Only around 11% of occupied homes in Scotland have renewable or low-emission heating systems, with the majority still relying on high-emission sources like gas and oil. To meet Scotland’s net zero greenhouse gas emissions target by 2045, over 2 million homes will need to transition to clean heating systems.

Heat pumps and electric resistive heating are the main clean heating options available today and they are likely to work well in most homes. This project investigates the feasibility of clean heating, especially heat pumps, in challenging home types in Scotland, in terms of practicality and cost effectiveness.

We reviewed academic research, industry literature and case studies, and conducted a combination of surveys and semi-structured interviews with industry experts. We identified the advantages, disadvantages, contradictory evidence and research gaps surrounding the application of clean heating technology in Scotland.

We reviewed studies and identified the following challenging dwelling types:

• Older properties from before 1919
• Rural properties
• Small properties
• Flats and tenements.

Findings

Overall, while there are challenges to implementing heat pumps across different property types, innovative solutions and careful planning can facilitate their adoption and contribute to decarbonising heating systems in Scotland. We found:

• Older properties: Buildings from before 1919, often with solid walls and potentially holding protected status, may pose challenges for both insulation upgrades and heat pump installations due to planning constraints and preservation concerns. Whilst it is common to prioritise improving energy efficiency prior to the installation of heat pumps, recent studies have concluded that heat pumps can operate effectively when installed into homes that have not undergone energy efficiency upgrades. It is also important to note that while increasing energy efficiency stands as a crucial objective, the structural integrity and overall condition of the building need consideration. It is important to ensure a building is in good condition before installing new heating systems, in particular, repairing structural issues, water ingress and damage. Consequently, any new heating technologies will be more effective and contribute to the building’s overall energy performance.
• Rural properties: Rural areas can present unique challenges due to grid capacity limitations and vulnerability to power cuts. However, heat pump adoption rates are already highest in off-grid regions due to cost savings compared to existing off gas network fuel sources. Evidence shows that heat pumps can operate well in cold climates, with studies evidencing effective performance compared to gas boilers, even at extremely low temperatures. No significant barriers to heat pump adoption have been identified. Heat pumps with additional corrosion protection are available for coastal areas. However, a lack of local contractors, increased servicing costs and higher costs for energy efficiency improvements pose challenges in remote areas, particularly the Scottish islands.
• Small properties: Space constraints, such as limited room for hot water storage and radiator upgrades, present challenges for heat pump installations. No evidence of a quantitative threshold to define ‘small’ was identified. Innovative solutions like compact heat batteries or external hot water storage may offer alternatives.
• Flats and tenements: In addition to the challenges presented above, flats and tenements face difficulties due to constraints on external locations for air source fans, as well as coordinating changes with neighbours and building owners, due to differing tenancy arrangements. Case studies highlight the importance of careful planning and resident input in determining suitable locations. These are similar to the challenges to basic repairs and maintenance of blocks of flats and tenements and to fabric improvements, such as insulation. Fifth generation heat networks, with individual indoor heat pumps supplied by communal ground sources may provide a potential solution.

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 in February 2024

DOI: http://dx.doi.org/10.7488/era/4864

Executive summary

Only around 11% of occupied homes in Scotland have renewable or low-emission heating systems, with the majority still relying on high-emission sources like gas and oil. To meet Scotland’s net zero greenhouse gas emissions target by 2045, over 2 million homes will need to transition to clean heating systems.

Heat pumps and electric resistive heating are the main clean heating options available today and they are likely to work well in most homes. This project investigates the feasibility of clean heating, especially heat pumps, in challenging home types in Scotland, in terms of practicality and cost effectiveness.

We reviewed academic research, industry literature and case studies, and conducted a combination of surveys and semi-structured interviews with industry experts. We identified the advantages, disadvantages, contradictory evidence and research gaps surrounding the application of clean heating technology in Scotland.

We reviewed previous studies and identified the following challenging dwelling types: older properties from before 1919, rural properties, small properties, and flats and tenements.

Findings

Overall, while there are challenges to implementing heat pumps across different property types, innovative solutions and careful planning can facilitate their adoption and contribute to decarbonising heating systems in Scotland. We found:

• Older properties: Buildings constructed before 1919, often characterised by solid walls and potentially holding protected status, may pose challenges for both insulation upgrades and heat pump installations due to planning constraints and preservation concerns. Whilst it is common to prioritise improving energy efficiency prior to the installation of heat pumps, recent studies have concluded that heat pumps can operate effectively when installed into dwellings that have not undergone energy efficiency upgrades. It is also important to note that while increasing energy efficiency stands as a crucial objective, the structural integrity and overall condition of the building need consideration. It is important to ensure a building is in good condition before installing new heating systems, in particular, repairing structural issues, water ingress and damage. Consequently, any new heating technologies will be more effective and contribute to the building’s overall energy performance.
• Rural properties: Rural areas can present unique challenges due to grid capacity limitations and vulnerability to power cuts. However, heat pump adoption rates are already highest in off-grid regions due to cost savings compared to existing off gas network fuel sources. Evidence shows that heat pumps can operate well in cold climates, with studies evidencing effective performance compared to gas boilers, even at extremely low temperatures. No significant barriers to heat pump adoption have been identified. Heat pumps with additional corrosion protection are available for coastal areas. However, a lack of local contractors, increased servicing costs and higher costs for energy efficiency improvements pose challenges in remote areas, particularly the Scottish islands.
• Small properties: Space constraints, such as limited room for hot water storage and radiator upgrades, present challenges for heat pump installations. No evidence of a quantitative threshold to define ‘small’ was identified. Innovative solutions like compact heat batteries or external hot water storage may offer alternatives.
• Flats and tenements: In addition to the challenges presented above, flats and tenements face difficulties due to constraints on external locations for air source fans, as well as coordinating changes with neighbours and building owners, due to differing tenancy arrangements. Case studies highlight the importance of careful planning and resident input in determining suitable locations. These are similar to the challenges to basic repairs and maintenance of blocks of flats and tenements and to fabric improvements, such as insulation. Fifth generation heat networks, with individual indoor heat pumps supplied by communal ground sources may provide a potential solution.

Recommendations

• Establish evidence for the suitability of air-to-air heating and, if found to be appropriate, provide policy support for certification and installation in homes where it is more cost effective than water-based space heating.
• Policymakers should monitor developments in thermoelectric heat pumps, which may provide radical space savings.
• Explore whether there is a role for hybrid heat pumps in certain circumstances, for hot water only.

Glossary

Introduction

Of the 2.5 million occupied homes in Scotland, only around 11% currently have renewable or very low emission heating systems with the majority still reliant on high-emission energy sources like gas and oil (Scottish Government, 2021b). To meet net zero greenhouse gas emissions targets, over 2 million homes will have to transition to clean heating by 2045 (Scottish Government, 2021a). Clean heating systems have been defined within the consultation on a Heat in Buildings Bill by the Scottish government as:

“Systems – such as heat pumps and heat networks – that don’t produce any greenhouse gas emissions at the point of use” (Scottish Government, 2023b). Bioenergy is not included in this definition due to emissions at the point of use so were not included in this work.

As described, several technologies already exist, each at different stages of adoption. Electric heating was commonplace in homes throughout the 1960s and beyond, resulting in significant improvements over time to make them more efficient and streamline their design. Alternative technologies, such as heat pumps, which also first became commercially available in the 1960’s, are less mainstream in Scotland, but are expected to play a significant role in the decarbonisation of heat in Scotland. The Climate Change Committee has described them as a ‘low regrets’ option (CCC, 2020) and they feature prominently in Scotland’s Heat in Buildings Strategy (Scottish Government, 2021a).

While electricity provided from the grid is currently a mix of renewable and non-renewable energy, it is expected that as renewable power generation such as wind and solar power increases, the emissions associated with electricity will continue to reduce, rendering it an extremely low carbon energy option. To capitalise on this, it will be required that heat in homes provided by gas, oil, and other high emitting energy sources be phased out and replaced by electricity.

The Scottish Government’s Hydrogen Action Plan States “We do not consider that hydrogen will play a central role in the overall decarbonisation of domestic heat and therefore cannot afford to delay action to decarbonise homes this decade through other available technologies. The potential for hydrogen to play a role in heating buildings depends upon strategic decisions by the UK Government that will be made over the coming years and the Scottish Government will continue to urge the UK Government to accelerate decision-making on the role of hydrogen in the gas grid”.

Consequently, this report predominantly focusses on heating systems which utilise electricity as an energy source, specifically heat pumps and their applications. However, it should be recognised that heat networks and each of the clean heating technologies described may play a crucial role in addressing challenging dwelling types.

In this report, we investigate the feasibility, in terms of practical application and cost-effectiveness, of applying clean heating technologies in challenging dwelling types.

Additionally, we explore alternative clean heating options, considering their potential application to the archetypes and examine scenarios where hybrid fossil fuel heating systems may offer a transitional solution, particularly in contexts where the full adoption of renewable technologies poses challenges.

This research focussed on the following building types that we have considered upon review of previous studies as reflecting broadly those that are considered as difficult to decarbonise with clean heating:

• Older properties, especially those built before 1919
• Rural properties
• Small properties
• Flats and tenements of different forms

This project does not consider clean heating challenges that are relevant to all building types, such as skills shortages and capital costs. However, we acknowledge additional challenges such as temporary disruption to households who may need to decant. Particularly when households are without hot water while install work is on-going. This is more acute in winter when losing heating and hot water for a period of time is most impactful to households. This may be perceived as a barrier to adoption, however no evidence was found to corroborate this within this research. Presented below are the results of the evidence review. The research identifies gaps in the available evidence which may inform future research priorities. We also identify where there are best case examples relevant to Scotland.

The evidence reviewed was a combination of grey literature, published research, academic papers, case studies and industry expert feedback through interviews and a survey. For in-situ evidence of how heat pumps are likely to perform in Scotland, we reviewed both large-scale heat pump field trials and small-scale monitoring studies. Whilst, the scope of the research was for both domestic and non-domestic buildings, the majority of identified evidence relates to domestic settings.

Method

A Rapid Evidence Assessment (REA) is a systematic and streamlined approach to reviewing existing literature and evidence on a specific topic within a limited timeframe. This method is often employed when there is a need for quick insights and when a traditional comprehensive systematic review may take too long. The full method for the REA can be found in Appendix 10.1.

Using the keyword searches in relevant databases, 147 sources were identified. The results were screened according to the protocol. Each of the screened sources which were analysed further can be found in the references section of this work. The purpose of the deeper dive was to investigate what evidence was available that heat pumps are a practical, technically feasible and cost-effective clean heating option for hard-to-treat archetypes in Scotland. To enhance the literature review, surveys and interviews were carried out with industry professionals. These interactions aimed to determine whether the research gaps identified in existing literature were mirrored in industry and to explore any opportunities or strategies that the industry has developed to address the identified challenges. The survey and interview questions can be found in Appendices 10.2 and 10.3, respectively.

We received 16 survey responses from:

• Six retrofit advisory/consultancies
• Four registered social landlords
• Five architects/Designers
• One utility company

We conducted 10 structured interviews with:

• Three installers
• Four registered social landlords
• Two architects/designers
• One research institute

Clean heating technologies

This section outlines the main technologies for heating free of emissions at the point of use. Various clean heating technologies are available, adaptable to specific building and occupant needs. Each technology presents unique opportunities and applications, catering to diverse requirements.

Direct electric

Direct electric, or electric resistive heating generates heat by passing electricity through a resistive element, in the same way a kettle works. Examples of direct electric heating are storage heaters, panel heaters, electric boilers, infrared heating, and electric underfloor heating. Direct electric heating is 100% efficient, delivering one unit of energy as heat for every unit of electricity consumed.

Direct electric heating has a low capital cost.

A significant barrier in the uptake of electric heating is the unit cost, which remains expensive when compared with gas (Nesta, 2023a, 2023b). To overcome this, there is the opportunity for UK Government to review the distribution of taxes by reducing the tax on electricity and increasing the tax on high emitting energy sources (Ahmad, 2023; Rosenow, 2022; Sevindik, 2023). This may encourage the uptake of heat pumps and also aid in the renewable energy transition.

Heat pumps

Heat pumps operate by transferring heat from one medium to another. Heat pumps are used in fridges, freezers and air conditioning, as well as in heating systems. Air-source heat pumps use the outside air, while ground-source heat pumps will use water preheated by the ground as the source medium. As the source medium passes through a heat exchanger inside the unit, it causes a refrigerant enclosed in a loop to evaporate into a gas. This gas is compressed, raising its temperature. It then passes through a second heat exchanger, transferring its heat to the inside air, or to water that circulates to radiators, underfloor heating, and to heat up water tanks and so on. The refrigerant, now in a liquid state, then passes through an expansion valve, reducing its pressure and temperature, completing the cycle.

Domestic heat pumps may source heat renewably from the air, ground or water sources such as rivers, lochs, and the sea. They may also use waste heat from industrial sources such as data centres and factories.

The most common form of domestic heat pump in Scotland sources heat from the outdoor air and delivers it through water-filled radiators. Heat is delivered to living spaces through conventional wall-mounted radiators or underfloor heating. This is commonly referred to as an air-source heat pump (ASHP), or air-to-water heat pump (A2W).

‘Air to air’ (A2A) heat pumps are common in commercial applications such as shops and are also installed in domestic settings. Heat is delivered to living spaces by blowing recirculated air over a heat exchanger. During warmer seasons, A2A heat pumps can also be used for cooling, extracting heat from indoor air and releasing it outside. This operates independently of piping and radiators, and one unit will generally service a single room/space.

Ground source heat pumps collect heat from boreholes up to 200 metres deep or from shallow coil collectors buried over large areas. They can achieve higher operating efficiencies because ground temperatures, which sit consistently between 5°C and 10°C, are warmer than air temperatures in the depths of winter. However, these operating efficiencies can be negated by the higher capital costs, especially in buildings with lower heat demands. The primary influence on heat pump efficiency is the difference in temperature between the source (the outside air temperature for ASHP’s), and that of the flow to the indoor emitters. The narrower the gap, the higher the efficiency. In other words, with radiators operating at lower temperatures, e.g., 45°C instead of 65°C, energy use and operating costs will be noticeably lower. Average in situ efficiencies of around 270-300% are reported (HeatpumpMonitor.org, n.d.)

To maintain comfortable room temperatures with this cost-efficient operation, new higher-output radiators and larger pipework may be required. Replacing pipework, if required, is likely to be particularly disruptive. Upgrades to radiators may also be required for condensing boilers to operate in energy efficiency condensing mode. Condensing boilers were mandated in 2005 as a carbon abatement strategy, but Building Standards were never adapted to enforce the changes to the radiators and controls required to achieve the energy efficiency savings. Consequently, boilers often operate significantly below manufacturers efficiency claims. Instead, the upgrades to radiators required for improved efficiency are now being enforced with the transition to heat pumps through the MCS Certification standard for publicly funded installations.

Heat networks

Heat networks distribute heat, and sometimes cooling, from a central origin to multiple properties. Several clean heat network technology options are currently available, for example, communal networks, which serve a single building, and district heating which covers a wider area. Fourth generation heat networks distribute heat in insulated pipes using water at around 65°C (Lund et al., 2021). Fifth generation district heating and cooling (5GDHC) distributes very low temperature heat, between 10°C and 20°C, from sources including boreholes, mine water and industrial waste heat. Individual heat pumps in each property transfer the heat to the home at high temperature or, in summer, transfer heat from the home to the network for cooling.

This variety of options means that individual building owners, as well as local authorities, may drive heat network adoption. This report will include consideration of communal, fifth generation networks as a clean heat option for some property types.

Heat networks are central to the Scottish Government’s Heat in Buildings Strategy with a capacity target of 2.6TWh of output by 2027 and 6TWh by 2030 (Scottish Government, 2021b). Currently heat networks supply 1.18TWh of heat in Scotland to 30,000 homes and 3,000 non-domestic properties (Scottish Government, 2022a). To operate effectively, be economically sustainable, and offer cost-effective solutions, heat networks must be strategically situated. This involves locating them in areas with ample heat demand and density to ensure optimal functionality.

Challenges for clean heating

The following section outlines the findings of this work in determining the suitability of clean heating technologies for challenging dwelling types. The primary findings are generated via the literature review, which are corroborated by the relevant findings in the semi-structured interviews, as highlighted. As discussed in Section 5, there are several low or zero carbon heating technologies available. The purpose of this work is to identify strategies that are both cost effective and practical to apply in the identified challenging dwelling types. Where heat pumps are not determined suitable, alternative technologies have been outlined.

Older properties

In the context of this report, older properties denote traditionally constructed buildings erected prior to 1919 (HES, n.d.). These structures are typically characterised by solid wall construction and may also be designated as protected buildings. This section applies to both houses and tenements.

Heritage and planning

Almost all properties built in Scotland before 1919 have solid walls and often have attractive facades in natural materials, principally sandstone and granite. Pre-1919 properties make up 19% of the Scottish housing stock (Scottish Government, 2023c). Regarding insulation improvements, older properties are often described as ‘hard to treat’ (HES, 2016), because readily available and cost-effective treatments such as cavity wall insulation are not suitable. Furthermore, heritage and planning constraints may prevent some measures such as external wall insulation or increase the cost of others, such as heritage-compliant double glazing.

Obstacles to implementing heat pump technology in older buildings have been identified in building regulations and planning consents, as in the example of a retrofit of a Glasgow tenement block, which was neither listed nor in a conservation area (K. Gibb et al., 2023). This four-story sandstone block, comprising eight small flats and built in 1895, is representative of a large proportion of tenements across Scotland. However, there are important qualifications about the transferability of findings from this project. This was an empty property wholly under the control of a social landlord aiming to fill a retrofitted empty property with social tenants. Planning officers raised concerns with designers on several fronts, such as the installation of external wall insulation, PV panels on the roof, and attaching air source heat pumps to the rear wall. Consequently, new gas boilers were installed in the top floor flats.

The challenges with planning consent outlined above were echoed in the industry survey and interviews. Interviews with installers and housing professionals identified challenges around gaining approval from local authorities and planning officers to proposed changes to increase energy efficiency and green technologies in existing homes, as well as a lack of consistency between different regions which make it difficult to develop repeatable solutions.

Fabric efficiency

Some sources asserted that building fabric efficiency is important for heat pumps to work effectively. However, the rationale for this assertion was often not explained, such as in Carroll et al. (2020). The innovation charity Nesta also made this assertion 2021 (Nesta, 2021), but reversed it 2024 stating:

“It is often claimed that homes need to be well insulated to have a heat pump, but this is largely untrue” (Nesta, 2024).

A WWF report focussed on decarbonisation pathways for Scotland’s housing stock stated that “it is technically possible to install heat pumps in solid wall properties without insulating the solid walls”. However, without insulation upgrades, the heating system upgrade can be more expensive due to the need for larger radiators, pipework and heat pump (Leveque, 2023).

Different household needs in the context of fuel poverty refer to the unique challenges fuel-poor households face in heating their homes due to financial constraints and inefficient systems. These challenges necessitate tailored solutions, like specialised heat pump installations, to ensure energy is used effectively and affordably. Addressing these needs is crucial for reducing overall heat demand, aligning with energy efficiency and sustainability efforts (London Economics, 2023; NEA, 2023a). Where literature describes inefficiencies in heat pump installations without solid wall insulation, this is sometimes referring to the total cost of ownership rather than the pure energy efficiency of the heat pump. For example, the WWF technical report on Scottish housing stock pathways considered capital costs of insulation and heating upgrades (excluding public subsidies), as well as the operating cost over 15 years. It found that the total cost of ownership of a heat pump in a solid walled detached house would be 8% lower over 15 years if solid wall insulation was included in the investment (Palmer and Terry, 2023a).

Total heat required to be delivered from the heating system can increase with heat pumps operating with radiators at lower temperatures, as compared with gas boilers. This is due to the reduced responsiveness of low temperature heating, resulting in the need to maintain temperatures within a narrower range. Essentially a right sized heating system heats up a building more slowly than an oversized boiler. For these reasons, households almost always need to change their heating schedule in order to achieve the same comfort as before (Terry and Galvin, 2023). Modelling found that this is especially important in homes with high thermal mass, such as brick internal walls or solid external walls without insulation on the interior face. Such homes may require up to 20% more heat be delivered from a heat pump, compared with turning off a gas boiler during periods of non-occupancy, such as in households that commute to work. The authors propose that an estimate of increased heating demand would be a useful measure of heat pump readiness, and that the parameters required to assess this should be provided on energy performance certificates.

The long-established ‘fabric first’ approach to energy upgrades prioritises reducing heating demand with insulation and draught proofing before installing clean heating. While the enhancement of energy efficiency stands as a crucial objective, the structural integrity and overall condition of the building necessitate simultaneous consideration. The advantage of this sequence, as opposed to the reverse order, has been to avoid some pipework and radiator upgrades and to reduce the size and cost of the required clean heat sources. However, there is an increasing recognition that, given fabric insulation levels do not influence operational energy efficiency, and depending on individual household needs, decarbonisation may be prioritised ahead of demand reduction to meet emissions targets (Nesta, 2024).

In much of the housing stock potentially no invasive demand reduction is required to meet emissions targets. Instead, the focus should be on electricity pricing and workforce education to enable good installation standards (Eyre et al., 2023). The UK Government’s Review of Electricity Market Arrangements (BEIS, 2022) is considering changes that would significantly reduce the cost of operating heat pumps, such as decoupling electricity pricing from volatile wholesale gas prices.

Rural properties

Within this work, rural refers to properties located off the gas grid which rely on alternative heat sources such as oil boilers to heat their homes.

Many off gas grid properties use electric resistive heating, which is a clean heating technology, but which partially accounts for higher rates of fuel poverty in rural areas (Scottish Government, 2023c) due to the higher unit cost of electricity compared to gas which leads to higher running costs. Therefore, more energy efficient heat pumps are a potential solution for fuel poverty in off gas grid areas.

Rural dwellings face a unique set of challenges compared to those found in urban settings.

Electricity network

The electricity network is vulnerable to extreme weather. In 2021, 40,000 households were left without power for three days in northern England and north east Scotland following Storm Arwen (OFGEM, 2023). This review did not find evidence establishing whether electric heating is more vulnerable in off gas grid area than on-gas areas. It should be noted that all types of heating – other than solid fuel burners require an electrical supply including gas, oil and biomass boilers.

Grid capacity is expected to be a potential constraint to the electrification of heat in all areas. The grid constraint is alleviated, and infrastructure investments can be postponed, if demand is reduced with insulation and if heat pump efficiency is improved, for example through the use of ground source heat (DELTA, 2018). Off gas grid housing often has the advantage of being built at low density, providing greater opportunity for the use of ground source heat pumps. However, ground source heat pump has a higher capital investment, and consideration should be given to share ground source networks also known as fifth generation heat networks.

Another strategy for reducing or postponing the need for network infrastructure investments is demand levelling. Time of use tariffs, the Demand Flexibility Service and the falling cost of domestic batteries provide incentives for consumer behaviour changes and automated smart demand response systems which can shift some electrical loads out of peak demand periods. Off gas grid areas have the same opportunity to benefit from these incentives as on gas areas.

Cold climates

Concerns have been raised about heat pump efficiency in cold climates (Simons, 2023). Field studies, however, demonstrate that with proper design, heat pumps maintain efficiency even at temperatures as low as -10°C, and can still be effective in conditions down to -30°C. (D. Gibb et al., 2023). It is crucial to understand that the effectiveness of heat pumps is not determined by the type of building or its insulation level. Efficiency is consistent across different environments and for buildings requiring more heat, due to size or less insulation, a larger heat pump can be employed to meet the demand effectively. This adaptability ensures heat pumps can provide efficient heating solutions in a wide range of settings and climates. This finding is applicable to all areas of Scotland but can be particularly relevant to rural areas which can face more severe winters and lower temperatures.

Evidence of adoption

Although challenges are present for rural homes, nevertheless the highest rates of heat pump installation are found in off gas grid areas (Nesta, 2023c). Analysis of the MCS installation database showed the UK’s highest adoption rates are in the Highlands & Islands, rural Wales and Cornwall. This is likely because significant operating cost savings are achieved with heat pumps, compared with oil and direct electric heating due to the high efficiencies of heat pumps (see Section 5.2).

Islands and Coastal areas

Research into clean heating for new housing in island communities found no consumer barriers or region-specific capital barriers to heat pump adoption (ClimateXChange, 2022). Additional anti-corrosion treatments are included in coastal locations. However, a lack of local specialist contractors was considered a constraint on installation rates and increased servicing costs were incurred due to mainland contractor travel costs.

Small properties

This section considers barriers to heat pump adoption related to indoor space, including both houses and flats. There is no formal definition of ‘small properties’ and categorisation differs in the literature so we have used a broad definition to include properties that are identified as having space limitations since this is what limits the uptake of heating technologies that require more space than existing systems.

Hot water storage

In Scotland, 80% of dwellings currently have boilers and most of these are combi type, producing hot water on demand. Homes with combi boilers do not have space committed to hot water storage. Unlike a combination (‘combi’) gas or oil boiler, heat pumps and direct electric systems generally do not supply instant hot water. Therefore, it is necessary to have a system in place for storing energy to meet the occupant’s hot water demand. The system usually takes the form of a hot water cylinder, the volume of which is driven by the size of the property and number of occupants. This calls for an evaluation of alternative hot water storage systems and a general evaluation of consumer barriers in terms hot water storage.

There is also the opportunity to think more broadly in terms of energy storage and review the viability of communal hot water storage externally.

Finding space for a hot water cylinder is one of the most significant consumer barriers in all homes and is particularly acute in small properties (Nesta, 2021; Palmer and Terry, 2023a; Scottish Government, 2022b).

In an analysis of the Scottish Building stock, homes with less than 18m² of floor area per habitable room were assumed to be unsuitable for individual heat pump adoption due to the requirement for a hot water cylinder (Element Energy, 2020). This threshold, which equates to 90 m² for a dwelling with 3 bedrooms and two reception rooms, was not explained. Since the average floor area of Scottish homes is 97m² (Scottish Government, 2023c) this threshold, if significant, takes in a large proportion of the housing stock.

One technical solution for small properties is compact phase change material heat batteries, such as those produced by Sunamp. These contain a material which is melted when heated by a heat pump, solar thermal panels or internal resistive element. It heats water instantly when a tap is opened, eventually solidifying as it cools. Heat batteries can be up to four times smaller than equivalent hot water cylinders.

Another solution is to locate hot water storage outside. This strategy was trialled in seven small houses by National Energy Action (NEA, 2023b). In this system a compact heat battery is located outside in an insulated enclosure adjacent to the heat pump.

Electrical batteries in conjunction with instant hot water taps and electrical showers may be a feasible solution where hot water demand is relatively low. Lithium-ion batteries can have roughly double the energy density of water storage, so could be effective in space-constrained cases (Energy Saving Trust, 2017). The cost of lithium-ion batteries has reduced dramatically in recent years (BloombergNEF, 2023) new battery technologies such as flow batteries are now emerging in domestic applications (PV magazine, 2023).

An interim solution, highlighted in interviews with housing officers, is to enable decarbonisation of space heating would be to allow the retention of combis for hot water production only. Thus, a heat pump would cover 100% of the space heating requirement. Over time, households may find space for hot water storage, potentially incentivised by the high unit cost of hot water or further technical solutions may emerge.

Radiators

In most UK homes, radiators are currently undersized to meet industry convention comfort standards with efficient gas boiler operation (BEIS, 2021). Consequently, either boilers must heat radiators to higher temperatures or rooms are cold.

In order to meet comfort standards and achieve high operating efficiencies with heat pumps, heating water temperature is typically needs to be lower with a heat pump than with gas or oil boilers. This means larger radiators and changes to pipework are often part of a heat pump installation (BEIS, 2021; Nesta, 2021; Zhuang et al., 2023).

In some cases, dependent upon ease of access, replacing undersized radiators could be fairly trivial, (Leveque, 2023), however in some, space constraints such as the wish to preserve space for bookshelves, may present a consumer barrier (Nesta, 2021; Wade, 2020).

Designing the heating system to operate at a higher temperature can mitigate the need for radiator upgrades. The capital savings may balance out operational cost increases over the life of the system (Palmer and Terry, 2023). Nonetheless, with the availability of modern heat pumps, designers can specify operating temperatures similar to the outgoing heating system which could mitigate the need for radiator upgrades.

Cost effectiveness

In small properties with low heat demands the capital costs of an air-to-water heat pump may not be economic. Alternative technologies can be considered.

Air-to-air heat (A2A) pumps have significantly lower capital costs than air-to-water and may be an attractive solution where there is no existing water-based system (Lowes, 2023). They therefore provide an option for addressing fuel poverty in homes with existing direct electric systems.

A further benefit of A2A heat pumps is that they can also provide cooling from the same capital investment in homes that are at risk of overheating in summer (Khosravi et al., 2023). Air to air systems account for a large part of Europe’s lead over the UK in heat pump installation rates, although much of this is for heating in Southern Europe (Nesta, 2023d).

Infrared is proposed by manufacturers as a clean heat solution with low capital cost. Its use in industrial settings such as warehouses with high ceilings is well established (Anwar Jahid et al., 2022; Cao et al., 2023; Kylili et al., 2014). However, there is lack of evidence on energy efficiency benefits over simple resistive heating (Brown et al., 2016) with studies focussing on high ceilings (Roth et al., 2007). Other studies have identified discomfort concerns due to asymmetric temperatures (Corsten, 2021). By reducing the overall heat demand of a building and targeting only certain areas, while you may use less energy, overall, the building will be colder than if you maintained a constant air temperature. As a result, damp and mould could become more prevalent. In general, only things which are hit by the IR radiation will get hot although some heat will be emitted by the things which get hot and heat up the surroundings (Lowes Richard, 2022).

Where heat pumps remain impractical for small properties storage heaters are the most cost-effective option available today. In modelling of total cost of ownership, storage heaters are the optimal clean heating solution in some situations (Palmer and Terry, 2023a).

Flats and tenements

Flats and tenements are defined here as any building that contains multiple dwellings. This includes, four-in-a-blocks, low rise blocks, high rise blocks and tenements.

In the 2011 Census, it was found that 36% of the Scottish population lived in flats, making up the highest percentage among dwelling types (NRS, 2011). Around a third of tenement flats were built prior to 1919, another third between 1919-1982, and the final third after 1982. Many tenement flats are in a state of critical disrepair, particularly those built before 1919 (Built Environment Forum Scotland, 2019). The Scottish Parliamentary Working Group on Tenement Maintenance has been meeting since March 2018 with the purpose of establishing solutions to aid, assist and compel owners of tenement properties to maintain their buildings. Recommendations include establishing periodic inspections and maintenance sinking funds. This is important for energy efficiency and clean heating to be implemented in flats. (Scotland, n.d.)

Location of heat pump

Typically, air-source heat pumps are installed externally, such as in garden areas, driveways, or other outdoor spaces around the building. Unlike houses, flats and tenements often lack private gardens. Literature cited the lack of external space as a challenge when looking to install heat pumps (Nesta, 2021; Scottish Government, 2022b; Southside Housing Association, 2020).

The Scottish Government undertook a case study on the Dunbeg Phase 3 project in Oban which installed air source heat pumps into 74 flats (Scottish Government, 2022b). A primary finding highlighted the importance of considering a suitable external location for heat pumps specifically, relating to shared gardens. This challenge has not been expanded upon in the Dunbeg case study as it is likely a planning constraint similar to that experienced during the retrofit of a tenement block in Glasgow (K. Gibb et al., 2023). In this case, the aspiration was to utilise heat pumps that were attached to the external wall. However, planning officers determined that heat pumps could only be installed if they were located in the back communal garden on the ground and were fenced off. Consequently, gas boilers were installed in the top two floors.

Southside Housing Association trialled the installation of air source heat pumps to a selection of flats (Southside Housing Association, 2020). The installation work was informed by surveys and feedback from the residents. At the outset, the drying area within each floor of the flats was selected as the location for the heat pump. However, further consultation with residents determined that the preference was for the heat pumps to be installed on the individual flat balconies. This strategy presented some challenges in the beginning, such as difficulty pumping condensate water back to the main drain and heat loss through the external pipework. As a pilot project, the lessons learned should be applied to future projects, having successfully demonstrated alternative locations for flats with limited external space.

Air source heat pumps offer a versatile heating solution for multi-storey buildings. Ground-mounted units are ideal for efficiently heating ground-level and first-floor flats, using tailored circulation systems to distribute heat effectively. For higher floors, split system configurations are beneficial, allowing refrigerant lines to run vertically with greater ease and efficiency than insulated water lines, though this setup requires additional indoor equipment. Additionally, in buildings where rooftop access is available, heat pumps can be strategically installed on roofs or in loft spaces, providing effective heating coverage from the base to the top of the building.

Another option for flats is the adoption of either shared external heat pump units, such as at Hillpark in Glasgow (Star Renewable Energy, n.d.). Such systems have been demonstrated as being more cost effective than individual units whilst also consuming less space (Palmer and Terry, 2023). Agreement between different owners and tenants can be difficult to attain, especially where there are multiple owners and tenure types.

Options exist that enable an air source heat pump to be located fully within the building. Exhaust air heat pumps form part of the ventilation system and draw heat from exhausted stale air. Further heat is drawn directly from outside. They are most readily suited to energy efficient buildings (Energy Saving Trust, n.d.).

Individual room air to air heat pumps could provide further low capital, easy installation options. These systems are gaining popularity in some settings with existing ducted air systems, for example in flats in the United States (Gradient) and in UK hotel rooms (Powrmatic).

Clean hot water heating could be provided independently on the hot water system by using hot water heat pumps which either using excess internal heat or ventilation exhaust air or outdoor heat to generate hot water.

Shared ground source heat networks, also known as fifth generation heat networks, provide a clean heating solution that does not need equipment to be located above ground outdoors. Ground temperature heat drawn from boreholes is shared across homes through a network. Individual water to water heat pumps inside each property supply heat to space and to hot water storage.

In common with the challenges of addressing communal maintenance, the main remaining barrier to heat pump adoption in flats is the challenge of gaining agreement to, and coordinating works, between all owners of the building. These are similar to the challenges to basic repairs and maintenance blocks of flats and to fabric improvements such as insulation. An expert Short Life Working Group presented recommendations for addressing these barriers in 2023 (Scottish Government, 2023a). These centred on whole building approaches and further amendments to the Tenements Act.

Future Developments

This review has found that with careful consideration, clean heating technologies are available to suit challenging dwelling types, though there are factors to consider including running cost, space constraints and need for communal agreement. There remains the opportunity to address barriers and support delivery through further technical and policy development as well as sharing best practice by gathering more evidence from pilots on key aspects such as managing costs, disruption levels and post occupancy evaluations.

Application of existing technologies

This review has reported on a variety of technologies in different forms of application. It shows that there is no panacea, or one-size-fits-all solution for clean heating. Further consideration is required to support the finding that appropriate technologies are available for challenging dwelling types. These recommendations are provided as a cumulation of findings from the literature review, industry interviews and the report authors experience.

As described in section 6, air-to-air heat pumps may provide a cost-effective means of providing low-cost clean heat in small dwellings. However, there is only weak evidence for the energy efficiency of such systems. For related reasons, there is no certification standard to support publicly funded air-to-air installations. Policy makers should consider commissioning field or laboratory studies to clarify the effectiveness of air-to-air heat pumps.

The role of cascade heat pump systems such as exhaust air heat pump and hot water heat pumps should be considered further. These systems use both outdoor air and internal air to provide heating and hot water at different temperature levels. Further research is required to determine appropriate applications and the required skills and policy support.

There is also the opportunity to think more broadly in terms of energy storage and review the viability of communal hot water storage externally, this would be particularly well suited to flats and tenements or small homes in rural areas which may have limited internal area.

Fifth generation heat networks

Besides wide-area fourth generation heat networks, which operate at around 65°C, this report has covered other heat network configurations including communal air source heat pumps for flats. However, the potential for shared ambient loop networks, also known as fifth generation heating and cooling networks, to serve Scottish challenging dwelling types is not well reported in the independent literature. Further research in this area is merited.

Improving installed heat pump performance

As described in the context of older buildings in section 6, with some households and buildings it may be appropriate to decarbonise without any new insulation measures. However, while it’s possible to install any heating system at any time, it’s advised to first enhance the building’s fabric. Rather, it is more important to focus on design and installation standards to maximise in situ efficiency (Eyre et al, 2023).

Workforce education should be directed towards better system design. This concerns the right-sizing of heat pumps, radiators and pipework. This enables heat pumps to operate in their high efficiency ‘sweet spot’ for more of the heating season. This can often reduce capital costs and avoid unnecessary radiator and pipework upgrades.

Furthermore, a better understanding is needed about whether demand reduction and energy-saving measures can enable or speed up the deployment of technologies such as heat pumps, for example, by reducing the size and cost of equipment required, smoothing out peaks in electrical demand, and reducing operating costs.

Emerging technology

Domestic heat pumps use the vapour compression cycle. An alternative heat pump technology, the Peltier Effect is used in thermoelectric heat pumps. In these devices voltage applied to a semiconductor device creates a temperature difference between the two sides of the device, supporting thermal energy collection from renewable sources (Tritt, 2002). Thermoelectric heat pumps, known for their application in industries and portable devices like camping fridges, offer unique benefits for challenging building environments, especially smaller spaces such as flats or compact homes. Their key advantages include a lack of working fluid, eliminating concerns over global warming potential, absence of moving parts which ensures durability and minimal maintenance, and a compact size that allows for flexible installation options. Unlike traditional systems, thermoelectric units do not necessarily require external components, making them an ideal choice for locations where external installations are impractical. This makes thermoelectric heat pumps a versatile and eco-friendly option for urban living spaces where space constraints and building regulations might limit the use of conventional heating systems.

Developments in industry indicate that thermoelectric heat pumps may be suited to heating dwellings. TE Conversion, based in Glasgow, discussed with the author how they expect to test prototypes operationally in domestic settings in 2024.

Emerging technology once recognised as a ‘mature’ technology, service and maintenance costs are not anticipated to be any higher than for fossil fuel (or biomass) equipment as the intervention period should be longer. Annual service costs whether for gas boilers or heat pumps are likely to be comparable.

Conclusions

We conducted a review of existing literature and evidence to assess the feasibility of heat pumps as a clean heating option for building types considered difficult to decarbonise. We found that with careful consideration and effective design, clean heating technology can be applied to all types of challenging dwellings.

However, a key caveat of this report is the need to evaluate the cost-effectiveness of implementing clean heating technology in varied circumstances. Without a comprehensive cost analysis of comparable solutions, it is difficult to determine their economic viability. Therefore, future research should prioritise conducting whole-life cycle cost analyses of different heat pump applications and scenarios, ideally based on industry data wherever available.

The appendices include four key literature pieces that may complement the findings of this report, offering a comprehensive understanding of the challenges and opportunities associated with challenging dwelling types and clean heating technologies.

Recommendations

Based on the findings of the report, the authors recommend the Scottish Government explore the following:

• Conduct in-depth case studies, evaluations and surveys on the application of clean heating technology in challenging dwelling types to extract valuable socio-technical lessons learned and develop repeatable solutions.
• Future studies that facilitate consistent appraisal and comparison in heat pump evaluations.
• Investigate zero carbon back-up options for areas with vulnerable above ground distribution networks.
• Consider the recommendations of the Working Group on Tenements – mandatory owners associations, periodic inspections and maintenance sinking funds. This is important for energy efficiency and clean heating to be implemented in flats.
• Investigate alternatives to hot water storage in flats and small properties and a general evaluation of consumer barriers in terms of hot water storage systems. For example, Community Energy Storage systems.
• Establishing evidence for the energy efficiency of air-to-air heating and, if found to be appropriate, providing policy support for certification and installation in homes where it is more cost effective than water-based space heating.

In addition, the research team identified several financial and regulatory barriers for Scottish Government to consider:

• Monitoring developments in thermoelectric heat pumps, which may provide radical space savings.
• MCS certification for air-to-air heat pumps or support for communal ambient loops with individual water-to-water heat pumps for flats.
• Hybrid heat pumps where fossil fuels are used only for hot water.
• Resolving inconsistency in planning guidance for heritage buildings and conservation areas.

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Corsten, A., 2021. A comparative performance assessment of infrared heating panels and conventional heating solutions in Dutch residential buildings.

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Appendix

Methodology

A Rapid Evidence Assessment (REA) is a methodology which enables a researcher(s) to undertake a systematic review of existing literature related to a specific research question and provides a method to search and critically appraise relevant literature. To further complement this, a deeper analysis of the gaps identified in the literature review was undertaken through a combination of surveys and semi-structured interviews with industry experts.

A rapid evidence assessment is split up into seven key stages:

1. Protocol development
2. Evidence search
3. Search screening
4. Evidence extraction
5. Critical assessment of evidence
6. Synthesis of results
7. Communication of findings

Each of these stages and their methods have been discussed in more detail below.

Protocol development

The purpose of the protocol development is to develop a search strategy and formally detail the methodology. Developing a protocol distinguishes Rapid Evidence Assessments (REA’s) reviews with less structure. This ensures that the evidence review (ER) process is rigorous and transparent. It also facilitates communication among the User, Steering Group, and Review Team, laying out how the review will be carried out. The Review Team bears the responsibility for developing the review protocol, active input and approval from the User and Steering Group are essential components of the review process.

Background

Approximately 20% of Scotland’s total greenhouse gas emissions originate from homes and workplaces. In pursuit of climate objectives, the Scottish Government has established targets, aiming to transition over one million homes to clean heating systems by 2030, with the broader goal of achieving clean heating for all homes by 2045. Over one third of Scotland’s housing stock comprises tenement properties, characterised by factors such as accessibility issues, space limitations, ownership complexities, and structural challenges, which can pose difficulties in installing clean heating technology. Although several clean heat technologies exist, heat pumps are expected to play a significant role in the decarbonisation of heat in Scotland. The purpose of this work is to assess whether heat pumps represent a practical, technically viable, and cost-effective clean heating option for various dwelling types, including flats, tenements, and other hard-to-treat archetypes. 

Primary question

What evidence is there that heat pumps are a practical, technically feasible and cost-effective clean heating option for Scottish flats, tenements, and other hard-to-treat archetypes?

Population: Flats, tenements, and other hard-to-treat buildings in climates like Scotland’s.

Impact: Clean heating technologies

Comparator: Existing fossil fuel heating system

Outcome: Practical, technically feasible, cost effective

Secondary question

What evidence is there that dwelling types may be suited to other ZDEH technology such as direct electric heating.  Which dwellings are suited to non-ZDEH hybrid heating systems? 

Evidence search

The search strategy outlined above was utilised to carry out the evidence search. Boolean Operators, including words like AND, OR, NOT, or AND NOT allow the combination or exclusion of keywords, leading to more precise and productive results. This streamlined approach is designed to save time and effort by eliminating irrelevant hits that would otherwise need to be reviewed before being discarded.

Google searches are restricted to searching 32 words at a time; therefore 3 keyword searches were undertaken. As such the core searches performed across the three key databases can be seen in the table below. These were duplicated in each of the chosen search engines, Google, Google Scholar and Edinburgh Napier University academic library.

The keyword searches are outlined below:

Table 1: keyword search

Search results were then exported to an excel file. Duplicate results between the three searches were removed.

Search screening

Search result screening ensures that only the most relevant results are taken forward to the evidence extraction phase. Inclusion and exclusion criteria, in this case RAG analysis, was utilised was then used to carry out this initial screening.

Table 2: boundary conditions

Evidence extraction

1. Key observation/particular area of interest
2. Evidence overview
3. Key data

Once the initial search screening had been completed, we analysed the searches for further information to determine their alignment with clean heating in Scotland for challenging dwelling types. The following information was extracted or each piece of evidence:

Critical assessment

The critical assessment is the part of the REA which is used to determine the robustness and relevancy of the information that has been extracted in the preceding stages.

Assessing relevancy

The initial step in the critical assessment involves assessing the relevancy of evidence in connection to clean heating in hard-to-treat archetypes. The following has been considered:

• The appropriateness of the method employed in the evidence to clean heating in Scotland for hard-to-treat property types.
• The relevance of the evidence to hard-to-treat archetypes in Scotland.
• The relevance of the intervention under scrutiny.
• The relevance of the measured outcome.

Synthesis of results

This stage involves the systematic analysis and integration of findings from the gathered evidence to draw conclusions or make recommendations. This stage typically follows the data extraction phase and precedes the final reporting or dissemination of findings.

Communication of findings

The final step in the REA communicates the findings in a report and provides appropriate recommendations and conclusions.

Industry survey questions

The survey was conducted through Survey Monkey specifically targeting the HeatSource network, a collaborative low carbon heat knowledge hub, hosted by BE-ST on behalf of Scottish Enterprise. The survey was distributed to 311 people with a return rate of 16. The return of 5% although low provided some insights. The low return in part could be due to the timing, the survey was distributed in December.

Survey questions

1. Provide your view on the suitability of electric heating for challenging property types based on your experience. If unsuitable, please provide the reasons why. As far as possible provide values or data to support your views.
2. For which challenging property types have you considered, assessed, designed or installed clean heating systems? Select all which apply.
   • Multi-storey flats
   • Tenements (any age)
   • Old/heritage properties pre-1919
   • Four in a block
   • Off gas grid properties
   • Small properties of less than 80m²
   • None of the above (please specify other)
3. What experience do you have or have considered in retrofitting any of the following technologies?
   • Instant electric heating systems, for example, electric boilers, CPSU, infrared, panel heaters
   • Off peak direct electric, for example storage heaters
   • Air source heat pumps
   • Ground source heat pumps
   • Other (please specify)
   • None of the above
4. Thinking about the heating projects you have been involved in, what was your desired outcome/ motivation for action? You can define this further in the space provided.
   • Achieve a reduction in operating costs
   • Achieve parity operating cost
   • Reduction in fuel poverty
   • Achieve reduction in carbon emissions
   • Improving occupant thermal comfort
   • Achieve a reduction in cost savings for periodic replacement
   • Where possible provide supporting figures/data. (for example, reduce carbon emissions associated with a property by x%, increase thermal comfort for tenants) Define your desired outcome, ideally with numbers. Please specify below.
5. Thinking about projects you have been involved in where clean heating systems were considered, did they go ahead?
   • Yes
   • No
6. Did you achieve your desired outcomes? Where possible, provide figures or data citing actual versus target for outcomes.
   • Yes – why?
   • No – why?
7. If you have abandoned attempts to install a clean heating system, why was this?
   • Capital cost
   • Expected operating cost
   • Installation barriers
   • Occupant/user barriers – e.g., concerns with heat pump controls
   • Lack of supply chain
   • Lack of occupier engagement/support
   • Lack of funding
   • Other
   • Please use the space below to elaborate on the reasons and context for the decision to not proceed with a planned installation.
8. If you are an installer, what is important to successful outcomes in clean heating installations in challenging property types?
9. In your opinion, what additional evidence is needed to increase confidence in deploying clean heating in challenging property types?
10. In your opinion what are the key barriers to increasing deployment of clean heating in challenging property types?

Semi-structured interviews

Interviewees were identified by the project report authors as key industry experts with experience of clean heating technology. In total ten interviews were conducted with installers, architects, and housing professionals. The interviews were an addition to the literature review process to help draw out key findings in areas such as barriers to adoption and potential solutions to deliver clean heating technology at scale.

Sample questions altered slightly dependent on background and job role.

1. What is your experience of retrofitting zero direct emissions heating systems?

2. What barriers do you perceive with difficult to treat archetypes?

3. What did your previous research reveal to you about ZDEH systems?

4. What is your opinion on alternative solutions (using a table of options)

5. Why do you think retrofitting ZDEH systems in difficult to treat homes is not being done at scale?

6. What are the key things you need to see to enable difficult to treat properties being retrofitted?

Case examples

Using our sources protocol and deeper dive the four sources below were identified as most insightful in terms of the research question. Although it must be stressed all four still have gaps in findings.

© Published by BE-ST, 2024 on behalf of ClimateXChange. All rights reserved.

While every effort is made to ensure the information in this report is accurate, 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.

info@climatexchange.org.uk

+44(0)131 651 4783

@climatexchange_

www.climatexchange.org.uk

The Scottish Government’s Heat in Buildings (HiB) Strategy commits all Scottish homes to be net zero by 2045. However, in line with the commitment to a Just Transition, the Government recognises that personal circumstances may, in some cases, make it more challenging for people to meet the requirements of the proposed Heat in Buildings Standard. Personal circumstances include vulnerability criteria related to the occupiers of the dwelling, such as disability, age, or low income.

This study reviewed how regulations, both in the UK and internationally, have accounted for personal circumstances. The researchers also investigated the impact of including personal circumstances in the regulation. The report highlights new emerging policy areas to support consideration of how similar regulations could work in Scotland.

Findings

The study identified 18 examples of personal circumstances being included in international heat and energy efficiency regulations. Key findings include:

• There is limited evidence of including personal circumstances in regulations.
• The most common personal circumstances identified relate to those with a low income.
• Germany allows exemptions for clean heating regulation for owner-occupiers over 80 years of age, if they live in a building of up to six flats.
• Most stakeholders were aware of funding or support for low-income households, but several noted they had not considered including other personal circumstances within regulations.
• A proposal in Flanders aims to introduce a decision tree for personal circumstances, which includes significant life events to excuse residents for not meeting the standard.
• Stakeholders were concerned that including personal circumstances in the proposed HiB Standard would risk people losing out on the benefits of the energy transition such as reducing energy costs, greater energy efficiency and warmer homes.

For further details 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.

May 2024

DOI: http://dx.doi.org/10.7488/era/4854

Executive summary

Project aims

The Scottish Government’s Heat in Buildings (HiB) Strategy commits all Scottish homes to be net zero by 2045. However, in line with the commitment to a Just Transition, the Government recognises that personal circumstances may, in some cases, make it more challenging for people to meet the requirements of the proposed Heat in Buildings Standard. Personal circumstances include vulnerability criteria related to the occupiers of the dwelling, such as disability, age, or low-income.

This study reviewed how regulations, both in the UK and internationally, have accounted for personal circumstances. Provision made for vulnerable groups for these circumstances included exemptions, extensions or abeyances, support mechanisms such as financial support, amendments or alterations to the standard.

This research will support the Scottish Government’s development of the proposed standard, through considering personal circumstances in domestic buildings, specifically focusing on owner occupied homes and the private rented sector.

We also investigated the impact of including personal circumstances in the regulation. The review has covered relevant low-carbon heating, domestic energy efficiency, housing and transport regulations. Flexibility is often provided within operational regimes without it being explicitly specified within the legislation, and this flexibility was not captured by this study. We also highlight new emerging policy areas to support consideration of how similar regulations could work in Scotland.

Summary of key findings

The study identified 18 international examples of personal circumstances being included in regulations. Six stakeholders from consumer organisations, professional housing sector, government departments and policy groups were interviewed to provide insight on regulations identified through the study. Our key findings are:

• There is limited evidence of including personal circumstances in regulations.
• The most common personal circumstances identified relate to those with a low income. Several regulations across Europe and Canada offer additional financial support for low-income households to undertake energy efficiency renovations or to upgrade to clean heating systems.
• Similar examples from the Netherlands, Switzerland and the USA exempt properties from upgrading to a clean heating system if the cost of doing so is prohibitive or if the lifetime savings were too low.
• Germany allows exemptions for clean heating regulation for owner-occupiers over 80 years of age, if they live in a building of up to six flats.
• Most stakeholders were aware of funding or support for low-income households, but several noted they had not considered including other personal circumstances within regulations.
• A proposal in Flanders aims to introduce a decision tree for personal circumstances, which includes significant life events to excuse residents for not meeting the standard. If implemented, this could allow application for a time extension to meet energy efficiency and clean heat standards in properties based on specific personal circumstances such as divorce or death in the family.
• Stakeholders were concerned that including personal circumstances in the proposed HiB Standard would risk people losing out on the benefits of the energy transition such as reducing energy costs, greater energy efficiency and warmer homes.
• There were concerns regarding a lack of clarity on how including personal circumstances would work in practice and the potential for an additional administrative burden on both residents and those administering schemes.
• Further examples of personal circumstances within regulation include Low Emission Zones across the UK, which provide exemptions for vehicles owned by those with a disability. However, drawing direct parallels to energy efficiency and clean heating regulations is challenging due to the specifics of how the regulation works.

Recommendations and value to a policy audience

Should the Scottish Government decide to implement new regulations that include personal circumstances, the key recommendations are:

• More thorough consideration of the potential benefits and risks associated with including personal circumstances – The benefits have largely been assumed but they require further investigation. The impact of including personal circumstances requires further consideration to understand which groups are most likely to benefit. Additionally, the needs of different vulnerable groups require greater clarity to ensure that the introduction of any flexibilities best meet these needs. This includes owner-occupiers, tenants in the private rented sector and communities connecting to heat networks to determine the likely positive impact. The risks of losing out on the benefits of the transition should also be considered.
• Consider additional support and flexibility – In addition to providing financial support to cover the cost of the measure, consider providing further support or alternative accommodation for low-income households during disruptive works.
• Ongoing monitoring of policy and regulation developments in similar countries, particularly in Flanders.

Glossary

Introduction

This report provides findings from review of a wide range of international regulations that include provision for personal circumstances. Some personal circumstances are legally protected characteristics such as age, disability and pregnancy. However, the definition of personal circumstances is broad and can include wide ranging factors such as income level, health conditions (including disabilities), ownership status of property, location (which can affect outside temperatures), household composition and different cultural practices. These characteristics could affect the ability of different groups to comply with regulations.

The aim of the review is to inform the Scottish Government’s decision-making on future regulations regarding decarbonising residential buildings in Scotland and what types of provisions could be made to take into account personal circumstances. The review covers a variety of regulations that make provision for personal circumstances within different countries and regions that are considered to have relevance for the Scottish Government.

Policy context

The Heat in Buildings (HiB) Strategy commits all of Scotland’s buildings, including residential, to net zero by 2045 (Scottish Government, 2021). A proposal for the HiB Standard (“the standard” for the purposes of this report), comprising a minimum energy efficiency standard and a prohibition on polluting heating systems, was recently consulted on by the Scottish Government (Scottish Government, 2023).

The consultation proposed a prohibition on polluting heating systems from 2045, thereby requiring all homes to switch to a clean heating system. A clean heating system is defined as one with zero direct emissions at the point of use. The Scottish Government’s consultation proposed that private landlords must meet the minimum energy efficiency standard by 2028 and owner occupiers by 2033. Owner occupiers that install a clean heating system will not be mandated to improve their energy efficiency, however it is preferable, for the reasons outlined below.

The benefits of improving the EE performance of homes, particularly regarding the insulation levels and the resulting improved thermal performance are well established. Residents are likely to experience improved comfort and lower bills. EE schemes have a long history in Scotland and the UK, with significant numbers of properties now having good levels of insulation. However, some properties are still behind, with over 37% of private sector homes in Scotland having minimal levels of loft insulation and 47% no form of wall insulation (Scottish Government, 2024).

Clean heating is essential to meet decarbonisation targets and for homes with an improved thermal performance (through meeting EE standards) the expectation is that residents will not experience higher bills following a change to their heating system. The consultation on a HiB Bill also proposed two early action triggers for upgrading a heating system ahead of 2045; these are after the purchase of a property (with a grace period of 2 to 5 years), and when a heat network becomes available (Scottish Government, 2023).

The Scottish Government recognises that there are numerous reasons why properties remain poorly insulated, including technical, cost, practical and personal circumstances. EE retrofit measures and clean heating system installations are sometimes associated with disruption in the home which can be a major barrier for residents. For example, a heat pump installation will typically take 2-4 days to complete (LCP Delta, 2022) and can be disruptive to residents. The associated disruption is the main barrier to upgrading to a heat pump (LCP Delta, Energy Systems Catapult, Oxford Computer Consultants, 2022). This disruption could potentially have a greater impact on those in vulnerable situations.

There is recognition that personal circumstances could make it more challenging for some people to meet the proposed standard due to real or perceived barriers. Personal circumstances are relevant for both energy efficiency (EE) and clean heating requirements.

To ensure fairness, the Scottish Government has proposed (in its consultation on a Heat in Buildings Bill) that the Bill (Scottish Government, 2023) will:

• Ahead of 2045, exempt those who can’t, or perhaps should not have to, meet the HiB Standard.
• Provide extra time for those who need it to meet the standard or require that people comply with a modified version of the standard which considers their building’s characteristics or unique circumstances.
• Make it simple for people to appeal where they believe the requirements are incorrect or unfair.

The new bill has been central to a consultation process which closed in March 2024 (Scottish Government, 2023)

Research aims and scope

This project sought to identify examples of regulation which incorporated personal circumstances from a broad range of international regulations, including energy efficiency and low carbon, housing and transport policies. Regulations were reviewed to determine how suitable alterations, extensions or exemptions have been included to accommodate personal circumstances in different types of regulation. This includes what measures have been used or proposed to provide support (such as financial, deadline extensions) to assist with full or partial compliance with the regulations. This will inform Scottish Government decision-making around future proposals, including if and how to incorporate personal circumstances into new retrofit policy.

Overview of methodology

The key focus of this project was to identify regulatory examples, both within the UK and internationally, that include personal circumstances as a basis for extensions, abeyances or exemptions. We anticipated the number of examples specific to heat and energy efficiency regulations would be low. Our approach therefore drew from a broad base that included other sectors. This approach ensured we cast a wide net to identify a diverse range of types of personal circumstances and different ways these have been accounted for in regulations. To ensure all relevant examples were identified, our approach included a comprehensive evidence search and multi-method approach:

• A desk-based study: We reviewed data from internal reports and databases, including a previous international review for ClimateXChange on heat and energy efficiency policy (LCP Delta, 2023). Additionally, we searched publicly available policy databases and conducted tailored internet searches to identify academic, policy and other research sources.
• Consulted with in-house expert colleagues: this supported our research and ensured we focused our searches in areas that were likely to provide value.
• An online call for evidence: This was posted to LinkedIn via our company page which has over 10,000 followers to encourage stakeholders to share relevant regulatory examples.
• Interviews with external stakeholders: We completed interviews with six external stakeholders to discuss how regulatory examples had been implemented and the impact of including personal circumstances. Stakeholders were from a broad range of sectors and countries including the UK, Europe and Canada. These are summarised in the table below.

Table 1: Interviewees by sector and country

In our research, personal circumstances refer to a variety of individual or household factors that may affect the ability to comply with or benefit from such regulations. Depending on the personal circumstance, they can be transient by their nature or permanent. Specifically, we considered the following aspects of personal circumstances:

• Income level: Financial status is crucial as it affects an individual’s or family’s ability to invest in energy-efficient technologies or renovations. Lower-income households may require subsidies or financial incentives to afford necessary upgrades. Low-income households may also struggle to deal with disruptive works in the house, particularly if they need to find alternative housing during the work.
• Health conditions and disability: Health issues, especially those related to respiratory problems or illnesses exacerbated by cold or damp conditions, can make certain regulations more urgent or necessary for specific individuals. They can also make it particularly difficult to deal with disruptive works in the house.
• Property type: The type of property one lives in (e.g., detached house, flat, listed building, etc) can influence the feasibility of certain energy-efficient solutions or decarbonisation methods. A separate piece of research investigated building characteristics that may require exemptions is ongoing at the time of writing.
• Ownership status: Whether a person owns or rents their home significantly impacts an individual’s ability to make substantial changes to their property, such as upgrading heating systems. Renters often lack the ability to implement these improvements, as landlords retain the final decision-making power. Landlords might impose modifications that do not align with tenants’ preferences or fail to consider their personal circumstances adequately. Additionally, tenants may face the risk of eviction if they push for changes that landlords find inconvenient. Thus, protecting the interests of tenants becomes crucial, ensuring that energy efficiency improvements and clean heat installations do not result in undue cost or disruption for them.
• Location: Geographic location affects climate-related needs; for example, homes in colder regions might prioritise heating efficiency more than homes in milder climates. The reliability of the heating system is also crucial in colder regions. Additionally, rural or urban settings can influence access to certain technologies or energy sources and logistics.
• Household composition: The size of the household and the presence of vulnerable individuals (such as children, elderly, or disabled members) can affect energy needs.
• Cultural practices: Cultural or lifestyle factors might affect energy consumption patterns and openness to certain technologies or changes.

The project team built an Excel database to log all relevant regulations identified through the project and to include key information for each one. The database was a valuable resource when completing the analysis of findings for the project. Relevant criteria collected for each regulation included the enforcing authority to determine the eligibility and type of personal circumstance within the regulation, as well as the method of support available – such as extension, financial support, etc, and redress options (if relevant). The full list of database criteria is available in the appendix.

Research limitations

We acknowledge that the number of regulatory examples that include personal circumstances we have identified is limited. The researchers have endeavoured to identify regulatory examples to the extent that is possible. However, we acknowledge the limitation of finding all relevant regulations given the breadth of the project and the fast-developing nature of the heat and energy efficiency policy space.

We have not conducted full research into the reasons why governments have not included personal circumstances within regulations but suggest the following potential reasons for limited examples:

• Not considered viable: Inclusion of personal circumstances may have been considered, but the government determined that doing so was not feasible. This could either be due to the potential to limit effectiveness of the regulation or challenges associated with how including personal circumstance would work in practice. There may be an assumption that appropriate flexibility will be offered within the overall regime, without it being explicit in the overarching legislation.
• Low priority: Countries may have considered including personal circumstances at some stage during regulation design but deemed this a low priority resulting in no further action.
• Oversight: Countries may have neglected to consider the significance of personal circumstances within key regulation and the potential benefit of including them.

As the research focused on identifying regulations, the research on the type of personal circumstances that affect people’s ability to meet a regulation is limited. Additionally, we have not researched in detail how government intervention could best help different people meet the regulations as this is beyond the scope.

A further limitation of the research is the focus on regulation. There is a possibility that some countries are open to considering exemptions or extensions in practice on a case-by-case basis. This would require residents to reach out to the enforcing authority or body to request some flexibility on the regulation that considers their personal situation. The interview data suggests this possibility, but this was not investigated in detail in this report. It is also possible that Government funding is provided to people in vulnerable circumstances that is not linked directly with regulation; this was also not covered within the scope of the research.

Key findings: Personal circumstances in energy efficiency and clean heat regulations

We undertook a comprehensive review of heat, energy efficiency and other home decarbonisation-related regulations to identify the most relevant examples of regulations including flexibility in enforcement for personal circumstances. Through desk-based research, we identified 18 existing regulations relevant to this study that consider personal circumstances.

We conducted six interviews for this project. Most interviewees were not aware of examples of regulations that include provision for personal circumstances and responses to the idea ranged from neutral to negative. One interviewee who works for a professional housing sector body confirmed that within the housing sector, regulation usually involves meeting a minimum standard with funding available for those who cannot do this themselves. There are no exemptions from electrical and gas safety standards, so the interviewee questioned why decarbonisation measures should be treated any differently as the regulation is in part intended to benefit the resident. Discussions regarding personal circumstances within regulations focused on low-income residents struggling to meet standards due to lack of finance; most interviewees were familiar with such regulation. Most interviewees agreed the solution to this would be provision of additional funding and confirmed that they were only aware of such examples. This tallied with our findings from the desk-based research.

To facilitate the analysis, we have grouped our findings into two categories based on the personal circumstance considered. Our first category considers income levels and highlights eight policies providing additional support to lower-income households, using different methods. Our second category considers the high cost of the work mandated by the policy / regulation and highlights three examples of policies supporting owner-occupiers with the costs incurred for energy efficiency improvements or replacing their heating system with the mandated clean and renewable technology. A third section focuses on other exemptions and considerations, in which we highlight three other policies. In our analysis, we have merged two policies (implemented in France) together as they effectively work together and left out other policies identified which related to legal requirements and were thus out of scope. At the end of this section, we provide a detailed summary and analysis of the six interviews we conducted for this project. Interviewees came from different sectors to ensure a wide range of views.

Income level

Overview

Out of the 18 regulations identified which considered personal circumstances, nine considered income level. More particularly, the regulations had a specific provision for low-income households. These regulations, covered in more detail below, focus on the renovation of existing residential buildings to increase their energy efficiency, and on the replacement of inefficient or high-carbon heating systems for hot water and space heating. These regulations were identified in Europe for the most part (France (3), Italy, the Netherlands, the UK and Poland) as well as in Canada. They include minimum standards setting out how renovation should be conducted and which appliances to install, as well as other regulations encouraging the uptake of energy efficiency measures.

In our research, we identified two distinct phases—initial and advanced— in the evolution of regulatory approaches aimed at promoting energy efficiency and reducing environmental impact. The initial phase is characterised by non-binding, voluntary measures designed to encourage the adoption of clean heat technologies. This phase relies heavily on incentives such as grants, subsidies, or tax rebates to motivate owner-occupiers to implement energy-efficient solutions without the pressure of legal mandates. Most of the regulations highlighted in this section are part of governments’ first step in driving the transformation of buildings on the way to decarbonisation and net zero objectives. In contrast, the advanced phase introduces legally binding regulations that include minimum standards setting out how renovation should be conducted and which appliances to install, as well as other regulations encouraging the uptake of energy efficiency measures. The Scottish Government is specifically interested in the regulations falling in the advanced phase, as funding (initial phase) has already been implemented in Scotland. Two of the regulations highlighted fit into this advanced phase as they include minimum standards, which could show a potential path for the evolution of existing or future clean heat measures. Minimum standards create a legal requirement for specific appliances or energy efficiency measures to be installed, which is then enforced by local planning authorities. The City of Vancouver’s Zoning and Development by-law (City of Vancouver, 2022) mandated the installation of zero emissions heating systems in all new low-rise residential buildings in 2022 and will extend this mandate to all new and replacement heating system installations in 2025. The second example is Poland’s Clean Air 2.0 (Ministry of Climate and Environment, 2022) in which Polish regions have implemented emissions standards for heating appliances in all new and existing single-family homes.

Policymakers across these six countries recognise the urgency in renovating their housing stock and turning them into clean, efficient and comfortable homes. However, they are also aware of the cost implications of these updates and retrofits. As a result, they have developed support schemes and policies to incentivise and help all households to undertake these works, with specific, additional support for low-income households. The definition of a low-income household depends on local economic conditions and is country specific. However, the support provided to low-income households has commonalities across the regulations identified:

• Grants and subsidies: the regulation offers a free contribution to owner-occupiers who undertake an energy efficiency renovation in their home. The contribution usually only covers a share of the total cost of the renovation and is capped up to a certain amount. As an example, the French PrimeRénov’ (Republique Francaise, 2024) is an incentive to help owner-occupiers replace their heating system; in addition to other incentives, it can cover up to 90% of eligible expenses for very modest households, 75% for low-income households, 60% for intermediary households and 40% for high-income households. Eligible expenses include a large-scale renovation of a home leading to an improvement of at least two EPC labels, a specific renovation of the heating system or insulation, or the renovation of a multiple occupancy building.
• Low-interest loans: the regulation offers access to a low-interest loan for owner-occupiers to undertake the renovation and / or retrofit. Depending on countries, the loan can cover part or the total of the renovation work. The Dutch Energy Saving Loan provides a 0% rate on the total cost of the renovation for owner-occupiers with an aggregate income below €60,000. (Nationaal Warmtefonds, 2024).

In our review, we did not identify examples of regulations providing exemptions or abeyances related to income levels. Similarly, redress options weren’t mentioned on the websites reviewed.

Analysis of effectiveness and success

All nine regulations accounting for income level as a personal circumstance proved effective in incentivising owner-occupiers to install energy efficiency measures. Across the countries identified, at least thousands of households had applied for the support schemes. These schemes are available to most households but provide additional support for low-income households. In France, the PrimeRénov’ has received over 1.7 million applications, distributed over €1.7 billion in grants between 2020 and 2023 (Carole-Anne Cornet, 2024). In the Netherlands, over €1.2 billion were provided as part of the Energy Savings Loans, resulting in the renovation of over 90,000 homes across the country (Nationaal Warmtefonds, 2024). One notable measure is the Italian Superbonus which was the only measure providing support up to 110% of the cost of the renovation for owner-occupiers. Whilst the initial objective of the regulation – incentivising owner-occupiers to undertake energy efficiency renovations – has been achieved, the policy had been much more popular than expected, as the take-up of incentives had hit €219 billion by the end of 2023, as opposed to the budgeted €35 billion (Balmer & Fonte, 2024).

Understanding the effectiveness of providing additional support when considering income level as a personal circumstance is more challenging, as governments don’t report such detailed information. Table 2 provides detailed uptake and spending information for all measures identified, when information was available.

Table 2: Income level-related measures and impact

High cost of work in the home

Overview

Out of the 18 regulations identified which considered personal circumstances, three specifically considered the high cost of work in the home, as a combination of property type and location personal circumstances. These regulations mandate the ban of fossil-fuelled heating systems and their replacement by clean or hybrid heating systems. These regulations were identified in the Netherlands, Switzerland and the United States of America (USA). For this exemption, these regulations consider the cost of replacing a fossil-fuelled heating system with a clean / hybrid one and the lifetime cost of running the clean / hybrid heating system. In the cases where the combined estimated installation and running costs of the clean / hybrid heating system are higher, owner-occupiers are exempt from the ban. The regulations in place do not mention a duration for this exemption. Denver City Council has implemented such a regulation banning the installation of natural gas furnaces and water heaters in new commercial and multi-occupancy buildings as part of its new building codes (Weiser, 2023). Additionally, they have earmarked $30 million in incentives to help building owners and homeowners install heat pumps instead.

Analysis of effectiveness and success

There is no published information available online on the effectiveness and / or success of these regulations. These regulations are rather recent, published in 2021 in Switzerland, 2023 in the USA and 2024 in the Netherlands. The Dutch regulation, which mandates a hybrid heat pump as the standard for residential heating, will be implemented from 2026. (Dutch Ministry of the Interior and Kingdom Relations, 2023)

Table 3: Measures considering high cost of work in the home

Other exemptions: alternative clean heating considerations, location, age of residents and household composition

Overview

Our research uncovered two examples of regulations where an exemption was granted if an alternative clean heating system was already being implemented. This approach effectively ties compliance obligations to geographic location, making them dependent on local infrastructure rather than individual choice. As a result, whether a homeowner needs to adhere to these mandates becomes a matter of personal circumstance dictated by their residence’s location, which is typically a fixed factor unless the homeowner decides to move. This geographic-based exemption recognises the contributions of existing local initiatives and reduces redundancy in regulatory compliance.

These examples are both in the Netherlands, where gas-fired heating appliances were banned from all newbuild construction in 2018 and all replacement heating systems will need to meet a specific level of efficiency as per the standard for heating appliances implemented from 2026. The standard for heating appliances is a de facto ban on gas-fired heating appliances with the only alternative being hybrid systems and heat pumps. The Dutch Government grants exemptions to the construction of a new build development when green gas is used in the local and existing gas infrastructure, and if there is no alternative heating system available. From 2026, the Dutch Government plans to grant exemptions to the heating appliance efficiency standard only when homes are connected, or plan to be connected in the near future, to another alternative to natural gas, such as a heat network, to avoid duplication of costs.

Our research also uncovered a unique example of a regulation in Germany mandating all new heating system installations to be at least 65% renewable, effectively mandating hybrid systems or heat pumps. In addition to subsidies and wide-ranging transition periods applying to the whole population, this regulation includes an exemption for owner-occupiers aged 80 or older occupying a building of up to six properties, for new installations or replacement. There is no published explanation of the reasoning behind this exemption, however we understand it is meant to avoid any unnecessary stress and disruption on elderly people.

Analysis of effectiveness and success

The Dutch efficiency standard will be implemented from 2026 and thus can’t be assessed yet. However, we believe that the Dutch public is aware of this regulation as it attracted significant attention in the press and general media when it was voted on. Similarly, whilst the German building act is one of the most advanced clean heating legislations in Europe, there isn’t enough time to measure its impact since it was implemented in January 2024. The Dutch Gas Act has been implemented since 2018 and is estimated to support 1.5 million existing homes to change their heat source by 2030 (Cole, 2021).

Table 4: Other exemptions

Interview findings

The following sections provide an overview of the responses and comments from interviewees. Where similar responses have been made, information has been grouped together thematically where appropriate.

Country specific examples

Flanders are looking to introduce a decision tree of personal circumstances

One interviewee shared a proposed policy change that relates to the Energieprestatie legislation in Flanders (Propriétés Im mobilières (PIM), 2022). This regulation mandates that for all property sales from 2023 onwards, properties with an EPC of E or F must be renovated to a level D or better within five years of purchase. Failure to do so will result in a fine. However, the Flemish energy minister recently announced that people struggling to comply due to personal circumstances would not necessarily face a fine. The proposed solution is a decision tree that could include personal circumstances such as divorces, a death in the family or financial difficulties to determine whether it is reasonable that an owner occupier has not met the standard (Baert, 2024). The decision tree announcement has not yet been followed up by an official change to the regulation. Therefore, currently the requirement to meet the regulatory requirement applies to everyone.

The interviewee was asked to comment on potential parameters for the decision tree; they stressed that all comments are highly speculative. It is likely that the decision tree will be for an extension rather than exemption to the standard, such as allowing the owner occupier an additional five years. The government recognises the importance of homes all meeting the standard so it is unlikely that many people will be granted an extension. It is not yet clear how the Flemish government will define valid personal circumstances but losing a job is unlikely to qualify as there is funding available for those on low incomes. However, a terminal illness diagnosis or the death of a partner could potentially be considered valid.

British Columbia is not actively looking to include personal circumstances but do include other exemptions

British Columbia has some significant differences in terms of policy and housing heating systems. Exemptions only apply in cases where the physical house cannot accommodate the change, such as lack of floor space. The interviewee also stated that in emergency situations, such as a heating system breakdown, the government will not insist that the homeowner upgrades the system. In Vancouver, there is a regulation that mandates upgrades to low-carbon hot water heating systems. This regulation was described as ‘soft’ with minimal levels of enforcement for the first five years; the regulation comes into effect from 2024 (City of Vancouver, 2024). The expectation is that this will be tightened and more stringently enforced in the future, but the current focus is on early adopters. The interviewee recognised the potential benefit of including personal circumstances, particularly to allow extensions in emergency situations or for right to repair. However, there was also a concern that this would increase the administrative burden.

Additional findings from the interviews

Challenges getting people to make changes in their homes

Several interviewees commented on the challenge in getting both owner occupiers and landlords to make changes to their properties. One interviewee commented that smoke alarms are now obligatory in all properties in Scotland, but compliance has been challenging despite this being affordable and less invasive than some decarbonisation measures. There was an acknowledgement that some people will struggle to meet the standard and that this was valid, for example for elderly or disabled people, as associated disruption would be harder for these groups. Likely reasons for lack of engagement relate to a lack of trust and in some cases, insufficient funding or access to finance. It is vital that these barriers are addressed as a priority where possible, before introducing regulation that allows exemptions or extensions.

Concerns raised regarding including personal circumstances in regulation

Including personal circumstances could risk some residents being ‘left behind’ and missing out on the benefits of the energy transition due to decarbonisation measures not being completed. This could be due to a lack of financial support (or lack of awareness that this is available), lack of understanding of the benefits (such as a warmer home) or due to some stakeholders, such as landlords, using personal circumstances as a loophole to avoid undertaking work. This point was raised in several interviews. Several stakeholders stated that the priority should be engaging and supporting people to meet the decarbonisation standards as it will benefit them overall. In circumstances where the cost of doing the work is prohibitive more funding should be made available. One interviewee commented that if a person on a low income cannot stay in their home during the retrofit work, then the funding should also cover the cost of them temporarily staying somewhere else.

Personal circumstances may be a valid reason for not meeting the standard, but regulation is not necessarily the right tool

Several interviewees noted that vulnerable people, particularly elderly and disabled people, are often already known to social services and there is potential to rely on their assessment of someone’s personal circumstances as they are on the front line. In some countries, people are sometimes exempted from meeting energy efficiency regulation informally. In cases where someone has a terminal illness then a decision can be made on the ground not to enforce. The focus should be on making delivery work in practice and not just meeting the regulation. One interviewee commented that personal circumstances do not always fall under precise criteria, for example having no social support from friends or family may make someone more vulnerable but regulation will usually not include such criteria. Some retrofit programmes have not sufficiently considered how to work with socially diverse groups, which creates issues for delivery. Addressing this problem would support better delivery of regulations on the ground and lead to better overall outcomes, instead of focusing on top-down regulation.

Unclear how including personal circumstances would work in practice

There is a risk that including personal circumstances in regulations will be overly bureaucratic. There would need to be clarity on how people apply for exemption or extension and how personal circumstances are monitored to determine if they are still relevant. Personal circumstances can change quickly, so the regulations need to be able to respond dynamically in a way that is not restrictive. There is still a risk that things will become confusing and difficult to manage. There are already challenges with the current data levels on standards within the domestic sector that need to be improved to ensure an accurate picture on compliance. Improving the quality of the data would be necessary to manage any exemptions or extensions under personal circumstances. Additionally, there needs to be clarity on how to handle situations such as mixed tenancy blocks of flats where there may be different personal circumstances in each dwelling.

If personal circumstances are to be included in regulation this should be minimal

Three interviews highlighted that if personal circumstances were to be included, it should be cautiously. One stated that there could be a place for extensions but highlighted that there are still concerns related to managing this in practice. Another interviewee stated that any exemptions should be kept to a minimum as there was concern that this could be deliberately used to stop change. There is a risk that those with personal circumstances are assumed to be unable to act, which is not necessarily correct. Most people will be able to act and those that cannot, due to financial issues should be provided with support. Several interviewees stated that this should include appropriate levels of finance, including through banks and mortgages so people can make the necessary improvements to meet the standard.

Key findings: Personal circumstances in other decarbonisation regulations

In an effort to identify as many examples as possible of decarbonisation regulations including flexibility for personal circumstances, we widened the scope of our research to transport and housing-related decarbonisation regulations. A few cities across the UK have implemented is at the forefront of decarbonising individual transport in measures to reduce the number of polluting cars in city centres. The regulation sets a standard for vehicle emissions, and drivers need to pay a fee if their vehicle doesn’t meet the standard. London’s Ultra Low Emission Zone (ULEZ) has been extended in 2023 to cover all of London’s boroughs. (Transport for London, 2023) It provides exemptions for vehicles for disabled people, because they might not be able to use alternative transportation options. ULEZ regulation also provides for a fee reimbursement for National Health Service (NHS) patients driving to a point of care. The second example is a similar and more recent regulation in Edinburgh, which offers a few more exemptions for specific types of vehicles, including vehicles for people with disabilities as well as historic vehicles, showman’s vehicles, emergency and military vehicles. (Edinburgh Council, 2024)

Whilst these regulations provide examples of decarbonisation regulations including blanket exemptions, it is challenging to draw specific learnings for heating and energy efficiency decarbonisation, particularly as the exemptions included are tied to vehicle types.

Table 5: Personal circumstances in other decarbonisation regulation

Conclusions

Key findings for regulation development

Income level

Most of the regulations identified in our research focused on addressing the impact of the energy transition on low-income households. Policymakers seem to be aware of the high costs of the transition and provide financial support under different forms, including grants, subsidies or low interest loans and tax deduction. The financial support is usually tied to specific energy efficiency objectives in the home, or the installation of a specific heating technology. Low-income households can get access to more funding to cover the incurred costs, up to 110% in Italy.

No financial support is provided to deal with the disruption resulting from the replacement of the heating system. The interviews identified this as an important gap in policy, as vulnerable people, particularly those with ongoing health conditions will likely need additional support, during work that is particularly disruptive.

High cost of work in the home

A few of the regulations identified in our research provided exemptions to owner-occupiers where the cost of installing a clean heating system was significantly higher than the cost of installing a fossil-fuelled heating system. Whilst these regulations consider the installation cost as well as the lifetime cost of the appliance, it remains challenging to assess the lifetime cost of a new appliance and without careful implementation and enforcement, there is a risk that this type of regulation could be exploited to justify the continued use of fossil-fuelled heating systems.

Other exemptions: alternative clean heating and age

A few of the regulations identified in our research provided exemptions from clean heat standards where homes had access to alternative clean heating technologies (e.g. heat networks) or when green gas is used in the gas network. Our research also found an example which exempted owner-occupiers over 80 years of age from replacing their heating system with a system that is at least 65% renewable, to avoid significant disruption.

Stakeholder opinions on the inclusion of personal circumstances

The interviewees primarily consisted of those who had never considered including personal circumstances within regulations or who were sceptical about how this would be beneficial. There were also questions raised regarding how effective this would be in helping vulnerable groups while balancing the needs of the energy transition. This included a lack of clarity regarding who the introduction of personal circumstances was intended to support and additional concerns regarding the process becoming overly bureaucratic. One interviewee noted that the potential disruption associated with installing decarbonisation upgrades could potentially be alleviated by providing temporary accommodation for vulnerable residents during the works.

Overall conclusion

Our overall research concluded that there are limited examples of regulations that include exemptions, extensions or abeyances based on personal circumstances. Our recommendation to the Scottish Government is that blanket exemptions are not suitable for this policy area as it risks excluding some members of society from the benefits of the energy transition. We found a limited number of regulatory examples that consider personal circumstances. This could be a suitable amendment to the regulation provided there is clarity on how exemptions would be managed over time and that does not become overly bureaucratic for residents.

We recommend that the Scottish Government continues to monitor the situation in Flanders, as new policy announcements may provide greater clarity on the proposed decision tree. We also recommend further consideration is given to the suggestion by one interviewee, to provide alternative accommodation for those on a low-income during upgrade works to their homes, which can be highly disruptive.

Priorities for further research activity

We have found that the Scottish Government appears to be considering the impact of upgrading residential home on vulnerable groups more than other countries. This is an important consideration to ensure the energy transition is fair and does not negatively affect vulnerable groups. However, should the Scottish Government seek to include personal circumstances within energy efficiency and clean heat regulations we recommend further research. This includes investigating more precisely which vulnerable groups are most likely to benefit from an exemption, extension or abeyance through stakeholder engagement. Additionally, greater clarity is required regarding what the needs of different vulnerable groups are to determine how the inclusion of personal circumstances within regulations would potentially benefit them. Finally, there is a need to identify the potential risks and possible negative unintended consequences associated with including personal circumstances before any policy amendments are made.

The introduction of personal circumstances has the potential to provide different levels of benefit for different groups that may struggle to meet the HiB Standard. There was significant discussion during the project, with interviewees, the Scottish Government and the project delivery team regarding who is most likely to benefit from the inclusion of personal circumstances in regulation. However, this was not the key focus of the research, so any conclusions regarding who is most likely to benefit is highly speculative. We have outlined our assumptions below, but these would require further research to be conclusive.

The three groups that could benefit from the inclusion of personal circumstances relate to the proposed trigger points for action from Scottish Government. These are outlined below:

• New owner-occupied properties: One of the proposed trigger points to meet the standard is the point of sale of a property. The benefit of including personal circumstances is likely to be low for this group, as they have already encountered disruption when moving. The current proposal is to allow a grace period of 2-5 years for this trigger point; therefore, additional disruption associated with meeting the standard would likely be well tolerated. One interviewee commented that when some vulnerable people, particularly older people, move to a new property, they often move to sheltered or social housing rather than into a privately owned home. This would reduce the benefit of including personal circumstances as such housing is covered by separate legislation.
• Tenants in the private rented sector: Another proposal is for landlords to meet the standard, regardless of the circumstances of their tenants. The potential benefit of including personal circumstances of tenants could be high, as vulnerable people in this group have less agency than those in owner-occupied properties. However, there is also a risk that by including personal circumstances, landlords may see this as a loophole to avoid making improvements on their property that would benefit their tenants. The uncertainty regarding the levels of disruption and potential unintended consequences for tenants would benefit from further research.
• Opportunity to connect to a heat network: A final proposed trigger point is a new district heat network. Residents would not be obligated to connect but would be expected to adopt an alternative clean heating solution instead if they do not. The benefit of including personal circumstances for this group could also be high, as any community or neighbourhood that connects to a heat network is likely to be composed of a range of residents, including vulnerable people.

References

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Energy Systems Catapult (ESC). (2024, May). Electrification of Heat – Home Surveys and Install Report. Retrieved from https://es.catapult.org.uk/report/electrification-of-heat-home-surveys-and-install-report/

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Appendix

The full list of criteria collected for each regulation and included in database:

• Country / Region where the policy is in force
• Type of regulation such as a national strategy, subsidy, standard, tax, etc
• Level of governance: municipal, regional or national
• Implementing body within relevant country
• Topic area: energy efficiency, clean heat or both of these or transport
• Name of regulation/policy
• Date first introduced
• Regulation objective
• Regulation description
• Personal circumstances provision in the regulation
• Support available – Financial
• Support available – abeyances or exemptions
• Redress options available
• Criteria used for assessment
• Link to the regulation
• Link to relevant case study (if available)

© The University of Edinburgh, 2024
Prepared by LCP Delta 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, 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.

The Scottish Government is committed to reducing emissions from homes and buildings. The 2023/2024 consultation on the Heat in Buildings (HiB) Bill proposed standards covering heating and energy efficiency that all existing buildings will be required to meet.

This report explores the data sources that could be used to develop a digital compliance monitoring system for the proposed standards. Through desk-based investigation and stakeholder interviews, the researchers identified public and private repositories of information regarding buildings, which could be used to carry out compliance monitoring for domestic and non-domestic properties.

Findings

• There is no digital dataset that combines data relevant to the HiB Standard that is highly accurate and with full coverage of all buildings in Scotland.
• An optimal digital solution in terms of coverage and accuracy could be achieved in the near term by combining data from different sources and enriching it with new data. Relevant data sources are discussed in the report.
• There is an opportunity for Scotland to develop a comprehensive central database looking at many aspects related to buildings and property, including building materials, fabric condition, and energy use.
  

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

February 2024

DOI: http://dx.doi.org/10.7488/era/4856

Executive summary

The 2023/2024 consultation on the Heat in Buildings (HiB) Bill proposed standards covering heating and energy efficiency that all existing buildings will be required to meet. This report explores the data sources that could be used in future to develop a digital compliance monitoring system for those standards. The standards require:

1. In all buildings, including non-domestic premises: non-polluting heating from 2045.
2. In owner occupied homes: a minimum energy efficiency standard by the end of 2033.
3. In privately rented homes: a minimum energy efficiency standard by the end of 2028.
4. Those purchasing a property to comply with the prohibition on polluting heating within a specified amount of time following completion of the sale.
5. Providing local authorities and the Scottish Ministers with powers to require buildings within a Heat Network Zone to end their use of polluting heating systems by a certain date and with a minimum notice period.

Compliance with the standards can be met through:

1. The presence of a clean heating system, including connection to a heat network.
2. Meeting the energy efficiency standard through either installing a list of measures or meeting a fabric energy efficiency rating of 120kWh/m²/year or less.

Compliance with the standard creates a need to check on the progress of Scotland’s buildings. This may require a dedicated system. Through desk-based investigation and stakeholder interviews, we identified public and private repositories of information regarding buildings, which could be used to carry out compliance monitoring for domestic and non-domestic properties.

Findings

We found no digital dataset (or database comprising various datasets) that combines data relevant to the HiB Standard that is highly accurate and with full coverage of all buildings in Scotland. For instance, only 55% of Scottish domestic dwellings have an assessed EPC created following a domestic energy assessment, as opposed to a prediction based on similar nearby properties. As a result, no existing dataset could readily be used for compliance monitoring.

Ultimately, reliable digital compliance monitoring can only be achieved with a high degree of accuracy of the data being inserted and coverage across the whole built environment in Scotland. Our findings include observations around the role of data governance, property identification, professionals and professional indemnity insurance, data consistency, archetype approaches, and data sharing.

Conclusions

We suggest that an optimal digital solution in terms of coverage and accuracy could be achieved in the near term by combining data from different sources and enriching it with new data. We identify below which datasets are relevant to various aspects of the Standard. This review is on the basis that current update points for EPCs remain the same and that the process is able to adapt and update sufficiently quickly to the new clean heating systems coming onto the market.

Table 1 Existing datasets that could be used to measure compliance

Considering the above, the following options may be considered by the Scottish Government for the establishment of a compliance and monitoring tool. Each option has advantages and drawbacks as well as a set of actions required to enable successful implementation.

Option 1: Use existing data sources in their current locations

• Option 1a: Homeowner reporting into existing locations – 3 to 6 months to develop

1. Homeowners are required to self-report into these locations and upload evidence. Government looks individually at these data sources.
2. The responsibility to demonstrate compliance rests with the homeowner, who must generate, gather and upload the relevant information to the data sources to demonstrate compliance to the government.

• Option 1b: Professional reporting into existing locations (status quo)
  • Government looks individually at these data sources, which can only be updated by professionals.
  • The responsibility to demonstrate compliance rests with the homeowner, who must pay for generating, gathering and uploading the relevant information to the data sources to demonstrate compliance to the government.

Option 2: Professional reporting from linked databases – 3 to 6 months to develop

1. Data sources listed above remain in their current locations.
2. Government looks at a single portal, which in turn looks at existing sources that can only be updated by professionals.
3. The responsibility to assess compliance rests with the government and the responsibility to demonstrate compliance rests with homeowners or their professional consultants. The government creates a means of collating the data on a per-property basis via a new portal.

Option 3: Professional reporting into a new central database – 12 to 18 months to develop

1. Data is moved from existing data sources to a new government-managed platform.
2. Government manages a combined dataset that can only be updated by professionals.
3. The responsibility to assess compliance rests with the government, and the responsibility to demonstrate compliance rests with homeowners or their professional consultants. The government creates a means of collating the data on a per property basis on this new platform.

Opportunities

We highlight an opportunity for Scotland to develop a comprehensive central database looking at many aspects related to buildings and property, including building materials, fabric condition, and energy use. While this is out of scope of this project, such a database could bring many benefits, such as increased building safety, simpler conveyancing, smoother statutory consent processes, fewer vacant homes, improved building condition, and more resilient property value. The EU and various member states are legislating on the introduction of property logbooks (also called “green building passports”) to constitute such datasets from the ground up, starting at property level. The list of database tools provided by the private sector in our study is testament to the market’s confidence in their potential to positively impact comfort, affordability, and the environment through the provision of digital logbooks.

Glossary of terms and abbreviations

Background and context

Introduction

Following the Scottish Government’s Climate Change (Emissions Reduction Targets) (Scotland) Act 2019, new strategies and policies have been published to provide a framework for reducing the emissions from our homes and buildings. One such key document is the ‘Heat in Buildings Strategy’, which aims to support the decarbonisation and retrofitting of existing buildings. Further to the Strategy, a consultation ran between November 2023 and March 2024 with proposals for a Heat in Buildings (HiB) Bill, designed to provide new regulations for the improvement of energy efficiency and transition to clean heating systems in homes and buildings in Scotland. At local authority level, Local Heat and Energy Efficiency Strategies (LHEES) and Delivery Plans have been published to identify opportunities and target funding for decarbonised heat at local council level.

The Scottish Government wishes to explore a digital system to monitor compliance of existing buildings with the upcoming Heat in Buildings Standard to be established by the proposed Bill. This paper reviews existing digital data sources that the Scottish Government could draw on in developing a future monitoring regime.

Data in property and construction

The real estate industry started to adopt digital technology, such as spreadsheets and accounting software, throughout the 1980s as personal computing became more common (Reed, 2021). At the same time, it became possible to model building performance using computers, leading the Building Research Establishment (BRE) to develop the Standard Assessment Procedure for the Energy Rating of Dwellings (SAP), based on the BRE Domestic Energy Model (BREDEM) and published by BRE and the Department of the Environment in 1992. It has now been adopted by the UK Government and Scottish Government as the official methodology for calculating the energy performance of dwellings (Scottish Government, 2023).

This approach was drawn into international environmental legislation through the European Union’s Energy Performance of Buildings Directive (EPBD), first enacted in 2002, and updated in 2010, 2012, 2018 and 2024. This Directive called for standard assessment procedures to analyse the energy performance of buildings, standard data inputs and outputs, and a means of communicating the findings of this process to the public through what became Energy Performance Certificates (EPCs). EPCs use building energy models to communicate modelled energy efficiency in buildings, from bands A (highest energy efficiency) to band G (lowest energy efficiency). Given the varying definitions of ‘energy efficiency’, these bands have changed over the years.

Heat in Buildings (HiB) Strategy (2021)

The HiB Strategy, published by the Scottish Government in October 2021 “provides an update to the 2018 Energy Efficient Scotland Route Map and the 2015 Heat Policy Statement, and brings together [Scottish Government’s] ambitions on energy efficiency and heat decarbonisation into a single framework.” It calls for all owner-occupied homes to reach EPC C by 2033 and all private rented homes by 2028, although it acknowledges that the more difficult homes in mixed tenure or mixed ownership blocks, and non-domestic premises, may take until 2045 to achieve it. Public Buildings should have zero emission heating sources as soon as possible, with a backstop of 2038.

The Strategy further acknowledges challenges around these targets, suggesting that “where it is not technically feasible or cost-effective to achieve the equivalent to EPC C rating, (…) a minimum level of fabric energy performance through improvement to walls, roof, floor and windows, as recommended in the EPC, would apply.”

Heat in Buildings Bill consultation

In December 2023 the Scottish Government published a consultation (Scottish Government, 2023) on the proposed Heat in Buildings Bill.

The consultation included the following proposals:

1. Prohibit the use of polluting heating systems after 2045 across all buildings.
2. Require those purchasing a home or business premises to end their use of polluting heating systems within a fixed period following completion of the sale.
3. Require homeowners to make sure that their homes meet a reasonable minimum energy efficiency standard by 2033 only where no clean heating system has been installed.
4. Require private landlords to meet this minimum energy efficiency standard by 2028 regardless of whether a clean heating system has been installed.
5. Require property owners to connect to a Heat Network when it comes available, or change to another form of clean-heating of their choice

We consider the elements below, present in the consultation, to be of particular relevance to the data requirements for a compliance system.

Section 2 states:

“We propose to set a minimum energy efficiency standard that can be met by installing a straightforward list of measures. This list of measures would be developed to prioritise those that could have the most impact for homes with the lowest amount of cost and disruption. Any homeowner who had installed these measures – or as many of them as are feasible for the type of home they live in – would be considered to have reached a good level of energy efficiency and meet the new standard.

We think this list could be:

• loft insulation
• cavity wall insulation
• draught-proofing
• heating controls
• 80 mm hot water cylinder insulation
• suspended floor insulation”

“Alongside this straightforward list of measures, we propose an alternative option of meeting the standard based on the result of an EPC assessment. We have recently consulted on the addition of a new fabric efficiency metric to EPCs, which could be used to show that a property meets a good level of energy efficiency.”

“Owner occupied homes that have ended their use of polluting heating by 2033 will not be required to meet the minimum energy efficiency standard.”

“Private rented properties would still be required to meet the minimum energy efficiency standard, however, even if a clean heating system had already been installed.”

“We are not proposing to set a minimum energy efficiency standard for non-domestic buildings.”

“While we are also not proposing to apply this Heat in Buildings Standard to the social rented sector, the sector will still be on the same pathway.”

Section 4 states:

“We are proposing that any buildings within a Heat Network Zone will not need to meet the Heat in Buildings Standard following a property purchase.”

Section 5 states:

“This consultation has described five points in time at which we may be asked to meet the Heat in Buildings Standard:

1. at the end of a grace period which follows the completion of a property purchase;
2. following notice from a local authority to a building owner in a Heat Network Zone that they are required to end their use of polluting heating;
3. at the end of 2028, private landlords will need to have met the minimum energy efficiency standard;
4. at the end of 2033, owner occupiers will need to have met the minimum energy efficiency standard; and
5. at the end of 2045, all building owners will need to have ended their use of polluting heating.”

A definition of HiB Standard compliance

We used a definition of HiB Standard compliance against which to compare existing digital datasets, databases, and tools.

1. Presence of a clean heating system i.e., a heating system which does not emit CO₂ at point of use.
   1. This includes connection to a Heat Network.
   2. Being in a heat network zone means that the property does not need to meet the Heat in Buildings Standard following a property purchase.
2. Installing a list of measures (alterations to the building) or meeting a fabric-based heating demand of 120kWh/m²/year or less (as modelled by approved software).

The opportunity for Scotland

Scotland’s differentiated legislative, regulatory and policy regime affords it the opportunity to determine its own approach with regards to energy and heat in buildings, though with certain limitations around control over the gas grid or product standards. Furthermore, the Scottish building stock is different to the wider U.K. stock, calling for a specific approach. More people live in flats (National Records of Scotland, 2023), (Office for National Statistics, 2023), construction is of a lower quality generally (BRE Trust, 2020), it has a larger social housing sector (Serin, et al., 2018), and the climate is more challenging. Furthermore, traditional tenements, post-war non-traditional construction, and the greater prevalence of timber kit construction in the late 20^th century (PBC Today, 2022) are all unique features of the Scottish building stock.

The gap between the current state of Scottish housing and the expectations set by the HiB Bill will stimulate economic activity. This positions retrofit as a key area of potential growth in the labour market.

Mapping the current situation

Buildings

The HiB Strategy (Scottish Government, 2021) and Scottish House Condition Survey (Scottish Government) contain statistics about the built environment and the people and communities living in them.

1. The total domestic building stock in Scotland comprises around 2.7m homes.
2. Following their introduction in 2009, as of 2023 around 1.5 million domestic EPCs currently exist (55% of the building stock).
3. Following their introduction in 2009, as of 2023 around 49,000 non-domestic EPCs currently exist (25% of the building stock).
4. In 2022-2023 there were 101,055 residential property sales in Scotland (Registers of Scotland, 2023), leading to as many updates to the EPC register.

Building data holders

We drew up a list of organisations known to be maintaining databases associated with the built environment. Other organisations were added upon suggestion by interviewees.

All organisations were contacted via email with a letter of introduction from the Scottish Government about the research study. A series of standard questions were posed, which are listed in Appendix A.

The array of different datasets and tools for buildings and energy data included within this study can be categorised as follows:

1. Public databases – owned, funded or managed on behalf of the government.
2. Public data analysis tools – owned, funded or managed on behalf of the government.
3. Private datasets and analysis tools – owned and funded by third parties.

A summary of all databases contacted as part of this study is provided in Annex A. The following tables summarise the findings. Where “-” is used, there was no comment given in the interview relating to this category.

Public databases only

Table 2 Summary of information in public databases

Detailed commentary on each is in Appendix B.

Public databases with data analysis tool

Table 3 Summary of information in public databases with data analysis tools

Detailed commentary on each is in Appendix C.

Private database or data analysis tool

Table 4 Summary of private databases or data analysis tools

Detailed commentary on each is in Appendix D.

Information required for HiB monitoring

The compliance criteria noted in section 3.5 are cross-referenced below with the datasets and tools reviewed in Table 5.

We haven’t distinguished between data which is assumed, predicted, observed, or modelled. See Section 5 below for commentary on this distinction. The databases are primarily split into two categories:

1. Those which contain EPC data (beyond the EPC band).
2. This includes data about all elements of the building.
3. EPC data is the basis of “Home Analytics”
4. Home Analytics is itself the basis of several other databases (see Appendices B, C and D for details)
5. Those that don’t contain EPC data beyond the EPC band.

The only public data set with data of a higher quality on the individual building elements than the EPC data is the Scottish House Condition Survey (SHCS). The SHCS data is based on a small sample set of the housing stock and then extrapolated over the whole stock to generate the associated report. This level of quality and accuracy is also present in “Single Survey” data, which is present for a much larger percentage of the stock, though this is held privately at present.

One of the few databases which provide centralised and accessible information about Heat Network Zones is the Scotland Heat Map, providing that Local Authority LHEES data has been uploaded to it.

Table 5 Databases cross-referenced with HiB compliance criteria

Data sharing and transferability

Data is held by various organisations in a mix of structured and unstructured databases. Some of them are publicly or privately accessible via APIs. Some of them require the export of data in usual formats (CSV or XLS). Some of them do not have any built-in connections, but this could be created on demand. More problematic is the lack of a common framework for what the data means, different ownership of data, the lack of data sharing agreements, and the rights that individuals and organisations have to make it available to others.

While SAP (upon which the EPCs are based) provides a useful definition and structure for each element it looks at, enabling comparisons across buildings, this is not an exhaustive way of looking at and analysing buildings. These gaps, and the lack of a common standard, are quickly filled by other assessment methods created by trade bodies or organisations for their own purposes, which results in a fragmented, hardly interoperable, and ultimately unactionable data universe. For instance, while SAP determines floor area in a certain way, Royal Institution of Chartered Surveyors (RICS) determines it differently. While RICS or RIAS leave it up to Chartered Professionals to prioritise fabric interventions, SAP provides a proscriptive way. While PAS2035 provides a specific list of possible interventions, these are not used across the board in all retrofit assessment software available.

In short, there is no commonly agreed way of fully describing the characteristics, condition, and work required of all buildings. Work is underway in the private sector to address some of these gaps and differences. For instance, we are aware that a study group within the National Retrofit Hub is working on creating a data scheme suitable for domestic properties. Such a scheme could then be adopted by Residential Logbook Association (RLBA) members to standardise the way in which data is recorded and presented in their platforms. This work could further be integrated into the emerging Property Data Trust Framework being developed by the Open Property Data Association in order to standardise access to various data points. As a whole, this work could provide a standard for the description of buildings, increase interoperability of platforms and databases, and pave the way for faster rollout of retrofit measures. There is also currently a small project being funded by BE-ST to investigate the opportunity of a national buildings ‘domestic’ database.

Before data can truly be transferable, however, other issues need to be considered as part of this work. These include data ownership and data sharing consent mechanisms. For instance, some of the data which a homeowner could make use of in order to plan retrofit, such as Home Analytics, belongs to the Scottish Government, is held by the Energy Saving Trust and can only be accessed by request from local authorities or registered social landlords, but not homeowners. This creates a barrier to access information which ultimately relates to the property in the ownership of the person trying to access it. Similarly, Trustmark logs information covering all past government-funded interventions, but this information isn’t readily accessible to the homeowners. Access to this would allow homeowners to have precise and up to date information of their property’s heat and energy installations, and the potential for further work. For consumer access to such information to be possible, such as through the medium of a property logbook (also called “green building passport”), a trusted means of verifying the identity of the person requesting the data needs to be agreed upon by all parties.

Particular attention should be paid to the data ownership and sharing provisions of data held by third-parties on behalf of the government. The study team recognises the commercial incentives that organisations holding data on behalf of the government have to restrict, and in some cases charge for, access to data which is in public (government) ownership. A review of the government’s data sharing agreements with third-party organisations holding data on its behalf could be conducted to ensure that:

1. publicly-owned data can be made available to appropriate persons and organisations (such as the householder or their consultants);
2. publicly-owned data is not privatised;
3. only modelled data derived from third party organisations’ own investment and Intellectual Property can be commercialised.

Summary of existing energy & building data landscape

Our review showed that there is no single existing source of data which could readily be used as a compliance and monitoring tool for the Scottish Government for the aspects of building construction and performance set out in the HiB Bill consultation. The existing data landscape described above is patchy in its coverage, with even the most comprehensive data set (Domestic EPCs) covering just over 50% of the stock to which it applies^[1]. Some databases, such as EPCs, have the potential to contribute an important proportion of the data required. However, they suffer from issues which preclude their wholesale adoption for the purpose of compliance and monitoring.

Furthermore, while the structure of EPC data is consistent, there are variations in the structure, unit of measurement and phraseology of the other data points gathered, held, and processed in other databases which could all be complimentary if this issue were resolved.

Two of the databases listed above – the Scotland Heat Map and the National Grid – bring together complementary datasets to provide a more holistic picture of the decarbonisation potential of building heat sources, but it is hard to use them for HiB compliance as they present data for groups of buildings, rather than individual buildings.

In conclusion, any solution for the monitoring and tracking of the HiB compliance will have to draw on several datasets and be enriched with additional data to close gaps where modelled/assumed data is currently relied upon.

Observations

The following section contains our more detailed observations of the datasets outlined in summary above in more detail with commentary arranged by topic.

Indexing

Accessing information about a given property across multiple databases would require searching indexed data according to a single unique identifier for the property.

There are several ways in which properties in the UK have been identified. These include Property Title numbers, Unique Property Reference Numbers (UPRN), Meter Point Reference Numbers (MPRN), and Postal Addresses. Unfortunately, these aren’t immediately usable: Property Titles can relate to more than one dwelling, UPRNs aren’t present for every building in the UK, MPRNs can relate to multiple properties at once, and Postal Addresses have multiple formats. A breakdown of the strengths and drawbacks of various identifiers is in Appendix E.

Heat network zones

The HiB Bill consultation refers to the Local Heat and Energy Efficiency Strategies (LHEES) published by each Local Authority. Each LHEES identifies potential Heat Network Zones, areas where a heat network appears to be viable. LHEES are to be updated every 5 years. The second round of LHEES will take into account designated heat network zones. Some LHEES data on Heat Network Zones is being uploaded to the Scottish Heat Map. The Scottish Government will update the Heat Map data and Local Authorities will report any inaccuracies/ ad hoc updates, making use of the Heat Map’s GIS framework to make them interactive and usable.

Given the high priority the HiB Bill consultation gives Heat Network Zones, knowing whether a property is in a Zone or not is a key piece of information for compliance monitoring. Having all LHEES potential heat network zone data and designated Heat Network Zone data digitised and accessible would provide a key plank of the SG monitoring and compliance framework. Potential zone data isn’t vital for compliance – but could help to communicate where zones might soon be.

EPCs, RdSAP, Home Analytics

Domestic buildings must have an Energy Performance Certificate (EPC) created on construction, sale, or lease (or marketing thereof). An EPC must be created through an approved modelling methodology called SAP, or RdSAP in its simplified version. The certificate must be lodged on a public register, which in Scotland is administered on behalf of the Scottish Government by the Energy Saving Trust (EST).

The base data that is collected and used for creating EPCs (EPC data) is collated and owned by the Scottish Government. This data is then enriched with socio-economic and spatial indicators, such as Local Authority Ward, topographical information, Scottish Index of Multiple Deprivation, and other indicators to create a data set called “Home Analytics” (HA). Predictive modelling is then used to:

• Close the gaps: of the 2.7m homes in Scotland, only around 1.5m of them have EPCs. To get a Scotland-wide picture, HA predicts EPCs using the EPCs of nearby properties.
• Identify decarbonisation opportunities. By looking at several other simple datasets (e.g., orientation, typology, nearby land) it can suggest measures which might be viable for each property (such as the installation of a wind turbine, or solar panels).

Where data has been assumed, or predicted based on an algorithm, confidence ratings applied to show that these data points were not produced via observation by an energy assessor. 100% confidence is given to original information, and lower ratings for derivative or modelled information. Home Analytics is available to public sector organisations and their subcontractors for specific projects.

Due in part to difficulties in accessing the Home Analytics dataset, many of the organisations we spoke to have constructed their own database based on the public EPC register, augmented by combining with various other data sources to generate more informed conclusions about either the country-wide picture, or smaller zones of stock.

Non-domestic analytics

Non-domestic buildings also must have an EPC on construction, sale or lease, or marketing thereof. SBEM or an approved Dynamic Simulation Model (DSM) can be used to produce the EPCs. In the same way as domestic EPCs, the input and output data is owned by the Scottish Government and is managed by EST. Our research did not extend into the non-domestic analytics database. However, from discussion with interviewees the study team were informed that the non-domestic analytics database contains less observed data, and more modelling than HA (due to bigger variance in non-domestic buildings).

Public Buildings Standards

Having spoken to several key managers within the public building portfolios sector, we found that the energy performance data held by the public sector about their buildings is variable and incomplete.

Scottish Futures Trust (an executive non-departmental public body of the Scottish Government, established to improve public infrastructure investment) are now onto the second revision of their Net Zero Public Buildings Standard, which “helps public bodies define objectives for their new or retrofit construction project in pursuit of a credible path to net zero operational energy”.

As noted above, HiB notes the target for public buildings is to have clean heating systems first and foremost, with achieving a broader level of energy efficiency a further implicit means of improving the efficiency of said heating system. Given this, the target for this stock may be purely to decarbonise heating systems.

PAS2035 and Trustmark

PAS2035 is the UK Government specification for the retrofit of domestic buildings. It establishes a complete process, creates new roles and responsibilities, and brings in checks and balances which aim to avoid the pitfalls of previous Government-funded home energy efficiency investments. It is currently mandated where the “ECO” funding stream is used for projects, and some public sector bodies in England and Wales mandate it for works funded by other streams. From the study team’s experience, standard PAS2035 practice relies heavily on EPCs as the tool to determine the energy efficiency of buildings before and after any work.

Trustmark is the organisation tasked with applying quality assurance (QA) to the PAS2035 process. A key element of this quality assurance is that installation data should be uploaded to a Trustmark-managed ‘data warehouse’ at the end of a PAS2035-compliant project. This data comprises the wider QA documentation generated, such as “before and after” EPCs, photographs, reports, drawings, and specifications.

The Scottish Government, and the wider construction industry in Scotland, have been debating the role of PAS2035 in retrofit activity for several years. As of the date of this study, there appears to be a mixed response to increasing use of the PAS2035 standard for retrofit work, in part due to the higher cost implications. This may be discounting the benefits of record-keeping and post-installation data lodging aspects which PAS2035 brings.

Trustmark notes that the data is considered publicly owned, and consequently private commercial organisations cannot easily access it, despite ongoing explorations into how to expose more of it. They also note that the vast majority of what is held relates to properties in England, given the small number of PAS2035 projects carried out in Scotland. Trustmark reported that only around 600,000 properties (2% of UK 27 million existing homes) have data lodged in the ‘data warehouse’.

Microgeneration Certification Scheme (MCS)

The MCS is a quality assurance scheme for small renewable energy, heat pump and Photovoltaic (PV) cell installations. It was created to improve the quality of work carried out by having a defined list of approved installers, and a methodology to track such installations. It was implemented by the UK Government from 2011 onwards. MCS requires registration of installers, standard methods of generating specifications and quotes, and guarantees for equipment installed and after-sales care. The documentation of each system installed is lodged with MCS and held centrally.

Lead vs lag

Many databases comprise data for buildings which can be described as “historic” or “stale” (i.e., not recent). We refer to them as ‘lag’ data. Others use this historic data as inputs into models which suggest what measures individual buildings, groups of buildings, whole estates, or the national stock could benefit from. This second type of data is considered ‘lead’ data.

For the purposes of tracking compliance, the lag data sources are more useful because though they might be stale, they are not predicted, which implies a lower confidence. But this raises the question of the point at which the lag data gets updated. These data update points are described as “update points” below.

Property Logbooks / Building Passports

Two of the organisations we spoke to provide property logbooks (sometimes referred to as “building passports”). These software applications are emerging digital tools which provide a comprehensive digital record of the building’s past. Some of them comment on fabric condition, occupancy patterns, and provide a ‘roadmap’ for work to be undertaken to the building into the future. The advent of these digitised data repositories and improvement plans is something the focus of this paper (accessing and synthesising building databases) could leverage.

Two-way connections between building logbooks produced by private companies and nationwide databases, such as Home Analytics and Scotland’s Heat Map, could create a joined up, dynamic and holistic data environment about buildings, and have positive impacts extending beyond the current aims of the Heat in Buildings Bill.

The provision of property logbooks is now mandatory in France for newbuilds and retrofitted properties (Today’s Conveyancer, 2023). A European research project (DemoBLog) is contributing to the evidence that a holistic and digital approach to building data can accelerate reduced environmental impact of buildings (European Commission, 2023).

A Scottish equivalent is the recommendations of the Scottish Parliamentary Working Group on Tenement Maintenance and their proposal for five-yearly inspection reports. These documents would include Building Passport-level information on the mutual parts of tenements and be mandated by statute. To be useful in the context of HiB compliance, they would have to then be digitised and accessible.

Modelled vs measured

Measured or observed data comprises data captured in-situ and reported directly without processing. However, we found that very few properties have had an in-situ performance measurement, and that sample sizes would be too small to extrapolate to the whole stock, or even to archetypes. While this data can be relied upon to measure compliance, this data is incomplete (more measurements should be made) or stale/lag (which can be addressed by update points described below).

Where it hasn’t been possible to measure data in situ, chiefly due to the cost of surveying, tools have sought to model (or predict) data based on a variety of criteria, such as similar typologies nearby and assumed occupant behaviours. As noted above, this is a core component of Home Analytics, but it is also used in some of the private sector databases.

This distinction becomes complex as EPCs use observed data as an input, and then use software to model energy usage and fabric based heating demand, making them a hybrid of both.

Compliance monitoring relying on modelled/predicted data may lead to disputed findings where the approved modelling is shown to conflict with real-world observed measurements. For instance, should an RdSAP-based EPC state that fabric based heat demand is over 120kw/sqm/year, but measured heat demand proves to be lower, would the property be deemed to be in compliance? This is an important matter for an upcoming Bill to make clear, with consequences for a digital compliance monitoring system.

Update points

As noted above, EPCs are required by regulations:

• When a domestic or non-domestic building is built, sold, or leased (when advertised for such).
• As a condition of receiving funding, such as grants for energy improvement works (Home Energy Scotland, Business Energy Scotland, or Local Energy Scotland), or ECO (which requires PAS2035).

These update points allow for the refresh of data, which, over a period of months trickles all the way through to various datasets, including Home Analytics, and others. Having more update points, such as at any intervention listed in the Standard, would help measure compliance using existing datasets.

Several key triggers are noted in the HiB Bill consultation, including one focussing on the property’s purchase. The chances of the HIB trigger points, and the trigger points for updating the other databases, aligning in a reasonable time frame should be considered. For instance, if an EPC is updated on purchase to show that the building is not on a clean heating system, and then one is installed without an obligation to have a new EPC created, and then the Scottish Government checks for compliance, the record would show that the building does not comply.

Confidence and risk

Variation in data quality and the widespread use of modelling to produce apparently complete datasets has led to lack of trust from practitioners, who like to rely on their own measurements prior to providing retrofit advice. This has been a primary driver behind the UK and Scottish Government’s recent work to ‘improve’ or ‘enhance’ areas such as the process and content of EPCs (Scottish Government, 2023). Concern over data quality is not unique to the construction and property sectors. A challenge for the Scottish Government is how any existing data source can be used to check for compliance if the data is of potential uncertain provenance and fidelity.

The traditional construction and property sectors used a structure of insurances, professional qualifications, and codes of ethics to provide a quality assurance system for work with buildings. Where advice and design is concerned, this system relies on professional indemnity insurance backed up with chartered professionals such as architects, surveyors and engineers. These structures are notably absent from the energy efficiency and retrofit sector, which contributes to a lower level of trust in the sector by the public.

There is some quality assurance built into some of the datasets the study team reviewed. For example, Trustmark, via the Scheme Providers, carries out sampling of EPCs to check for compliance against the standard process for producing EPCs. Some private operators align and utilise British Standards quality assurance or data management certifications.

Energy focus

A significant number of the datasets reviewed are focused on energy (kWh/sq.m/year), rather than building fabric, or connection to a heat network zone. The reasons for this are varied, though perhaps linked to the prevalence of EPC bands as a primary focus in recent years. EPC data includes building fabric information, which can be used for HiB Standard monitoring and compliance, though this is not present where just the EPC band itself is used in a given database. From this we observe that the EPC data is more useful for monitoring and compliance than just the EPC band itself.

The future of EPCs

An obvious challenge to basing a compliance scheme on EPC data modelling is the ongoing initiatives in the public sector that could result in changes to the methodology and outputs of the EPC over the next few years. The Scottish Government refer to their ambition to improve the EPC in the HiB Bill consultation and recently consulted on a range of options. In parallel, the UK Government is looking to replace SAP with the Home Energy Model (HEM).

Self-certification

In researching compliance against the Heat in Buildings Standard we considered the potential approaches involving either self-declaration (relying solely on the building owner/occupant), or the role of existing compliance and check mechanisms.

Below we have outlined examples of self-certification compliance approaches:

The census: it is mandatory for everyone to complete the census. There are fines for not doing so, or for giving false information. There is not, as far as we’re aware, a process for checking the validity of information given by respondents to the census. However, there is no gain or loss to the person completing the census for the information they provide, and so there is no particular pressure to report any given way.

Building Standards: Building Standards (the control over building regulation consent in Scotland) requires drawings to be submitted showing how the proposed works meet the building regulations. A Building Warrant is issued, enabling the works to be built legally by the local authority when they deem the proposals meet the Building Regulations. At the end of the works, the client or their representative issues a Completion Certificate, self-certifying that the works meet the drawings consented as part of the warrant. The Local Authority does spot-checks on the works to confirm that this is the case, and, if satisfied, will issue an Acceptance of Completion Certificate.

SER: the Structural Engineers Register is a limited company appointed by the Scottish Government’s Building Standards Division to administer a scheme for Certification of Design (Building Structures). This is one of only two areas where self-certification is allowed. The scheme requires structural engineering firms and individual engineers to maintain registration with SER though qualifications and audits of their work. This allows them to sign off the structural design of buildings and avoid review by the local authority. The oversight of the scheme is stringent and the structural calculation assessments are checked by a separate engineer. For Section 6 of the Building Regulations (Energy), there is an online submission procedure administered by RIAS.

EPCs: Domestic Energy Assessors (DEAs) undergo a 3-day training course, submit photo evidence of their inspections, and are checked on a percentage of their assessments. They carry Professional Indemnity Insurance (PII), they have a code of practice administered through Trustmark, and are required to carry out Continual Professional Development (CPD). Their obligation is to run the RdSAP process correctly, but they are not responsible for the result of the EPC, or for the recommendations given by the EPC (which are generated by algorithm).

MOTs: In the case of motor vehicles, cars must have an MOT annually and hold a certificate stating they meet the checklist of performance indicators. Qualified test centres check this, for which there is a nominal charge. Any factors not in compliance are notified to the vehicle owner/user. Using a car which has failed to pass a MOT certificate means it is illegal to drive the vehicle.

Competent person: A “competent person” is required to carry out processes mandated by organisations like RICS, and this level of qualification is set out in the relevant professional standard. BS7913 sets best practices for work with historic buildings and establishes the role of a “competent person” and what qualifies a person as such. In both cases, funders or clients of work to which this competence relates require this standard to be met to enable them to fund the work.

Self-reporting

Self-reporting may be suitable for reporting compliance with the clean heating system mandate, with checks being carried out at purchase (such as the Building Warrant used for new build, or for existing buildings where the assessment is included within the pre-sale survey of the building). If a statement has been made that a clean heating source is present, but this is found not to be the case on sale by the Home Report Surveyor, then the sale value is likely to be affected and may fall foul of the Sale of Goods Act (1979).

Self-reporting is however more complex for the energy efficiency standard, as the definition of something seemingly simple, such as the loft-roll being compliant, varies from standard to standard. Questions arise, such as whether it is evenly installed, pushed into corners, whether there is a vapour control layer under it, whether it is dressed around the cold-water storage tank, etc. A further challenge is that not everyone is able to access the loft, or sufficiently computer-literate to use the digital systems. It is our recommendation that some form of survey by an assessor with some level of training and consumer protection could undertake this work.

The energy efficiency metric (kW/m²) is more complex still, as it requires training in how to use a dedicated piece of software, and how to reliably enter data to get consistent results. Again, we propose that a competent assessor is best placed to carry out this work

Finally, homeowners must seek advice on what alterations to make to a property to make it compliant. At present, the RdSAP EPC is very clear that the recommendations are suggestions, and not “advice” to be followed without further checks. This distinction frequently escapes the public, which could lead to widespread failure of retrofit to deliver reliable improvement. However, this is where an ‘archetypes approach’ for retrofit guidance could assist homeowners and property managers.

An advantage is that self-reporting can lead to wide societal engagement, and more education and agency over the task at hand.

The challenge with self-reporting is to incentivise individuals to do it and to make the process easy to comply with. The quality of self-reporting will vary. Like the census process, the questions being asked and the possible answers need to be precisely determined (such as using multiple choice answers). There is a risk of false reporting to gain advantage unless there is some policing/checking if the answers given will lead to any gain or loss.

Consultant reporting

The challenge with consultant reporting is that there are significant differences behind the designation of ‘consultant’, with training ranging from 3 days to 7 years. Some consultants have legally protected status, codes of ethics and some have a code of practice. Some carry PII, some don’t. PII only insures the advice given for a certain area of competence. For instance, a structural engineer’s PII will not pay out if the advice was given on non-structural matters. Both the PII and the confirmed area of competence are therefore important. Without PII and a defined area of competence, there is no consumer protection for the advice given by the consultant.

There are differentiations between different specialisms. We suggest it would be useful to conduct further research assessing how HiB Standard compliance could be conducted by different disciplines and roles, their areas of competence required, and requirements for PII.

Reporting should show confidence rating linked to the qualifications/ability/consumer protection of the person making the statement. Red/Amber/Green ratings are used by some, others (Home Analytics for example) used percentages.

Options to consider

This study suggests three main options that may be considered by the Scottish Government for the establishment of a digital compliance and monitoring tool.

Option 1: Use existing data sources in their current locations

Data sources remain in their current locations, with two options:

1. Option 1a. Homeowners are required to self-report into these locations and upload evidence.
2. Option 1b. Professional reporting into existing locations (status quo).

For both options, the responsibility to demonstrate compliance rests with the homeowner with either self-reporting or professionals reporting.

Advantages

1. Requires little investment from the government.

Drawbacks

1. Would likely be difficult for homeowners due to the complexities of the Standard and the need to look for information in various places.
2. It may be long-winded for owners who are not familiar with digital technology.
3. Reduced consistency if homeowner reporting, rather than a professional with PII.

Requirements

1. Create “how-to” guides to help homeowners understand where they can gather the information.
2. Ensure that the appropriate data sharing mechanisms and identity verification mechanisms are in place so that information can be queried from data holders by homeowners.
3. Ensure that non-digital means of accessing the information are available.
4. Identify opportunities for market to engage; district heating providers to broker connections between public/commercial anchor load buildings and homes in heat zones, clean heat system providers provide support apps/websites, surveyors promote building assessment services.

Option 2: Professional reporting from linked databases

Data remains in its current locations. Government looks at a single portal, which in turn looks at existing sources. The responsibility to assess compliance could rest with the government or homeowners, but the government must first create a means of collating the relevant information on a per property basis.

Advantages

1. Saves homeowners’ time.
2. Gives the government a more comprehensive picture of any property in the country.
3. Makes property data more actionable and consistent in reporting
4. Public facing online data input platforms already exist, with confidence ratings, allowing self-monitoring at the front end. Back-end data logging to be linked by unique identifier.
5. Consumer protection and consistency of data due to presence of PII.

Drawbacks

1. Requires more technical investment from the government
2. Medium risk to privacy infringements

Requirements

1. Create or generalise the use a unique identifier per property
2. Create more data update points
3. Create or use an existing data nomenclature and phraseology
4. Review and update existing data sharing agreements with relevant data holders
5. Create APIs to enable data transfer
6. Create a public facing ‘check if your building is compliant’ government portal such as Check vehicle tax

Option 3: Professional reporting into a new central database

Data is moved from existing data sources to a new government-managed platform. The responsibility to assess compliance could rest with the government or the homeowners, but the government must first gather all relevant information on all properties in a new data holding structure.

Advantages

• Saves homeowners’ time
• Gives the government a complete picture of every property in the country
• Makes property data more actionable and enhances consistency of reporting.
• Provides country-level insights on all property and energy needs
• Enables more modelling and place-based answers to decarbonisation needs.
• Consumer protection and consistency of data due to presence of PII

Drawbacks

1. Requires significant government investment
2. Could be construed as government overreach
3. Existing data custodians could offer pushback
4. Might slow down innovation if human resources are not devoted to exploiting data
5. Higher risk to privacy infringements.

Requirements

1. Create or generalise the use of an unique identifier per property
2. Create a public facing ‘check if your building is compliant’ government portal such as Check vehicle tax
3. Create more data update points
4. Create or use an existing data nomenclature and phraseology
5. Create technical infrastructure required to hold data
6. Terminate existing data sharing agreements with relevant data holders and organise data handover
7. Either create APIs to enable data transfer between existing data custodians and the government, or change the data lodging mechanisms to feed in directly into the government data lake
8. Create a frontend dashboard to query information from all databases at once
9. Identify opportunities to exploit data strategically.

Further Key Considerations

The following points should be considered alongside the options set out above.

Data governance

The industry suffers from a lack of commonly agreed standards and procedures which would allow data to flow between organisations and databases. While there exists virtually no technical difficulty in moving data across platforms, the legal basis for this, the format of the data, and the necessary safeguards in terms of data ownership, are absent.

This lack of such a data governance framework is a significant hurdle to the emergence of the retrofit industry, and ultimately, the decarbonisation agenda. To fill the gap, private sector actors have been forming associations and trade bodies, to formulate answers to these issues, such as the Open Property Data Association or Residential Logbooks Association. Our view based on our research and experience is that for real progress to be made, governments will need to take ownership of the data governance issue and standardisation of process and reporting structure, participate in industry work, and eventually endorse the outcomes of this work, as was done when the UK Government endorsed the SAP methodology for assessing buildings.

In general, providing that the ownership of a given property can be proven (such as through the Property Data Trust Framework), publicly-owned information about a property should be available free of charge to that property’s owner, and their consultants.

Identifying and indexing

There is currently no comprehensive way to identify every structure considered a separate building in Scotland. Several possibilities exist. UPRN would be a good way forward for domestic properties compliance, but less so for non-domestic buildings. A separate piece of work is required to find a way to identify and index all buildings to which the Standard and associated monitoring and compliance checking will apply.

Archetype approaches

An exercise to analyse how archetype approaches and interventions could support a compliance methodology may be useful, considering the high number of house and apartment types within an archetype construction (e.g., tenements, timber frame, no fines). Studies and reports have cited archetypes approaches [ (ZEST Taskforce, 2021), (Smith, 2021), (Bros-Williamson & Smith, 2024)] to retrofit, and archetype-specific list of measures to be applied to demonstrate compliance aligned to a specific EPC band.

Common Scheme Standardisation / nomenclature

A significant piece of work would be required to ensure that, once a building identifier has been produced, the data attached to this identifier is labelled according to a nomenclature shared across the industry. The work required would involve:

1. Determining a common format in which input data pertinent to retrofit objectives can be collected to enable interoperability, transfer and actionability regardless of provenance and destination.
2. Determining a common format for output data reflecting the resulting programme of works.
3. Encouraging any relevant organisation to adopt the standard, starting with property logbook providers.
4. Working with governments to publicise the scheme and insert it within the Property Data Trust Framework.

Data access and data sharing

Building data is the fundamental building block on which national retrofit efforts are planned and delivered. Without easy access to publicly-owned information about their property, homeowners may delay their investigations and home improvements. Without free access to publicly-owned information about their property, homeowners could be made to finance organisations that have no ownership of this data. The study team believes that a strict distinction should be made between publicly-owned and privately-owned data, and that the former be made readily available to appropriate persons.

Beyond operational energy

The primary emphasis of the HiB Bill consultation centres on promoting clean heating systems, such as heat networks or individual building systems powered by clean electricity, and on fabric improvements. The focus on building fabric does not include comment on the condition of the building, which is a factor of fabric performance. Factoring condition into the HiB Standard, on top of monitoring and compliance, could provide an opportunity to address the condition of the nation’s building stock as part of the retrofit agenda. We suggest that broadening the approach to compliance and monitoring to encompass building condition could offer an opportunity for synergistic improvement to fabric and energy and underpin a future legacy of a pan-Scotland built environment approach.

Appendices

Question List/Appendix A

Table 6 Areas of discussion with database owners

Detailed commentary to section 4.3/Appendix B

Sasine Register. Not spoken to. Information in the study is from publicly available data on what the register does.

EPC Register. The EPC register is a database of all EPCs created for domestic and non-domestic buildings in Scotland. It is managed by the Energy Savings Trust.

Valuation Database. Not spoken to. Information in the study is from publicly available data on what the Database does.

Scottish House Condition Survey. This is a subset of the Scottish Household Survey who survey 10,000 households a year, asking a huge range of demographic questions (age, disabilities, activities, etc.). They then re-survey 3,000 dwellings with a physical inspector (assessor, architect), who do a full physical survey, recording everything about the house in terms of energy efficiency (fuel, central heating, insulation, age and efficiency of boiler) and things like disrepair. The selection of buildings is intentionally representative of the wider housing stock.

Scotlis. The land register can be used to find property prices, view boundaries on a map, check if land or property is on the land register, and identify who owns the property. Not spoken to. Information in the study is from publicly available data on what the register does.

PAS2035 Data Warehouse. Trustmark hosts retrofit lodgement data (PAS2035) for buildings that have been retrofitted under government funded retrofit schemes. This includes information about the retrofit work done. Each home is lodged individually. Trustmark’s key role is quality assurance, so they test a sample of these installations using a risk-based approach for desktop and on-site audit using the information uploaded to the data warehouse.

Detailed commentary to section 4.4/Appendix C

Scotland Heat Map. It is a GIS tool, a collection of datasets, that primarily Local Authorities use to check for demand for heat, to help introduce policies to reduce CO₂ from heat production. Are areas suitable for heat networks. It is one of the core datasets in LHEES. At the moment some Local Authority LHEES are being uploaded to it. It’s about bringing data together in a spatial way. The main metric is heat demand metrics generated from a range of sources. Based on UPRN, they have a strong relationship with the Ordnance Survey. Uses a layered approach, footprint on an OS map, and applying energy benchmarks. Different sources of subjective reliability. Indicative tool bringing together data generated for other purposes, have to make some gross assumptions based on not much information. It answers the question: does this area look promising for heat networks?

Improvement Service. This is a data sharing portal. It helps Local Authorities make data useable, standardised, and actionable. Their first big project was to put some order to the property address dataset.

Public Sector Benchmarking. They have performed energy benchmarking analysis for Scottish Public Sector assets. It shows data for a “typical” building of that type to compare against “best practice”. Public sector building managers can then compare their building to that. The point of this document was always to do comparisons. Highland Council have taken this data and analysed the whole estate and made the data public but that is yet to happen elsewhere.

Home Analytics. It’s an address level database with information on all properties in Scotland ranging from building characteristics to heating systems based on the RdSAP input and output data from domestic EPCs. It contains more or less half of all buildings as survey data and uses algorithms to create assumed EPCs for those which don’t exist. It is indexed by UPRN (which is produced by Ordnance Survey). Installations which require a new EPC due to funding rules will lead to this data ending up in Home Analytics, which is uploaded/updated every 6 months.

Non-Domestic Analytics. The EST team who run this were not spoken to, so the data in our report is based on publicly available information about non-domestic analytics. Like Home Analytics but for non-domestic buildings. It contains everything Home Analytics does, except there is less modelling behind it. Fewer non-domestic properties have an EPC, so there are more unknowns. Big exception is access.

DREam. Home analytics data augmented with IR survey results and asset management data provided by a private company IRT. The dataset remains the property of the Local Authority or RSL commissioning the study.

National Grid ESO. This tool cross-compares other datasets to provide long term energy forecasting for domestic and non-domestic demands, and potential opportunities as the nation decarbonises.

National Household Model. Not interviewed.

Detailed commentary to section 4.5/Appendix D

Kuppa. A modelling tool for options appraisal: “Kuppa gives you a holistic view of a home’s energy performance, now, and how it could be in the future.”

Zoopla. Not interviewed.

National Buildings Database. Emergency services and safety data, edging into climate resilience currently under development by Edinburgh University and others.

Shedyt. Shedyt is a digital homeowner manual which exists to simplify property management for occupiers in collaboration with a marketplace of real estate experts, starting with residential property developers. It’s a tech company first and foremost, offering a marketplace. They match property developers to the people who sell to them. When a newbuild goes up, everything is specced up: the aim is to not throw this away. Long term ambition being to help the occupier down the line. Up to now, the data wasn’t captured for the benefit of the homeowner, but only themselves & legislation. The idea is to offer one place to manage your home idea.

The Property Logbook Company. Their business came from the legal side of use cases. In 2003 the land registry went from analogue to electronic titles. All the analogue documents become irrelevant when things went digital. Going digital has actually slowed down conveyancing. PLC suggested making “the big warehouse” digital to overcome that – for the lawyer, it provided the certainty that a document existed. It’s a digital interpretation of a very analogue process. PLC built B2B business which the consumer accessed whenever they bought and sold properties. The homeowner has access to the system. When they put new windows in, for example, they can upload the document to evidence this

Single Survey. The single survey is a condition survey presented in a legislatively mandated format, standardised for all homes transacted in Scotland. The data gathering and report production is by proprietary software created by the individual providers. Quest (owned by Landmark) have a database. OneSurvey, in Scotland, is controlled by Allied Surveyors. MovMachine in Edinburgh (ESPC) is used as CRM. SurvPoint is used by Shepherds is also used as CRM and Project Management platform. Quest is £12/use. The data is owned by the surveying firm. Information gathered is given to Rightmove, Zoopla etc. this information could’ve been collated centrally, but RICS didn’t proceed with the idea. The richer data is in the Surveyor’s notes, but that’s difficult to access. It could be possible to strip out the condition codes from the online databases. Postal address is key identifier.

PropEco. Futureproofing home with advanced data and analytics

Chimni. A property logbook company. Secure digital record of all transactions (conveyancing), maintenance, DIY and certifications (such as connectivity with EPC register), Trustmark supporting retrofit. They provide an additional group of APIs which allows a homeowner to access the info that sits in the Trustmark Data Warehouse. Their aim is building API certifications with as many places as possible.

Kamma Data. Originally a geospatial map company. The first thing they do is attach UPRN to addresses. Their end product is data. They note that property data is poor quality, with no proper framework and thus inconsistent. They’ve built a machine learning module which helps match properties together and build a profile for property. They have a retrofit automation tool which takes pricing data and data from the national grid to make recommendations, making it an optimisation engine.

Novoville Shared Works. A property logbook/building passport looking at people, property and its constituent elements. Structured around RICS, RIBA and GFI frameworks for data and cross-compatible with RdSAP data structures, Shared Works can connect to thermal modelling engines such as Scene to provide retrofit optioneering to build a plan which is then audited by a construction professional such as an architect or surveyor. The Shared Works Building Passport can be looked at alongside other to form buying communities and so create community groups and cost efficiencies.

Kestrix. Similar to IRT’s DREam but coming at it from different direction. Kestrix’s premise is scalability of IR to the building energy efficiency market, and once scaled to work towards accuracy. The lack of accurate actionable data is the challenge they’re trying to solve. Their tool captures vision and thermal imagery to build 3D models. Their goal is to get to U Values from IR. They aim to create a more accurate than EPC building physics model to leverage and make retrofit recommendations for portfolio. The imagery is aerial, oblique shot from drones, thermal imagery shot at night, private mode right now, project based. They outsource the drone work. They are a software company.

Property Identifier Commentary/Appendix E

UPRNs

Of all the above, the Unique Property Reference Numbers (UPRNs) appear as the best way of identifying private residential buildings. This is because they are already used in many of the datasets reviewed, they are unique, and supported by the Ordnance Survey.

For those working with non-domestic buildings where different buildings may all reside on one campus, UPRNs were deemed insufficient by some of the interviewees since several buildings will share one UPRN yet may be very different.

Property Title Numbers

When HM Land Registry register a property, they give it a unique reference called a title number and prepare both a register and, in most cases, a title plan. Like the UPRN, this is connected to the legal property, and so would be the same for individual structures all on the same legal title and therefore present shortcomings when dealing with some non-domestic buildings.

MPRN

MPRNs act as unique identifiers for the gas meter in each building. However, with the ongoing decarbonisation of homes and considering the 16% of the Scottish housing stock not connected to the gas grid, the use of MPRNs related to gas would not provide adequate coverage and might over time become a redundant identifier.

MPAN

A meter point access number (MPAN) is used for electric meters in buildings. As with MPRNs, these identifiers are not suitable, as some buildings have several meters, and some meters serve more than one building.

VOA

In December 2023 the Dept for Net Zero and Energy Security established a research project to develop a National Buildings Database (commencing with non-domestic buildings). One of the potential identifier codes for each building that may be used is the Valuation Office Agency (VOA) registration for each building. The Property Details dataset was introduced in the 1970s and was originally known as the Dwelling House Coding guide. Its original purpose was to provide a simple system for understanding the main features and attributes of a property. VOA datasets do not contain information about individuals or households. The information VOA collects and holds about domestic properties supports statutory functions for valuation and maintenance of Council Tax lists under the Local Government Finance Act 1992. It’s the statutory requirement of VOA to maintain accurate valuation lists for Council Tax. However, VOA only collects data needed to place an accurate band on the property.

As council tax is operated separately in Scotland and given the separate laws and regulations for Scotland’s property, it may be useful to determine if there is a Scottish equivalent identifying code which could be utilised as part of the monitoring and tracking of HiBs.

Outside of Britain

Unique Building Identifier (UBID) is an initiative by the US Department of Energy (DOE) to establish a system for generating and maintaining unique ID’s for all buildings across the planet. The UBID algorithm generates a unique ID based on the geo-spatial location and form of a building footprint. A unique building ID will provide a universal indexing mechanism for the collection, linking and aggregation of building-centric data from disparate sources (see: GitHub – Open city model data for the United States).

References

BRE Trust, 2020. The Housing Stock of the United Kingdom. [Online]
Available at: https://www.gov.scot/publications/delivering-net-zero-scotlands-buildings-consultation-proposals-heat-buildings-bill/pages/1/

Bros-Williamson, J. & Smith, S., 2024. Applying a retrofit and low-carbon technology archetype approach to buildings in Scotland, Edinburgh: University of Edinburgh.

European Commission, 2023. Demo-BLog – Development and Demonstration of Digital Building Logbooks. [Online]
Available at: https://build-up.ec.europa.eu/en/resources-and-tools/links/demo-blog-development-and-demonstration-digital-building-logbooks

National Records of Scotland, 2023. Housing. [Online]
Available at: https://www.gov.scot/publications/delivering-net-zero-scotlands-buildings-consultation-proposals-heat-buildings-bill/pages/1/

Office for National Statistics, 2023. Housing, England and Wales: Census 2021. [Online]
Available at: https://www.gov.scot/publications/delivering-net-zero-scotlands-buildings-consultation-proposals-heat-buildings-bill/pages/1/

PBC Today, 2022. Timber frame homes UK market to rise by £70m. [Online]
Available at: https://www.pbctoday.co.uk/news/mmc-news/timber-frame-homes- uk/107522/#:~:text=In%20Scotland%20timber%20frame%20homes,%2C%20rising%20by%20almost%2060%25

Reed, R., 2021. Property Development. Abingdon: Routledge.

Registers of Scotland, 2023. Property market report 2022-23. [Online]
Available at: https://www.ros.gov.uk/data-and-statistics/property-market-report-2022-23#:~:text=In%202022%2D23%3A,when%20compared%20with%202021%2D22

Scottish Government, 2021. Heat in Buildings Strategy – achieving net zero emissions in Scotland’s buildings. [Online]
Available at: https://www.gov.scot/publications/heat-buildings-strategy-achieving-net-zero-emissions-scotlands-buildings/

Scottish Government, 2023. Building standards approved energy assessment software: guidance. [Online]
Available at: https://www.gov.scot/publications/building-standards-approved-energy-assessment-software-guidance/

Scottish Government, 2023. Delivering net zero for Scotland’s buildings – Heat in Buildings Bill consultation. [Online]
Available at: https://www.gov.scot/publications/delivering-net-zero-scotlands-buildings-consultation-proposals-heat-buildings-bill/pages/1/

Scottish Government, 2023. Energy Performance Certificate (EPC) reform: consultation. [Online]
Available at: https://www.gov.scot/publications/energy-performance-certificate-epc-reform-consultation/pages/2/

Scottish Government, nd. Scottish House Condition Survey: Collection. [Online]
Available at: https://www.gov.scot/collections/scottish-house-condition-survey/

Serin, B., Kintrea, K. & Gibb, K., 2018. Social housing in Scotland. [Online]
Available at: https://housingevidence.ac.uk/wp-content/uploads/2024/03/R2018_SHPWG_Scotland.pdf

Smith, S., 2021. Developing Net Zero Technical Solutions for Scotland’s Future Mass Retrofit Housing Programme, Edinburgh: Scottish Government.

Today’s Conveyancer, 2023. Property logbooks made compulsory in France. [Online]
Available at: https://todaysconveyancer.co.uk/property-logbooks-made-compulsory-france/

ZEST Taskforce, 2021. Achieving net zero in social housing: The Zero Emissions Social Housing Taskforce Report. [Online]
Available at: https://www.gov.scot/binaries/content/documents/govscot/publications/independent-report/2021/08/achieving-net-zero-social-housing-zero-emissions-social-housing-taskforce-report/documents/zero-emissions-social-housing-taskforce-report/zero-emissions-social

© The University of Edinburgh, 2024
Prepared by EALA Impacts CIC, Novoville and 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, 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.

1. https://epbd-ca.eu/wp-content/uploads/2021/07/Implementation-of-the-EPBD-in-the-United-Kingdom-%E2%80%93-Scotland-%E2%80%93-2020.pdf ↑
   

July 2024

DOI: http://dx.doi.org/10.7488/era/4622

Executive summary

Scotland’s net zero 2045 ambition and updated Climate Change Plan require the rapid development of carbon capture and storage (CCS) and carbon dioxide removal (CDR). Current pathways to meeting statutory targets are dependent on large industrial clusters, funded by the UK Government.

Alternative pathways for the rapid decarbonisation of smaller, distributed biogenic sources of carbon dioxide (CO₂) may be available, noting that these would be of an order of magnitude less than the industrial clusters, with the advantage of high-value CDR credits. This requires permits for storage sites within Scottish inshore waters which extend to 12 nautical miles from the coast, and policy coordination across capture, transport and storage.

This study explored the potential total CO₂ storage capacity in Scottish inshore areas and the availability of onshore emissions originating from biomass, known as bio-CO₂. The study also investigated if the distribution of potential sources and storage availability would make it possible to expedite Scotland’s CCS and CDR potential.

The capture of bio-CO₂ is already a commercial success in Scotland, with an ambition to scale without subsidy to 1 million tonnes per year by 2030, which requires storage. Norway, Denmark and Iceland are selling CO₂ storage at a premium, reflecting a supply-and-demand imbalance in regional storage availability.

Aims

This study aimed to assess the potential for developing CCS within 12 nautical miles of the Scottish shoreline – an area within Scottish Ministers’ competence. We explored the feasibility to deploy high-value capture and low-cost CO₂ storage in Scotland and what the commercially viable total capacity for nearshore storage is likely to be. The outcomes also address the availability of bio-CO₂, domestic CCS value chains, fit-for-purpose storage site licensing and high-value CDR certificates.

We propose that Scotland can make rapid progress by refocusing on domestic bio-CO₂. These emissions are already being captured in Scotland at low cost and with simple technology.

We identified prospects within the 12 nm territorial waters. Developing secure storage of high value bio-CO₂ within the Scottish jurisdiction can produce several financial benefits, including premium lease payments to Crown Estate Scotland, development of local skills and growth of new businesses. This has the potential to increase Scottish GDP by tens to hundreds of millions of pounds per year, as well as paying staff and corporate taxes.

Developing Scottish storage sites for CO₂ provides elements of control over licensing and the pace of approval for carbon capture and storage. Developing secure storage of high value bio-CO₂ within the Scottish jurisdiction can produce CO₂ removals, equivalent to direct air capture but at much lower financial cost.

We reviewed the potential for the rapid licensing of inshore storage using a streamlined version of UK licensing. Four geographic areas of interest are ranked by maturity of evaluation. We examine when injection could start if all regulations were in place across the different authorities.

Findings

We addressed five elements of CCS: licensing, storage, sources, timeframes and cost. We found that it is theoretically possible to adopt a streamlined licensing framework; inshore storage is available for rapid appraisal, albeit at a very limited capacity compared to offshore; bio-CO₂ sources are abundant across nine sectors with explosive growth potential driven by the global CDR market; timeframes can be measured in years with the potential to deliver operational injection of bio-CO₂ before 2030; costs are competitive with UK clusters and export markets.

Licensing

• CO₂ storage involves multiple activities under different licensing regimes.
• New regulations for CO₂ storage are not required.
• Minor amendments to existing statutory instruments may be required.
• The amendments may be fast if based on existing UK regulations and the CCS Directive.
• A Crown Estate Scotland (CES) lease is also required.
• Consents may also be required from the Scottish Environmental Protection Agency (SEPA) and the Scottish Government’s Marine Directorate.

Storage

• Four areas have well data and seismic coverage.
• Only the Lybster oil field is a candidate for immediate development.
• The total expected nearshore capacity is 2 Mt without further extensive surveying.
• The Forth Basin is a low Technology Readiness Level research opportunity.

Sources

• We mapped 98 of the largest bio-CO₂ sources in Scotland.
• Source emissions range from 2 to 360 kilotonnes per annum.
• Separation of CO₂ from distilleries and biogas upgrading are low cost.
• Combustion sources are higher cost and are the largest sources and sectors.
• The source distribution across five clusters favours road transport to local storage.

Timeframes

• North Sea Transition Authority appraisal licences average five years and three months.
• Appraisal are followed by storage permits and 2 years of further site development.
• The fastest storage permits are issued in as little as three years.
• The fastest development of a site to first injection is around a year.
• Lybster permitting could be fast but requires further exploration of legal frameworks.
• Rapid progression is dependent on pre-existing data to confirm site suitability.

Costs

• Capture costs for separation sources are low, at £60 per tonne.
• Capture costs for combustion sources are higher, at £120 per tonne.
• Truck transport costs £20 per tonne per 100 miles, or £0.12/tonne/km.
• Storage costs for Lybster are £70 per tonne.
• The full chain CCS cost is £150 per tonne for separation within 100 miles of Lybster.
• Storage costs for sites further offshore are at least two to three times higher.

Revenue

• CDR credits on the European voluntary market are worth £297 per tonne.
• Taxing storage would be subject to further work by the Scottish Government.
• As a simple example, a 10% tax could yield between £7 and £30 per tonne per annum.
• Lybster tax revenue would be £30 million for a 2 Mt capacity and £15 per tonne tax.
• Further revenue is available if bio-CO₂ is transported to Acorn via the Feeder 10 pipeline.
• Combined revenue for Lybster and Feeder 10 could total £250-500 million by 2045.

Next steps

In order to progress the potential benefits of CCS and CDR in Scotland, we recommend the following actions.

• The Scottish Government could conduct further work to fully understand the law around consenting and regulating storage and consider pursuing a streamlined regulatory framework for storage that builds on the structure established by the NSTA while emulating the accelerated approach taken by Denmark and Norway. This is relevant to Scottish policy, legislators, SEPA, and the Marine Directorate.
• The Scottish Government could consider supporting an appraisal of Lybster with the involvement of a compliant operator. This would require 3D seismic interpretation to build a static model and undertake reservoir simulation. This could be completed within one year with the intention of transitioning to a front-end engineering design study and development decision within three years. This requires a competent person’s report on the site, model outcomes, and risk analysis.
• The Forth Basin saturated water injection proposal could be considered as a potential research pilot to mature the concept and location from its current low TRL. This is relevant to the Scottish universities’ research community and British Geological Survey.
• Maturing the Fraserburgh and Solway Firth areas could proceed when market signals support the necessary investment in data acquisition and offshore development.
• The Scottish Government could seek mechanisms and policies to maximise the domestic benefits of full chain CCS, rather than exporting captured bio-CO₂ to storage providers in other countries. The high concentration of bio-CO₂ sources in the central belt raises the possibility of a gathering station for Feeder 10 access to Acorn.

Onshore bio-CO₂ sources located close to inshore CO₂ storage prospects.

(Sources: SCCS, BGS, SNZR, NNFCC, NSTA)

List of abbreviations

Glossary

Introduction

The following report consists of five sections that cover CO₂ storage licencing, inshore storage opportunities, available sources of bio-CO₂, storage development timeframes, and a cost-revenue analysis of onshore capture, transport, and inshore storage. The report closes with six questions and answers that aim to synthesise the outcomes and propose ways forward.

Licensing

The Energy Act 2008 first enabled CO₂ storage in the UK. The Carbon Dioxide Regulations 2010 adopted many requirements of the EU CCS Directive 2009 on the geological storage of carbon dioxide and came into force October 2010 – Appendix A. The regulations were extended in 2011 to address the termination of licences. The CCS Directive was transposed into UK law in 2012 by the adoption of secondary legislation under the authority of the Energy Act 2008.

CCS Directive

An EU regulatory framework for CCS was first proposed by the European Commission in 2007 (EC, 2007). The CCS Directive 2009 provides the framework for CO₂ storage with only brief mentions of capture and transport. The CCS Directive is supported by a series of six guidance documents. The guidance covers: the storage complex, characterisation, risk management, stream composition, monitoring and corrective measures, criteria for the transfer of liability to the competent authority, and financial security and financial mechanisms. The Directorate-General for Climate Action (DG CLIMA) commissioned DNV in 2022 to revise the guidance documents to reflect the current understanding of CCS and remove ambiguities identified during the development of early CCS projects. The outcomes can be expected in Q3 2024.

Licensing in the UK

DESNZ currently leads UK government energy policy, preceded by BEIS (2016-2023) and DECC (2008-2016). UK energy policy is framed by HM Treasury budgeting and long-term planning. The Energy Act 2008 makes provision for gas storage, enabling the licensing of CO₂ storage appraisals and CO₂ storage permitting – Figure 1.

Figure 1. Current UK licensing framework for CO₂ storage in Scotland for offshore areas such as Acorn.

UK licensing development

There are currently 27 UK appraisal licences open – see detail in Appendix B and Figure 2.

Figure 2. The location of offshore CO₂ storage appraisal licences currently active in UK waters.

Licence CS001 and 1CS003-CS027). CS002 was reissued as CS003 in 2023.

Over a decade of policy engagement and early licensing experience has led to the current structure of appraisal licensing, storage permitting, and licence termination. The appraisal licence and storage permit terms both consist of three phases each:

• Appraisal licence phases: 1. Appraise 2. Assess 3. Define
• Storage permit phases: 4. Execute 5. Operate 6. Monitor

The seventh and final phase is a further monitoring period that occurs after the transfer of the site liability from the operator to the regulator with the termination of the storage permit. The seven phases are described in more detail below:

1. Appraise: This initial phase consists of an early risk assessment to establish storage feasibility and identify gaps which are then addressed by site characterisation. The characterisation of the trap structure may require 3D seismic acquisition over the site or reprocessing of an existing survey, and appraisal drilling.

2. Assess: This phase is a thorough evaluation of the site characterisation outcomes, and the operator’s proposed storage plan or need for further appraisal.

3. Define: This phase is a detailed proposal for site development commonly referred to as front end engineering and design (FEED). The design specification and required engineering informs a final investment decision and, if positive, an application for a storage permit.

4. Execute: On issuance of a storage permit, the operator executes the design plan. This entails the construction and commissioning of the engineering works necessary for CO₂ injection into the target reservoir and for site conformance monitoring during the operational phase.

5. Operate: This phase commences with the first injection of CO₂ and conformance to the operational plan. Any deviation from the planned operational conditions such as pressure excursions, flow impedance, or indications of out-of-zone migration are investigated and addressed to the satisfaction of the regulator, or otherwise promoted to a change in the operational plan up to and including a suspension of operations and early closure of the site.

6. Monitor: This phase commences with the end of injection and closure of the site and is a continuation of any preceding operational monitoring adapted to the specific requirements of conformance monitoring for the post-operational phase.

7. Verify: This phase commences with the end of the storage permit and transfer of site liability to the regulator. It consists of a sustained monitoring plan that verifies the long-term conformance of the site to expected outcomes.

The seven phases outline the structure of the current UK licensing regime – Table 1. In practice, each phase entails many elements that need to be negotiated between the operator and regulator. The negotiations are based on the specific requirements of a storage site and the evidence base of increasingly detailed assessments, characterisation, development proposals, and adaptation to conditions during the execution and operational phases.

Illustrating this, 17 of the 28 appraisal licences include between two and five additional requirements that apply during the initial appraisal phase to support characterisation – Table 2. These range from acquiring 3D seismic and drilling an appraisal well, to undertaking CO₂ transport and topside installation studies, core sampling, and fault geomechanical analysis.

Table 1. Main stages of license progression

Table 2. Additional licensing requirements.UK licensing structure

Licensing in Scotland

Inshore developers in Scotland must first secure the appropriate rights to appraise and develop storage from the Crown Estate Scotland (CES). A CES agreement is required for a site appraisal. A CES lease is required for storage in accordance with the Energy Act 2008. The CES approach to managing storage assets is set out in the CCS Asset Profile (CES, 2022).

Onshore consent is covered by Scots law and is a matter for the local planning authority. Offshore consent for CO₂ storage in territorial waters is also covered by Scots law, and requires coordination between the Scottish Environmental Protection Agency (SEPA), the Marine Directorate (MD) and the NSTA. The shared jurisdiction is discussed below.

Scots law

The territorial sea adjacent to Scotland is subject to both UK and Scots law. In terms of international law, the UK as the coastal state, enjoys sovereignty in the territorial sea which includes the seabed and subsurface. How the UK decides to exercise that sovereignty is a matter for the UK and this becomes complex in the context of devolution – Appendix C.

Licensing and regulation

Oil and gas fields under the territorial sea adjacent to Scotland are vested in the Crown. Although Scottish Ministers did receive licensing powers for oil and gas in the post-referendum settlement in the context of the Scotland Act 2016, this was explicitly only in relation to the onshore area, defined as lying within the baselines of the territorial sea – section 47. Licensing in relation to all offshore oil and gas, within the territorial sea and under the continental shelf, is a matter for the NSTA. This would be relevant to the closure of the oil production licence for Lybster in preparation for CO₂ storage.

Scottish Ministers are established as the licensing for CO₂ storage in the territorial sea by section 18 of the Energy Act 2008. The Storage of Carbon Dioxide Regulations 2010 went on to define a licence as granted by the authority, namely the NSTA – Regulation 1.3. However, the Storage of Carbon Dioxide Regulations 2011, a Scottish Statutory Instrument (SSI), transferred the powers to grant storage licences to Scottish Ministers, along with the associated powers to oversee the development, operation, monitoring, and closure of storage sites in Scottish territorial waters. This greatly simplifies the regulatory framework and requirements for licensing storage in Scottish waters.

Two points are worth noting. Firstly, the SSI precedes the 2012 transposition of the CCS Directive, and withdrawal of the UK from the EU in 2020. Very minor amendments to SSI 2011/24 may be required to reflect this. For example, the reporting authority named in the SSI is the European Commission.

Secondly, while the necessary powers sit with Scottish Ministers to oversee storage licensing, the competent authorities, and associated resources and procedures are not developed. Purchasing the services of the NSTA as regulator is an option that requires exploring. The long experience of the NSTA is an important supporting consideration. One option may be an agreement between an existing Scottish authority such as the Marine Directorate and the NSTA to deal with carbon licensing in territorial waters.

There is a precedent, the Memorandum of Understanding between the HSE and OPRED to form the Offshore Safety Directive Regulator, now OMAR, when that directive required a competent authority to deal with health, safety, and environmental risks under one roof (HSE, 2024). While that involved two regulators at UK level, there ought to be no objection to a similar arrangement between a UK and a Scottish regulator given the commonality of purpose and the desirability of a seamless approach.

Liability and ownership

Hydrocarbons in strata, even if residual and uneconomic, are vested in the Crown unless the Crown specifically transferred ownership, which it would be unlikely to do. Regarding liability for operational oil fields, the principal party is the licensee. In most cases, however, liability is joint and several with co-venturers under a joint operating agreement.

For decommissioning, it is a matter of anyone who holds a section 29 notice under the Petroleum Act 1998. Again, this will usually be co-venturers, but the list is lengthened to minimise the risk to the state if duty holders become insolvent. Things get more complicated in relation to any remaining infrastructure under an agreed derogation. Firstly, there is no specific legislation or regulation on this matter; rather it is dealt with in the context of guidance notes issued from time to time by OPRED. Leaving aside the apparent confusion in the guidance over ownership and section 29 notice holders – see Appendix C7. More fundamentally, there is an argument that the use of a Crown lease in relation to CCS constitutes an exercise of property rights. This raises the possibility that pre-existing infrastructure is a fixture in both jurisdictions. It follows that this belongs to the owner of the land or seabed to which it is attached. This has never been tested but is certainly arguable.

By contrast, this is a much easier proposition to establish within the territorial sea where the Crown Estate has habitually claimed property rights and the courts have readily confirmed them. Whatever is stated in the guidance notes and essentially accepted by duty holders in relation to decommissioning, property law may say something different.

Pore space

For Lybster, whereas the hydrocarbons in the field are vested in the Crown and those rights are exercised by the NSTA, the pore space is the property of the Crown. Property rights would be exercisable by the CES. For the Forth Basin, the pore space would also be owned by the Crown and the property rights would be exercisable by CES. Note that this property law analysis also implies that CO₂ injected into depleted reservoirs beneath the territorial sea would be owned by the Crown on the basis of the principle of annexation. This has been more fully explored in the context of enhanced oil recovery (Patterson & Paisley, 2016).

Shared jurisdiction

The exploration and production licensing for Lybster at the time would have been a matter for the Secretary of State. Even now, as the reservoir lies within the territorial sea, the oil licensing would be a matter for NSTA. However, the CO₂ storage licensing is a matter for Scottish Ministers. The siting and operation of the drilling rig onshore would then and now be a matter for the local planning authority. Thus, both UK law and Scots law are engaged as appropriate.

The Beatrice field presents a most interesting problem. The residual hydrocarbons in the field remain vested in the Crown. The pore space within 12 nm is owned by the Crown. The ownership of pore space beyond 12 nm is not clear, but from a practical perspective only the Crown has sovereign rights to act. The licensing authority within 12 nm is Scottish Ministers, and, beyond the 12 nm, NSTA. This may be resolved by some form of arrangement modelled on those for hydrocarbon reservoirs that cross boundaries.

Summary

CO₂ storage involves multiple activities under different licensing regimes. These need to be explored further by the Scottish Government to fully understand what will be necessary to put in to law for CO₂ storage within Scottish waters. New regulations will be required; it may well be, however, that insofar as existing regulations could be relied upon, the process of modifying SSI 2011/24 and drafting consents could be fast. This would really be a question for those with a better insight into the technical detail and political due process.

Inshore storage

Scotland’s territorial waters cover an area of 55,480 km² with the potential for inshore storage. This includes a great deal of seismic data – Figure 3. While the 2D seismic coverage is extensive, only three areas have 3D seismic: Lybster, Fraserburgh, and the Solway Firth. 3D seismic is the most effective data for accurately characterising subsurface structures (Dee, et al., 2005). In its absence, 2D data may identify structures of interest in cross-section. The Forth Basin area is covered by a 2D survey – Appendix C. The availability of data allows the prospective areas to be ranked by maturity – Table 3. The exploration ranking of Fraserburgh and the Solway Firth is explained in the description of the areas of interest that follows below.

Areas of Interest

Figure 3 presents areas of interest for inshore CO₂ storage.

Figure 3. Areas of interest for inshore CO₂ storage. Four areas are identified with seismic coverage and exploration well data – see Annex E for an inventory. Lybster has the best data coverage (contingent), followed by Fraserburgh and the Solway Firth (prospective), and the Forth Basin (exploration).

Table 3. Inshore areas of interest ranked by maturity and potential to progress rapidly.

Lybster Area

The Lybster oil field is ranked as contingent on the maturity pyramid where the maturity progresses from an exploration resource (large base) to a commercial reserve of sites (small top) via contingent prospects – Figure 3. The area of interest encompasses 306 km² that include the field and exploration structures, Knockinnon and Braemore.

Two more oil fields, Beatrice and Jacky, are located at the 12 nm limit. Lybster is notable for three reasons: its proximity to the coast; a substantial amount of data and analysis; and an existing production well. These significantly reduce the potential cost and timeline to developing a storage site. The field needs to be screened for capacity and suitability to qualify the field for appraisal licensing. The initial capacity estimate and assessment of suitability are documented in Section 4.2, supported by Appendix D.

Knockinnon and Braemore are relatively immature with respect to storage analysis but noteworthy for potentially providing step-out capacity to Lybster. Beatrice has not been assessed for this report as the field is beyond a presumed technical limit for onshore development via extended reach wells. 12 nautical miles is equivalent to 22 km; the 2022 record for an extended reach well is 15 km. A reasonable economic limit of 10 km has been set for assuming offshore development. Beatrice, the largest field in the area, straddles the 12 nm boundary. Jacky is a small satellite field in territorial waters to the north of Beatrice.

Fraserburgh & Solway Firth

Both areas have 3D seismic survey coverage and exploration wells. The location of the 3 wells and seismic for Fraserburgh, approximately 16-20 km from shore, would require an offshore installation (pipeline, injection well, and monitoring equipment). Any prospects within the area would need to be identified from the existing seismic and well data and screened for suitable reservoir injectivity and caprock seal properties prior to appraisal licensing.

The Solway Firth area has two exploration wells and a 3D seismic survey in the southern half of the 12 nm territorial waters. One of the wells is within the seismic survey area. The location of the seismic and well 13 km from shore would require an offshore installation (pipeline, injection well, and monitoring equipment). As with Fraserburgh, prospects within the area would need to be identified from the existing seismic and well data and screened for suitable reservoir injectivity and caprock seal properties prior to appraisal licensing. As such, both areas are ranked as prospective on the maturity pyramid.

Forth Basin

The Forth Basin is close to a diverse cluster of bio-CO₂ sources located in the Central Belt. The Forth was screened for prospective storage sites as part of the CASSEM project (SCCS, 2012). Trap structures were identified but rejected due to a lack of well data and poor control on the 2D seismic interpretation for caprock thickness and reservoir volume (Monaghan et al., 2012). The Forth also contains a large basin, the Leven syncline. The syncline may be suitable for an alternative strategy of CO₂-brine surface mixing and injection of the CO₂-rich mixture which is denser than the syncline’s porewaters (Eke et al., 2011). This approach to storage is examined in section 2.3. The low TRL of dissolved CO₂ injection and need to mature the concept for the Forth Basin rank this area as exploration.

Lybster prospect

Lybster was drilled in 1996 just 3 km off the Caithness coast – Figure 4. Lybster is 3 km from the coast, with a vertical offshore discovery well, 11/24-1 (1996), onshore extended reach appraisal well, 11/24-3 (2008), 3D seismic coverage, and a reservoir model.

Figure 4. The Lybster prospect location, associated reservoir model, seismic section and well data.

The model (Figure 4, bottom right) is constructed from 3D seismic data (Figure 4, bottom left) and well data (Figure 4, top left). The field has two high quality reservoir units, the lower ‘A’ and ‘B’ sands, separated by a baffle, the mid-shale, and capped by the Uppat Shale seal. The field is divided into two halves by a fault that strikes NE-SW. Several small faults occur between the regional Great Glen Fault (GGF) and Helmsdale Fault (HF).

The discovery well for Lybster was plugged and abandoned. The field was then drilled from the shore in 2008 via a 3 km extended reach well; the only offshore UK field to be produced this way. Most North Sea fields are much further offshore. This makes Lybster an accessible and low-cost storage prospect that requires no expensive infrastructure. If suitable, the suspended production well could be repurposed for CO₂ injection.

Lybster is a four-way closure, or small 6 km² dome, that has trapped oil and gas beneath a mudstone caprock for tens of millions of years. This is a good indication of suitability for storing CO₂. The structural volume or space available for storage is calculated from known properties of the field such as reservoir area, thickness, porosity, and fluid properties such as CO₂ density at reservoir conditions. The expected capacity is 2 Mt, (low-high range: 0.3-9 Mt).

An appraisal licence requires an early risk assessment (ERA) to formally establish the expected capacity and technical suitability of a suite of attributes ranging from seal and reservoir quality to fault geomechanics, lateral migration risk, legacy wells, and more. The ERA is a gap analysis that identifies further data requirements and potential issues to address in the ‘Assess and Define’ phases of an appraisal term for a storage licence. A first-look analysis follows below.

Storage analysis

At least two attributes of the Lybster field require further analysis as part of an early risk assessment. Firstly, the production history deviated from expectations – Figure 5. Increasing gas and water cuts within a matter of months and declining oil production resulted in a well workover and then suspension. A dynamic reservoir model is needed to explain these outcomes and fully understand the flow and containment of fluids within the structure.

Figure 5. Production history in barrels of oil, water, equivalent gas, and produced reservoir volume.

Secondly, the field is located between two large faults, the Helmsdale Fault and Great Glen Fault, and has several smaller faults within the field boundary that segment the reservoir. These require a detailed geomechanical study to de-risk the prospect – Appendix F.

Capacity: The expected capacity of Lybster, based on the structural volume, is 2.1 Mt of CO₂. – Table 4. This reasonable mid-range value assumes just half the field area, 3 km², and an average reservoir thickness of 15 meters. A storage area of 3 km2 assumes the main fault for the field is sealing and CO₂ storage is restricted to half the mapped field area. The full field area, 6.11 km2 (NSTA estimate), effectively doubles the capacity for mid-range values.

Combining the full-field area with high-range values for the other five variables quadruples the capacity. The full field area and high-range values for all variables furnishes an optimistic maximum capacity of 9.4 Mt. The low estimate, a pessimistic 0.35 Mt, uses low range values and halves the expected area again. The highly conservative minimum estimate of 100 kt is based on the produced volumes of oil, gas, and water.

Qualifying adjectives for capacity are as follows: ‘minimum’ is the lowest value calculated, a highly conservative production volume estimate. The structural volume estimates are defined as ‘low, ‘mid’, and ‘high’, based on reasonable range estimates for six variables; the dominant variable is the storage area. Note that while the outcomes resemble the common P90-P50-P10 approach, the data is too sparse to support a statistical analysis. This simply reflects the field’s short production history. The two methods are summarised in Appendix H.

Table 4. Structural volume variable range and applied values for capacity estimates

Discussion

The Lybster field area has been intensively studied – Appendix H. While this report relies on Keenan’s detailed analysis of reservoir attributes such as porosity (Keenan, 2023), it corrects for the field area which was underestimated by an order of magnitude. The 2 Mt outcome is reasonable when compared to traps with a similar area such as Sleipner, Norway.

The alternative analysis, presented by Watt (Watt et al., in preparation), assumes a replacement volume for produced fluids. While this is a common approach to the capacity assessment of mature depleted fields such as Viking and Hamilton (Track-1 and Track-2 storage sites), the outcome is highly conservative for Lybster, a field with an unusually short production history. We favour the structural volume as a more reasonable indication.

The suite of suitability attributes also supports Lybster as a strong candidate for a licenced storage appraisal – Figure 6. This will apply the rigour necessary to mature the attribute scores from speculative to verified or identify gaps for further analysis. Our recommendation is that an appraisal licence include studies on fault integrity, geomechanics, and reservoir simulation.

Figure 6. Boston Square analysis of attribute suitability for Lybster. A Boston Square is a simple scheme for scoring expert judgement from 1 to 3 devised by the Boston Consulting Group.

Forth Basin

The Forth Basin contains the Leven syncline, a geological structure in the Forth Estuary mapped on 2D seismic – Figures 7 and 8. Most proposals for CO₂ storage assume injection of liquid CO₂. This requires a geological seal above the reservoir to trap its buoyant rise. However, it is also possible to inject dissolved CO₂ with large volumes of water, where the CO₂-saturated water is denser than the porewater and sinks rather than rises. Research at the BGS and the University of Edinburgh shows that suitable geology to retain sinking dense CO₂ may exist beneath the inshore waters of the Forth Estuary (Smith et al, 2011).

CO₂-brine surface mixing

The CO₂-brine dissolution approach was extensively modelled by Eke et al. (2011) and became a commercial reality in 2014 with the industrial-scale injection of 7 ktpa of CO₂ from the Hellisheiði power plant, Iceland. While the physical limit for CO₂ dissolution is 50 kg/m³, optimal chemical and physical parameters are controlled in the surface process facility. For Iceland, the outcome is 20 kg of dissolved CO₂ per cubic meter of injected brine. This increases the volume of injected fluid by about 35x compared to a pure CO₂ injection project like Sleipner. Reservoir pressure increases are minimised by extracting brine from the reservoir for mixing and return. This has worked for Iceland, with injection recently increasing from 7 ktpa to 12 ktpa. Future plans will scale to 40 ktpa before 2030. However, the geological setting, densely fractured young volcanic rocks, is quite different from the Leven Syncline.

Figure 7. Forth Basin, location of 2D seismic data grid, interpreted line and exploration well 25/26-1.

Figure 8. 2D seismic line CAS87-116, revealing the stratigraphy and structure of the Leven Syncline.

Suitability

The high volumes of brine injection associated with dissolved CO₂ storage require a simple combination of a large regional aquifer with good reservoir quality and low structural complexity. The aquifer needs to provide a sufficient volume to help minimise pressure increases. Reservoir quality also minimises pressure increases. This implies above average porosity and permeability and thick continuous beds of high net-to-gross sandstones. Low structural complexity implies a simple geometry with a small number of faults that are transmissive, i.e. open to the lateral flow of brine, allowing the dissipation of injected fluids. These attributes are not clearly established for the Leven syncline – Figure 9.

A detailed analysis of the area (Monaghan et al. 2012) noted the poor data quality, lack of reservoir data, and structural complexity. These attributes are reflected in the low TRL status of the Forth Basin prospect.

Figure 9. Forth Basin area regional geology, indicating the stratigraphic and structural complexity.

Sources of bio-CO₂

Our analysis of over a hundred sources of bio-CO₂ in Scotland produced a database of 98 sites with emissions that range from 3 to 360 ktpa – Figure 10. Four small distilleries, 1.6-2.8 ktpa, are included as these have already been selected for bio-CO₂ capture. The total resource is 3.7 Mtpa. Almost all the sources, 91 sites, are grouped into five regional clusters – Figure 11.

Categories and Sectors

We have categorised the sources based on capture method: combustion, 89%, and separation, 11%. Separation at distilleries and anaerobic digesters is low-cost and high purity relative to post-combustion flue gas capture. The two categories are then split by process into nine sectors.

Biomass

Biomass, the largest sector at 46%, produces CO₂ from the combustion of plant and animal waste. Biomass is often configured as combined heat and power (CHP). The 18 facilities in the database produce an average of 95 ktpa and total 1.7 Mtpa. The six largest sites, 150-360 ktpa, include Markinch, Steven’s Croft, and Morayhill. This accounts for 900 ktpa of bio-CO₂ emissions. The smallest site, Gleneagles, emits 7 ktpa. Locations tend to be semi-rural.

Energy from Waste

Energy from Waste (EfW), the second largest sector, 29%, produces electricity and heat from the incineration of municipal waste, often in a CHP configuration. Roughly half of the emissions are bio-CO₂ (Tolvik, 2024). The 13 sites emit a total of 1.1 Mtpa, average 84 ktpa. The five largest are amongst the top ten sources, total 0.6 Mtpa, average 126 ktpa. The largest, South Clyde Energy Centre, 158 ktpa, is planned for 2025. The smallest site, Binn, 38 ktpa, opens in 2026.

Anaerobic Digestion

Anaerobic digestion (AD) covers a range of dry and wet waste applications that produce raw biogas. AD tends to be small, with 39 sites in the database accounting for 0.5 Mtpa of bio-CO₂, average 13 ktpa. The largest site, 44 ktpa, is the Girvan distillery. The smallest site, Crofthead farm, 3 ktpa. We identify five sectors where biogas is combusted on site:

• AD Landfill is the fourth largest sector overall after biomass, EfW, and distillery fermentation, with 18 facilities producing a total of 0.18 Mtpa, average 10 ktpa.
• AD Industrial is the second largest AD sector with 7 facilities producing 0.17 Mtpa, average 25 ktpa. Sites include distilleries, breweries, and pharma manufacturing.
• AD City Waste is the third largest AD sector with 6 facilities producing 0.08 Mtpa in total, average 14 ktpa. Sites process municipal wet streams such as food waste.
• AD Farming is the fifth largest AD sector with 6 facilities producing 0.04 Mtpa in total, average 7 ktpa. Sites process wet streams such as crop waste and silage.
• AD Sewage is the smallest bio-CO₂ sector, with just 2 facilities in the database producing 0.02 Mtpa in total: Seafield, 16 ktpa, and Nigg, 8 ktpa.

Distillery Fermentation

Whisky distilleries produce CO₂ during the mash fermentation stage. The CO₂ can be easily separated using a simple wash process where pressurised water acts as a solvent. This generates a pure CO₂ stream. Distillery fermentation (DF), 10%, is the third largest sector after biomass and EfW, with 20 sites producing 0.35 Mtpa in total, average 18 ktpa.

The three largest distilleries account for 0.2 Mtpa, average 66 ktpa; the remaining 17 sites account for 0.16 Mtpa, average 9 ktpa. The database includes four small distilleries: Tomatin, Speyburn, Tullibardine, and Balmenach, 1.6-2.8 ktpa. These are shortlisted along with Invergordon and North British for commercial bio-CO₂ capture and storage (CCSL, 2024). Many of the 20 sites are located around Speyside as part of the Inverness cluster.

AD upgrading

AD biogas can be upgraded to biomethane by separating out the CO₂ using a membrane filter. The biomethane is frequently sold directly into the natural gas grid. As with distilleries, this also generates a low-cost and high-purity stream of bio-CO₂. AD upgrading is the seventh largest sector overall, 2%, with eight sites producing 0.07 Mtpa in total, average 8 ktpa. Sites include farms and industrial facilities located in semi-rural areas across the country.

Table 5. Bio-CO₂ sources by sector. Note: the lowest cost sectors are highlighted in grey.

Figure 10. Bio-CO₂ sectors. Distillery (orange) and AD Upgrading (green) are categorised as separation, yielding a low-cost CO₂ source relative to post-combustion capture. Values in square brackets [18] represent the number of sources; area of circles represent the size of the source (ktpa).

Figure 11. Onshore sources of bio-CO₂ across Scotland. 91 of the 98 sites are located in five clusters.

Many low-cost distillery sources are located in the Inverness cluster, relatively close to the Lybster site. The five clusters are analysed by road distance from the nearest storage prospect in section 3.2. Also, note the overlap of the Forth and Clyde clusters at the terminus of the Feeder 10 pipeline. This highlights an interesting possible alternative to inshore storage, i.e. access to the Acorn offshore storage hub. This is discussed further in the summary.

Regional Clusters

We have grouped the sources into five clusters. The boundaries are marked by either a 100 km or 50 km diameter circle. Note, the sources east of Elgin are closer to Fraserburgh but included as part of the Inverness cluster given the primacy of Lybster as a storage candidate.

Inverness

The Inverness cluster, the third largest overall, falls within the Lybster catchment area. The cluster has 21 sites, producing 0.55 Mt of bio-CO₂, and boasts a concentration of low-cost separation sources: 12 distilleries, 92 ktpa, and two AD upgraders, 18 ktpa. The average road distance to storage is high at 186 km. However, just over half of the cluster, 0.31 Mtpa, is within 150 km of Lybster: 5 distilleries, 43 ktpa, including the region’s largest distillery, Invergordon, 24 ktpa, which has been shortlisted for commercial CO₂ capture; and 2 biomass plants: Morayhill, 323 ktpa, and Balcas, 28 ktpa, which is close to the Invergordon distillery. The remaining low-cost sources, 67 ktpa, are 200 to 240 km from Lybster by road.

Aberdeen

The Aberdeen cluster sits within the Fraserburgh catchment area, with six facilities producing 116 ktpa. The majority comes from five combustion facilities; the remainder from a small AD upgrading facility: Savock Farm, 4 ktpa. The largest source is the NESS EfW plant at 67 ktpa. The cluster has the third shortest average road distance to storage at 56 km.

Dumfries

The Dumfries cluster has five facilities producing 300 ktpa, mostly from the Steven’s Croft biomass plant, 0.28 Mtpa. The area includes two low-cost AD upgrading facilities producing a combined 18 ktpa. One of these, Crofthead, is already commercially capturing 13 ktpa, and has a separate CHP source, 3 ktpa, currently not captured. All the sites are within 70 km by road of the Solway Firth storage prospect. The cluster average at 48 km is the shortest overall.

Forth & Clyde

The Forth and Clyde clusters are closest to the Forth Basin storage prospect. These are the two largest clusters in our database, with a combined 59 sites producing 2.5 Mtpa. The area accounts for 69% of all combustion and 45% of all separation sources in the database; and includes some of the largest facilities including the Markinch and Caledonian biomass plants, 360 and 144 ktpa, and Cameronbridge distillery, 75 ktpa. Just over 0.84 Mtpa is within 50 km of the Forth Basin storage location, including Cameronbridge, 9 km, and Markinch, 10 km.

The North British distillery, 49 ktpa and 49 km by road from the storage location, is already commercially capturing CO₂ for export to storage in Denmark. Low-cost separation sources account for 190 ktpa of bio-CO₂ at an average road distance of 80 km from the storage location. It is worth noting the Feeder 10 terminus is located in the overlap of the two cluster boundary circles. Also of interest, are the significant local combustion clusters at Irvine, 290 ktpa, and Dunbar, 208 ktpa, which are 107 km and 109 km by road from the storage location.

Outliers

Seven outliers account for just 3% of all combustion, and 24% of all separation sources. The latter value reflects a concentration of low-costs sources in Ayrshire. This includes two facilities at the Girvan distillery: fermentation, 75 ktpa, and AD upgrading, 17 ktpa; and the neighbouring Ailsa Bay distillery, 7 ktpa. Combustion sources include Charlesfield AD, Borders, 18 ktpa, the Acharn biomass plant, Perthshire, 31 ktpa, and the Pulteney distillery, Wick, a small biomass plant, 19 ktpa. The latter is the closest source to Lybster.

Table 6. Bio-CO₂ sources by cluster. Note: the sources outside clusters are highlighted in grey

Development timeframes

CCS is being rapidly deployed to meet demanding net zero targets. By our analysis, there are 32 projects across Europe with realistic timelines to storage by 2030 – Figure 12. Development timeframes have become crucial to delivering these targets, as policy makers seek to balance haste with due diligence. The exponential growth in demand for CDR credits is also exacerbating a supply imbalance for CO₂ storage that early movers, notably Denmark (Stenlille), Iceland (Coda), and Norway (Northern Lights) are seeking to capitalise on. We observe that timeframes in these countries are the fastest in Europe at around five years.

Figure 12. The outlook for European Storage, 2030. Seven countries have megatonne projects planned, with 64% of capacity in the North Sea. Countries in grey have no storage planned for 2030.

UK timelines

The NSTA, as the UK’s competent authority and carbon storage regulator, is instrumental in setting UK licensing timelines. The first UK carbon storage licensing round was held in 2022. The NSTA announced 21 accepted appraisal licences in September 2023, building on the experience of the previous seven licences. Each licence is tailored to the prospective storage site with a deadline for a storage permit application and specific requirements relating to the necessary maturation of the project for a permit application – Appendix D.

The first storage permits are expected no later than Q4 2024 for Endurance CS001 (East Coast Cluster) and Hamilton CS004 (HyNet North West). Assuming a two-year construction and commissioning period, first injection is expected no later than 2028 with minor delays possibly increasing that to 2030. It is worth noting that 21 of the appraisals are required to submit storage permit applications between 2026 and 2028, which may cause a significant bottleneck similar to Class VI well permitting delays at the Federal level in the USA – Appendix I.

Analysis of the 27 active licences indicates that the average appraisal time from early risk assessment to storage permit application is five years and three months. Examples of exceptionally short and long appraisals are the Scottish Cluster’s Acorn East licence (Storegga, two years) and the East Coast Cluster’s Bunter 42 expansion (BP, eight years). The former is supported by a decade of prior site characterisation. The latter is an exploration target that requires 3D seismic acquisition and an appraisal well. Allowing for construction and commissioning, storage projects expect to be operational, i.e. ‘on injection’, within eight years on average of an appraisal licence application.

EEA timeframes

Analysis for EEA projects is largely dependent on public statements of ambition. The outcomes are faster than the UK. The nine Norwegian projects average six years from initial application to expected operation. Denmark is relatively fast by comparison, averaging four years for its six projects. The two large Dutch projects, Porthos (2019) and Aramis (2021), expect to be operational within seven years. Pycasso, the French project launched in 2021, has the longest development period at ten years. The remaining projects for Bulgaria, Greece, Iceland, and Italy expect to be operational within five years of their start dates which range from 2021 to 2023. If the UK timings are indicative, ambitious EEA deadlines of less than six years for a third of the projects are likely optimistic and at risk of delays of one to five years. This may result a storage capacity substantially less than the EU target of 50 Mtpa.

Implications for inshore storage

Many storage projects are on timelines of around a decade characterised by three phases: a pre-licensing identification and application phase of approximately three years; an appraisal licensing phase that averages five years; a storage permit construction and commissioning phase of around two years. This is likely to hold true for Fraserburgh and the Solway Firth, the two less mature areas of interest identified in Chapter 2. Lybster is an exception, with several factors indicating a fast-track approach that could support a storage permit application within three years. This option is examined in the final chapter of this report.

Cost-revenue analysis

The following cost-revenue analysis for the capture, transport, and storage of bio-CO₂ establishes to a good first approximation the potential value of developing onshore and inshore CCS in Scotland. The full chain cost is compared to available revenue from the recent emergence of a high-demand and low-supply voluntary CDR market.

Note that indicative costs for capture, transport, and storage are based on publicly available sources where possible. In the absence of published data, companies operating in Scotland, the UK, and Europe have been approached to provide a commercial estimate.

Capture

Capture is divided into two categories: combustion and separation. Combustion accounts for seven of the studied nine sectors and 89% of the bio-CO₂, 3.3 Mtpa. This category costs more than separation as the capture is a post-combustion process on a low-purity and dilute flue gas stream, whereas separation from distilleries and biomethane upgraders is on a high-purity and concentrated CO₂ stream that simply requires dehydration and compression.

The combustion sources in this study range from eight large biomass and EfW facilities, 130-360 ktpa, to twenty-five small AD sites, 3-12 ktpa. Post-combustion capture is sensitive to economies of scale, with many studies noting a wide range of capture costs that reflect the stream purity and size of the facility. For example, there is an average 43% increase in cost for an order of magnitude decrease in capture rate from megatonne to sub-megatonne projects (GCCSI, 2021).

The available literature focuses on large CCS applications, broadly defined as facilities emitting at least 100 ktpa (IEAGHG, 2024). A degree of generalisation is therefore necessary given that 89 of the 98 sources in this study emit less than 100 ktpa, with half the sources emitting less than 15 ktpa.

Where possible, we estimate a range for costs and assume the high cost given the predominance of small sources in our data.

Biomass is the largest sector in this study with sources averaging 95 ktpa. We estimate a low cost of £87 per tonne based on the levelised cost analysis of Lehtveer & Emanuelsson (2021) – Appendix J. We estimate a high cost of £128 per tonne based on analysis of emitters smaller than 100 ktpa by Beiron et al. (2022). We favour the high cost as representative – Table 5.

Energy from Waste is the second largest sector with average emissions of 84 ktpa. Two estimates were found with broadly similar costs: £81 and £109 per tonne (MVV, 2024; IEAGHG, 2024). We favour a high cost as the average plant capacity is small at under 200 ktpa of waste.

Anaerobic Digestion covers five sectors in the combustion category with low average emissions of 13 ktpa. We found no data on capture costs for AD combustion. We assume a low-cost of £128 per tonne from the biomass analysis, given the much smaller size of AD sources. In the absence of data, we conservatively assume a high cost of £136 per tonne based on a mean EfW cost, £95, multiplied by the order-of-magnitude scalar for combustion, 143%.

Separation produces highly concentrated streams of pure bio-CO₂ (EBA, 2022). Distillery fermentation, average 18 ktpa, and AD upgrading, 8 ktpa, are the two sectors that use cryogenic distillation and membrane separation to capture the CO₂. Global analyses provide a low-cost estimate of £30 (IEA 2021; NETL, 2023). In our opinion this reflects economies of scale for large bioethanol plants in the USA. A high-cost price of £60 per tonne is based on a commercial sales estimate for small emitters (E Nimmons, pers. comm., May 2024)^[1].

Table 7. Estimated capture costs by sector, including % concentration of CO₂ in emissions stream.

Transport

Truck transport is the simplest option, as rail transport of geographically dispersed sources would require onloading and offloading at rail heads with truck transport at both ends. A rail route north from Inverness, and clusters further south and east, terminates at Wick. No cost analysis of rail has been undertaken for this study.

Truck transport of CO₂ is by a cryogenic T75 ISO tank as a liquid at -35°C and 22 bar. Each truck carries 20 tonnes. Assuming an injection rate of 100 ktpa and batch delivery over 6 days a week throughout the year, 16 truck loads per day are required. There is scarce literature on truck costs for Europe. However, a commercial estimate of £20 per tonne for a 100-mile round trip seems reasonable (E. Nimmons, pers. comm. May 2024) and is applied here – Appendix J. This is equivalent to £0.124 per tonne per km, which is similar to a recent cost estimate of £0.126 by Ricardo (2023) and $0.111 for the USA (Stolaroff et al., 2021). We presume that the slightly lower dollar estimate reflects lower fuel costs in America.

The average road distance to Lybster for the Inverness cluster is 191 km, with 87 ktpa available within 150 km. This includes 40 ktpa of low-cost CO₂ from four distilleries; the remaining 47 ktpa are from two biomass sources, Balcas and Pulteney. The Inverness cluster has enough low-cost CO₂ to supply 109 ktpa at an average road distance of 188 km, equivalent to £24/tonne.

With the exception of Savock Farm at Ellon, 4 ktpa and 300 km, the remaining low-cost sources are more than 360 km away. It follows that road transport costs for 100 ktpa over 10 years are £20-50 million with an opportunity to source all of the bio-CO₂ from the Inverness cluster and low-cost sources at £24 million. It is worth mentioning that a hydrogen fleet would reduce life cycle emissions and road wear, being lighter than an electric vehicle equivalent (Low, 2024).

Storage

Three storage cost scenarios are considered. The most detailed is Lybster, outlined below. The second scenario is a first approximation for Fraserburgh and the Solway Firth. This is similar to Lybster but less mature and more challenging with respect to appraisal wells, seismic data, and location. The third scenario is a consideration of potential costs for the Forth Basin proposal, the least mature of the storage options.

Lybster

The cost analysis for Lybster assumes 100 ktpa of CO₂ over a decade which would account for half of the expected capacity estimate of 2 million tonnes – section 2.2.1. This would potentially mature the understanding of the site towards a further decade of injection.

Buffer: The site will require tanks for the temporary storage of CO₂ prior to injection. We assume four tanks with sufficient capacity for an injection rate of 100 ktpa, equivalent to an injection rate of 12 tonnes/hr. This allows for 10 days of well maintenance per year. While the production and injection of CO₂ is continuous, transport occurs in discrete runs and is a batch process. Redundant capacity is required on-site to provide operational flexibility. Assuming 16 trucks a day and 125% capacity based on LNG shipping experience, 4 x 100 m³ onsite tanks would buffer flow to the wellhead. For comparison, the twelve Northern Lights tanks at Øygarden are 6 times the size to accommodate one shipload, 7,500 m³. The capital investment for the Lybster storage tanks and site works is assumed to be around £1 million.

Compression: The site will require a compressor to take the liquid CO₂ to the required pipeline pressure of 150 bar for the well system and injection at reservoir conditions. We estimate this to require 120 kWh per tonne after Psarras et al. (2020) at an operational cost of £30 per tonne with no capital investment, assuming rental of the equipment from a service company. The operational cost over 10 years at 100 ktpa is estimated at £30 million.

Injection: The site also requires an injection well. The discovery well, 11/24-1, is unsuitable. The well is designated AB3 (NSTA, 2023), i.e. permanently abandoned and seabed cleared, with no infrastructure in place. Additionally, three cement barriers isolate the well. The re-purposing of 11/24-1 would be technically challenging and very expensive.

The production well, 11/24-3y, is currently suspended with the onshore surface infrastructure in place. The current drilling pad can be re-used and the well re-purposed. 11/24-3y is an extended reach well that has been designed to encounter a 173 m succession of the target reservoir sandstones compared to the 25 m of the vertical exploration well, 11/24-1. This favours good injectivity. It is estimated that the conversion cost of an onshore well to CO₂ injection is approximately £1-2 million (IEAGHG, 2022). This is an order of magnitude cheaper than an offshore injection well at £10-15 million based on NSTA estimates of recent North Sea drilling costs at £5-10 thousand per meter (NSTA, 2023). We conservatively assume a combined conversion and maintenance cost for the well of £3 million.

Appraisal: The storage site requires an expert reinterpretation of the existing 3D seismic cube, including depth conversion and static model construction (three months) and dynamic simulation of the reservoir (nine months). This would match the known fluid production history and forward model the reservoir response to CO₂ injection and storage (9 months). We estimate the cost of this appraisal study to be about £0.5 million. A related geomechanical study of similar duration and rigour is also estimated to cost £0.5 million. The budget for a two-year appraisal that includes both the modelling and geomechanical studies, a well repurposing study, and standard elements of the NSTA appraise-assess-define framework for appraisal licensing is estimated to cost approximately £3 million.

The cost estimates sum to a sub-total is £37 million. Assuming operational costs for the site of £250,000 per annum, the capital investment and operational costs sum to £40 million. Not addressed here are monitoring and verification, as these are highly dependent on the technologies chosen. The design of the monitoring programme is an important element of the appraisal licence. However, if we conservatively assume a monitoring cost of £20 million over the lifetime of storage and add £10 million for conformance and decommissioning, this indicates a storage cost of £70/tonne based on 100 ktpa over 10 years.

Fraserburgh and Solway Firth

These two prospective sites require an offshore installation and operation. Assuming suitable targets are discovered at 1,000-2,000 m depth, the well drilling cost would be £10-15 million. A compressor would need to be either located offshore on a small operational platform, or at the landfall end of a 16 km pipeline. While there is scant literature on short pipeline costs, we conservatively assume a cost of £50 per tonne based on the analysis of Johnsson et al. (2017). The 10 year 100 ktpa cost is £50 million. The cost of an offshore operational platform is tentatively estimated at £10 million. Note that no cost estimate was found for this element.

Appraisal costs reflect the need to reinterpret the existing seismic over the area at £2 million, plus the possibility of needing 100 km² of new 3D seismic for exploration and appraisal at £5 million. Further appraisal requirements will likely increase the appraisal budget to at least £10 million. From the Lybster cost breakdown, we can add on the cost of temporary storage, £1 million, compression, £30 million, maintenance for the well, £3 million, and monitoring of the site, £20 million. It follows that the total cost for Fraserburgh and Solway Firth would be, to a very rough approximation, around £140/tonne, i.e. double the estimate for Lybster.

Forth Basin

No cost analysis is undertaken for the Forth Basin, as our recommendation is for this prospect to proceed as an experimental pilot study with a nominal injection rate of 10 ktpa. The site would require an injection well with the wellhead located onshore to reduce costs. However, the research budget would need to cover the cost of the well, and handling of the onshore dissolution of CO₂ into brine extracted from the well. Any research proposal is likely to be costed at more than £10 million for the well alone. The brine extraction, mixing facility, and re-injection are likely to more than double the well cost. However, no data was found on the latter elements. As such, an accurate costing is beyond the scope of this study.

CDR market

The European Union and UK have yet to regulate a CO₂ removal requirement. However, the voluntary market for carbon dioxide removal (CDR) is rapidly emerging, with rumours of Microsoft, Shopify, and Stripe buying credits valued at USD1,000 per tonne from Iceland’s Carbfix and Climeworks projects in 2021. Climeworks is offering public CDR subscriptions at USD1,500 per tonne (WP, 2024). These are based on direct air capture (DAC) and CO₂ mineralisation in the young and reactive basalts of Hellisheiði, 20 km to the east of Reykjavik.

A different price signal for permanent storage has recently emerged in Europe. In 2023, the European Commission approved the Danish NECCS fund (DKK 2.6 billion, €350 million) for the permanent geological storage of CO₂ from direct air capture and biogenic sources; the projects must be operational by 2026. In April 2024, Denmark awarded NECCS funding to three bio-CO₂ companies to remove 1.1 Mt of CO₂ between 2026 and 2032 – Table 8^[2].

Table 8. Awarded NECCS funding for CDR and CCS in Denmark, April 2024.

These credits have been negotiated on the voluntary carbon market, and tentatively establish a low CDR value of £110. Ørsted, the Danish power company, are also contracted by Microsoft to capture 3.67 Mt of bio-CO₂ over 10 years which will be exported to Northern Lights for a combined transport and storage cost of around €100 per tonne. The Ørsted credit value is unknown. However, given the much higher value of credits for geological storage in Iceland, we favour the high value of £297 as indicative of European CDR pricing in the near future.

Value proposition

Applying the high-cost prices for capture, transport, and storage, and assuming storage at Lybster, we can estimate a full chain cost. Low-cost bio-CO₂ is sourced from the Inverness cluster. A combined capture and storage rate of 100 ktpa is assumed for a period of 10 years.

£60 per tonne for bio-CO₂ from separation sources, primarily distilleries

£24 per tonne for transport for an average road distance of 188 km

£70 per tonne for storage from buffering tanks to decommissioning

• Full chain CCS cost estimate: £154 per tonne
• Voluntary market CDR credit revenue: £297 per tonne
• Net return on investment over 10 years: £143 million

Conclusions

The following section poses six questions that draw out the major themes and outcomes of our research. The answers are intended to highlight actionable policy directions that may support the rapid development of domestic CCS on small but lucrative bio-CO₂ sources.

Can Scotland develop inshore bio-CO₂ storage by 2030?

The short answer is yes. The key metrics are 3.7 Mtpa of available bio-CO₂, including 109 ktpa of the lowest cost sources, mainly distilleries, within 188 km of the inshore Lybster prospect. This is a good source-sink match for a site that has an expected 2.1 Mt capacity. First injection by 2030 will require a rapid formal appraisal and regulated consents to permit storage.

The remaining prospects identified in this study are much less mature and characterised by locations that require a substantial investment to appraise. A realistic timeline for these prospects is 2035-2040 with no clear indication at this stage that the prospects are suitable.

How can this be funded?

There are several ways to fund the appraisal of Lybster, which we estimate will cost about £3 million and take three years. Commercial interest may be sufficient to raise capital. This may be through a capture company that is seeking storage, or as a joint venture between the capture company, whisky distilleries and their parent companies. A successful appraisal will lead to construction and commissioning, including site works such as tank installation and well engineering, which we estimate to cost £3-5 million. An approximate budget of £10 million is needed.

We note the strong narrative structure of decarbonising international brands within a cultural tradition. This may attract global corporations who wish to associate themselves with carbon dioxide removals that have a story to tell. As a strategic project for Scotland, the appraisal costs may be partly underwritten by government funding.

On commissioning, verified carbon storage certificates can be issued on the voluntary market at an estimated price of £300 per tonne. On injection, assuming a sustained injection rate of 100 ktpa and a 20% mark-down of storage to removal, the site would generate an annual revenue of £24 million. No subsidy would be needed once storage has commenced. This would contribute to both Scotland’s economic growth and a just transition to net zero.

How quickly can this be done?

The fastest appraisal-to-permit timelines in Europe are about three years. These fast-track appraisals rely on an aggressive pursuit of a commercial opportunity and a background of available data and mature understanding of the technical risk. Lybster has both the interest and the technical maturity. The missing piece is the necessary legislation to support a legal consent for the appraisal license and storage permit if successful. The legal advice is that the necessary consents may only require a transfer of existing UK regulations to Scottish law.

How much bio-CO₂ capture is available?

In total, we have identified 3.7 Mtpa of available bio-CO₂. This is far in excess of the initial requirement for inshore storage, which we estimate at 0.1 Mtpa. The 3.6 Mt surplus and its geographic concentration in the central belt suggests that offtake to Acorn via the Feeder 10 pipeline ought to be considered as a parallel strategy to inshore storage, noting that this could be a considerable time in the future – Figures 13 and 14.

Combustion source capture is relatively high cost at around £120 per tonne. Separation is much more valuable at £60 per tonne. Distilleries and AD upgraders are common at the low end of the range, making up nearly half of the smallest 27 sites that average 5 ktpa, and one-third of 22 sites that average 10 ktpa. Significantly, there are 14 separation sources near Inverness that may support 21 modular capture units assuming 3-5 ktpa per unit, i.e. sufficient to batch load 16 trucks at 20 tonnes per day for a 100 ktpa supply to Lybster.

Figure 13. Central Belt sources: 2.3 Mt of combustion bio-CO₂ is available, of which 0.3 Mt is from 28 small AD sites; another 190 ktpa of separation bio-CO₂ from 6 distilleries and 2 AD biogas upgraders.

How much storage capacity is available?

Based on current data, our analysis found that only the Lybster prospect has potential commercially viable storage capacity – expected to be 2.1 Mt. This would be sufficient for 20 years of storage at an injection rate of 100 ktpa. This is not significant in terms of overall storage capacity in the North Sea or in terms of Scotland’s overall statutory climate targets but would provide an opportunity to showcase Scotland as a global frontrunner for CCUS technologies.

2.1 Mt of storage would generate £500 million in CDR revenue at 100 ktpa – an injection rate that is much lower than the technical limit for CO₂ storage, which is generally thought to be around 700 ktpa. The low estimate is 0.35 Mt, which would result in only three to four years storage and a revenue of £72 million. The high estimate of 9.4 Mt would be more than sufficient to provide storage out to 2090 at a revenue in excess of £1.5 billion.

What policy actions need to be taken?

The legal opinion is that minor amendments to existing regulations are required to license storage appraisals and storage permits in the territorial waters of Scotland. To repeat the summary from Chapter 1: CO₂ storage involves multiple activities under different licensing regimes. It may well be, however, that insofar as existing regulations could be relied upon, the process of modifying existing statutory instruments could be fast. This would really be a question for those with a better insight into the technical detail and political due process.

The government may also consider if it is helpful to fund the appraisal of Lybster partially or wholly, at an estimated cost of £3 million, which could commence immediately in anticipation of the required amendments being in place to sanction the outcomes and grant a storage permit. Assuming a construction and commissioning term of 1-2 years, the legislative changes would need to be in place by 2028 to support an on-injection outcome by 2030.

Figure 14. Storage prospects by maturity and available bio-CO₂ from the 98 sources. The inner circle represents the available separation CO₂; the lighter outer circle represents the combustion CO₂. Note: the Clyde circles are not associated with a prospect but included for relevance to Feeder 10.

Vision

Storegga has proposed that Acorn will include a NET contribution (Storegga, 2022a). This was originally envisaged as a direct air capture project but timelines and capture costs for this technology suggest that bio-CO₂ has a greater likelihood of supporting 2030 targets. We envision two bio-CO₂ scenarios that potentially provide significant tax revenue to Scotland.

Scenario 1: Low-cost separation sources at £60 per tonne provide the highest profit and earliest opportunity for taxation. For Lybster, 100 ktpa is available from the Inverness cluster of distilleries. For Feeder 10 and Acorn, 200 ktpa is available from the central belt.

Scenario 2: More costly but larger combustion sources, primarily biomass and energy-from-waste plants at £120 per tonne provide 2 Mtpa of CO₂ to Feeder 10. For Lybster, a large biomass plant, Morayhill, potentially doubles and then trebles the 100 ktpa injection rate if early well performance and capacity indications support expansion. This may include possible satellite prospects such as Knockinnon and Braemore.

Storage taxation: Assuming a 10% tax on storage only, this would harvest a nominal £7 per tonne on a storage cost of £70 per tonne – our estimate for Lybster; Storegga has published a transport and storage cost of £45 per tonne for Acorn (Storegga, 2022b). Taxing the full chain yields £15 on a CCS cost of £150. A tax on net profit would also yield £15 assuming a £300 credit.

Credit taxation: A yet more lucrative option would be to tax the CDR credit, yielding £30 on a nominal £300 per tonne – Figure 15. The supply-demand imbalance for permanent removals suggest high prices may be sustained for at least a decade as early storage capacity is primarily being booked to industrial clusters and fossil CO₂, which is priced as a reduction on the ETS market.

Figure 15. Storage rate and potential tax revenue for two described Lybster and Feeder 10 scenarios.

Worth noting is that a successful demonstration of profitable storage and permanent removals at Lybster would potentially catalyse a race to capture separation bio-CO₂ from AD sources. This would drive decentralised farm-scale emissions control, upgrading of biogas to biomethane and displacing fossil methane from local energy networks and the grid where a connection is available.

A boutique demonstration of storage at Lybster also has the advantage of being driven by commercial incentives and timelines, with the possibility of positively disrupting the cluster timelines and NET outcomes, especially for the second scenario.

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Appendices

Appendix A Background on the CCS Directive

Pioneering work on CCS legislation in the EU was undertaken by the UK with the implementation of the UK Energy Act 2008. The Energy Act established a national regulatory framework for offshore CO₂ storage with sufficient flexibility to transpose the anticipated CCS Directive. Directive 2009/31/EC on the geological storage of carbon dioxide was adopted by the EU Council of Ministers in 2009. The CCS Directive was transposed to UK law in 2012 and also incorporated into the Agreement on the European Economic Area. The EEA includes significant storage activity in Norway and Iceland. Despite recent changes in EU membership, the CCS Directive provides a common framework across Europe for offshore CO₂ storage.

The CCS Directive applies to onshore and offshore geological storage of CO₂ within a country, including exclusive economic zones and continental shelves. Member States that choose to permit storage must carry out an assessment of their regional potential storage capacity. Member States retain the right not to allow storage in their territories. Member States are required to report to the Commission on the implementation of the CCS Directive every four years. The Commission shares the progress with the Parliament and the Council. The 3^rd report noted that the CCS Directive had been transposed into the national law of sixteen Member States by 2017. As of the 4^th report, released in October 2023, only nine countries, Germany, Estonia, Ireland, Cyprus, Latvia, Lithuania, Austria, Finland, and Slovenia, prohibit the geological storage of carbon dioxide. Germany, 23% of EU fossil CO₂ emissions, announced a carbon management strategy in 2024 to support CCS and currently plans to export CO₂ for storage, primarily via the Rhine-Delta Corridor. The 4^th report concluded that the CCS Directive had been correctly applied from 2019 to 2023 across the EU, acknowledging progress in Europe on the development and exploration of CO₂ storage sites, and support for storage projects in most European countries.

DG CLIMA have commissioned DNV to revise the CCS Directive guidance documents to reflect the current understanding of CCS and remove ambiguities identified during the development of the first CCS projects in the EEA. Outcomes of the revision can be expected in 2024. The revised guidance documents aim to support operators and competent authorities in the practical implementation of permitting storage.

Appendix B Analysis of UK licensing

The Energy Act 2016 assigned the role of regulator to the Oil & Gas Authority (OGA) including related infrastructure such as CO₂ pipelines. The OGA issued seven CO₂ storage appraisal licences between 2012 and 2022. The North Sea Transition Authority (NSTA) issued a further 21 appraisal licences in 2023.

The UK’s Oil & Gas Authority (OGA) has issued 28 storage appraisal licences since 2012^[3], of which 27 are active, with most having been issued through the NSTA carbon storge licensing round in 2023. The OGA issued the first CO₂ storage licence, CS001, in 2012^[4]. The licence permitted BP to drill a single appraisal well in the Bunter aquifer, southern North Sea, to assess storage for White Rose, a post-combustion capture project on coal power at Drax. Prior to this, large CCS projects had been proposed for Scotland at Longannet (Scottish Power, coal, 2008) and Peterhead (BP, H₂ and EOR, 2005). Neither progressed to a storage appraisal before funding support was withdrawn.

Licence CS002 was also issued in 2012, to Shell for the Goldeneye oil field and Peterhead project^[5]. Both CS001 and CS002 progressed to FEED and were rumoured to be close to positive final investment decisions (FIDs) when funding was withdrawn with the cancellation of the £1bn CCS competition in 2015. These two licenses suggest an appraisal timeframe of around 4 years for these early projects. The publicly available CS001 and CS002 documents do not include a description of the technical requirements or staging of the appraisals.

The OGA extended CS001 in 2018 for the Endurance project and went on to issue CS003-CS007 by the end of 2021, prior to rebranding as the North Sea Transition Authority (NSTA) in March 2022^[6]. The new licenses enabled storage appraisals for the Track-1 and Track-2 clusters, namely Endurance (BP), Acorn (Storegga), Hamilton (Eni), and Viking (Harbour Energy), as well as two Bunter prospects (BP). The latter, CS006 and CS007, appear to be build-out capacity for the Track-1 East Coast Cluster. We note that the Track licenses balance appraisals of saline aquifers, Bunter and Acorn, with appraisals of depleted gas fields, Hamilton and Viking. The second tranche of licences document the staging of appraisals, and the additional requirements associated with specific licenses – see Section 3 and Fig 6.2.

Overlooking the years of appraisal for Acorn and Endurance prior to 2021, the four storage appraisals associated with the Track-1 and Track-2 are identical at 4 years. The licence holders must apply for a storage permit or relinquish the area at the end of the appraisal. The less mature Bunter prospects, CS006 and CS007, are licensed for 6 and 8 years respectively. Both include 3D seismic acquisition and appraisal well drilling as additional requirements.

The NSTA became the UK competent authority and storage regulator in 2023. This extended the role of the NSTA to mentoring aspirant storage operators and stewarding offshore storage from the start of appraisal to the end of operational liability with the transfer of the site ownership to the state on closure, subject to meeting the terms of licence.

The seven early licenses prepared the ground for the NSTA to issue 21 licenses in 2023, CS008-CS028. Nominations closed in May 2022. The NSTA launched the licensing round in June 2022. Applications closed September 2022 and licences were offered in May 2023.

The outliers are CS011 (Storegga, Acorn East, 2 years) and CS025 (BP, Bunter Closure 42, 8 years). 25 of the licences are in the North Sea: 18 in the southern North Sea, 3 in the central North Sea, and 4 in the northern North Sea. There are 2 licences in the East Irish Sea.

Appendix C Questions and Answers on Scots Law

C1. How was the UK North Sea divided at devolution for the purpose of renewables?

There are essentially two boundaries between Scotland and England in the North Sea. One determines which courts would be responsible in the event of criminal or civil matters arising out of offshore oil and gas operations – the Civil Jurisdiction (Offshore Activities) Order 1987 and the Criminal Jurisdiction (Offshore Activities) Order 1987.

The other is derived from the arrangements made at the time of devolution to delineate those parts of the territorial sea and the EEZ that would be treated as waters adjacent to Scotland and those which would not for purposes of environmental protection and the regulation of fisheries – namely the Scottish Adjacent Waters Boundaries Order 1999.

The area subject to Scottish jurisdiction is less in the case of the 1999 Order. It is important to note, however, that the 1987 Orders were made under the Oil and Gas (Enterprise) Act 1982 (as well as under the Continental Shelf Act 1964) and confer jurisdiction on the civil and criminal courts respectively in relation to “relevant acts”, which are defined (now by s11(2) of the Petroleum Act 1998) as “activities connected with the exploration of, or the exploitation of the natural resources of…the [sea]bed…or the subsoil beneath it”. Note that section 11(3) is so worded as to make it clear that it applies to installations involved in CCS.

By contrast, the equivalent Orders dealing with civil and criminal jurisdiction in relation to offshore renewable installations which were passed in 2009 utilise the same boundaries as the 1999 Order insofar as they seek to reflect the division of powers in relation to such installations as between Westminster and the Scottish Ministers (see the Civil Jurisdiction (Application to Offshore Renewable Energy Installations etc) Order 2009, and the Criminal Jurisdiction (Application to Offshore Renewable Energy Installations etc) Order 2009).

One could argue that this arrangement is not very tidy, but there does not appear to be any active dispute about it. Were there ever to be Scottish independence, however, and the matter of the location of what would now become the international maritime boundary required to be resolved, existing boundaries drawn for internal administrative and jurisdictional purposes would not be determinative and could, indeed, provide arguments respectively for those seeking more northerly or southerly solutions—albeit interestingly that those specifically relating to offshore oil and gas installations would appear to suggest a more southerly boundary. It would essentially be a matter to be agreed between Scotland and the rest of the UK as part of an overall settlement involving the division of assets and liabilities.

C2. Is CO₂ storage in Scottish territorial waters already in the Scottish competence under the Energy Act 2008? Does Scotland require additional legislation for storage, such as transposing or adopting the CCS Directive to Scots law?

Scottish Ministers are clearly established as the licensing authority in relation to CO₂ storage for the territorial sea adjacent to Scotland by s18 of the Energy Act 2008. The Storage of Carbon Dioxide (Licensing etc.) Regulations 2010, however, do not apply to this area, insofar as they define a “licence” as a licence granted by the authority (now NSTA/OGA) in relation to “a controlled place which is not in, under or over the territorial sea adjacent to Scotland” (Reg. 1(3)). Further legislation would therefore be required were Scottish Ministers minded to operate as the licensing authority for this area, albeit that there would be good reasons simply to mirror the existing regulations.

C3. What are the Scottish Ministers responsible for within the 12 nm limit? Sea surface to seabed? All fish, water, and benthic quality from land outfalls into sea?

Given the way in which powers have been allocated between UK and Scottish bodies, it is not possible to give a once and for all answer to this question. In terms of international law, the UK as the coastal state, enjoys sovereignty in the territorial sea which includes the seabed, the subsurface and the water column (subject only to, for example, rights of innocent passage). How the UK decides to exercise that sovereignty, however, is a matter for it and this becomes complex in the context of devolution. Thus, while Scottish Ministers undoubtedly have responsibility for, say, environmental issues in the territorial sea adjacent to Scotland, this needs to be read in conjunction with the environmental responsibilities in the hands of OPRED in the context of oil and gas operations in the same space.

C4. Who has responsibility and rights for the sub-seabed, mineral oil and gas rights?

Oil and gas under the territorial sea adjacent to Scotland as with all such resources wheresoever located in the UK, onshore or offshore, are vested in the Crown. Whereas Scottish Ministers did receive licensing powers for oil and gas in the post-referendum settlement in the context of the Scotland Act 2016, this was explicitly only in relation to the “onshore area”, defined as lying “within the baselines” of the territorial sea (s47). Thus, licensing in relation to all offshore oil and gas, within the territorial sea and under the continental shelf, is a matter for the NSTA/OGA.

C5. Does Scotland need its own regulator and competent authority? Or can those services be purchased from the UK government?

Purchasing the services of the NSTA/OGA would still require there to be appropriate regulations covering the territorial sea adjacent to Scotland and may raise political considerations. For example, if it is seen as expedient to make use of the UK regulator for this function, the question would arise as to where else such an approach might be appropriate – industry generally would like to deal with fewer regulators and to have to adapt to fewer jurisdictional variations. This could, of course, be countered by pointing to the very specific nature of the issue at hand where the long experience of the NSTA/OGA and its predecessors is an important consideration. Another way of looking at this, however, would be to consider whether an agreement could be reached between, say, Marine Scotland and the NSTA/OGA to deal with carbon licensing in territorial waters adjacent to Scotland (again on the basis that appropriate regulations are in place for the territorial sea adjacent to Scotland). There is a precedent for such an approach, effected by Memorandum of Understanding between the HSE and OPRED^[7] to form the Offshore Safety Directive Regulator (now OMAR) when that directive required a competent authority to deal with health and safety, and environmental risks under one roof. That, of course, involved two regulators at UK level, but there should be no objection to a similar arrangement between a UK and a Scottish regulator given the commonality of purpose and the desirability of a seamless approach.

C6. Is the natural fill of residual oil and gas in depleted gas fields owned by Scottish Ministers or retained by the Crown Estate?

Residual oil and gas remain vested in the Crown.

C7. Who holds liability for oil and gas field operations, for decommissioning, and for permanent abandonment within the 12 nm limit?

First and foremost, in the context of operations, attention will be focused on the licensee. In most cases, however, liability will be joint and several with co-venturers under a joint operating agreement. In relation to decommissioning, it is a matter of anyone who holds a section 29 notice under the Petroleum Act 1998 – again usually co-venturers, but the list is lengthened to minimise the risk that the state is left to tidy up if duty holders become insolvent. Things get more complicated in relation to any infrastructure left in place under an agreed derogation. There is no specific legislation or regulation on this matter; rather it is dealt with in the context of guidance notes issued from time to time by OPRED. Originally, the wording was as follows: “The persons who own an installation or pipeline at the time of its decommissioning will remain the owner of any residues”. More recently, it has been adapted to: “The persons/parties who own an installation or pipeline, or are a section 29 [notice] holder, at the time of its decommissioning will remain the owners of any residues and remains after decommissioning.” This is problematical on a couple of levels. For a start, either someone is the owner, or they are not. If they are merely a section 29 notice holder, they cannot without further ado suddenly become the owner. More fundamentally, there is an argument that the use of Crown Leases in the EEZ in relation to renewables and CCS constitutes an exercise of property rights in the seabed which raises the question of whether any infrastructure left in place is actually a fixture (in both Scots and English law) which belongs to the owner of the land (or seabed) to which it is attached. This has never been tested but is certainly arguable. By contrast, this would appear to be a much easier proposition to establish within the territorial sea where the Crown Estate has habitually claimed property rights and the courts have readily confirmed them. Thus, whatever is stated in the guidance notes (and, of course, essentially accepted by duty holders in the context of a decommissioning programme), property law may say something different.

C8. Does Scotland own the pore space for the Lybster field and Forth Basin?

If I am right in understanding that the Lybster field lies wholly within the 12 nm limit, then whereas the hydrocarbons in that field are vested in the Crown and those rights are exercised by the NSTA, the pore space is the property of the Crown, which property rights would be exercisable by the CES. Insofar as the Forth Basin aquifer is similarly located within the 12 nm limit, the pore space there would also be owned by the Crown and the property rights would be exercisable by CES. Note that this property law analysis also implies that CO₂ injected into depleted reservoirs beneath the territorial sea would be owned by the Crown on the basis of the principle of annexation. Roddy Paisley and John Paterson wrote a report on CO₂ in the context of EOR years ago in which the property dimension was more fully explored.

C9. Is Lybster administered under onshore or offshore regulation? UK or Scots law?

Insofar as the exploration for and production of hydrocarbons is involved, then the petroleum licensing at the time would have been a matter for the Secretary of State. Even now, insofar as the reservoir lies beyond the baselines for the territorial sea and thus within the territorial sea, the licensing in relation to such a reservoir would be a matter for NSTA/OGA. The siting and operation of the drilling rig onshore would then and now be a matter for the local planning authority. Thus, both UK law and Scots law are engaged as appropriate.

C10. Now that the Beatrice field is no longer in production, does Scotland own the field, which is partly in territorial waters and partly beyond the 12 nm limit?

This is a most interesting problem. The residual hydrocarbons in the field remain vested in the Crown. The pore space within 12 nm is owned by the Crown. The ownership of pore space beyond 12 nm is not clear, but from a practical perspective only the Crown has sovereign rights to act in respect of that pore space. The licensing authority within 12 nm is Scottish Ministers and beyond the NSTA/OGA. Ways forward? Some form of arrangement modelled on those for hydrocarbon reservoirs that cross boundaries. This returns us to the answer above where an MoU between Marine Scotland and NSTA/OGA was suggested.

C11. Are consents expected to be closely similar, or identical, to permissions and standards already enacted for offshore oil and gas licensing, appraisal, development, and production? Lybster must have already passed regulatory agencies inspections for oil production, water cut disposal, and gas flaring – will CO₂ injection for storage be different or require a new inspection?

Given that different activities under different licensing regimes are involved, new consents would be required. It may well be, however, that insofar as existing data could be relied upon, the process would be faster. This would really be a question for those with a better insight into the technical processes.

Appendix D Timeframe analysis of European CO₂ storage

Analysis of CO₂ storage projects across Europe at various stages of development indicates that both the European Union’s 2030 CO₂ storage target (50 Mtpa) and United Kingdom’s 2030 target (20-30 Mtpa) may be achieved if storage development deadlines are met and expected storage rates are slightly exceeded. The addition of large storage projects in Norway and Iceland will very likely be necessary to meet EU demand and provide a contingency against capacity shortfalls. Planned storage capacities for Norway, Denmark, and Iceland vastly exceed domestic emissions, indicating an ambition to establish large CO₂ import markets.

On average, megaton-scale European projects store 2-4 Mtpa. At the national level, results range from Bulgaria (P10 optimistic, 0.8 Mtpa) and Greece (P50 expected, 1 Mtpa), to Iceland (P10 optimistic, 2 Mtpa) and Norway (P50 expected, 15 Mtpa). The data indicates that the European Economic Area (EEA) and United Kingdom are on track to deliver regional storage rates of 18-106 Mtpa by 2030, with an expected P50 forecast of 58 Mtpa, i.e. slightly less than the 70-80 Mtpa aggregated net zero target for the EU and UK. Regionally significant storage in the North Sea remains a mainstay for the Netherlands (P50 4.5 Mtpa), the UK (P50 22.5 Mtpa), and Denmark (P50 12.2 Mtpa, of which 3 Mtpa is offshore). The emergence of onshore storage ambitions for Denmark (4-14 Mtpa) is an interesting development. It is notable that the UK, Norway, and Denmark contribute 44% of total storage. Only six EU27 countries are planning megatonne-scale projects. Portugal, Spain, Germany, and Poland, 45% of EU CO₂ emissions, have no large projects planned – Table D.1.

Table D.1. Storage rates for the 32 projects on track to potentially deliver storage by 2030.

Appendix E UK Licensing timeframe

Table E.1. UK licence timing from CS001 to CS028 (2012-2023).

NSTA Carbon Storage Licensing Round #1

Appendix F AOI inventory of 3D seismic and wells

AOI 1 – Lybster field area

Q11: 3D RE07112025 2007
(Proprietary, IGas PLC)

• 11/25-2 1986 dry hole 3713 m
• 11/25-1 1984 dry hole 3307 m
• 11/24b-4 2019 dry hole 963 m
• 11/24-3z,y,x,w,v, producing well
• 11/24a-2z 2004 dry hole 2098 m
• 11/24-1 1996 oil well 1884 m

AOI 1 – Beatrice area

Q11: 3D TB973D0001 1997

Q11: 3D BN803F0001 1985
(Proprietary, Repsol Sinopec)

• 11/30a-B9Z 1984 oil well 2398 m
• 11/30-7 1978 oil show 2192 m
• 11/30a-10 1990 dry hole 3461 m
• 11/30-5 1977 oil well 2372 m
• 11/30a-A26Z 1988 producer 2083 m
• 11/30-2 1976 oil well 2220 m
• 11/30a-8 1982 oil well 2495 m
• 11/30z-C2 1985 oil well 2266 m
• 11/30-4 1981 dry hole 2391 m

AOI 1 – Jacky area

• 12/21-5 1987 dry hole 2722 m
• 12/21-2 1983 oil show 3459 m
• 12/21c-6 2007 oil well 2233 m

AOI 1 – Wick area

Q12: 3D GE863F0001 1986

(Speculative, Schlumberger)

• 12/16-1 1988 dry hole 3659 m
• 12/16-2 1993 dry hole 1554 m

AOI 1, South of GE86

• 12/21-3 1984 oil show 4174 m
• 2D: 12-81-145 NW-SE
• 2D: BN/12-81-126 SW-NE
• 12/21-1 1969 dry hole 1590 m
• 2D: 12-81-144 NW-SE
• 2D: 12-86-10 SW-NE
• 12/22-3 1986 dry hole 2190 m
• 2D: A12-85-03 NWW-SEE
• 2D: A12-85-10 NW-SE

AOI 1 S of Lybster, W of Beatrice

• 11/29-1 2008 dry hole 2483 m
• 2D: 302A NW-SE
• 2D: 105A SW-NE

AOI 2 – Forth Basin area

Q25: 2D CN872D1010 1987

(Proprietary, ConocoPhillips)

• 25/26-1 1990 dry hole 2040 m

AOI 3 – Fraserburgh area

Q18: 3D PGS18002MOF 2019, Release 2029

(Speculative, PGS Exploration Ltd)

• 18/05a-1 1982 dry hole 1984
• 2D: CNS-83-125 NW-SE
• 2D: A18,19-82-25A W-E
• 18/05-2 2007 dry hole 1763 m
• 2D: A18,19-82-25 W-E
• 2D: A18,19-82-20 N-S
• Q19: 3D YC06A01902 2007
• (Proprietary, CENTURY Exploration Ltd)
• 19/01-1 1992 dry hole 3425 m
• 2D: A18,19-82-31 E-W
• 2D: A18,19-82-28A N-S

AOI 4 – Solway Firth area

Q112: 3D ES943F0001 1994

(Proprietary, ExxonMobil)

• 112/15-1 1996 dry hole 2715 m
• 2D WG932D0001 Line 151 NW-SE 1993
• 2D WG932D0001 Line 149 SW-NE 1993
• 111/15-1 1995 dry hole 1981 m
• 2D: BG942-13 SW-NE
• 2D: BG96-112-19 NW-SE

Appendix G Lybster Field

Lybster is Old Norse for “slope farmstead”. The field was named after the local village, an important herring port in the 19^th Century. Premier Oil drilled the discovery well, 11/24-1, in 1996. This was one of a series of exploration successes in the 1980s and 1990s including the Fife and Angus fields, Central North Sea. The vertical discovery well tested up to 2,000 bopd of 36°API oil and was suspended. Premier was also party to the offshore extension of Wytch Farm in 1994. This made the Dorset oil field the largest onshore asset in Western Europe. The development required a five km extended reach well, the first of its kind in the UK.

Lybster was acquired by Caithness Petroleum in 2008 and, like Wytch Farm, developed from land with a 5 km extended reach well, 11/24-3z – Figure F.1. Lybster and Wytch Farm are the only onshore-offshore extended reach well developments in the UK. The Lybster structure is crossed by a northeast-southwest trending fault. The appraisal well and a short side-track tested the western half of the field which proved uncommercial. The well was re-entered in 2010 and side-tracked across the fault to twin the discovery well.

The assessment of oil fields, like storage prospects, require high quality subsurface data, with 3D seismic and well data being commonly cited as key datasets for the suitability and capacity assessment of a site. The Lybster field, in addition to its near-shore location, has both.

The well plan and production strategy for the oil field were based on a 3D reservoir model built from the RE07 seismic survey. Multiple interpretations are possible depending on the wells chosen for depth conversion of the seismic. For example, compare Figure F1 with Figure F2. While the models are similar, depths differ for the field area by as much as 60 metres.

Figure F.1. A ‘top surface’ model for the RE07 3D survey by an oil company (Corallian Resources, 2018).

In the model below, the inferred oil-water contact (white line, dashed) differs from the field outline (red line). This suggests the depth conversion of the Keenan model differs from the oil company interpretation. The Keenan depth conversion of seismic two-way-time is based on a single well log and challenging, as noted by Keenan (2023). The depth uncertainty was not estimated but is likely to be of the order of tens of meters which would impact on an accurate geometric assessment of capacity and precise location of the spill point to the north.

Figure F.2. A ‘top surface’ reservoir model for the RE07 3D seismic survey area by Keenan (2023).

Geological setting: The onshore Lybster area is unconformably overlain by Middle Devonian flagstones. These extremely hard, thinly interbedded siltstones and sandstones form a top to the more prospective and younger Jurassic formations below. The flagstones caused the 11/24-3 well drillers significant challenges in 2008, slowing the early hole progress, as documented in the well completion report.

The Devonian flagstones are underlain by Cretaceous carbonates and calcareous mudstones, organic rich Jurassic mudstones, coals and siltstones, Triassic sandstones and Permian sandstones, mudstones, and minor salts. Late Jurassic rifting in the North Sea resulted in large normal faults and relatively deep marine basins. At the time of this tectonic activity the Great Glen Fault and Helmsdale Fault were active as normal faults. The field is a four-way dip closed structural trap that formed at a flexure point in response to tectonic inversion of the Inner Moray Firth area. A fault separates the field into an unproductive western compartment and a proven oil-bearing eastern compartment.

The main reservoir, the Beatrice Formation, is 10-20 m thick and composed of a shallow marine sandstone sequence that lies between the Brora Coal Formation and the Heather Formation, which is of Middle Jurassic age. The upward-coarsening sandstones of the Beatrice Formation have been interpreted as marine barrier-bar and offshore-bar environments. The ‘B’ Sand is interpreted as distributary channel environment.

Appendix H Production history

Lybster was in production from June 2012-December 2014, with a five month pause from July-November 2013. Production averaged 184 bopd for the first 13 months, and 64 bopd for the last 13 months. Oil was transported by road tanker to Immingham for sale. An average of 0.989 mmscfpd of associated gas was flared. The field was sold to IGas in 2013. A rapidly changing production profile in Q2 2013 saw the gas cut double and water cut increase more than ten-fold from an average daily 57 m³ to over 690 m³. This led to the July 2013 well intervention. Oil production resumed in December 2013 with a declining profile from 142 bopd in January to 25 bopd in September 2014. Associated gas dropped to an average of 0.883 mmscfpd. The daily water cut doubled, increasing to 1,244 m³ in May 2014.

Field: Lybster oil field

Operator: IGas, 2013 – present

Location: Inner Moray Firth, North Sea

Category: Small, 250k barrels OOIP

Discovery: 11/24-1

Water Depth: 39 m

Discovered: Premier Oil, Repsol

Discovery: 20 Sep – 22 Oct 1996

Reservoir: Beatrice formation

Trap 4-way dip closure, 1-2°

Res Lithology Sandstones, thin shales

Reservoir Top 1,433 m / 4,700 feet

OOIP GIIP 250 kbbl, 2000 mmscf

OWC, FWL 1493 m / 4,898 feet

Quadrant/ block: 11/24

Area: 6.11 km²

Discovery: 1 exploration well

Appraisal: 1 ERW + 2 side-track

First Production: 11/24-3z, Aug 2011

Liquids: oil + flare + water

Reservoir: Mesozoic sandstones

Primary: A and B Sands

Figure G.1. Discovery well 11/24-1 summary

Poro-Perm: 15%, 200 mD

Reserves: proven – probable – possible

Oil & Condensate: 147-62-48 kbbl

Sales Gas: 734-310-243 mmscf

Oil equivalent: 274-115-90 kboe

Produced volumes

Oil (sold): 97,992 bbl

Gas (flared): 108,582 boe

Water (treated): 79,940 bbl

CO₂ storage

Seal, primary: Uppat Shale, 23 m thick

Seal complex: KCF Shale, 1065 m thick

Capacity (min) – produced volume: 95 kt

Capacity (low) – structural volume: 0.35 Mt

Capacity (mid) – structural volume: 2.1 Mt

Capacity (high) – structural volume: 9.4 M

Figure G.2. Well 11/24-1 log for reservoir section and overlying seal.

Appendix I Lybster CO₂ Storage Assessment

A series of interpretation techniques have been applied to establish the storage capacity and storage suitability of Lybster. The North Sea Transition Authority (NSTA) and British Geological Survey (BGS) are the primary sources for the seismic and well data that inform the analysis.

The study area is defined by the boundary of RE07112025, a 3D seismic survey acquired in 2007 across quadrant-blocks 11/24 and 11/25, encompassing an area of 306 km² – Fig 4.1. 3D seismic is the most effective data for accurately characterising subsurface structures and reservoir connectivity (Dee, et al., 2005). The survey defines the Lybster study area as it represents the limit of the subsurface that can be geologically mapped with confidence. Site characterisation also relies on existing well data from the field and surrounding area. These provide depth-conversion calibration points for 3D models based on the seismic. Well data are provided by the North Sea Transition Authority (NSTA) and British Geological Survey (BGS) through their open access data resources.

Table I.1: Summary of wells in area and available data.
G, S, D stands for gamma, sonic, density; CS for check shot.

Five exploration wells are located within the study area, including the Lybster discovery well, 11/24-1. A further seven wells were selected from the surrounding region, based on location and data quality, to establish the stratigraphic and structural relationship between the field and its surrounding geology. Table I.1 documents the studied wells. Each of the wells penetrate beyond the mid Jurassic strata that contains the oil field reservoir. However, few wells extend beyond the Upper Triassic, setting the stratigraphic floor for the evaluation above the Permian basement.

Premier Oil drilled the ‘wildcat’ discovery well, 11/24-1, in 1996. Production tests flowed 415-1850 barrels of oil per day from the Jurassic Beatrice Sandstones. The field was further developed in 2008 when Caithness Petroleum drilled an extended reach well, L11/24-3 and side-track, L11/24-3Z from onshore.

Both the well and side-track showed minimal oil. Caithness Petroleum re-entered L11/24-3 and drilled a second side-track, L11/24-3y, to intersect 11/24-1, the discovery well – Fig 3.2. The new side-track successfully proved hydrocarbon reserves, and in 2011 Caithness Petroleum re-entered the well to start production in 2012. The field was purchased by IGas in 2013, followed by a 5-month workover period to improve the well. However, the workover failed to prevent an increasing gas-oil ratio, and increasing water cut. IGas suspended production from the well in 2014 during a period of low oil prices.

I1 Site characterisation | Attribute suitability

Injectivity: The production history suggests good injectivity – Figure 6. The field area is in hydraulic connection with the regional aquifer. The measured permeability, 200 mD (range 10-4,000 mD) reflects the observed reservoir lithologies which are predominantly darcy-permeability sandstones with minor interbedded siltstones. Reservoir thickness is adequate at 5-25 m and the reservoir units, the Beatrice A and B Sands, extend across the basin.

Seal: The history of oil and gas retention for many millions of years at Lybster and Beatrice is evidence for a highly suitable seal. The Uppat Shale is 23 m thick in well 11/24-1. The caprock was not sampled at Lybster but a 13 m core is available from Beatrice, well 11/30a-8. The shale was described as homogeneous but not tested for permeability – Appendix F.

Faults: The main fault that bisects the field is considered to be sealing as the western half of the field contains no hydrocarbons. A number of smaller associated faults lie within the field boundary. Two risks associated with faults, leakage and seismic reactivation, need to be de-risked at appraisal with a fault analysis study including a geomechanical assessment.

Wells: The discovery well, 11/24-1, was plugged with three cement isolation barriers, abandoned, and cleared to seabed in 1996. As such, it does not represent a leakage risk but cannot be repurposed for CO₂ injection. The production well, 11/24-3y, is suspended with its surface infrastructure in place. A dedicated study on the suitability for repurpose as a CO₂ injector needs to be to a condition of an appraisal licence.

CO₂ density: The field depth, 1,430 m, is ideal for dense phase CO₂ storage. The reservoir temperature and pressure, 47 °C and 15 MPa, mean that the reservoir CO₂ density will be 725 kg/m³. This will make it highly miscible with the residual oil, 726 kg/m³. The CO₂ will trap between the existing natural gas cap, 110 kg/m³, and porewater below, 1030 kgm³. This sandwich configuration is an ideal fluid trap for a depleted oil field. The oil-free area to the west of the fault will function as saline aquifer store with about 90% of the supercritical CO₂ rising to trap beneath the caprock, and about 10% dissolving into the surrounding porewater.

Migration: The four-way dip trap geometry is ideal for preventing lateral migration. The structural spill point is to the northeast of the field at 1,500 m: a saddle to the up-dip Braemore prospect. The expected capacity, 2 Mt, assumes no fill beyond the oil-water contact at 1490 m. The appraisal licence will require a site boundary that is likely to be defined by the structural spill point and dynamic simulation of the expected plume extent.

Location: The near-shore location and proximity to sources of high-value bio-CO₂, primarily from local distilleries, makes the location exceptional. Access by road places requirements and limits on annual injection rates relating to trucked loads and on-site temporary storage.

Monitoring: Not assessed. The monitoring location for the storage area is in shallow waters of around 40 m depth. This will require a suite of geophysical equipment suited to the local environment. The appraisal licence will require a plan for monitoring storage that focuses on the injection well and remote monitoring from the surface.

Intervention: Not assessed. The requirements and cost of intervening in the case of poor well performance or unexpected migration out of the storage complex has not been assessed.

I2 Site characterisation | Capacity estimate

Structural Volume

Storage area 3 km² (Assumes only half the field area of 6 km² is available)

Net thickness 15 m (Assumes an average value from the range: 5-25 m)

Porosity 15% (Assumes an average value from the range: 8-22%)

Net to Gross 68% (Estimated from the gamma ray log for 11/24-1)

CO₂ density 725 kg/m³ (Dense phase at ambient reservoir conditions)

Saturation 62.5% (Assume an average value from the range: 50-75%)

High CO₂ capacity, optimistic: 9.4 Mt = 6E06 x 21 x 0.19 x 0.76 x 740 x 0.70 kg

Mid CO₂ capacity, expected: 2.1 Mt = 3E06 x 15 x 0.15 x 0.68 x 725 x 0.625 kg

Low CO₂ capacity, pessimistic: 0.35 Mt = 1.5E06 x 9 x 0.11 x 0.6 x 710 x 0.55 kg

Produced Volume

Produced reservoir fluids 131,227 m³ (Oil: 14%, Gas: 76%, Water: 10%)

CO₂ density, reservoir conditions 725 kg/m³ (Pressure: 15 MPa, Temp: °47 C)

Minimum and highly conservative: 95.1 kt = 131,227 m³ x 725 kg/m³

STRUCTURAL VOLUME: A structural volume estimate of storage capacity assumes the pore space is available for CO₂. A mid-range value of 2.1 Mt indicates the potential for a reasonably sized CO₂ storage project. The limitations and range assumptions for the pore volume estimate should be accounted for within the low estimate which assumes the smallest area and poorest reservoir quality, representing a minimum capacity of 350,000 tonnes of CO₂.

PRODUCED VOLUME: The fluid replacement capacity for a produced field is often useful in establishing a reliable ‘proven’ storage capacity estimate, based on known volumes which have been produced from the reservoir. However, the Lybster field was in production for a surprisingly brief period, which means that a production volume estimate will be extremely low, and hardly representative of the available pore volume. A storage capacity of 95,100 tonnes is estimated from produced volumes of oil, gas, and water using this method.

I3 Site characterisation | Stratigraphic analysis

An assessment of the stratigraphy was completed using composite logs, geophysical logs, core photographs, and published studies (Thomson & Underhill, 1993; Richards, et al., 1993; Tamas, et al., 2022). Where data gaps existed within the study area, wells from the surrounding region with a similar stratigraphy were looked at as analogues for Lybster.

The Lybster site assessment uses standard criteria established in previous CO₂ storage projects (Chadwick, et al., 2008; Alcade, et al., 2021; IEAGHG, 2022). Lybster attributes are assessed using a traffic light, where green indicates favourable properties, red indicates unfavourable properties, and orange indicates intermediate values. Table I2 documents the outcomes for storage criteria.

Table I.2: Traffic light assessment of reservoir and seal attributes for CO₂ storage

Secondary reservoir: The Brora Sandstone and Alness Spiculite members display good reservoir characteristics as indicated by their low-gamma ray values and lithologies, but poor permeability within the two formations suggests a reservoir quality unsuitable for CO₂ storage.

Secondary seal: The Kimmeridge Clay Formation exists as a thick regional succession of fine siltstones and mudstones above the Uppat Mudstones. A stable gamma-ray curve in all well logs is indicative of a homogenous, low-porosity formation, suitable for a secondary seal.

I4 Site characterisation | Structural analysis

A four-way dip closure, or dome, associated with an anticlinal structural deformation traps buoyant CO₂ and tightly constrains the migration of CO₂ within the crest of the structure. The main fault which crosscuts the field area is identified as a potential leakage pathway and requires further investigation to de-risk the site, but its proven history of trapping hydrocarbons is a positive indicator.

The Lybster structure formed at a flexure point during tectonic inversion of the Inner Moray Firth area. A fault segments the field roughly in half: a western compartment with no oil as proven by wells 11/24-3 and 11/24-3z; and an eastern compartment where the Beatrice Sandstones are oil bearing.

The Uppat Mudstones are an effective top seal, preventing upward migration. The adjacent structural high at the Braemore prospect, and patterns identified across the in-line seismic profile, suggest a series of anticline-syncline pairs along strike, parallel to the coastline.

The continuation of the reservoir along strike presents the possibility of increased storage capacity. Injecting down-dip of the trap and into the water-leg of the reservoir on the migration path but outside the structural closure increases the storage capacity with a proven trap at the end of the migration path.

I5 Site characterisation | Production Data

Existing exploration and production well data from Lybster allows for a detailed analysis of the reservoir pressure conditions and residual fluids within the field, both of which are significant for CO₂ storage capacity calculations. The Lybster field is hydrostatically pressured with open boundaries to a regional aquifer, the Beatrice Formation. This is as a positive indicator for CO₂ storage as a reservoir with open boundaries allows for the displacement of pore fluids and the dispersion of injected-related pressure. This increases the storage capacity compared to a field with closed boundaries.

Production data suggests the field contains a column of residual natural gas. This is also favourable for CO₂ storage as gas is more compressible than oil or water, increasing storage capacity. As CO₂ is denser than natural gas at reservoir conditions, 724 kg/m³ vs 110 kg/m³, the CO₂ will occupy the bottom of the reservoir when injection stops with the remaining natural gas at the top of the reservoir. This acts as a gas barrier which reduces the risk of CO₂ leakage through the top seal.

Table I.3: Historic production data for Lybster oil field.