It excludes those that had not provided any benefits. It can therefore be assumed that the dataset excludes those projects that were deemed not financially viable enough to enable community benefit provision.

This analysis goes further to explore whether there are any differences by technology class within onshore projects only (offshore projects have been removed at this stage as the recommended £5,000/MW applies only to onshore technologies). In order to do so, it is important to control for project size (as measured by MW capacity), so as not to produce spurious results. Figure 6 illustrates how many pounds (£) are allocated to community benefits for every pound (£) spent producing energy, categorised by the project’s size in capacity (MW). Blue dots represent projects that have committed less than the recommended £5,000 per MW per year, while green dots represent projects that have committed more than the recommended amount and red dots represent project that have committed the recommended £5,000 per MW. For projects with total production costs under £25 million, when comparing hydro and onshore wind projects of the same capacity that both allocate £5,000 per MW annually to community benefits, onshore wind projects are actually providing more community benefits per pound (£) spent on energy production than hydro projects.

Figure 5 Community Benefits Package by Total Cost of Production Bucket (Under £25M, £25M-£250M and £250M+ Total Cost)

Source: See appendix F (Recommended data sources)

Figure 6 Community Benefits Package by Total Cost of Production Bucket (Under £25M, £25M-£250M and £250M+ Total Cost)

Source: See appendix F (Recommended data sources)

Appendix D Methodologies for estimating revenue and costs

Project Revenue

Simplified Annual Revenue Estimation – Generation Projects

The fundamental formula for estimating annual revenue is as follows:

Estimated Revenue = Expected Generation (MWh) * Electricity Price (£/MWh), where

Expected Generation (MWh) = Capacity (MW) * Capacity Factor* Hours in a year

Breaking down these components:

• Installed Capacity (MW): This represents the maximum power output of the project under ideal conditions. This data is readily available from the Renewable Energy Planning Database (REPD).
• Capacity Factor: This represents the actual output of a project as a percentage of its maximum potential output over a specific period. Historical capacity factors for certain technologies (onshore wind, offshore wind, hydro, landfill gas, and sewage sludge digestion) in Scotland can be found in the Energy Trends: UK Renewables publications^[57].
  • Addressing Missing Capacity Factors: For technologies where Scotland-specific capacity factors are unavailable (e.g., solar PV, tidal, wave, biomass), several approaches can be used:
    • UK-wide Proxies: Use UK average capacity factors as a starting point, acknowledging this as a limitation and potential source of error.
    • Technology-Specific Adjustments: Adjust UK proxies based on technology and location characteristics. For example, solar PV capacity factors are influenced by latitude and solar irradiance. Tools like PVGIS can provide location-specific solar irradiance data to refine estimates (this approach is out of scope for the analysis in this study).
• Average Annual Electricity Price (£/MWh): This represents the average price received for each MWh of electricity generated over a year. Given the difficulty of obtaining project-specific PPA data, the wholesale market price serves as a practical proxy.
  • Wholesale Price Data Sources: While real-time wholesale price data requires plugging into Elexon’s BMRS API, a simplified approach for this framework should entail using Ofgem’s published weekly wholesale day-ahead price data^[58] to calculate annual averages. These are GB-wide averages, and hence regional variations should be recognised as a limitation.
  • Simplified CfD Approach (for CfD-supported projects): For projects under a Contract for Difference (CfD) the strike price is a guaranteed price. This figure is a conservative estimate of returns, as actual revenue could be higher if market prices exceed the strike price. CfD data is available from the Low Carbon Contracts Company (LCCC).

Estimating Future Revenue (also applicable for projects not yet operational) – Generation Projects

For revenue in future years, or for projects under development or construction, estimating future revenue requires additional considerations:

• Project Lifetime Assumption: Specify a reasonable assumed operational lifetime for the technology (e.g., 25 years for offshore wind, 20-25 years for solar PV). This assumption directly impacts total revenue calculations.
• Future Capacity Factor Estimation: Project future capacity factors based on recent trends and technological advancements. If historical capacity factor data for the specific technology in Scotland (or a similar region) is available, this trend should be analysed over the past years.^[59] This trend should be extrapolated outward to estimate future capacity factors. For less established technologies with limited historical data, the technology’s maturity should be considered. Rapidly evolving technologies may see more significant performance improvements expected while more mature technologies might expect to see more stable future performance anticipated. For example, floating offshore wind might be expected to see larger capacity factor gains in the coming years compared to a more established technology like onshore wind.
• Future Electricity Price Estimation: Given the volatility of electricity markets, projecting future prices is challenging. For projects supported by a Contract for Difference (CfD), the strike price offers a guaranteed future revenue stream and can be used as a conservative estimate. For non-CfD projects, where future revenue is directly exposed to market price fluctuations, a simplified approach involves using the average annual CfD strike price for the corresponding technology in each future year. However, it’s essential to acknowledge that:
  • CfD strike prices are influenced by auction dynamics and may not perfectly represent the market value of electricity from non-CfD projects.
  • Not all technologies are represented in CfD auctions.
  • Using CfD strike prices as proxies across all non-CfD projects might result in a somewhat conservative revenue estimate, as market prices could exceed the strike price in some years.

Prices beyond the latest future year reported in the CfD auction reports are set at the price in the latest year for the respective technology. For example, if CfD auction strike prices are set for the year 2027, the strike price in all future years will be set at the prices in 2027 for that technology. It is acknowledged these prices are unrealistic, however, they serve as the most appropriate benchmark against which to extrapolate.

• Discounting Future Cash Flows: To compare projects and scenarios, discount future revenue streams to their present value using an appropriate discount rate that reflects project risk. We propose using the technology-specific discount rate of 10% used by DESNZ in their Levelised Cost of Electricity (LCOE) methodology documents.

Total Cost of Production Calculation

Total Cost of Production Calculation – Generation Projects

Estimating the total lifetime cost of production across the range of projects in scope requires a consistent and transparent method to apply cost assumptions across different generation technologies. To support this, we use benchmark Levelised Cost of Electricity (LCOE) estimates published by DESNZ.

DESNZ’s LCOE values represent the average lifetime cost (£/MWh) of generating electricity for each technology type. These figures include all relevant capital, operational, fuel, and decommissioning costs, spread over the expected lifetime electricity output of a project. As such, LCOE is a useful and well-recognised benchmark for comparing the cost-effectiveness of electricity generation technologies in the UK.

Importantly, we are not re-estimating or recalculating LCOE. Instead, we are using DESNZ’s published LCOE values as input parameters in our framework to estimate total cost of production across different project configurations. Specifically, we apply the LCOE estimates to the expected energy output of each project to calculate a total cost figure. This calculation can be expressed as:

Total Cost of Production (£) = LCOE (£/MWh) x (Installed Capacity (MW) x Load Factor x Annual Operating Hours x Project Lifetime (years))

This approach allows us to derive a consistent estimate of total production cost, using technology-specific LCOE values as cost rates, scaled by the expected energy output of each project over its lifetime.

The process for estimating total cost of production is as follows:

• Technology categorisation: Categorise REPD projects to align with the technology categories used in the UK Government’s LCOE estimates file. This may involve mapping project types to the closest matching category in the government data.
• Energy Output Calculation: Estimate the annual energy output (MWh) for each project based on its capacity and typical capacity factors for the relevant technology.
• Total calculation: Using the scaled cost components and estimated energy output, we will calculate the total cost for each project using the formula. It’s important to note that the UK Government’s LCOE estimates are provided for projects with commissioning dates in 2025, 2030, 2035, and 2040. Therefore, our total cost calculations will need to be based on the estimate that most closely matches each project’s expected commissioning date. We will assign each project to the nearest available estimate year based on its planned commissioning date.
• Inflation-adjustment: Furthermore, all costs in the UK Government’s estimates are reported in 2021 prices. To ensure consistency and accurate comparisons across projects with varying commissioning dates, we adjust these figures to a common base year using HM Treasury GDP deflators. These temporal adjustments will help ensure that our total cost calculations accurately reflect the economic conditions and technological advancements expected at the time of each project’s commissioning, within the constraints of the available data.

Appendix E Socio-economic scoring mechanisms

Table 3 NASA Technology Readiness Levels

Table 4 IEA Technology Guide Technology Maturity Scale

Table 5 Market Maturity Scale

Appendix F Recommended data sources

The following below provides a summary of the key data sources currently available to measure framework parameters. However, these are not complete and additional work is required to fill gaps.

How to cite this publication:

Mulholland, C., Jones, R., Tapie, N. and Stow, C. ‘Renewable energy technologies and community benefits’, ClimateXChange. http://dx.doi.org/10.7488/era/6396 

© The University of Edinburgh, 2025
Prepared by Ipsos on behalf of ClimateXChange, The University of Edinburgh. All rights reserved.

While every effort is made to ensure the information in this report is accurate as at the date of the report, no legal responsibility is accepted for any errors, omissions or misleading statements. The views expressed represent those of the author(s), and do not necessarily represent those of the host institutions or funders.

This work was supported by the Rural and Environment Science and Analytical Services Division of the Scottish Government (CoE – CXC).

ClimateXChange

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If you require the report in an alternative format such as a Word document, please contact info@climatexchange.org.uk or 0131 651 4783.

1. 
   

   See Community benefits and shared ownership for low carbon energy infrastructure: working paper (accessible webpage) – GOV.UK ↑

   
   
2. 
   

   Scottish Government (2020) ↑

   
   
3. 
   

   Scottish Government (2024) ↑

   
   
4. 
   

   Scottish Government (2019) ↑

   
   
5. 
   

   Scottish Government (2018) ↑

   
   
6. 
   

   Scottish Government (2023) ↑

   
   
7. 
   

   Community benefit funds typically mean that developers will voluntarily contribute a certain amount of funding to local communities. In some cases, the level of funding is linked to the amount of installed capacity of the project or the amount of energy produced. ↑

   
   
8. 
   

   Kerr et al (2017), Anchustegui (2021), Kerr & Weir (2018), O San Martin et al (2022), Scottish Government (2022), Scottish Government (2019), Scottish Government (2018) ↑

   
   
9. 
   

   O San Martin et al (2022) ↑

   
   
10. 
    

    Anchustegui (2021) ↑

    
    
11. 
    

    Glasson (2020) ↑

    
    
12. 
    

    https://localenergy.scot/community-benefits-register/ ↑

    
    
13. 
    

    Kerr et al (2017) ↑

    
    
14. 
    

    In the reviewed literature, shared ownership was a common practice in countries outside the UK, notably in Germany and Denmark. However, this is not outlined here as shared ownership is not part of the Scottish Government’s definition of community benefits. ↑

    
    
15. 
    

    le Maitre, 2024; Toledano, et al., 2023; O San Martin, et al., 2022; ↑

    
    
16. 
    

    Anchustegui, 2021 ↑

    
    
17. 
    

    Lansbury Hall, 2020; Regen, 2022; Lane, et al., 2019; ↑

    
    
18. 
    

    Energy UK, 2024 ↑

    
    
19. 
    

    Centre for Sustainable Energy (CSE), 2005; Walker, 2023; Glasson, 2020; Chen, 2024 ↑

    
    
20. 
    

    Regen, 2022 ↑

    
    
21. 
    

    van den Berg & Tempels (2022); Glasson (2020) ↑

    
    
22. 
    

    Kerr & Weir (2018), Scottish Government (2022) ↑

    
    
23. 
    

    le Maitre (2024) ↑

    
    
24. 
    

    Glasson (2020) ↑

    
    
25. 
    

    Rudolph et al. (2014) ↑

    
    
26. 
    

    Rudolph et al. (2014) ↑

    
    
27. 
    

    Glasson (2020) ↑

    
    
28. 
    

    Glasson (2020) ↑

    
    
29. 
    

    Glasson (2020) ↑

    
    
30. 
    

    SSE Renewables (2024) ↑

    
    
31. 
    

    Regen (2022) ↑

    
    
32. 
    

    Le Maitre et al. (2024) ↑

    
    
33. 
    

    Wind Europe (n.d.); San Martin (2022); Arsenova et al. (2024); Anchustegui (2021) ↑

    
    
34. 
    

    Klain et al. (2017) ↑

    
    
35. 
    

    Lane & Hicks (2019) ↑

    
    
36. 
    

    Lane & Hicks (2019) ↑

    
    
37. 
    

    Chen et al. (2024); Klain et al. (2017); Rudolph et al. (2014) ↑

    
    
38. 
    

    Glasson (2020), Manitius (2023), Arsenova & Wlokas (2019), BiGGAR Economics (2024a), BiGGAR Economics (2024b), Toledano et al. (2023) ↑

    
    
39. 
    

    Klain et al. (2017) ↑

    
    
40. 
    

    Wind Europe (n.d.) ↑

    
    
41. 
    

    Chen et al. (2024), Klain et al. (2017) ↑

    
    
42. 
    

    Arsenova & Wlokas (2019) ↑

    
    
43. 
    

    Arsenova & Wlokas (2019) ↑

    
    
44. 
    

    US Department of Energy (2024) ↑

    
    
45. 
    

    Department for Energy Security and Net Zero (2023) ↑

    
    
46. 
    

    Anchustegui, 2021; Kerr, 2017; le Maitre, 2024; Rudolph, et al., 2014; Toledano, et al., 2023; Arsenova,et al., 2019 ↑

    
    
47. 
    

    Herrera (2021) ↑

    
    
48. 
    

    Herrera (2021) ↑

    
    
49. 
    

    le Maitre (2024) ↑

    
    
50. 
    

    Toledano, et al. ↑

    
    
51. 
    

    Arsenova, et al., 2024 ↑

    
    
52. 
    

    Kerr et al (2017); le Maitre (2024) ↑

    
    
53. 
    

    le Maitre (2024) ↑

    
    
54. 
    

    BiGGAR Economics (2023) ↑

    
    
55. 
    

    Four operational offshore wind projects were in Scotland, two in Wales and fifteen in England. ↑

    
    
56. 
    

    The Pearson correlation coefficient measures how strongly two variables are linearly related, ranging from -1 (perfect negative correlation) to 1 (perfect positive correlation), with 0 indicating no linear relationship. ↑

    
    
57. 
    

    https://www.gov.uk/government/statistics/energy-trends-section-6-renewables ↑

    
    
58. 
    

    https://www.ofgem.gov.uk/energy-data-and-research/data-portal/wholesale-market-indicators Wholesale market indicators | Ofgem ↑

    
    
59. 
    

    It is recommended to aim for a minimum of 5 years of historical data. This provides a reasonable basis for identifying trends and patterns, while also smoothing out short-term fluctuations or anomalies. ↑

    
    

As part of its commitment to achieving net zero by 2045, the Scottish Government has ambitions for Scotland to become a major exporter of low-carbon hydrogen and hydrogen derivatives and products (HDPs).

Hydrogen can be produced using electrolysis, a process which involves splitting water into hydrogen and oxygen. When this process is performed using only renewable sources of electricity, the hydrogen produced is known as green hydrogen.

This study explores Scotland’s capabilities of producing green hydrogen and developing the HDP sector, identifying opportunities and barriers it may face in scaling it up. It also aims to understand the role different regions of Scotland can play in enabling the growth of these sectors.

Findings

Scotland’s abundant access to renewable energy, geographic proximity to the EU, skilled workforce and a favourable external policy landscape are major strengths that can enable growth in the hydrogen and HDP sectors. However, there are potential weaknesses and barriers too. Producing renewable electricity, a major cost source for producing green hydrogen, is currently relatively expensive in Scotland, with prices around 70% higher than the average of EU and G7 countries.

Supply chain capabilities and addressable market demand

Following a systematic comparison of the supply chain capabilities of 14 potential hydrogen hubs identified by the Scottish Government, Aberdeen ranked the highest in many metrics, followed by Cromarty and Ayrshire.

The report also assessed the addressable market demand for HDPs. Roughly 97% of all HDP demand comes from the aviation and maritime sectors and Grangemouth was estimated to have the biggest market demand for both.

Co-locating demand and supply will enable the early scaling of Scotland’s hydrogen and HDP sectors as national network infrastructure is developed. Analysis of both supply and demand found that with the presence of a large chemicals industry and a major airport, Grangemouth outperforms all other hubs. Despite relative strengths in supply chain capability, Aberdeen is not the optimal region for co-locating supply with demand opportunities.

Policy gaps

Analysis of the policy landscape in the UK, the EU and Scotland suggests a number of potential approaches to help develop the hydrogen and HDP sectors. Scotland’s abundant access to renewable energy, strong workforce capabilities and demand potential can facilitate vibrant hydrogen and HDP sectors. However, Scotland will need to address issues such as:

• the high cost of electricity generation;
• a more sophisticated planning regime that considers both site demand and supply in order to optimise co-location strategies.

Working with the UK and foreign governments to capitalise on export opportunities will allow Scotland to expand its potential market size.

Cross-hub development

Although Aberdeen and Grangemouth stand out as having relative strengths in relation to supply chain capabilities and market demand, there are strengths and capabilities across the other potential hubs. Cromarty and Ayrshire offer strong supply chain capabilities. Glasgow and Fife present significant demand opportunities. The Western Isles and Argyll and Islands may require targeted support to enhance their supply chain capabilities, while the Scottish Borders may need support in developing greater regulatory experience.

This diversity points to the importance of a cross-hub approach, in addition to co-locating demand with supply. By balancing cross-hub collaboration with localised development, Scotland can maximise the potential of its hydrogen economy, driving the sector’s long-term growth and resilience.

For further information, please read the report.

If you require the report in an alternative format, such as a Word document, please contact info@climatexchange.org.uk or 0131 651 4783. 

Research completed: April 2025

DOI: http://dx.doi.org/10.7488/era/6397

Executive summary

Aims

The Scottish Government is committed to achieving net zero emissions by 2045, five years ahead of the UK’s target. Scotland also aims to become a major exporter of low carbon hydrogen derivatives and products (HDPs) and has access to the abundant renewable energy necessary for their production. Hydrogen derivatives are chemicals produced from hydrogen that can more easily be stored and transported and then converted back to hydrogen for later use. Examples include ammonia and methanol. Hydrogen products, such as sustainable aviation fuels (SAFs), do not need a further conversion process and are used for a range of applications.

Hydrogen can be produced using electrolysis, a process which involves splitting water into hydrogen and oxygen. When this process is performed using only renewable sources of electricity, the hydrogen produced can be deemed as green hydrogen.

As green hydrogen supply is crucial for the development of HDP production, this study explores Scotland’s strengths and weaknesses in developing both the green hydrogen and HDP sectors. Throughout this study, the term “hydrogen and HDP sector” is used to include green hydrogen and HDPs produced using that green hydrogen.

This study analyses Scotland’s supply chain capabilities in producing HDPs and identifies opportunities and barriers it may face in scaling up the hydrogen and HDP sectors. It also aims to understand the role different regions of Scotland can play in enabling the growth of these sectors.

Findings

Scotland’s abundant access to renewable energy, geographic proximity to the EU, skilled workforce and a favourable external policy landscape are major strengths that can enable growth in the hydrogen and HDP sectors. However, there are potential weaknesses and barriers too. Producing renewable electricity, a major cost source for producing green hydrogen, is currently relatively expensive in Scotland, with prices around 70% higher than the average of EU and G7 countries.

Supply chain capabilities

The Scottish Government’s Hydrogen Action Plan identified 14 hydrogen hubs. This report systematically compared the supply chain capabilities of each for producing HDPs. Hubs were assessed on:

• Availability of feedstock (i.e., production source material)
• Economic factors from co-located industries
• Workforce and skills
• Infrastructure,
• Local policy and planning support, and
• Co-location with innovation institutions

For comparison, the Duisburg region of Germany was assessed against the same metrics, as a potential competitor to Scottish hubs.

Aberdeen ranked the highest in many metrics, followed by Cromarty and Ayrshire. The Duisburg hub also scored highly on several metrics. The aim was not to find a single best hub. Aberdeen’s high score suggests that it is currently relatively well-developed against the supply chain metrics, it does not suggest that this is the sole hub suitable for developing Scotland’s hydrogen and HDP sectors.

Addressable market demand

The report estimated the addressable market demand for HDPs in each hub. The HDPs considered were ammonia and e-methanol for the maritime sector, ammonia-based fertiliser for the agriculture sector, e-methanol feedstock for the chemical sector, and SAF for aviation.

The addressable demand for all HDPs in all the sectors is around 35 TWh. Roughly 97% of this comes from just the aviation and maritime sectors. Grangemouth is estimated to have the biggest market for HDPs in both sectors.

Co-locating demand and supply

Co-locating demand and supply will enable the early scaling of Scotland’s hydrogen and HDP sectors as national network infrastructure is developed. Aberdeen and Grangemouth both stand out as key hubs for the development of Scotland’s HDP economy. Analysis of supply and demand found that with the presence of a large chemicals industry and a major airport, Grangemouth outperforms all other hubs.

Despite relative strengths in supply chain capability, Aberdeen is not the optimal region for co-locating supply with demand opportunities because the maximum demand potential is higher in Grangemouth.

There are significant hazards associated with HDPs bringing associated regulatory requirements. Analysis of current Control of Major Accidents and Hazards (COMAH) site locations provides insight into the infrastructure and the expertise needed to handle HDPs safely. Fife, Glasgow, Moray and Grangemouth hubs have the most COMAH sites, bringing relatively strong experience in this regulatory environment.

Policy gaps

Analysis of the policy landscape in the UK, the EU and Scotland suggests a number of potential approaches to help develop the hydrogen and HDP sectors. Scotland’s abundant access to renewable energy, strong workforce capabilities and demand potential can facilitate a vibrant hydrogen and HDP sectors. However, Scotland will need to address issues such as:

• the high cost of electricity generation;
• a more sophisticated planning regime that considers both site demand and supply in order to optimise co-location strategies.

Working with the UK and foreign governments to capitalise on export opportunities will allow Scotland to expand its potential market size.

Conclusions

Hub development requires both a cross-hub approach and strategic co-location of regional supply and demand. Individual hubs should not be considered in isolation. Particular hubs score relatively highly but this does not preclude a very significant role for other hubs within the overall hydrogen and HDP sectors.

Aberdeen and Grangemouth stand out as having relative strengths in relation to co-location of supply chain capabilities with demand. Cromarty and Ayrshire offer strong supply chain capabilities. Glasgow and Fife present significant demand opportunities. The Western Isles and Argyll and Islands may require targeted support to enhance their supply chain capabilities. The Scottish Borders may need support in developing greater regulatory experience.

By balancing cross-hub collaboration with localised development, Scotland can maximise the potential of its hydrogen economy, driving the sector’s long-term growth and resilience.

Glossary / Abbreviations

Abbreviations

Glossary of units

Introduction

Scotland has set an ambitious target to reach net zero by 2045. To be able to achieve its targets, Scotland will have to rapidly decarbonise its economy. The Scottish Government is exploring options to use hydrogen to decarbonise certain sectors and to develop current HDP capabilities in support of climate goals. Scotland ultimately aims to produce 5 GW of low-carbon hydrogen by 2030 and 25 GW by 2045. In addition to reaching its net zero goals, the Scottish Government also aims to utilise these resources to capitalise on export and other economic opportunities. Green hydrogen is expected to be the dominant low carbon production method in Scotland. This study focuses solely on HDPs produced from green hydrogen, which are referred to as “HDPs” throughout this report.

In this study we aim to explore Scotland’s supply chain capabilities. To situate the need for this research, we conducted a review of existing literature (see Appendix A: Current state of play). Our review of the literature analyses the strengths that Scotland possesses to scale up its hydrogen and HDP sectors. It also details some of the biggest barriers that Scotland is likely to face. The review then focusses briefly on specific HDPs and their potential role in enabling Scotland’s transition to net zero.

We also analyse Scotland’s strengths and weaknesses in developing its capabilities. We focus on assessing the opportunities and challenges associated with exporting HDPs to the rest of the UK and the EU. Moreover, we aim to understand the role that different regions of Scotland can play in enabling the development of HDP production. We have identified 14 regional hydrogen hubs in Scotland from the Scottish Government’s Hydrogen Action Plan (2022), shown in Table 1. In addition to the Scottish hubs, the study also considers the Ruhr region of Germany as an alternative hub. Scotland is expected to export a significant amount of its green hydrogen produce to the EU. Therefore, the Ruhr region of Germany was considered as a potential alternative source of green hydrogen for the EU.

For each metric, we rank the hubs to analyse their relative strengths, before combining these rankings into a final capability score for each hub in Section 3.8. In this manner, we provide a balanced and quantitative assessment of the relative supply chain capabilities of Scotland’s hydrogen hubs. It is important to note that the purpose of this analysis is not to find the absolute “best” hydrogen hub in Scotland. By ranking the hubs in each metric, we have assessed their relative strengths and weaknesses.

In an international market, Scotland’s hubs will be competing with various other green hydrogen and HDP production areas. As Scotland aims to export to Europe, in particular Germany, it will have to compete with local European production (Scottish Government, 2024). Germany’s Ruhr region aspires to be the first model hydrogen region to accelerate the hydrogen sector in Europe (Hydrogen Metropole Ruhr, 2023). Hydrogen is already playing a role in developing HDP production in the region (Metropole Ruhr Business, 2025). One example is the Greenlyte’s project in Marl which is producing e-methanol from CO₂ and green hydrogen. In August 2025, this project secured a 7-figure e-methanol offtake agreement with Germany-based MB Energy, indicating substantial market interest for HDPs produced in the Ruhr region (Greenlyte, 2025). Given Ruhr’s strong ambitions, to evaluate Scotland’s competitiveness at the international level, we will compare the Scottish hubs with the hydrogen hub of Duisburg, situated in the Ruhr region.

In subsequent chapters, we analyse the supply chain capabilities of each hub in Scotland, addressable demand for various HDPs in different sectors, and the regulatory environment related to safety. The final chapter focusses on the wider policy landscape, analysing gaps and providing recommendations to policymakers.

Table 1: List of Scottish hubs and their corresponding local authorities.

Supply chain capabilities of Scotland’s hydrogen hubs

In this chapter, we investigate the relative supply chain capabilities of Scotland’s hydrogen hubs to produce HDPs. We have selected six capability groups for evaluation (shown in Table 2). These groups are broadly based on the six key advantages for hydrogen production identified in the Scottish Government’s Hydrogen Action Plan (2024). Certain capability groups, such as pipeline infrastructure, are highly dependent on future developments at a national and international level. The results from analysing all these capability groups will allow us to assess each hub’s intrinsic and long-term supply chain strengths that will enable the fast growth of the hydrogen and HDP sectors.

We have then broken down these groups further into assessment metrics in order to accurately evaluate the capability groups against available data. This analysis produces detailed hub differentiation to support actionable conclusions for policymakers. Table 2 shows each capability group and their associated metrics. Further information on metric methodology, sources and data is found in Appendix B.

Table 2: Capability groups and assessment metrics for evaluating the supply chain capabilities.