Research completed in May 2024

DOI: http://dx.doi.org/10.7488/era/4964

This work was carried out in accordance with the requirements of the international quality standard for Market Research, ISO 20252

Executive summary

Aims

This study carried out a programme of deliberative public engagement to inform the design and delivery of Just Transition Plans in the transport, built environment and construction, and land use and agriculture sectors.

This report summarises findings from two phases of public engagement that aimed to:

  • uncover informed, considered and collective public opinion on the fair distribution of costs and benefits in the transition to net zero emissions in these three key sectors (phase one)
  • gather learning into the factors influencing any changes in participants’ attitudes, beliefs or values as a result of engaging in this deliberative process (phase one)
  • gather views on how specific policy options within the transport and built environment sectors could be implemented fairly (phase two).

Overall findings and implications

  • We all have something to contribute towards the costs of the transition to net zero, including the Scottish Government, businesses and citizens.
  • Participants wanted to see an equitable approach, meaning that everyone contributes but not all in the same way or by the same amount. They felt that a fair distribution of costs must take account of different circumstances, including:
  • the amount of control someone has over their level of emissions
  • the availability of lower carbon alternatives
  • their ability to pay.
  • Participants supported a progressive form of taxation to fund some of the changes required across key sectors, with higher income individuals and businesses paying more.
  • Participants emphasised the need for systems that protect those least able to afford transitions, including exemptions and support for low-income individuals and for those facing health or disability challenges.
  • A combination of incentives and disincentives was broadly supported and was considered the most effective way to encourage (and discourage) certain behaviours.
  • The timing of any new taxes, charges or penalties was felt to be a key consideration for ensuring a balance between motivating people to change while not unfairly penalising them. A phased, staggered approach was seen as one way of achieving this balance.
  • The importance of clear and transparent communication with the public was emphasised. It was agreed that the public should feel part of the decisions that affect them through ongoing public engagement.

Deliberative process and impact on views

  • Participants said they had developed and deepened their understanding of the scale and complexity of a just transition to net zero, in this deliberative process.
  • Initially, participants thought that those who emit the most should contribute the most. However, upon further deliberation and consideration of the impacts of this on different groups, they had a strong sense that this approach would be unfair if it did not consider those who have more limited control over their emissions (such as some businesses or people living in rural areas).
  • The factors that contributed most to participants’ views deepening or shifting were hearing from participants with different backgrounds; learning from experts; engaging with hypothetical scenarios and considering impacts from a range of perspectives; consolidating their views through voicing them in group discussions; and having time to reflect on the issues between sessions.
  • Overall, participants valued the opportunity to learn about, discuss and contribute to Scotland’s just transition. They emphasised the importance of ongoing engagement with the public, through these types of engagement.

Key messages for the transport sector

  • Achieving a decarbonised transport system will require significant investment in infrastructure across Scotland.
  • For any form of Road User Charging to be considered fair, participants concluded that different circumstances and needs should be considered, rather than taking a blanket approach. They felt there should be concessions or exemptions for some groups, including people on low incomes, those with health conditions or disabilities, elderly people, those living in rural communities and those who rely on their car for their livelihoods.
  • Participants felt that Road User Charging would be unfair in rural areas unless there was improved access to public transport.
  • They also highlighted the importance of allowing sufficient time for people to prepare for any changes being introduced.

Key messages for the built environment sector

  • Participants suggested that those who profit from buildings – including businesses in the construction sector and those owning multiple properties – should pay for the changes needed to lower the carbon emissions of those buildings.
  • To ensure the heat transition is paid in the fairest way possible:
  • There should be support available to all households but the amount of support should vary depending on circumstances, with those on low incomes and those with older properties entitled to the most government funding.
  • There should be protections in place, such as exemptions from penalties for vulnerable groups, rent increase caps to protect renters, regulation on the installation of new heating systems and a fair appeals process.
  • Other considerations included careful consideration around loans to avoid pushing anyone into financial hardship, reassurances around the efficacy of new heating systems and clear communication with the public about the changes required.

Key messages for the land and agriculture sector

  • Participants agreed that the costs of adopting a more climate friendly approach to food should be shared between the Scottish Government, businesses (including farmers but also other businesses along the supply chain such as supermarkets) and consumers. It was also felt that landowners should bear some of the costs.
  • Suggestions to ensure a fair transition in the way we produce and consume food:
  • Consider people’s ability to pay, with protection in place for low-income consumers.
  • Subsidise farms, favouring smaller farms with less income. Support payments should be specifically allocated towards covering the costs of reducing carbon emissions.
  • Give farms sufficient time and opportunity to change and reduce emissions before introducing any financial impacts such as additional tax.
  • Ensure that consumers have easier access to sustainable food options.

Introduction and method

This report presents the findings from public engagement regarding a just transition to net zero in three key sectors: transport, built environment and construction, and land use and agriculture. The research was carried out by Ipsos on behalf of ClimateXChange and the Scottish Government.

Background to the research

The Scottish Government’s approach to climate change is underpinned by a commitment to deliver a just transition. The Climate Change Plan 2018-2032 update[1] emphasises that a just transition “puts people, communities and places at the heart of our approach to climate change action.” The plan recognises climate change as a human rights issue and the transition to net zero as an opportunity to tackle inequalities.

The Climate Change (Emissions Reduction Targets) (Scotland) Act 2019[2] places statutory obligations on the Scottish Government to develop Climate Change Plans and demonstrate how just transition principles have been taken into account when preparing these.

The 2019 report[3] from the Just Transition Commission outlined recommendations for achieving a just transition to net zero. In its response, the Scottish Government set out its Outcomes, as part of its National Just Transition Planning Framework, and committed to producing Just Transition Plans for high-emitting sectors, sites and regions.[4] The draft Energy plan was published for consultation in January 2023[5]. Plans for transport, built environment and construction, and land use and agriculture are currently in development.

Alongside these policy commitments, the Scottish Government has also emphasised the importance of public engagement in the transition to a net zero and climate ready Scotland. The Climate Change Public Engagement Strategy (Net Zero Nation)[6] sets out the framework for engaging the Scottish public in the transition to net zero, including the objective “people actively participate in shaping just, fair and inclusive policies that promote mitigation of and adaptation to climate change.”

Objectives

Against the policy background outlined above, ClimateXChange and the Scottish Government commissioned a programme of deliberative research to inform the design and delivery of the outstanding Just Transition Plans in transport, built environment and construction, and land use and agriculture. The research initially had two objectives:

  • To uncover informed, considered and collective public opinion on the fair distribution of costs and benefits in the transition to net zero emissions in the three key sectors.
  • To gather learning into the factors influencing any changes in participants’ attitudes, beliefs or values as a result of engaging in this deliberative process.

As the research progressed, a third objective was introduced:

  • To gather views on how specific policy options within the transport and built environment sectors could be implemented fairly.

Ultimately, the research aimed to directly inform the Just Transition Plans and wider work on the transition to net zero across relevant policy areas.

Methodology

Deliberative approach

A deliberative approach was chosen for this research due to the complex and multi-faceted nature of Scotland’s just transition to net zero. Deliberative engagement is about putting people – through informed discussions, involving diverse perspectives, and understanding lived experiences – at the heart of decision making. It differs from other forms of engagement in that it allows those involved to spend time considering and discussing an issue at length before they come to a considered view. Previous research has noted that the complexity of views around climate change means that this topic lends itself well to deliberative forms of engagement.[7]

This deliberative research used a public dialogue approach,[8] a process whereby members of the public interact with experts and policy makers to deliberate on issues relevant to future policy and research decisions. The research was delivered in two phases, each of which are outlined below.

Phase one overview

Phase one brought together a group of 30 people from across Scotland to address the first two objectives (gathering views on a fair distribution of costs and benefits in the transition to net zero emissions, and gathering learning into the factors influencing participants’ attitudes as a result of engaging in a deliberative process). They met online for six workshops held between August and October 2023, each lasting between two to three hours, with the overall aim of answering these overarching questions in relation to each sector:

  1. As we transition to net zero, who should pay for the changes that will be needed?
  2. How can we make sure that system of payment is fair?
  3. How can we make sure that everyone benefits?

An outline of the process and each workshop can be found in the Appendix A.

Online community

Alongside the workshops, an online community helped support ongoing engagement with the participants, facilitating continued discussion and reflection. The online community was hosted on Community Direct (an Ipsos proprietary platform) and discussion was moderated by Ipsos researchers.

Recruitment

The aim was to achieve a sample of at least 30 participants with over-recruitment to account for potential cancellations or drop-outs. In the end, 30 participants started the process and 27 continued to the end.

    Participants were recruited by Fieldmouse, a specialist recruitment organisation, who contacted members of their existing panel of potential research participants by telephone. A screening questionnaire was used to capture demographic information about the participants, designed to help ensure the group’s profile was broadly reflective of the Scottish population. Quotas were set on various characteristics (see Appendix B) in line with national population data. However, those living in a remote rural or island area, from an ethnic minority group, with a disability or long-term health condition, or on a lower income were over-sampled to ensure sufficient representation of these groups.

    To support and enable participation in the research, and in line with industry standards, each participant was paid £400. Where necessary, training was provided on how to use the technology and access the meeting platform. This allowed Ipsos to enhance the diversity of those taking part. Workshops were also arranged to take place outside of regular office hours to increase participation.

    Materials

    Discussion guides (Appendix C) and stimulus (Appendix D) were developed by Ipsos and approved by ClimateXChange and the Scottish Government. A range of specialists joined at different points in the dialogue to provide information that would be useful for participants’ learning and deliberation. Presentations were developed by specialist speakers, in consultation with Ipsos, and these presentations were given live during the main plenary sessions. The specialists were available to answer questions from participants in sessions. Presentation recordings were hosted on YouTube and shared via private links for members to watch again in their own time in preparation for subsequent sessions.

    Stimulus were used to encourage participants to consider different impacts of the transition. Ipsos developed fictional characters to help participants think about the impact of potential changes on different groups; and fictional future systems of payment to help participants consider what a fair distribution of costs would look like.

    Fictional characters used throughout the workshops

    Alice is 28. She lives in Dundee in a third-floor flat that she shares with two other friends. Alice works as a nurse in Ninewells Hospital. She works shift patterns, meaning that she often finishes after 10pm. Alice’s income is £28,000 per year.

    David and Sarah are married. David is 42and Sarah is 40, and they have two children, Noah (10) and Katie (7). David works as a financial advisor and Sarah works as a website designer. They live in Bearsden, on the outskirts of Glasgow. David and Sarah’s combined income is £105,000 per year.

    Lorraine is 60. She lives on a farm in rural Aberdeenshire where she raises cattle and turkeys. Lorraine employs staff who work on the farm and the farm shop. Her son and daughter also work for the business. Lorraine’s income is £55,000 per year.

    Maria is 36. She lives in a flat in Moffat with her daughter, Ella (3). Maria has mobility issues and a respiratory condition that sometimes affects her breathing. Maria looks after Ella full time and does not have another job. Maria’s income from benefits is £21,500.

    Nadeem is 50. He lives on the Isle of Lewis, about 10 miles from Stornoway. He lives with his son, Ajay (23). Nadeem is a builder and Ajay works in a shop in Stornoway. Nadeem’s income is £45,000 per year and Ajay’s income is £24,000 per year.

    Phase two overview

    Phase two brought together a group of 20 people from across Scotland to address the third research objective (exploring specific policy options). They met online for three workshops held in March 2024, each lasting between two and three hours. An outline of the structure of each workshop is shown in Appendix A.

    Recruitment

    The aim was to achieve a sample of at least 15 participants with over-recruitment to account for potential cancellations or drop-outs. In the end, 20 participants started the process and 19 continued to the end.

      Participants were recruited by telephone using a screening questionnaire, as per phase one (see Appendix B for quotas and over-sampled groups). Participants were each paid £140 for their participation.

      Materials

      Discussion guides (Appendix C) and stimulus (Appendix D) were developed by Ipsos and approved by ClimateXChange and the Scottish Government. Presentations given in session one were developed by specialist speakers and Ipsos. Presentation recordings were hosted on YouTube and shared via private links for members to refer back to.

      In the remaining workshops, participants focused on two policies; Road User Charging (RUC) and the heat transition in domestic properties. For each policy, they explored two approaches before forming conclusions. Some of the fictional characters from phase one were used to help participants think about the impact of different approaches on a range of groups and to consider trade-offs.

      How to read this report

      The main body of this report provides a summary of key findings, while appendices 1-3 provide more detailed discussions relating to each sector.

      Readers are reminded that the report contains findings from two deliberative processes which were staged in two phases. Phase one’s remit was to consider the broader principle of fairness across three sectors, while phase two’s remit was to consider how specific policies could be implemented fairly within two of those sectors. Findings related to specific phases are highlighted at appropriate points, however, some chapters draw on both to minimise repetition (for instance, in the next chapter, where the starting points for both cohorts were similar).

      More broadly, the conclusions set out and discussed in this report are intended to inform the Scottish Government’s development of Just Transition Plans. The report includes verbatim assertions by participants and their understanding of the issues. These are not intended as authoritative statements of fact, but they tell us something valuable about how key issues have been perceived and understood by members of the public.

      It should also be noted that, at different points in the dialogue, participants engaged with hypothetical scenarios and policy approaches designed to help participants engage with the issues. They were not necessarily reflective of the Scottish Government’s powers or its intended course of action.

      Further, it should be noted that whilst the method of qualitative analysis is systematic and rigorous and the conclusions robust (being based on groups that are reflective of the diversity of the wider public), the analysis does not seek to quantify findings nor does it indicate statistical significance from a representative sample. This report offers a valuable insight into public perspectives on the key questions posed to them after receiving and deliberating on key information relevant to the questions. It will also provide valuable insights for engaging the public on policies which will have a significant impact on their lives.

      Participants’ starting point

      This chapter outlines the initial views of participants as they began the dialogue. It includes the views of both cohorts (i.e. participants taking part in phase one or phase two) in their respective first workshops, which covered similar content.

      Familiarity with key terms

      In both phases, participants were generally aware of and familiar with the term “net zero”. When asked to describe what this meant, they used words such as “reducing”, “balancing” or “offsetting our emissions”. Reference was also made to specific behaviours linked with the transition to net zero, such as changing modes of transport, using renewable sources of energy, and eating less meat or dairy. At this early stage there was some concern about the scale of the challenge of reaching net zero, and a desire to learn more about how we get there.

      “I recognise it’s something we should work towards but there are so many challenges to cancel out what we are doing. It would take radical changes to people’s lives. I find it hard to work out how on earth we will get there, which is why I really want to listen to the experts.” (Participant, phase 1, workshop 1)

      There was also some scepticism about how the term “net zero” was used, with some asking whether it actually translated into real change, and others asking whether the target was long term enough. This reflected fairly high levels of concern about climate change among these participants, and a desire to see action as a result of the dialogue.

      Participants were much less familiar with the term “just transition”. Among the few participants who had heard the term, they understood it to mean the sharing of responsibility for the transition to net zero, while protecting groups such as those in rural areas and those struggling financially. Others spoke of it specifically in terms of jobs, and the aim of protecting people who worked in traditional fossil fuel industries that may become obsolete (using the example of oil workers in Aberdeen). Overall, a just transition was seen as challenging and questions were raised such as “is it achievable?” and “who can be trusted to take the lead on this?”

      Participants expressed a general interest and concern in the topic of climate change and hoped to learn more about the policy developments, explore how they as individuals could act to help tackle climate change, and to both hear from others’ perspectives and feel that the Scottish Government is listening to their views.

      “There’s such a lot of different opinions, and living in a rural area we might have different opinions to those in a town or city. I wanted to find out more and join in.” (Participant, phase 2, workshop 1)

      Reactions to the first presentations

      In the first workshop of phase one, participants learned about key concepts that would help them in later deliberations. They heard three presentations which covered: Scotland’s current approach to net zero targets; the principle of a just transition and the work of the Just Transition Commission; and the Scottish Government’s Just Transition Plans for the three key sectors.[9] Phase two participants heard similar introductory presentations, but the second one focussed on the Scottish Government’s Just Transition Plans for the three key sectors; and the third one on wider public engagement on Scotland’s just transition.

      As well as generating a number of questions (which were responded to by expert presenters) the presentations highlighted some broader issues of importance for participants. Some emphasised their concern about the scale of change required to reach net zero and how challenging it will be to change attitudes and behaviours. Others felt that achieving a just transition would be very difficult due to the range of different circumstances to be taken into consideration, particularly the differences between urban and rural areas.

      “It’s a huge undertaking. I don’t think we can accommodate for every single person in the country not to be left behind.” (Participant, phase 1, workshop 1)

      Some felt reassured by the existence of the Just Transition Commission and the Scottish Government’s Just Transition Plans, but there was also a lack of clarity for others around the measures that would be put in place to ensure a just transition. There was therefore a broad interest in understanding more about what these would mean in practice.

      “We’ve heard all of this before. I want some of this to get put into practice. I haven’t seen anything […] We talk about emissions and everything but nothing has been put into practice to say “we start from here”. We don’t even know where the money is coming from. The transition part is expensive for ordinary households.” (Participant, phase 2, workshop 1)

      In phase two there was some scepticism among participants about the Scottish Government’s ability to implement changes fairly (based on perceptions of how LEZs in Glasgow and Aberdeen had been introduced). Given the focus on phase two on specific policies in the transport and built environment sectors, there were also concerns raised about the high upfront costs of switching to EVs or making home energy improvements (based on participants’ own experiences). Participants wanted to see more evidence of the efficacy of low carbon technologies before they would be willing to spend money on them.

      Overall, participants generally found the information in the presentations useful and informative. They stressed the importance of the wider public being made aware of Scotland’s net zero targets and the scale of changes required to meet them – the types of information that participants had just heard.

      “We need to make sure that people in this country know how [the transition] is going to affect them. You need to give real examples, concrete examples of what is going on in Scotland.” (Participant, phase 1, workshop 1)

      Early thoughts on fairness

      At the end of the first workshops (in both phase one and two), participants shared their reflections on what a just transition to net zero would mean. Their responses highlighted that, despite a lack of familiarity with the term, participants were engaging with some of the principles that underpin a just transition. These early themes included the following:

      • Costs should be distributed. Participants felt there should be some form of shared responsibility. There was a broad sense that everyone should contribute something, but it was also highlighted that these contributions would not be equal (as people would not be starting from equal positions). It was also felt that some individual actions would need to be supported by systemic changes.
      • Different needs and circumstances should be taken into consideration. In particular, fairness was linked to acknowledging people’s different financial circumstances and ability to afford the changes that might be expected of them. It was also linked to understanding the differences between urban and rural communities in relation to access to transport infrastructure.
      • Awareness-raising and public engagement are important to help people to understand why change is needed and what changes we can all make. It was stressed that consultation and engagement should focus on those who are most likely to be affected by the transition.
      • The transition should not result in further inequality and could even be an opportunity to tackle existing poverty and inequality. Particularly among participants in phase one, there was an aspiration that the transition to net zero should not results in the loss of jobs or communities.

      These early themes were revisited and developed further by participants in the remaining workshops, as they learned about specific sectors, deliberated on a fair distribution of costs and benefits, and (in phase two) considered different policy options.

      Principles of fairness across sectors

      In phase one, individual sectors were covered in three separate workshops on transport, built environment and construction, and land use and agriculture. In these workshops participants heard presentations which outlined some of the changes that may be needed in the sector.

      Participants were presented with a vision for the sector in 2040 based on the Scottish Government’s discussion papers and explored this in the context of different fictional characters and how they might be impacted. The visions for each sector outlined changes such as:

      • Transport – private cars produce fewer emissions; alternatives to private cars (e.g. public transport, car sharing etc) are readily available; there are measures to discourage car use (e.g. road charges); and new transport jobs have been created.
      • Built environment and construction – buildings are more energy efficient; places are designed and used differently (e.g. to cope with extreme weather, or reduce flood risk); the construction sector is more sustainable, using more locally sourced and natural supplies; and new construction jobs have been created.
      • Land use and agriculture – land is used differently, with less dedicated to food production and more to planting trees, peatland restoration and supporting biodiversity; people are encouraged to consider the climate impacts of food and waste less food; and land and agriculture based jobs have changed.

      Using these examples, and based on their own lived experiences, participants answered these questions for each sector:

      1. As we transition to net zero, who should pay for the changes that will be needed?
      2. How can we make sure that system of payment is fair?
      3. How can we make sure that everyone benefits?
      4. Answers to those questions were developed in detail in the final workshop and are outlined in the conclusions to phase one. Five common, cross-cutting themes emerged across sectors that are summarised below.

      Cross-cutting themes

      Support for those most impacted by the transition

      Having heard about the potential changes that may be required to reach net zero in each sector, participants identified certain groups that were likely to be impacted more than others. It was felt that these groups would require support so that they did not experience financial or other types of disadvantage as a result of the transition. These groups were:

      • Individuals and businesses in rural communities. Across all sectors, it was felt that rural areas would face specific challenges in meeting the aspirations outlined in the sectoral visions. These barriers included: a greater reliance on cars and a lack of public transport infrastructure; high costs of upgrading heating systems due to older, less energy efficient properties; and less easy access to sustainable food options in shops. It was felt that these types of barriers should be accounted for in the planning for the transition.
      • People who are unable to afford to make changes. Having heard about the potential changes needed in all three sectors, participants felt that these were likely to be expensive. There was particular concern about the impact of those costs on people who would already be considered financially vulnerable, including those on lower incomes and those struggling with the cost of living. This concern carried through to participants’ later views on fair systems of payment, and the importance of considering an individual’s ability to pay.
      • Businesses unable to afford to make changes. Smaller businesses, including small farms, were viewed as being more financially vulnerable and less likely than larger companies to be able to cover costs of the transition.
      • People working in jobs most likely to be impacted by the transition. This included: farmers who may be required to change the way they use land and produce food; those who drive for a living who may be impacted by the move to a decarbonised transport system; and the construction sector, who would need to reskill people to retrofit or build new energy efficient buildings.

      Shared responsibility for paying for the transition

      A theme throughout the sector-focussed workshops was that we all have something to contribute. When discussing each sector, it was felt that the costs of transitioning to net zero should be shared among the Scottish Government, businesses and citizens:

      • The Scottish Government should fund infrastructure that helps the public to make lower carbon choices (e.g. funding EV charging infrastructure, free public transport) and provide grants or loans to help people with upfront costs such as replacing heating systems. This support was seen as essential to help those who would not be able to afford these changes. It was also felt that the Government should continue to subsidise farmers, as without these subsidies farms may not survive.
      • Businesses should pay for making changes, particularly if they are going to benefit financially. This was seen as particularly the case for the construction sector and parts of the transport industry, but also extended to farmers and the wider food supply chain. The overriding theme was that profit-making businesses would both have the ability to pay (because they could afford to) and a responsibility to pay (if they would benefit from the changes).
      • Citizens. It was felt that the public bears some responsibility to pay for changes to our homes, our forms of transport, and the food we consume. It was also agreed that those continuing to make high carbon choices should bear the cost of those choices. However, there were a number of important conditions to this, including the affordability of the changes, and the extent to which someone has alternative choices available to them. These conditions, and how they would be accounted for, were explored in more detail in later workshops.

      There were also some specific groups identified as being responsible for changes within individual sectors, including landlords and property owners who it was felt should be responsible for making properties more energy efficient or transitioning to clean heating systems; and landowners who participants suggested should be taxed to help pay for some of the changes to land use needed.

        No ‘one size fits all’ approach

        Reflecting the points above, it was felt that different approaches would be needed to accommodate the circumstances of and likely impacts on different groups. Across the sectors, the following characteristics were seen as important to bear in mind:

        • The extent to which there are options available to support low carbon choices. For example, if there is a lack of public transport options (as in rural areas) or if the use of EVs is not practically feasible, then it would be unfair if people in those areas had to pay to fund EV or public transport infrastructure.
        • The ability to pay, so that those on lower incomes are not further disadvantaged by having to pay for changes they are unable to afford. This extended to businesses, as it was felt that farmers, small businesses, and those struggling financially should be provided with support towards making changes.
        • Having needs that may impact on behaviours, such as having a disability or health conditions that requires use of a car.

        In these sector-focussed workshops, there were mixed views on the extent to which systems of payment should be based on levels of emissions. On the one hand, there was a view that individuals who continue to drive high emitting vehicles or property owners who had neglected to make the necessary changes should be obliged to pay more. On the other hand, it was felt that higher emitters may not have a viable alternative, either because of where they live (i.e. those in rural areas may have no alternative to cars) or because of income (i.e. being unable to afford an EV or to make energy efficiency improvements in their homes).

        These views on fair systems of payment were explored in more detail, using hypothetical scenarios, in the penultimate workshop.

        Acceptance of the possibility of taxation

        1. Before they had explored potential systems of payment in detail, participants had already discussed the possibility of taxation to support the costs of the transition. While there was an expectation that the Scottish Government would contribute towards the costs (as noted above), it was also acknowledged that those costs paid could end up being borne by the individual anyway through taxation. A progressive tax was supported in principle, based on both ability to pay and ability to choose, but participants did not discuss (at this stage) the details of how that would be implemented.
        2. Some participants felt that payments should be covered by a tax on larger, profit-making businesses, particularly whose practices are not climate-friendly (e.g. those who import food from overseas). At the same time, there was recognition that penalising businesses too harshly could force them to leave Scotland which would risk jobs and move carbon emissions elsewhere. There was some support for a “food miles tax” or other form of high carbon products tax, but only if other more sustainable food options were available and affordable.

        Need for education and time

        When reflecting on the likely changes in each sector, participants felt there was need for further education, engagement, and public consultations around the transition. They felt that the necessity and benefits of transitioning to net zero should be clearly communicated to all citizens.

        It was also stressed that people and businesses would need sufficient time to adapt to the changes required for the transition to net zero, and that this would require advance notice of regulations, taxes or other charges, or incentives.

        How our fictional characters fared across all sectors

        When reviewing the impacts of the transition on our fictional characters, participants highlighted many of the points raised above, particularly the importance of taking into account factors such as location (whether they lived in urban or rural areas), ability to choose, tenure, income, occupation and other lifestyle factors.

        Who benefits from changes?

        Alice benefits from improvements to public transport which she could use to go to work in Dundee, rather than relying on her petrol car. However, it was pointed out that more regular buses would not necessarily make her feel any safer travelling to work at certain times (one of the main reasons she avoided using public transport). It was felt that Alice would also benefit from improved energy efficiency in her rented flat, provided upgrades were carried out by her landlord and that additional costs associated with this were not passed on to her. She would also benefit if she was able to afford a high-quality new build in future (as she was hoping to buy a property).

        An improved public transport system would benefit Maria, who did not drive. This would mean she would be less reliant on taxis, saving her money. As a tenant (in a flat with an EPC rating of C), she might also benefit if the housing association made her home more energy efficient and if appropriate measures were introduced to reduce the risk of flooding to her property (her ground floor flat was located in a flood risk area).

        Nadeem (a builder) could benefit from an increase in demand in the construction sector and from training opportunities available on new construction techniques, provided these are accessible to him and his staff.

        David and Sarah would benefit from the move to a more sustainable food system because their lifestyle choices were already in line with this vision (as they largely bought locally produced food, and were on the waiting list for an allotment), and they could afford to make further changes or absorb increased costs.

        Who might be negatively impacted?

        Lorraine would be negatively impacted across all sectors. As a farmer, she may be required to change her use of transport but have limited low carbon alternatives for agricultural vehicles and personal car use (based on the view that the sort of rural area where she lives is unlikely to have the level of integrated transport needed). It was also noted that her property would likely require a lot of work to make it more energy efficient, which she may not be able to afford. Lorraine’s livelihood was also identified as at risk given the challenges of diversifying land use and the need to increase prices to cover the cost of making those changes. Her age was noted as a factor in that she may not have time to benefit before she retires.

        It was felt that Nadeem would be negatively impacted because of his reliance on a van for his work and the fact that he lives and works on the Isle of Lewis. Based on the assumption that public transport would not be a viable alternative, it was considered unfair that his earnings would be affected by road charges. Nadeem and Ajay (both vegan) may lose out if a focus on local food products means they have less choice in their diet. This could be exacerbated by additional challenges transporting goods to where they live. Ajay’s job in a food shop might be at risk if it is adversely affected by increased prices.

        It was felt that Alice may see her rent increased to cover the costs of making her home more energy efficient. This would affect her ability to save for a new property, especially if very high energy efficiency standards led to increased costs for new builds. Alice and Maria were both identified as at risk of losing out if food prices increase because of their concern about the current cost of groceries. They may also struggle to access local produce; Maria because of her child care requirements, and Alice because of her shift patterns.

        Although David and Sarah would have to adapt their lifestyle in relation to transport (e.g. they would likely have to reduce their use of two cars) it was felt they would be able to adapt and absorb the costs with their income. However, it was recognised that there would need to be some flexibility or exemptions given for their use of the car when travelling with their disabled son.

         

        Fair systems of payment in practice

        In the penultimate workshop participants explored what a fair system of payment might look like across all three sectors. Hypothetical scenarios were created and used as a way of testing participants’ views of fairness. These were based on information provided in the workshop presentations and ideas raised by the participants themselves during breakout discussions, and were not necessarily reflective of the Scottish Government’s powers or its intended course of action. It should also be noted that participants’ interpretations of the scenarios should not be read as authoritative statements of fact, but rather reflect how key issues were perceived and understood.

        Hypothetical scenario 1: Those who earn the most pay the most

        In this scenario, costs would be covered through a progressive form of “net zero” tax applied to people in Scotland earning over a certain amount (see figure 4.1).

        Figure 4.1. Scenario 1: those who earn the most pay the most

        Powerpoint slide summarising scenario 1 in which those who earn the most pay the most: grants would be available to those on lower incomes to help cover the costs of switching to an EV or bringing homes up to an EPC rating of C or above, but higher earners would pay these costs themselves; regulation would be in place to prevent landlords from increasing rent or passing costs onto tenants; farms would be required to reduce their emissions and change the way they use land; smaller farms would be eligible for subsidies.

        What appealed?

        There was broad support for the idea of providing free public transport for those on low incomes, given the strong view that this group should be protected as we transition to net zero. However one participant raised the possibility that people on low incomes might already use public transport more than other groups, so felt that incentivising public transport use among those on higher incomes might have more impact.

        Providing grants for purchasing EVs was also an appealing aspect of the scenario, as it too would benefit those on lower incomes. However, it was felt that this policy could be more targeted in areas where public transport was not as available, such as rural areas.

        “Why would you give a grant to someone on a low income to buy a car in Glasgow or Edinburgh? People in rural areas don’t have a choice, they have to have a car. Giving them a grant could be a really useful thing, to make sure they’re able to get about.” (Participant, workshop 5)

        What were the concerns?

        Participants felt that middle income earners would potentially lose out under this hypothetical scenario if they would not qualify for grants or free public transport, but would still struggle to afford an EV or to make significant changes to their home.

        “It’s a bit vague, ‘low income’ versus ‘high income’. Those on a middle income fall between the cracks, and they can’t afford an electric vehicle or to make the home improvements.” (Participant, workshop 5)

        This fed into broader discussions around income, and participants felt that this would not necessarily correlate to ability to pay. Some reflected on their own situations as they considered the scenario, sharing that they had wanted to improve the energy efficiency of their homes but were unable to afford the changes.

        There was broad agreement that it would be unfair to fine people, especially those less well off, if they could not afford to upgrade their home. It was therefore felt that a more nuanced consideration of financial ability would need to be considered. Participants were supportive of the suggestion of a progressive “net zero tax”, using small income bands to avoid stark increases in taxation and ease the impact on households.

        Participants were aware of potential unintended negative consequences of this scenario. For instance, if landlords struggled to afford the changes they might choose to sell which could impact rental supply and lead to rent increases. There was some debate around whether all landlords should be ineligible for grants, or whether there should be scope for smaller landlords (i.e. with fewer properties) to be eligible, similar to the support offered to smaller farms in this scenario. However, no firm conclusions were reached on this.

        As highlighted in the transport workshop, participants remained concerned that a lack of EV charging infrastructure in rural areas would mean rural and island communities missing out.

        How our fictional characters fared in scenario 1

        Who benefits?

        Participants felt that Maria would benefit from free public transport, while Alice could use a grant to switch her petrol car to an EV.

        Who might be negatively impacted?

        Lorraine was considered to be a middle income earner who could miss out on financial support. Participants felt that she would be “hammered” under this scenario, given her home has an EPC rating of D and she may not be able to afford the necessary changes to bring it up to an energy efficient rating. With the requirements to reduce emissions on her farm as well, it was felt Lorraine would be negatively impacted in several ways.

        David and Sarah (owners of a rental property) were also identified as potentially being impacted through the net zero tax and requirements to change EPC ratings in rental properties, but being ineligible for grants. Although it was felt that they could and should pay a higher share based on their income, seeing the various ways in which they would be charged under this scenario, while caring for a disabled son, gave participants a more nuanced perspective which reinforced the view that income alone does not necessarily equate to affordability.

        A fair distribution of costs

        Participants felt the ‘Those who earn the most pay the most’ scenario could be fair in theory, but in practice would depend on how it was funded; how much time would be given to prepare for the changes; the infrastructure that would be put in place; and how “low income” would be defined. Participants reiterated the view that personal circumstances would need to be taken into account.

        Participants also identified a need for awareness raising to ensure fairness in this scenario. They felt that individuals would need to be given guidance on what changes they needed to make and what support would be available for them, recognising that not everyone knows what their home’s EPC rating is.

        A key caveat to the discussions was that the role of industry must also be considered alongside public behaviour change and cost-bearing. This was prompted by the risk of food prices increasing as farmers pass costs on to consumers, which would add to the financial burdens already placed on individuals.

        “Things are constantly going up, then with this added cost and figuring out if you pay for costs of your home being energy efficient, it seems a difficult and expensive thing to be going through and I’m not sure how this will be managed.” (Participant, workshop 5)

        Food price increases were felt to be somewhat inevitable when discussed in the land and agriculture workshop, but in the context of these scenarios were considered to be unfair, especially if big corporations were not doing their bit. It was suggested that “middle businesses” in the supply chain (such as supermarkets) could absorb more of the costs to minimise the impact on farmers or consumers.

        Hypothetical scenario 2: Those who emit the most pay the most

        Scenario 2 focused on a system of payment whereby those who emit the most pay the most. Costs would be covered through taxing higher emitting industries and other charges for people who contribute the most emissions (see figure 4.2).

        Figure 4.2. Scenario 2: those who emit the most pay the most

        Powerpoint slide summarising scenario 2 in which those who emit the most pay the most: all high emitting commercial businesses have to reduce their emissions by 2035, those who fail to do so pay a penalty; there are taxes on higher carbon products; homeowners are required to bring their homes to an EPC C rating or above, fines are issues for failing to reach this standard; Low Emission Zones and other forms of road user charging apply for petrol and diesel vehicles.

        What appealed?

        There were fewer aspects of this scenario that appealed compared to the others. The tax on high carbon food was identified by some as an effective way to encourage people to change their eating habits. Those who were in favour felt that products like meat becoming a ‘luxury’ would make them be more frugal and cut back on certain foods.

        “It might encourage me to think more carefully about what I’m buying, maybe being a bit more frugal in terms of what’s used. I see that as a good thing. I’d be quite happy with less choice in some ways because I feel we’ve got way too much choice now.” (Participant, workshop 5)

        However, the high carbon food tax was also criticised for making certain food products unaffordable, which was not considered fair. For some, this was based on the view that meat and dairy products were part of a nutritional diet and should not become a luxury. For others, it was about understanding the demands on peoples’ time and ability to pay for fresh, seasonal produce.

        “People don’t buy rubbish food because they love it, sometimes it’s because they don’t have the choice […] I love spending too much money in Real Foods, but not everyone has the ability to do that. It’s making sure we’re not leaving people behind. The affordable choice should be for the environment and the health of the people.” (Participant, workshop 5)

        What were the concerns?

        The main concern around the ‘Those who emit the most pay the most’ scenario was that some people and businesses were higher emitters due to circumstances outside their control. This echoed a strong theme, which emerged early in the dialogue, that people without low carbon alternatives available to them should not be penalised. The construction and farming industries were highlighted as examples where the costs of decarbonisation could be prohibitive and threaten livelihoods. It was also felt that costs could be passed onto consumers, meaning that it would not just be high emitters who would pay the most.

        Participants also expressed concern for homeowners and questioned the cost, feasibility and fairness of requiring homeowners to bring their homes to an EPC rating of C by 2033.

        “I think the timescale is an important factor here. At the moment, it’s 10 years away. By the time this is made law, it’s probably only going to be 7 years away. It’s what ability is there to do changes in the 7 years.” (Participant, workshop 5)

        It was felt that EVs would not be feasible for those living in rural areas, so they would be subject to road user charging despite having no viable alternative. There was some criticism of LEZs in particular, which were seen to have been unfairly implemented in some areas.

        “At Keith [in Moray] they were going to create a LEZ but anyone coming from Shetland, if they needed a car, that’d be taxed by the emissions zone [so] they don’t have a choice.” (Participant, workshop 5)

        How our fictional characters fared in scenario 2

        Who might be negatively impacted?

        Nadeem’s livelihood as a builder was felt to be at risk given the additional costs to his business, such as road user charges (if he was not able to switch to an EV) and paying penalties (if he was not able to reduce emissions). Similarly, it was felt Lorraine’s farm would be penalised and her business would be vulnerable if she could not easily change the use of her land.

        Who benefits?

        Participants felt that the characters living or working in cities, including Alice, Maria and David and Sarah, would benefit from the LEZs due to cleaner air. Given Nadeem and Ajay are both vegan, it was also felt that they would not be penalised for buying high carbon produce such as meat; “lack of penalty is kind of a benefit”.

        A fair distribution of costs

        Participants consistently felt an emissions-based approach would be unfair:

        “I think it’s penalising. There isn’t a lot of incentives there. It’s very directive, ‘You will do this or you will get fined.’ There isn’t a lot of, ‘We are supporting you’. It’s not a kind system […] It’s very harsh.” (Participant, workshop 5)

        They felt this system of payment would need a nuanced approach, recognising that some people and businesses have more limited control over their emissions than others, and they would be unfairly penalised if these differences were not considered.

        For the introduction of LEZs to be considered fair, improvements to the public transport infrastructure were considered to be a prerequisite.

        “There needs to be reliable, good quality transport. And we should start from that. If we start with installing Low Emission Zones, before we improve public transport, it will make people very hostile towards the idea. (Participant, workshop 5)

        Additionally, participants felt that there needed to be more of a balance between penalties and incentivisation to help facilitate low carbon choices. Awareness-raising, education and engagement was felt to be an important part of helping people transition, otherwise:

        “You are going to disengage and alienate the population and any change becomes a bigger challenge, dramatically. This is going to affect every single part of life.” (Participant, workshop 5)

        Hypothetical scenario 3: Incentives for making low carbon choices

        Scenario 3 focused on a system of payment where there are incentives for making low carbon choices. Costs would be covered through general increased taxation and through profits generated from certain businesses benefitting financially from the transition (see figure 4.3).

        Figure 4.3. Scenario 3: there are incentives for making low carbon choices

        Powerpoint slide summarising scenario 3 in which there are incentives for making low carbon choices: EV grants are available for all; public transport is subsidised for certain groups and in certain areas; profits from businesses benefitting from increased demand are used to fund reskilling; homeowners in the highest emitting homes are prioritised for support; there are tax breaks for businesses that meet their emissions reduction targets; there are tax breaks on lower carbon products.

        What appealed?

        Participants were initially drawn to the supportive nature of this scenario, with its emphasis on incentivisation. The provision of subsidised public transport was widely supported.

        “If you’re told you’ll get a bit of help, it’s more positive and people will more likely want to carry out and make these differences, but if they have to pay for it and take care of a family, they won’t want to do it. Incentives are always a good thing.” (Participant, workshop 5)

        Prioritising high emitting homes for grants and retrofitting schemes were deemed sensible and effective ways of bringing emissions down quickly. Participants living in higher emitting homes said they would appreciate the support to make improvements. Those who rented were more sceptical about this, as they worried that rent prices would be increased by landlords to make the changes, even if they were receiving grants.

        While there was a preference for incentives over penalties, there was a view that “there will always be people who can’t be bothered” to change. Participants also highlighted a risk that money could be wasted if it does not target those who need it most. For example, some questioned whether everyone should be eligible for an EV grant or only made available to those who would be unable to afford one without support.

        “The bits about grants for all electric vehicles, some people will be able to afford them so they won’t need them. That money could be used for something else.” (Participant, workshop 5)

        What were the concerns?

        Despite initial positivity towards the ‘Incentives for making low carbon choices’ scenario, concerns grew over how the various financial supports would be paid for and how effective a system based on incentives would be for reaching net zero targets. The idea of general increased taxation was a less appealing aspect of this scenario, as it was felt that this would ultimately result in everyone paying more, and would place an unreasonable burden on people in the context of a cost of living crisis:

        “I think we’ve reached a point where we’re all groaning from increase in taxation and cost of living.” (Participant, workshop 5)

        Specifically, and echoing earlier findings, middle income earners were identified as a group who were more likely to bear the brunt of general taxation but not see the benefits through grants and subsidies.

        “When you talk about general increases in taxation it’s always the middle income owners hardest hit. They earn more so they pay more tax, they then never get the benefits available. They may be £1 over the cut off but they are taxed higher and get no benefits.” (Participant, workshop 5)

        How our characters fared in scenario 3

        Who benefits?

        Participants felt that David and Sarah and Lorraine would benefit as their low EPC-rated properties (David and Sarah’s rental property was D, Lorraine’s home was E) would be prioritised for retrofitting schemes and grants. Profit-sharing for reskilling initiatives were seen to be beneficial for Lorraine too, as well as for Nadeem and his employees.

        A fair distribution of costs

        While the use of incentives was seen as a kinder approach than penalties, it did not necessarily follow that this system of payment would be fairer. As highlighted above, participants raised concerns about a general taxation putting pressure on some groups, while open incentivisation might mean grants and subsidies were taken up by those who were better off rather than those with the greatest need. Participants therefore felt that a fair distribution of costs under this system would mean more targeted support through grants and subsidies, in combination with a general taxation. The availability of grants and subsidies would also need to be widely publicised and not administered on a first-come-first-served basis to minimise the risk of people losing out.

        “Limiting the cash benefits to any group or individual is the key thing, because this is too open-ended.” (Participant, workshop 5)

        As with other systems of payment, it was perceived that the current infrastructure – particularly for public transport and EV charging – was too “fragmented”. It was strongly felt that these issues would need to be addressed first, to ensure people were able to make low carbon choices.

        This highlighted the importance of timing and sequencing for a just transition to net zero. The system of payment based on incentives was initially more appealing, but it was also felt that some charges might be necessary once people have had time and encouragement to make the necessary changes.

        “On the road to net zero it will probably not be fair to charge based on emissions before we reach the points at which changes SHOULD have been made… Emissions charging should be the “stick” coupled with the “carrot” of a really rigorous and case specific package of support to enable homeowners to make the necessary changes.” (Participant, online community)

        Summary on systems of payment

        These hypothetical systems of payment highlighted the range of complexities inherent in the different approaches to distributing the costs of the transition. Participants were not asked to choose any one scenario over another, but instead discussed how each scenario might impact different groups and raised key considerations for making these approaches as fair as possible. Their key points are summarised in the following table:

        Scenario 1 – those who emit the most pay the most

        Scenario 2 – those who earn the most pay the most

        Scenario 3 – incentivising low carbon choices

        • There was general support for the concept of people’s contribution being based on their ability to pay, but concerns over how a system of payment based on this would be implemented.

        • This scenario aligned with a strong theme throughout the dialogue of acknowledging different circumstances, and also of not making things harder for those already struggling or disadvantaged in any way.

        • While it was recognised that placing responsibility on those who contribute most emissions is fair in principle, there were concerns that this could have an unfair impact on people whose high emissions are due to circumstances beyond their control.

         

        • This scenario was felt to be a negative framing of the issue, which would increase resistance to change, and a “sledgehammer” “oppressive” approach which that was not in keeping with a just transition.

        • If an emissions-based approach to distributing costs were to be adopted, participants felt that there would need to be lower carbon alternatives in place, with consideration of, and support for, those without alternatives available to them.

        • The use of incentives was considered a more supportive and kinder approach to encourage behaviour change.

        • But it was recognised that this would come at a cost, and some found it difficult to support general taxation in the context of the cost of living crisis.

        • Participants questioned the fairness (and effectiveness) of taxing everyone when they may not benefit from the grants and subsidies themselves.

        Exploring policies

        In phase two of the research, a new group of 20 people from across Scotland were convened to learn about and deliberate on potential policy options within two of the key sectors that were focused on in phase one; transport and the built environment. The two policy options were:

        • Approaches to Road User Charging (RUC), involving a charge on car usage based either on distance driven or on a defined geographic area.
        • Approaches to funding the transition of domestic properties away from gas or oil-based heating systems to clean heating systems (such as heat pumps or district heat networks).

        Picking up where the first cohort left off, they considered the benefits and challenges of these policy options, before providing conclusions on how they should be implemented fairly.

        Road User Charging

        Views on Road User Charging are explored in more detail in the transport chapter. A summary of the key findings is presented here where participants were shown two possible options to road user charging, presented in the following table:

        Option 1 – UK national road pricing

        Option 2 – Urban local road user charging



          • This would involve a charge on drivers based on distance driven.

          • The pricing system would cover all of Scotland’s roads. The cost would vary depending on factors like the weight of the vehicle, the user’s disability status and place of residence e.g. urban residents may be charged at a different level than rural residents.

          • It would be measured and monitored using vehicle tracking technology or mile logging (e.g. at MOT control).

          • The amount paid would range between 3p and 10p per miles driven. Money raised would be invested in improvements to public transport and active travel infrastructure. Electric vehicles would not be exempt.

          • The type of system would be implemented by the UK Government.
          • This would involve a charge to drive into specific parts of an urban area.
          • When it is in place would depend on local circumstances, e.g. it may be applied at certain times of the day to coincide with when public transport is available. This could apply to large urban and suburban areas such as Edinburgh or Glasgow metropolitan areas.
          • It would be measured and monitored using number plate recognition or vehicle tracking technology.
          • The charge would be approximately £5 – £15 per day. Money raised would be invested in improvements in public transport and active travel infrastructure. Electric vehicles would not be exempt.
          • Similar systems are in place in London and Milan. This type of system would be implemented by local authorities (they already have the power to do this).

        Views on option 1: UK national road pricing

        UK national road pricing was introduced as a possible approach to RUC that would cover all of Scotland’s roads and involve a charge on drivers based on distance driven.

        A perceived general benefit of this form of RUC was that those who drove for convenience might be encouraged to choose public transport instead. In turn, the reduced traffic would improve air quality and bring health benefits. That funds raised would be invested in improvements to public transport was widely welcomed, and it was agreed that rural areas should be prioritised for funding, as public transport was considered to be less available and accessible in these areas.

        “A good thing about it is that the money raised is put towards public transport. If the money is invested into rural areas, that’d be really good. That’s where the money should go because they need transport.” (Participant, phase 2, workshop 2)

        The challenges participants were keen to ensure were considered and addressed included:

        • Taking different circumstances into account: It was felt that some groups would be unfairly impacted as their access to alternative options would be limited (e.g. those who rely on their car because of a disability or health condition, those who have to drive long distances for work, or those who live in rural areas where public transport alternatives are not available). It was agreed that exemptions or permits would need to be in place for these groups and these should be clearly communicated:
        • “It would be unfair for those that live in rural areas to pay the same when they don’t have a choice in transport.” (Participant, phase 2, workshop 2)
        • Balancing incentives and disincentives: It was surprising to some that EVs were not exempt. There were mixed views on the fairness of this which hinged on the risk of discouraging people from switching to lower carbon alternatives versus the overall objective of reducing distances travelled by car. It was therefore suggested that EVs should not be charged as much as petrol/diesel cars to incentivise lower carbon choices.
        • How the charge is paid: It was not considered fair to present drivers with an annual one-off charge, as this could come as a shock and be difficult to pay in one go. Instead, it was suggested that the costs should be spread out. It was also felt that consideration should be given to when the charge is applied (with a suggestion for it to be lower or lifted during the night to ensure those travelling for night shifts are not restricted).

        Views on option 2: urban local road user charging

        Urban local road user charging was introduced as another possible approach to RUC that would involve a charge to drive into specific parts of an urban area.

        The benefits highlighted were similar to those raised in response to option 1 (cleaner air and improved public transport infrastructure). For some, this option was considered to be fairer than national road pricing because it was assumed it would be implemented in areas with readily available public transport alternatives.

        “This one is targeting particular areas and not all journeys. You’re given an option to use your car or public transport to get into the city.” (Participant, phase 2, workshop 2)

        There were still challenges that participants raised in relation to this approach, including:

        • How those who living and working within the charging zone would be treated: It was agreed that exemptions would need to be made for such groups.
        • Considering the differences between types of urban areas: Inverness, for instance, was felt to be a different type of urban area to Glasgow or Edinburgh, as it served as a connecting transport hub for those in rural areas.
        • Ensuring access to alternatives: It was felt that adequate public transport infrastructure would need to be in place before RUC was introduced to an area.

        Funding the heat transition in domestic properties

        Views on the heat transition in domestic properties are explored in more detail in the built environment and construction sector. A summary of the key findings is presented here, where participants were shown two possible options to funding the heat transition, detailed in the following table:

        Option 1 – widely available public funding, stricter penalties

        Option 2 – targeted public funding, softer penalties

          • Scottish government grants and loans are available to all households.
          • Penalties for landlords for not meeting minimum energy standards by 2028 and clean heating by 2045.
          • Landlords are prevented from increasing rent after switching to a clean energy system.
          • Penalties for homeowners for not meeting minimum energy standards by 2033 and clean heating by 2045.
          • Some homeowners could be exempt from making some of these changes.
          • Scottish Government grants are available to households on lower incomes only. Low or zero interest loans available to all households.
          • Private finance opportunities are available.
          • Penalties for landlords for not meeting minimum energy standards by 2028, but more time allowed before penalties for not switching to clean heating are enforced.
          • Landlords are allowed to increase rent, but there is a cap.
          • Penalties for homeowners for not meeting minimum energy standards by 2033, but more time allowed before penalties for not switching to clean heating are enforced.
          • Some homeowners could be exempt from making some of these changes.

        Views on option 1: widely available public funding

        Participants considered a scenario in which Scottish Government grants and loans would be available to all households to improve energy efficiency and install a clean heating system. In this scenario, there would be penalties for non-compliance by the deadlines set out.

        As well as considering the general benefits of the clean heat transition (such as the need to use less energy to warm homes, and reduced emissions), participants also felt that the combination of widely available funding and strict penalties would encourage people to make the changes. The presence of exemptions for certain groups, protections for renters, and an appeals process were all welcomed.

        Participants also highlighted a number of challenges:

        • The 2028 deadline for landlords making home energy improvements was felt to be too close and not enough notice. There were also concerns raised that landlords would choose to sell rather than make the required changes, which would mean fewer homes available to rent.
        • Conversely, the 2045 deadline for clean heating systems to be installed was considered to be too far away and raised concerns that people would not be motivated to act quickly enough.
        • The availability of funding to all households drew mixed views:
        • On the one hand, it was not considered fair to fund households that could afford to pay for changes, while others unable to afford the changes may not receive enough to cover their costs:
        • “If you’re really rich, you can pay for it, why should you get a grant for it?” (Participant, phase 2, workshop 2)
        • On the other hand, it was considered fair that all households receive some support since the changes were being required of them:
        • “I think it would be fair to give grants to all households because they’re enforcing it. If they want people to do it, they’ll need an incentive.” (Participant, phase 2, workshop 2)

        In drawing conclusions, there was general agreement that while there should be support available to all households, this should vary depending on circumstances (with those on lower incomes and those with older properties being entitled to the most government funding).

        • There was some discomfort around the idea of people taking out loans to cover any remaining costs, particularly for those seeking to avoid debt or already struggling with existing financial commitments.
        • While welcomed, there were concerns that that an appeals process could be difficult and stressful which would be off-putting to some.
        • Building trust in the efficacy of the clean heating systems was felt to be a necessary pre-requisite to people installing them in their homes, and participants expressed a desire to see evidence of this:
        • “More trials, more comparisons and more information. I think if people have that then more people are going to go, ‘We see where you’re coming from, we understand and can get behind it.’” (Participant, phase 2, workshop 2)

        Views on option 2: targeted public funding

        Participants considered another scenario in which Scottish Government grants and loans would be available to households on lower incomes to improve energy efficiency and install a clean heating system (but not to higher income households, landlords or owners of second properties). In this scenario, there would be penalties for non-compliance on energy efficiency improvements, but penalties for not installing a clean heating system by 2045 would not be enforced straight away.

        The flexibility in when and how penalties would be applied was welcomed in this scenario. While there were concerns raised initially about landlords being able to increase rent (as in option 1), it was also recognised that there could be a positive impact for tenants if the properties energy efficiency is improved, leading to better living conditions and cheaper energy bills. It was agreed that a rent cap would be important to protect tenants from sharp rent increases.

        Similar challenges identified with a targeted funding approach as were raised in relation to widely available funding, which included concerns around the deadlines (2028 being too near and 2045 being too far), the push towards loans, and the need for clear and comprehensive communications to raise awareness of the changes that people would be required to make.

        Other challenges identified with this approach to funding the clean heating transition included:

        • A lack of clarity around the penalties, with some being enforced as soon as the deadline expires and others not being enforced right away. This was felt to be problematic and an ineffective way of encouraging people to act:
        • “If you say you’ve got to do something by 2045 but there are no consequences for not doing it by 2045 [..] do they really have to do it?” (Participant, phase 2, workshop 3)
        • The targeted nature of funding drew mixed views. For some it was felt to be fairer as financial support would be offered to those who need it most, while others felt that targeted funding would result in those just over the qualifying threshold being put under financial pressure. There were also concerns that targeted funding would limit the effectiveness of the policy, with those not eligible being less inclined to act.
        • There was a strong view against private financing, which was underpinned by a perception that private sector organisations were motivated solely by profit. If loans were to be offered, it was felt that these should be administered by Scottish Government:
        • “I don’t think private sector should offer loans in the first place. The government wants you to do this so they should offer the loan themselves or provide the grant.” (Participant, phase 2, workshop 3)
        • As well as providing communications around the efficacy of clean heating systems, participants also felt there should be clear advice on the running costs after installation and reassurance that these would be long-term solutions.

        Conclusions

        This chapter brings together conclusions from across both phases of the research. Conclusions were reached as participants drew on what they had learned over the course of the dialogue:

        In phase one, conclusions were developed iteratively by participants over the course of the dialogue, but were developed in detail in the final workshop and focused on answering the over-arching questions:

        • As we transition to net zero, who should pay for the changes that will be needed?
        • How do we make that system of payment fair?
        • How can we make sure that everyone benefits?

        In phase two, conclusions were reached at the end of each sector-focused workshop and concentrated on the fair implementation of Road User Charging, and the funding of the heat transition in domestic properties.

        Conclusions have been written using the participants own words as much as possible. Where any edits to wording were made by Ipsos, this was to correct repetition or duplication, or to reorder points into a more logical flow.

        As we transition to net zero, who should pay for the changes that will be needed?

        The overarching message was that we all have something to contribute. Specific contributions from three broad groups were identified:

        Government

        The Scottish Government should fund (in an efficient and timely manner):

        • Public charging infrastructure for electric vehicles.
        • An integrated, accessible, and reliable public transport system.
        • Grants and interest-free loans for retrofitting existing homes (available to homeowners and long-term tenants) and purchasing electric vehicles.
        • Subsidies and research grants for farmers and other small businesses. This should include support towards the cost of changing land use, encouraging development of lower carbon materials or produce, and reskilling and training initiatives.
        • Education and awareness raising programmes.
        • Research into low-carbon technologies (e.g. wave power).
        • An apolitical body to provide the lead in scientific and evidence-based practice.
        • As well as the Scottish Government, local authorities and other public sector bodies also have a big part to play and should cover some of the costs.

        Business

        Businesses (including landowners and private landlords) should pay for the changes they need to make. This should be through taxes and other means, and with some support from the Scottish Government.

        Businesses are especially responsible for costs where:

        • There is an opportunity for them to profit from the changes.
        • They contribute higher emissions where lower carbon alternatives (e.g. alternative land uses, lower carbon transport options or building materials) are possible.
        • They are landlords with a certain number of properties / making a certain amount of money (to be defined).
        • They can take on apprentices / reskill people.
        • They have a responsibility (e.g. private landlords would be responsible for insulating homes and improving energy efficiency; construction businesses would be responsible for switching to low-carbon materials and technologies; landowners would be responsible and accountable for making changes to the land use).

        There should be differentiation between small and large businesses, with support available towards the cost for smaller businesses.

        Citizens

        All citizens should contribute in some way, whether that’s:

          • Paying tax fairly.[10]
          • Changing how we get around (switching to electric vehicles, using public transport and more active travel) or paying charges for continuing to use high-carbon forms of transport when good low-carbon alternatives are readily available, feasible and appropriate to use.
          • Making changes to our homes where applicable (acknowledging that some changes may not be appropriate for older homes), with advice and support available.

        How do we make that system of payment fair?

        While participants did not settle on one specific system of payment, they did highlight some key aspects of what a fair system would like look. These fall broadly under six themes, as outlined below:

        EQUITY

        • Make the system equitable, meaning that everyone contributes but not all in the same way or by the same amount.[11]
        • Decide what an individual contributes based on their ability to pay (through a means-tested approach) or their ability to act. An independent body should decide on this system of payment (see leadership and accountability section).
        • Recognise the range of potential impacts on individuals and communities, and reflect individual circumstances when deciding how much different groups should pay. This should take into account location (differences by urban and rural areas), income and the needs of those with disabilities or long-term health conditions.
        •  
        • Support those on low incomes, so that they are not disadvantaged by the changes and to avoid people being left with no help.[12] “Low incomes” should be clearly defined and consider overall financial position, including assets and savings. Support could include discounts on travel depending on circumstances.
        • Public engagement
        • Regularly consult and engage with the public on these difficult decisions.
        • Consultation and engagement should be accessible and include a diverse range of groups. These engagements should be representative but small in scale and with a clear timeframe in mind.
        • Findings from these consultations should be reported on.
        • They should be a joint effort between the Scottish Government and local authorities, allowing for locally-focussed consultation (as national campaigns can miss parts of Scotland and might not reach everyone).

        Transparency

        • Provide education and information about why we need to make changes to reach net zero and what the impacts will be.[13]
        • Be transparent about how taxes, charges, grants and loans related to net zero are decided upon, and about how the Scottish Government is contributing to costs. Make this available to the public in a clear and accessible way.

        Infrastructure

        • Improve infrastructure across Scotland so that it is easier for people to make low-carbon choices. This should include more access to integrated public transport including in rural areas, affordable or free electric vehicle charging points, measures to make homes more energy efficient and more availability of low-carbon food.

        Regulation

        • Introduce regulation to control how much businesses (e.g. landlords, supermarkets, energy companies) can pass costs on to consumers. Businesses that don’t comply should be fined.
        • Prevent people and businesses from gaming the system or exploiting loopholes (e.g. higher earners, multinationals or landowners receiving more financial support than needed, or paying the charges to avoid making changes that others have to make).

        Leadership & accountability

        • Have clear leadership and accountability from the Scottish Government, following science and evidence (not politics).[14]
        • The Scottish Government should be responsible for setting up a non-political body, overseeing discussions between all the interested parties to take the lead on the just transition (including specialists in all relevant areas). They could take the lead on deciding who pays and ensure it is fair.[15]
        • Government-tendered contracts should have a large net zero element and not just who is going to do it cheapest. The independent governing body should review these decisions.

        How can we make sure that everyone benefits?

        Participants conclusions related to benefits showed similar themes to those relating to systems of payment. Key themes, once again, were of addressing inequality, education, supporting people to make changes and leadership from the Scottish Government.

        Reducing inequality

        • Use the transition to net zero as an opportunity to reduce other inequalities and make Scotland a fairer society. This could be done by, for example, closing the urban/rural divide, reducing health inequalities, reducing reliance on oil and gas and combatting extreme poverty.

        Education and support

        • Help all people (adults and children) to understand what outcomes they are contributing to and why it makes a difference.
        • Communicate changes in a positive and honest way, emphasising the benefits of net zero for future generations, while acknowledging that changes are unavoidable and will mean sacrifices.
        • Proactively tell people what costs and other changes are coming, what support is available to them and what will happen if we don’t make those changes. Proactively combat misinformation. This can be through multiple channels, including TV campaigns and population wide texts.
        • Provide easily accessible and accurate information from credible sources.[16] This should include individual calculators/tools to help people determine the impact of their own choices and the support available to them.
        • Give people time and support to make these changes (they won’t happen overnight).

        Encouraging behaviour change

        • Empower[17] individuals and businesses to make low-carbon decisions (where changes are viable) through a mix of “carrot” and “stick” initiatives.[18]
        • “Carrots” would be incentives to make low-carbon choices (e.g. tax breaks, grants, subsidies). These should come first and be widely publicised including the consequences of not taking them up (i.e. subsequent “sticks”).
        • “Sticks” would be restrictions or charges for making high-carbon choices once low-carbon choices are readily available. These should come after “carrots” and only if there are reasonable, economically viable alternatives already in place.

        Business & skills

        • Encourage and incentivise key industries to reduce emissions and support small businesses to innovate and come up with solutions.
        • Ensure there is an equitable distribution of Scottish Government support across different sectors.
        • Ensure that new jobs become available as old jobs become obsolete and that upskilling keeps pace with that.

        Planning

        • Set milestones so that changes are introduced in a gradual and ordered way, rather than in a late rush nearer to 2045. As part of this:
          • Ensure changes are thoroughly planned for first.
          • Prioritise changes, so it is clear to people what needs to happen when.
          • Continually review progress and adapt plans as needed.
          • Be prepared to adapt milestones and follow the science if things change.

        Leadership

        • Make sure the Scottish Government are leading from the front and setting an example.

        What needs to be in place to make Road User Charging fair?

        If RUC was to be introduced to reduce emissions within the Scottish transport sector, and to ensure it was implemented fairly, participants concluded that:

        It should be implemented with different circumstances and needs to be taken into consideration.

        There should be exemptions or concessions for some groups (e.g. people with disabilities, those who live or work in areas where RUC has been introduced, those living in rural areas and those on lower incomes).

        Ensure there is reliable, frequent and more integrated public transport infrastructure before RUC is introduced.

        Those were the conclusions that participants most strongly agreed upon. But other conclusions reached included that:

        • There should be more incentives as well as disincentives (e.g. not charging EV drivers the same as petrol/diesel drivers, and rewarding those who take fewest journeys).
        • Changes should be introduced carefully, gradually and the public should be clearly informed about them.
        • The changes should be considered in a holistic way, with consideration given to things like the affordability of housing (affecting where people can live and what options they have for getting to work), and the possible impact on tourism in areas where RUC is introduced.

        It should be noted that there were mixed views on the principle of RUC, whichever way it is implemented. While it was generally considered to be acceptable if the above conditions were met, there was also a strong and persistent (albeit more exceptional) view that RUC would be intrinsically unfair as it would limit the choices of those less able to afford the charges.

        What needs to be in place to ensure funding for the heat transition is fair?

        To ensure the costs of the heat transition are distributed fairly, participants concluded that:

        There should be support for all, but the share of funding should vary depending on circumstances, such as income and age of property.

        Exemptions from penalties should be in place, with a fair appeals process.

        Those were the conclusions that participants most strongly agreed upon. But other conclusions reached, which for some were fundamental to any clean heat transition being implemented fairly, included that:

        • There should be a proportionate approach that incentivises and supports people to make changes, and allows sufficient time for changes to be made before penalties are imposed.
        • The use of loans should be considered carefully, with long and flexible repayment plans that are sensitive to peoples’ circumstances. Ultimately, it was agreed that nobody should be forced to take out a loan.
        • There should be reassurances around the efficacy of clean heating systems, grounded in evidence that is clearly communicated with the public. This should be supported by regulation of new technologies being installed.
        • There should be a wide-reaching and transparent communications campaign to ensure people understand what’s needed, why it’s needed and what support is available.

         

        Participants’ learning journey

        An objective of phase one of the research was to gather learning into the factors influencing any changes in participants’ attitudes, beliefs or values as a result of engaging in this deliberative process. This chapter summarises findings in relation to this objective and draws only on findings from the cohort taking part in phase one.

        Extent to which views changed

        Early views

        As outlined at the start of this report, participants began the process with a fairly good grasp of the term net zero, but less so with the concept of a just transition. Though they had some ideas of the types of change that might be required to reach net zero (such as less reliance on cars, changes to our diet, and different ways of using energy in our homes) they were unsure of the detail about what a just transition to net zero might involve.

        Participants started the process slightly daunted by the challenge ahead, but nonetheless open-minded and keen to learn more from experts and from each other. They shared a sense of hope that this deliberative process might lead to some positive action. They also conveyed a sense of the responsibility in their own role in the process, and were keen to make a valuable contribution to the dialogue. However, there was also a note of scepticism about how much impact the process could have, and some questioned whether any action would be taken by the Scottish Government as a result.

        Participants’ gradual learning process

        As they moved through the process, it was clear that participants were gradually learning new information. During the sector-focussed workshops (workshops two, three and four), participants expressed notes of surprise at some of the information in the expert presentations, which had raised new issues for them or new ways of looking at things. For example, there was surprise at the scale of reduction in car use needed, at the costs of installing heat pumps in homes, and at the level of financial subsidies received by farms.

        Learning about the types of changes required to reach net zero also caused some concern among participants, as they appreciated the scale of the challenge ahead and the potential financial implications of those changes. This caused some participants to push back stressing that some changes would be too difficult to implement in certain parts of the country, particularly rural communities, or too costly for certain people.

        “It’s hard to imagine me being able to take on any more costs, as someone in fuel poverty. I can’t afford to replace the boiler if it breaks. It seems a bit ambitious, scary. Especially where I live, I am not the worst off, but I struggle to heat the home and then adapt to new technologies.” (Participant, phase 1, workshop 3)

        As they discussed the issues further in the sector-focussed workshops, participants said that they had developed a greater appreciation of the need for collective action to reach net zero and for costs to be distributed. Some said they had moved away from a feeling that responsibility lay mostly with the Scottish Government, local authorities or businesses, to feeling that societal-level change was required. However, they acknowledged that sharing of responsibility, and distribution of costs, would be complicated and would require thoughtful decision-making supported by education and awareness raising.

        “One of the things that struck me, the just transition will have to be government but also society in general. Society itself has to be a driver. The education value and sharing why this is important will make all the difference.” (Participant, phase 1, workshop 2)

        This sense of collective responsibility was a position that they brought into the final workshops, as they started their detailed deliberations and conclusion-forming.

        Views at the end of the process

        In the final session, participants reflected on whether their views had changed over the course of the process. The overall message was that they had developed and deepened their understanding of the issues, more so than having changed their opinion or position.

        Participants noted that, as a result of taking part in the dialogue, they had developed more understanding of the scale and complexity of the challenge of a just transition to net zero. Participants started the process appreciating the importance of reaching our net zero targets, but by the end they had more of an appreciation of how important, but also how difficult, it will be to ensure a just transition.

        “I haven’t necessarily changed my views on anything, but it’s forced me to think about this intensely and it’s driven home how important this is.” (Participant, phase 1, workshop 6)

        As noted above, there was a greater sense of shared responsibility, and need for collective action to achieve a just transition. At the same time, participants said they had more appreciation of the impacts of the transition on different groups, and for individual circumstances to be born in mind in deciding how costs should be distributed. Indeed, this was one of the strongest messages that participants shared towards the end of the process, and which was reflected in their conclusions. Linked to this, the need to protect the most vulnerable in society was a key theme throughout the process.

        “At the start I’d quite naively said the Scottish Government (should be responsible) but I’ve learned a lot and changed my mind…from hearing from the professionals and talking to people in the groups.” (Participant, phase 1, workshop 6)

        In addition to the deepening of understanding, one area where views did change somewhat was in relation to systems of payment. In the early stages of the process, some participants felt that responsibility for costs should lie with those who contribute the most carbon emissions. This, they felt, was the fairest way of allocating responsibility for costs. However, as noted in chapter 4, when discussing the scenario of “those who emit the most pay the most”, participants strongly felt that this would not be fair. Having deliberated and considered the impacts of different groups, they felt that some people and businesses have more limited control over their emissions than others. They therefore felt that a more nuanced approach would be required, and that some people and businesses would be unfairly penalised if these differences were not considered.

        “I felt it was more apt for the people that produce the most carbon to take the lead…but hearing about farmers and how they don’t really earn money, that really took me aback.” (Participant, phase 1, workshop 6)

        Views on who should take the lead

        In the first workshop, participants were asked a live-polling question “who should take the lead in tackling climate change in Scotland?” At that stage, around two thirds said it should be everyone (individuals, businesses and the Scottish Government) while two-in-five said the Scottish Government and one-in-five said all individuals in Scotland.

        Participants were asked the same question in the final session. As shown in figure 7.1, views did not change to a great extent. The most common answer once again was for everyone to take the lead. However, there was more emphasis placed “certain groups of people” and slightly more on the Scottish Government.

        Figure 7.1: Findings from “live polling” question asked in workshops 1 and 6

        Bar chart showing live polling results from workshops 1 and 6.

        Participants felt the relative emphasis on the Scottish Government highlighted a need for “leadership from the front”, a point that was highlighted in participants’ conclusions. They also noted that the slight change in the findings between sessions reflected the difficulty of placing responsibility on any one group.

        “We all have a part to play but taking a lead, someone has to be in the front. The fact that more people were choosing the Scottish Government and certain businesses and actors, it possibly reflects the complexities of the situation.” (Participant, phase 1, session 6).

        In discussing the results of the poll, participants emphasised the distinction between taking action to tackle climate change and taking the lead. It was highlighted that while we all bear responsibility for making changes, there was an expectation that leadership should come from the Scottish Government.

        What contributed to views changing

        Participants identified a range of factors that had contributed to their learning journey and to their views either deepening or changing. In summary, these were:

        • Hearing from each other. Participants felt that having the chance to discuss issues as a group helped them to appreciate different perspectives on the issues and different circumstances. The experiences of rural participants were highlighted as being particularly valuable:
        • “I had only thought about my own situation but have learned from people in completely different areas of Scotland and stages of life.” (Participant, phase 1, workshop 6).
        • Expert speakers, through their presentations at the workshop and their responses to participants’ questions.
        • Characters and scenarios had helped participants to consider the various aspects involved in the transition to net zero and to appreciate how different impacts might be felt by different people.
        • Being asked to articulate their views in the sessions helped to clarify and strengthen their own positions:
        • “Being asked to speak out, it makes your position clearer. It makes you put it into words, so you’re more aware of your opinion.” (Participant, phase 1, workshop 3).
        • Time to think and reflect about the issues, both between the sessions and over the course of the whole dialogue.

        Implications from the research

        The key outcome of this process was a set of conclusions (shown above) which provide clear suggestions for the Scottish Government to consider as it develops Just Transition Plans. This includes conclusions around specific policy options that were tested in relation to the transport, and built environment and construction sectors. The research also has a number of broader implications for future policy in this area, which are set out below.

        • A fair system of payment must consider different circumstances.

        When considering three hypothetical payment systems (based on ability to pay, level of emissions, or incentivisation), there were elements of each that were appealing and problematic. While it was recognised that placing responsibility on those who contribute most emissions was fair in principle, there were also concerns that this could be unfair if applied to those without the ability to choose lower carbon alternatives. Meanwhile, a system that considers ability to pay was seen to be more aligned with their overall principles of fairness but would require careful implementation to avoid negative impacts on some groups. Research has shown that there is a disparity between the carbon footprints of high-income and low-income households,[19] which suggests that higher emitters would also be those more able to pay. Ultimately though, participants’ views aligned with the existing National Just Transition Outcome,[20] of a fair distribution of costs and benefits that consider different circumstances.

        • There was support for a progressive form of taxation, with higher income individuals and businesses paying more.

        It was acknowledged that Scottish Government grants, financial incentives, and wider investment in infrastructure would require additional funding. It was therefore seen as somewhat inevitable that new or different forms of taxation would apply. However, there was resistance to the idea of a general taxation on the basis that this may create financial hardship for those unable to pay more. Instead, participants supported a form of progressive taxation, reflecting the principle of ability to pay noted above. Though not discussed in as much detail, there were also suggestions of taxing larger high-emitting businesses, energy companies, landowners, and a tax on high-carbon products.

        • Protecting the most vulnerable in society was seen as a fundamental requirement for any future systems of payment.

        Whether discussing broad principles of fairness, or how specific systems of payment or policies should be implemented, participants strongly felt that protections or exemptions should be in place for those least able to afford the payment. Participants also stressed the importance of supporting those with other needs or challenges related to health, disability and life stage.

        • A balance between incentives and disincentives may have the greatest appeal and impact.

        The use of incentives (such as grants for EVs and clean heating systems, funded retrofitting schemes, tax breaks for businesses that meet emission targets) was considered a more supportive and kinder approach to encouraging behaviour change than using penalties or charges. But they were not universally supported, and some felt they did not go far enough towards encouraging the level of changes required to reach net zero. Disincentives (such as Road User Charging) were broadly accepted on the basis that they would help to discourage car use. However, for both incentives and disincentives to be considered fair, it was felt that they needed to reflect individual circumstances and (as outlined above) ability to pay.

        • The timing of any new taxes, charges or penalties will be important.

        Introduced too soon, and these pose the risk of placing individuals in financial difficulty and may be met with resistance. Introduced too late and they may not be enough of an incentive to encourage, and instil a sense of urgency in, behaviour change. This was clear when participants discussed the heat transition; they felt that a target of 2028 or 2033 for homeowners to make energy efficiency improvements was too soon, but a target of 2045 for installing clean heating systems was too far away. The most appropriate timing will therefore require a balance between motivating people to change while not unfairly penalising them. A phased, staggered approach was seen as one way of achieving this balance.

        • It will be important that the public feel part of the decisions that affect them.

        The Just Transition Commission highlighted that “the time for difficult conversions is now”[21] and emphasised the importance of communication and engagement. Participants echoed this sentiment, emphasising the importance of clear and transparent communication about the need for changes in each of the sectors, and the need for ongoing public engagement.

        This will be particularly important when it comes to communicating changes such as those outlined in the Heat in Buildings bill. As highlighted in Appendix 2, participants perceived that heat pumps might not be suitable for all environments and there was an appetite for evidence to show their efficacy. A recent study from Energy Systems Catapult found that heat pumps were widely suitable across a broad spectrum of housing types, and that most heat pumps were installed without requiring other energy efficiency upgrades.[22] Communicating such evidence clearly and accessibly will therefore be vital to encouraging uptake.

        Learnings from this deliberative process for future public engagement

        Reflecting on their involvement in this deliberative research, participants raised a number of considerations to ensure meaningful public engagement on this topic in future. As highlighted in the previous chapter, engaging over a longer period of time enabled participants to consider complex issues more fully than would have been possible with other form of public engagement.

        Breakout groups changed between sessions and participants really valued the opportunity this gave them to discuss the issues with different people and to hear a wider range of perspectives. With a relatively small group of people coming together to discuss issues affecting Scotland as a whole, one participant raised a concern that some groups (e.g. those with disabilities) might have been missing from the discussions. Although those with disabilities were represented in the dialogue, this comment underscores the importance of ensuring that participants in public engagement understand why they have been invited to take part, how the group has been recruited, and where their involvement sits in relation to the wider landscape of public engagement on Scotland’s just transition.

        Some practical reflections on the process also highlighted the importance of designing an accessible process. As this project sought involvement from people living across Scotland, an online approach was felt to be appropriate and in particular enabled those living in rural areas, those with disabilities, and those with caring responsibilities to take part. Ensuring the information was presented clearly by experts and facilitators was also important, as it enabled participants to engage on the topic and able to express their views in a safe and non-judgemental space. Valuing participants’ time was another factor that ensured an accessible process; as one participant pointed out, they had been set a big task and being paid made them feel that they could dedicate their time and engage meaningfully.

        Participants also highlighted the importance (and challenge) of translating the work of the group into effective awareness-raising and engagement with the wider general public.

        • “We have now spent almost 15 hours listening to experts and discussing this and we have grown, some have changed [views], some are simply [more aware]. To [share] that kind of information across a population of 5 and a half million…there is quite a gap, with a lot of [work needed] to go forward. Because it’s so complex.” (Participant, phase 1, session 5)

         

        Appendix 1. Transport sector detailed findings

        This chapter outlines participants’ views on a just transition in the transport sector. It provides detailed findings from both phases of research:

        • Phase one, where a group of 30 people living across Scotland met over six online workshops and an online community to consider what a fair distribution of costs and benefits would look like. It focussed on three sectors, one of which was transport.
        • Phase two, where a group of 20 people living across Scotland met over three online workshops to explore specific policy options. One of those workshops focussed specifically on transport, including the potential use of Road User Charging.

        Summary of findings related to transport

        • The vision for a decarbonised transport system in 2040 was considered difficult to achieve without significant investment in transport infrastructure across Scotland.
        • Participants felt that the costs for the transition should be shared between:
        • The Scottish Government in providing support and infrastructure.
        • Businesses in the transport industry (with support for smaller businesses).
        • Citizens, but based on use, access to and choice over lower carbon alternatives, and ability to pay.
        • To ensure a fair transition, in which everyone benefits, participants felt that individuals’ circumstances needed to be considered and steps taken to address any barriers they might face. Groups identified as requiring additional support included:
        • Those on low incomes.
        • People with health conditions or disabilities.
        • Elderly people.
        • Those living in rural communities.
        • Participants highlighted the importance of allowing sufficient time for people to prepare for any changes.
        • Improvements to the current public transport infrastructure was seen as a prerequisite for a just transition.
        • To ensure any form of Road User Charging is implemented fairly, participants concluded that:
        • Different circumstances and needs should be taken into account, rather than taking a blanket approach.
        • There should be concessions or exemptions for some groups, including those listed above and those who rely on their car for work.
        • Charges should only apply where people have easy access to public transport.
        • Road User Charging applied to a defined urban area was considered fairer than an approach based on distances travelled.

        What changes were expected?

        Early in each phase participants discussed the changes to transport that they thought would need to happen for Scotland to reach net zero. These included:

        • A shift towards lower-emitting forms of transport, including more electric vehicles (EVs), car-sharing schemes, and public transport.
        • Restrictions on car use in city centres, such as Low Emissions Zones (LEZs) which had already been observed in cities like Aberdeen and Glasgow.
        • Electrification of rail and bus networks, with more frequent and efficient trains and ferries.
        • Improving cycling infrastructure, including more cycling lanes and incentives for active travel.
        • A reduction in the availability of domestic flights in favour of public transport alternatives.

        It was felt these changes would be expensive, as the infrastructure in Scotland (for both public transport and EV charging) was perceived to be lacking currently. Participants agreed that the transport network would need to become more integrated for people to be less reliant on cars.

        “When I try to travel down south by train, I have to drive to the railway station. That is defeating the object.” (Participant, phase 1, workshop 2)

        A distinction was drawn early in the discussions between cities and rural areas which prevailed throughout both phases of the dialogue. Among those living in urban areas, the need to reduce car use and encourage use of public transport was considered a positive, if inconvenient, change. Among those living in rural areas, there was a strong view that insufficient public transport had rendered cars “an essential not a luxury”. Participants expressed concern that public transport would not be improved sufficiently and that rural communities would be forgotten about.

        “I worry about rural areas as we have zero public transport. I walk to loads of places but can’t walk 45 miles to the nearest supermarket or 100 miles to the nearest hospital. I feel there’s no voice for rural areas, there’s dreadful infrastructure and I really worry.” (Participant, phase 1, workshop 2)

        Overall, it was therefore considered unfair to ask people to rely less on their cars without providing improved public transport. It was felt that this would be particularly unfair on certain groups, such as those living in rural areas, young families, those with disabilities, and elderly people. Improvements that participants wanted to see in transport infrastructure included more frequent, reliable, direct, cost-effective and accessible services.

        “Even if the buses were reliable, for what it would cost for a return ticket, you might as well put in the fuel and it works out cheaper.” (Participant, phase 2, workshop 2)

        Reactions to initial presentations in phase one

        Phase one participants heard introductory presentations providing an overview of the types of changes that would be needed to move to a decarbonised transport system. Following this, the scale of the challenge became more apparent and daunting to some.

        “I just think there are some serious decisions to be made – in how we live our lives, do our work, what we feel is essential in our lives – to enable that to happen.” (Participant, phase 1, workshop 2)

        As well as sparking further discussion about the potential costs (explored in detail below), the presentations also prompted participants to reiterate concerns about existing infrastructure (such as EV charging), which they felt would need to be significantly improved for this vision to be realised. Participants raised several questions about those infrastructure challenges.

        After hearing the presentation about inequalities in the transport sector, participants identified several groups that they felt could be at risk of being left behind in the transition:

        • Rural communities, particularly those living on islands, based on the points noted above about the current state of public transport in parts of Scotland.
        • Women, noting a point made in the presentation that women were less likely to have access to a car and were more reliant on public transport.
        • People on lower incomes, who participants felt may be trapped if they were charged more for using their car but could not afford to replace it with an EV.
        • People with disabilities or additional needs, who it was recognised may not find public transport accessible.
        • Small businesses, with concerns over potential job losses in the motor industry if EVs required less maintenance and for businesses struggling to absorb the costs of reskilling employees.

        Overall, there was a sense that the changes represented an imbalance towards removing transport options without providing alternatives. One participant illustrated this with an example, describing an experience of their partner who sold their car because they could not afford to drive in a LEZ and could not get to work on time using public transport.

        “I thought it was quite unfair. She wasn’t able to afford to buy a car she could have driven in the [LEZ] area […] and is now having to use mine […] She was really negative impacted. If she lived on her own she probably would not have been able to keep her job.” (Participant, phase 1, workshop 2)

        Vision for the transport sector discussed in phase one

        Phase one participants were presented with a vision for public transport in 2040 based on the Scottish Government’s discussion paper (see fig. 9.1) and explored this in the context of different fictional characters and how they might be impacted (see fig. 9.2). The vision was a high level scenario intended to encourage discussion and invite participants to consider its implications, based on the characters and their own lived experiences, before discussing what a fair distribution of costs and benefits would be.

        Figure 9.1: Vision for transport

        The vision for transport in 2040 includes: private cars produce fewer emissions; alternatives to cars are readily available; new jobs have been created in the transport sector.

        The role of transport for our characters

        Alice has a small, petrol car. There is a bus route that can take Alice from the hospital to her flat. But because of her working patterns, Alice prefers to drive to work. Even though this is more expensive, she does not feel safe travelling by bus late at night.

        David and Sarah have two cars: a diesel SUV and a mid-sized petrol car. David travels by car most days. Sarah mostly works from home. Either David or Sarah use one of their cars to drop-off and collect their children from school. Noah has a disability and uses a wheelchair.

        Lorraine sells produce at a small shop on the farm and supplies local businesses, but most of it is sold to suppliers across Scotland and the rest of the UK. There is no public transport in the area, so Lorraine and her family rely on their cars and vans.

        For weekly food shopping and other needs, Maria uses the local shops and services in Moffat. For anything further away, such as medical appointments for herself or for her daughter Ella, she takes a taxi. Those longer journeys would usually require two buses, which are not accessible for Maria.

        Nadeem uses a diesel van that he drives most days for work. Ajay drives a small hybrid car, which he uses every day to get to work in Stornoway. He has a bicycle but rarely uses it as he does not feel safe cycling on the road. There is limited public transport where Nadeem and Ajay live.

        Who could benefit?

        Under this vision, there was a view that anyone in transport poverty[23] would benefit from having access to public transport for their everyday needs. However, there were questions around the extent to which public transport could replace all types of journeys in all places.

        Participants felt that these changes might not feel beneficial to everyone immediately, as it would involve more effort and time to get around. Nevertheless, there was an acceptance that this would be a reasonable trade-off for a fairer, healthier society. A broader sense of duty was also felt, with participants recognising that they might not benefit directly from the changes themselves but future generations would.

        Who benefits?

        As they lived in urban areas and used public transport, participants identified Alice and Maria as two characters who would benefit under the vision, given the improvements to public transport. It was felt that Maria would be able to make more journeys using public transport and would be less reliant on taxis, saving her money. Alice could also use public transport to go to work rather than rely on her car. However, it was pointed out that more regular buses would not necessarily make her feel any safer travelling to work at certain times and that there would be other factors influencing this (such as the bus routes, behaviour of other passengers, and confidence in the driver to manage any issues).

        Who might be negatively impacted?

        The groups identified as potentially being negatively impacted under this vision were:

        • Individuals and businesses in rural communities, if more accessible public transport systems did not reach all parts of Scotland (which some participants felt would be the case), but initiatives like road user charges did.
        • Businesses in the tourism or hospitality sector, if road user charging put tourists off travelling to parts of Scotland.
        • Families with children, who could find public transport difficult to use.
        • People who drive for a living, if they were not exempt from road user charges.
        • People with limited mobility, if they were not able to use public transport and were not exempt from road user charges.

        Participants also commented on the intersectionality of these groups, and highlighted the need for different circumstances to be taken into account.

        Who could be negatively impacted?

        Although David and Sarah would have to adapt their lifestyle (e.g. use of two cars), it was felt they would be able to adapt and absorb the costs with their income, so they would not be at risk of losing out. However, it was recognised that there would need to be some flexibility or exemptions given for their use of the car when travelling with their disabled son.

        Lorraine was identified as at risk given the impact of the changes on her farm and limited low carbon alternatives for agricultural vehicles and personal car use (based on the view that the sort of rural area where she lives is unlikely to have the level of integrated transport needed).

        It was felt that Nadeem would also be negatively impacted because of his reliance on a van for his work and the fact that he lives and works on an island. Based on the assumption that public transport would not be a viable alternative, it was considered unfair that his earnings would be affected by road charges.

        While it was recognised that society as a whole would benefit if this vision was achieved – due to reduced air pollution and increased social interconnectedness – doubts remained over whether it could happen, and whether it could be implemented in a way that everyone benefits from.

        Phase one conclusions on a fair distribution of costs and benefits

        As we transition to net zero in the transport sector, who should pay for the changes that will be needed?

        There was a broad sense that the costs of transitioning to net zero in the transport sector should be shared and that no single organisation or group should bear sole responsibility. However, participants identified particular groups as being in a position to take more responsibility for these costs.

        A common view was that the Scottish Government should pay a substantial share to help people make the transition to a decarbonised transport system and to encourage behaviour change in how people travel, through incentivisation such as grants for the purchase of EVs and private charging infrastructure, and free public transport.

        “If the government wants everyone to change the way that we live, then they need to put more back in than us ourselves. If they want us to do so much more, they need to help out more than us personally.” (Participant, phase 1, workshop 2)

        However it was also acknowledged that any costs paid for by the Scottish Government could end up being borne by the individual anyway through taxation. Participants’ discussions therefore focused on ways to make this fair (see fair payment systems).

        It was also felt that the transport industry should take on some of the costs, especially where there was scope for businesses to profit (for instance due to increased demand and/or where they contribute higher emissions. Delivery companies had been mentioned in the presentation and it was felt that such businesses could bear the costs of decarbonising their fleets. However, it was also recognised that smaller businesses – such as local mechanics – would need financial support from the Scottish Government to make the initial changes required and to retrain the workforce in new green skills.

        Participants recognised that all citizens would ultimately have to pay something to help reach net zero in Scotland’s transport sector, but identified certain groups that they felt should bear more of the costs. It was generally expected that service users – i.e. people already using public transport – would continue to pay for that, and those benefitting from specific aspects of the transport system (e.g. EV infrastructure) should contribute in some way. It was suggested that those contributions could be scaled according to ability to pay and based on some wider investment in infrastructure.

        It was suggested that those who can avail of alternative forms of transport (but choose not to) should pay more for making choices that result in higher emissions, for example:

        “If someone makes a choice to have two cars in 2040 where we have great transport links, they need to justify it or pay up.” (Participant, phase 1, workshop 2)

        It was also suggested that tourists could pay a share of the costs through a tourism tax aimed at supporting changes in certain areas. However, as highlighted above, there were also concerns that such charges could reduce the number of visitors and negatively impact businesses that are reliant on tourism.

        There were some references to high carbon emitters and suggestions that they might be expected to pay more e.g. businesses that have high emissions, or individuals that continue to drive petrol or diesel vehicles. It was pointed out that those on higher incomes would be more likely to be able to pay the charges and continue high emitting behaviours, or be more likely to afford the low carbon alternatives.

        “The wealthy will always be able to do whatever they want to do. They will do however miles they want because they will pay the charges. The poor will be disadvantaged because they can’t pay.” (Participant, phase 1, workshop 2)

        However, this point was qualified by a view that some high emitters may not have a viable alternative, either because of where they live (i.e. those in rural areas may have no alternative to cars) or because of income (i.e. some would not be able to afford the switch to EVs). Affordability, therefore, was seen an important consideration, even in the case of those contributing the highest emissions:

        “Those with older vehicles, and so higher emissions, will be penalised but it might be unfair if those people cannot afford new, cleaner vehicles. This will disadvantage those who cannot use public transport as an alternative for whatever reason. People on lower incomes are always left behind.” (Participant, phase 1, online community)

        A view shared by some participants was that there will be parts of Scotland that will lose out once the changes are implemented. This view was particularly held by those living in rural areas who did not feel that the vision for transport in 2040 was realistic for rural communities, and considered it unfair to expect those communities to cover the costs of changes that (some felt) ‘will make their situation worse’.

        “It will not cover everyone’s needs here, the system and infrastructure is so dreadful they would need to start major roadworks now. I don’t see any of this helping rural areas at all.” (Participant, phase 1, workshop 2)

        How can we make sure that system of payment is fair?

        Thinking about individuals and groups in society who could pay for the changes needed to reach net zero, participants were supportive of a system of payment based on:

        • Use, with those benefitting from a particular mode of transport, or from a part of the transport infrastructure, or using these more paying a higher share. It was also felt that those using forms of transport that carry higher emissions (e.g. petrol/diesel cars) should pay a higher share for that, but only if they can afford to do so and if other choices are available (as outlined in the next two points).
        • Ease, availability and choice, with those who have services available to them paying, and correspondingly those who do not have services available or who are not able to use the services not paying. Choice was a particularly important factor in who should pay. Taking road charges as an example, participants felt it was not just important to think about proximity to public transport, but circumstances:

        “I live in a rural area where the closest bus is a mile away and the closest train station is nearly 2 miles away.  This means I’d have difficulty reaching either of those services, [and] when I am able to get there I’ve either had to walk or drive making it in my eyes a waste of time.” (Participant, phase 1, online community)

        • Ability to pay. In defining what ability to pay means, views were mixed. Some suggested this should be linked to benefits (none specified), while others felt this would be unfair to those not on benefits but with low incomes. A more exceptional view was that there should be a flat fee applied to everyone. There was broad agreement, however, that those on lower incomes should pay a smaller share than those on higher incomes:

        “It’s got to be based on what people can afford. In principle, it needs to be progressive, otherwise you will end up with poor people paying too much, and richer elements of society paying too little.” (Participant, phase 1, workshop 2)

        Participants felt that a fair payment system would require individual circumstances to be taken into consideration, in particular the needs of those in rural communities. For example, it was felt that car users in rural communities should not pay for road user charging if lower carbon alternatives (i.e. public transport or EV infrastructure) were not available to them and they were still reliant on petrol or diesel cars.

        “[For] people in rural communities who may struggle to transition to electric cars in particular (short range, financial challenge, no viable public transport alternative), will rural communities be given concessions, assistance?” (Participant, phase 1, online community)

        A range of ideas were suggested for taking different circumstances into account. These included a points-based system with an annual self-declaration (considering a range of criteria such as location, mobility, age, and financial circumstances) or a carbon token allowance system for individuals and companies.

        When considering the role of business in sharing the costs, participants worried that these could be passed onto the consumer (e.g. consumers paying more for items being delivered to their home or EV charging prices being increased while companies make large profits). It was therefore felt that there should be “checks and balances” in place to prevent this from happening. But there was also concern for smaller businesses being unable to adapt, so it was considered fair that they would be supported by government.

        “The government, which has the power to force change must be aware of the negative effects of forcing costly change on businesses that may not be able to afford it. Appropriate support should be in place, this may be financial, educational or of other modes such as time limited exemptions”. (Participant, phase 1, online community)

        In terms of the Scottish Government’s role in sharing the costs, it was recognised that some of the funding would inevitably be raised through taxation. A progressive tax was supported, based on both ability to pay and ability to choose.

        “Everyone has to contribute, but what you contribute depends on what choices you are able to make. If you make personal choices that will have more of an impact, you should pay more for it. In many places, you don’t have the choice. You have to factor all that in.” (Participant, phase 1, workshop 2)

        Overall, it was felt that any fair system of payment would need to give people time to make the changes required. In practice, this would mean giving plenty notice of the introduction of new regulations, taxes, charges, or incentives. Related to this, one suggestion was to introduce a sliding scale so that those not making the changes required are charged more as time elapses.

        It was also stressed that certain groups will need additional support, or exemptions from the costs. Echoing earlier views, there was widespread concern about the impact of costs on those who were already struggling financially, particularly in the context of the cost of living crisis. There was therefore a strong desire to protect and support those least able to afford the changes, as well as those with restricted choices in their transport use (e.g. those with disabilities and those in rural areas with no accessible services).

        How can we make sure that everyone benefits?

        If the vision for a decarbonised transport system was realised by 2040 (and there was some scepticism over whether it would be), a number of broad societal benefits were identified, including:

        • A more integrated, smoother and accessible public transport for Scotland (as outlined in the vision) improving health, wellbeing and social connectedness.
        • More services for communities to support a thriving local economy, reducing the need for people to travel further for their everyday needs.

        As with costs, participants highlighted that the benefits of the transition may not be the same for everyone. To ensure that everyone benefits from the transition, they therefore felt that specific circumstances of different groups should be acknowledged and steps taken to address the barriers they may face. This included the groups already mentioned: those on lower incomes and those struggling financially; people with health conditions, disabilities, and elderly people; and those living in rural communities.

        Participants felt that further education and engagement on the benefits of the transition was required. Public consultations, particularly with those most likely to be affected, were suggested as an effective way of understanding the needs of these groups.

        “At the moment there seems to be a disconnect between the current Scottish Government and the public; they are not listening to the genuine concerns of those who will be most affected and are least able to shoulder these burdens.” (Participant, phase 1, online community)

        It was also felt that the necessity of transitioning to net zero in the transport sector (and the benefits of doing so) would need to be clearly and widely communicated to people living in Scotland. Related to this, a theme of transparency emerged, with participants highlighting the importance of the Scottish Government showing how funds raised were being used (e.g. to improve public transport infrastructure).

        “You would need an acceptance from the collective good, that everyone is going to buy in from the system […] You have to take everyone with you on it, and that is a big challenge.” (Participant, phase 1, workshop 2)

        There was a view that reducing the cost of public transport would not have an impact on vulnerable groups unless it was available or accessible to them. Infrastructure improvements were therefore seen as a prerequisite for all people benefitting from the transition to net zero in the transport sector.

        “Older people already have free access to bus transport but if the buses don’t go where you need it’s no use.” (Participant, workshop 2)

        Exploring transport policies in phase two

        In phase two, participants discussed the potential application of Road User Charging (RUC) as a way of helping reduce our reliance on cars. They considered two possible approaches to this:

        • UK national road pricing, involving a charge on drivers based on distance driven.
        • Urban local road user charging, involving a charge to drive into specific parts of an urban area.

        Participants explored each approach through scenario-based discussions and considered the implications for different people living in Scotland (using some of the same characters from phase one).

        Initial views on the idea of Road User Charging

        Before the two approaches were presented, participants shared their initial thoughts on the idea of RUC in principle. Some clear themes emerged, which included:

        • Not implementing it as a blanket rule: while it was recognised that RUC could encourage people to reduce their reliance on cars, it was also felt that it could impact negatively on some groups (e.g. those on low incomes and those who rely on their car because of a disability or health condition, their work, or where they live). It was therefore agreed that exemptions or permits would need to be in place for these groups.
        • Ensuring there are alternative choices available: initially it was felt that applying some form of RUC would be fair where public transport alternatives were readily available (e.g. in cities), but not in areas where cars are not a choice but a necessity due to a lack of accessible public transport option (e.g. in rural areas):
        • “People who live in rural or isolated locations. It’ll be a struggle to get to public transport. I think it will be unfair to put charges on them when they don’t have an option.” (Participant, phase 2, workshop 2)
        • Ensuring that funds raised through RUC are spent on public transport improvements, which highlighted the importance of transparency in the policy for the public to trust it:
        • “The money raised needs to be used to directly improve the transport system rather than being gobbled up by the government.” (Participant, phase 2, workshop 2)

        It was broadly felt that RUC would be acceptable to the public if they understood why it was being introduced and what the benefits would be. However, there was some opposition to the principle of RUC on the basis that it would restrict peoples’ autonomy. It was felt that this would impact those on lower incomes most, as they might have to make decisions based on where they can afford to travel to, while higher earners could absorb the cost and not have to change their behaviour, thus exacerbating current inequalities.

        Views on UK national road pricing

        UK national road pricing was introduced as a possible approach to RUC that would cover all of Scotland’s roads and involve a charge on drivers based on distance driven, as described in the following table: (see figure 9.3).

        Option 1 – UK national road pricing

          • This would involve a charge on drivers based on distance driven.
          • The pricing system would cover all of Scotland’s roads. The cost would vary depending on factors like the weight of the vehicle, the user’s disability status and place of residence e.g. urban residents may be charged at a different level than rural residents.
          • It would be measured and monitored using vehicle tracking technology or mile logging (e.g. at MOT control).
          • The amount paid would range between 3p and 10p per miles driven. Money raised would be invested in improvements to public transport and active travel infrastructure. Electric vehicles would not be exempt.
          • The type of system would be implemented by the UK Government.

        A number of benefits to this approach were identified, such as cleaner air, improved health and wellbeing, and encouraging greater uptake of public transport.

        Participants noted that the money raised would be invested in improvements to public transport and active travel infrastructure. It was agreed that this should be prioritised in rural areas where public transport was widely perceived to be less available and accessible.

        “A good thing about it is that the money raised is put towards public transport. If the money is invested into rural areas, that’d be really good. That’s where the money should go because they need transport.” (Participant, phase 2, workshop 2)

        Consideration for different circumstances

        Reflecting one of the recurring themes from phase one, participants felt strongly that an approach like this would need to take account of different circumstances. It was reiterated that a charge on people living in rural areas who are reliant on their cars to access services would be unfair due to the lack of alternative options available to them.

        “It would be unfair for those that live in rural areas to pay the same when they don’t have a choice in transport.” (Participant, phase 2, workshop 2)

        Participants also discussed the impact on people they knew who travel long distances across the country as part of their jobs. With the prospect of national road pricing, it was felt that they would struggle to absorb these charges.

        Participants noted from the scenario description that costs would vary depending on certain factors, such as the user’s disability status, and this was broadly welcomed.

        “People who are dependent on cars with disabilities, there should be nothing stopping them using their cars, but people who could make small adjustments to their lifestyle, they should just have to bite it” (Participant, phase 2, workshop 2)

        To ensure that national road pricing takes account of different circumstances, it was agreed that there should be clarity around who the charge applies to.

        Who would be impacted more?

        While it was felt that David and Sarah (a couple living on the outskirts of Glasgow with their two children) could afford the charges and make small adjustments to their lifestyle to reduce car use, it was also recognised that there would be circumstances where they would need their car to care for their disabled son and that they shouldn’t be limited in this circumstance.

        This approach was also considered to be unfair for Nadeem (a rural builder), who would not have a choice but to transport his equipment and materials by van and incur the charge.

        Balancing incentives and disincentives

        When looking at national road pricing, there was some surprise among participants that EV users would not be exempt from the charge. There were mixed views on the fairness of this. On the one hand, it was felt that applying road pricing to EV users would act as a disincentive and would contradict other messaging that encourages drivers to switch to EVs. This concern was tied to a broader wariness around the potential that consumers would be faced with costs from multiple different angles.

        “They’re trying to force you to buy an electric car, but once everyone has got an electric car, they’ll change the rules. As a consumer, I just pay, pay, pay.” (Participant, phase 2, workshop 2)

        On the other hand, it was felt that EVs should be charged as they would still contribute to emissions through the manufacturing process, to wear on the roads. It was also felt that owners of EVs were more likely to be higher earners and therefore could afford the charge. If the objective is to reduce overall journeys by car, then exempting EVs would not help in achieving this.

        It was suggested that this form of RUC would be fairer if EVs were charged less than petrol/diesel cars to encourage lower carbon choices, while also encouraging people to rely less on their cars overall.

        “You could say you could be charged reduced rates for that purpose. You are contributing less compared with other people, so that could be one way around.” (Participant, phase 2, workshop 2)

        How the charge is paid

        The indicative cost of 3-10p per mile driven drew mixed responses. For some this amount was felt to be too low to have the desired impact, while others felt increasing the charge would place an unfair financial burden on people who are already struggling. It was suggested that charges could be increased over time to target those who choose to absorb the cost and continue to drive.

        Participants also had questions around how drivers would be expected to pay the charge. It was highlighted that a one-off annual charge could come as a shock to some drivers and would be harder to pay in one go. Instead, participants suggested that the costs should be paid in instalments to ease any financial pressures.

        It was also suggested that the charge could be lower (or lifted) during the night to ensure those working night shifts have more choices available to them. This was considered important in the case of people who may not feel safe using public transport at night.

        “I think there are different circumstances between somebody travelling to work and somebody travelling for leisure. I’m not sure how you would separate the two for making a charge.” (Participant, phase 2, workshop 2)

        Who would be impacted more?

        When considering this approach in relation to Alice (a nurse living in a city), the safety concern around her using public transport for night shifts was discussed.

        While one view was that Alice has the choice to drive or take public transport available to her and so it would be fair for her to pay the charges, another view was that it would be unfair for her to have to choose between her safety and her finances.

        Building on the concern raised about mixed messages, rules changing over time, and the costs for consumers continuing to mount up, it was felt that any changes introduced should be for the long-term.

        “If you’re going to have a just transition, make it sensible for the consumer and don’t make the consumer pay more and more.” (Participant, phase 2, workshop 2)

        Views on urban local road user charging

        Urban local road user charging was introduced as another possible approach to RUC that would involve a charge to drive into specific parts of an urban area, as described in the following table: (see figure 9.4).

        Option 2 – Urban local road user charging

          • This would involve a charge to drive into specific parts of an urban area.
          • When it is in place would depend on local circumstances, e.g. it may be applied at certain times of the day to coincide with when public transport is available. This could apply to large urban and suburban areas such as Edinburgh or Glasgow metropolitan areas.
          • It would be measured and monitored using number plate recognition or vehicle tracking technology.
          • The charge would be approximately £5 – £15 per day. Money raised would be invested in improvements in public transport and active travel infrastructure. Electric vehicles would not be exempt.
          • Similar systems are in place in London and Milan. This type of system would be implemented by local authorities (they already have the power to do this).

        This approach was considered to be fairer than national road pricing. While delivering the same benefits (e.g. cleaner air and improved public transport), participants also expected this approach to be implemented in areas where alternatives – such as public transport and park and rides – would be readily available. Participants were also reassured that similar systems had already been implemented in other cities.

        “This one is targeting particular areas and not all journeys. You’re given an option to use your car or public transport to get into the city.” (Participant, phase 2, workshop 2)

        Who could be impacted less?

        This approach was considered fairer for Nadeem, as it was assumed that he would not be travelling into areas where RUC was in place and his rural building business would therefore be unaffected.

        For David and Sarah, while it was recognised that RUC would likely affect them, they would have alternative public transport options available to them as they lived in a large urban area.

        Offering alternatives

        Reiterating earlier discussions around the importance of providing alternatives, it was strongly felt that adequate public transport infrastructure would need to be in place before RUC was introduced to an area.

        “I think it would have to be done once the developments on public transport were completed and once the government had good confidence that public transport is efficient.” (Participant, phase 2, workshop 2)

        Exemptions

        Participants queried how those who live within the charging zone, or travel in and out of it for work, would be treated. While it was felt that some businesses would be able to absorb the costs or find alternatives, it was perceived to be unfair on those who already live or work within the RUC areas. There was broad agreement among participants that exemptions would need to be made for such groups. Similar to national road pricing, it was felt that some EVs should also be exempt, such as those used for work purposes.

        “If you’re already living in an area and then you suddenly get told you’re going to have to pay £5 or £15 any time you take your car out purely because of where it is, I would say that would be quite unfair.” (Participant, phase 2, workshop 2)

        Urban area differences

        The definition of an “urban area” was also scrutinised, with a distinction drawn between cities like Glasgow or Edinburgh, and cities like Inverness. Inverness was considered to be a city that connects people by transport in rural areas to the rest of Scotland. If local road user charging was introduced here, there was a concern that it would limit the mobility of those living in the surrounding rural areas. This added to the concerns raised earlier about not taking a blanket approach, but considering different circumstances.

        “In Inverness, you wouldn’t just be restricting the city centre, you’d be restricting other areas outside of that. Inverness city centre is a connecting point to get to other areas. I can’t see this working [there].” (Participant, phase 2, workshop 2)

        What needs to be in place for Road User Charging to be fair?

        Participants identified a number of conditions that would need to be in place to make Road User Charging fair (see conclusions section). In reaching their conclusions participants were broadly accepting of the principles of Road User Charging, based on the view that it could help encourage some of the significant changes needed for Scotland to reach its net zero targets.

        A more exceptional view was that it would be difficult (and for one participant, impossible) to make RUC fair. Participants drawing this conclusion considered there to be too many variables to consider, and were concerned that RUC would ultimately deepen inequalities by limiting the choices of those less able to afford the charges.

        “I can imagine if you’re already living hand to mouth, it would be very stressful to keep track of all your miles and try and work out exactly what you’re going to be paying.” (Participant, phase 2, workshop 2)

        Appendix 2 – Built environment and construction sector detailed findings

        This chapter outlines participants’ views on a just transition in the built environment and construction sector. It provides detailed findings from both phases of research:

        • Phase one, where a group of 30 people living across Scotland met over six online workshops and an online community to consider what a fair distribution of costs and benefits would look like. It focussed on three sectors, one of which was the built environment and construction.
        • Phase two, where a group of 20 people living across Scotland met over three online workshops to explore specific policy options One of those workshops focussed specifically on the built environment, including the transition to clean heating systems in domestic properties.

        Summary of findings

        The vision for the built environment and construction sector was viewed positively, but also as overwhelmingly ambitious. Participants felt costs should be shared between:

        • The construction sector
        • Multiple property owners
        • Homeowners
        • The Scottish Government

        To ensure a fair transition, and that everyone benefits , it was suggested that:

        • Those who profit from buildings should pay for the work needed to make them adequately energy efficient.
        • Costs should be distributed based on ability to pay, which could include a means-tested approach to payment. Having more than one property was viewed, by some, as an indicator of wealth and that such individuals could afford to pay for changes to their properties.
        • Landlords have a responsibility to pay for their properties and there should be regulation to ensure they do so without passing on costs to tenants.

        To ensure the heat transition is paid for in the fairest way possible, it was concluded that:

        • There should be support available to all households but that the amount of support should vary depending on circumstances, with those on low incomes and those with older properties entitled to the most government funding.
        • There should be protections in place, such as exemptions from penalties for vulnerable groups, rent increase caps to protect renters, regulation on the installation of new heating systems, and a fair appeals process.
        • Other considerations included careful consideration around loans to avoid pushing anyone into financial hardship, reassurances around the efficacy of new heating systems, and clear communication with the public about the changes required.

        What changes were expected?

        Early in each phase, participants discussed the changes they thought would be needed for the built environment and construction sector to reach net zero. Their suggestions covered people’s homes, commercial or public buildings, and the broader construction sector, including:

        • Phasing out use of fossil fuels, for example shifting from gas and oil to cleaner heating systems in homes.
        • More energy efficient buildings.
        • Using more sustainable materials in construction.
        • Increased regulation on standards and location of new builds, including ensuring buildings were weather-proof.

        One of the key challenges participants identified at this stage was with retrofitting existing buildings. They felt this would be difficult due to the age and characteristics of a property (e.g. whether it would be possible to install cavity wall insulation), location (e.g. there was a perception that heat pumps did not work well in all environments), and the potential cost and disruption caused by making adaptations.

        “It [is] easier to address environmental and energy issues when building new houses, most of the problems arise when we try to improve these issues in older housing stock. It means prohibitive costs to change heating systems and insulate old buildings. Who is going to pay for this?” (Participant, phase 1, online community)

        Potential challenges were also raised specifically in relation to rural communities due to the nature of the existing housing stock, the climate, and the availability of skilled workers.

        On heating systems specifically, participants raised concerns about the upfront cost, their perceived suitability for some properties (e.g. apartments with limited external space or coastal properties), and the efficacy of such systems based on what they had heard. One participant, who had seen planning applications for heat pumps as part of their job, highlighted that the process of installing can also be difficult.

        “I’ve heard a lot of bad press about heat pumps not working properly […] I’ve heard people have installed them and removed them and gone back to boilers as they couldn’t get their house warm enough. It would be off-putting if you’re going to spend thousands.” (Participant, phase 2, workshop 3)

        In discussing their expectations for the sector there were early suggestions of financial support for homeowners to make changes to their property in the form of means-tested grants.

        Reactions to the initial presentations in phase one

        Phase one participants heard a presentation outlining the Scottish Government’s vision for the future of the sector, the types of changes that would be needed to achieve it, and the benefits and challenges associated with decarbonising the sector. A second presentation then outlined the inequalities within the sector that would need to be addressed as part of the transition to net zero.

        Echoing many of the sentiments raised in earlier sessions, some participants mentioned feeling overwhelmed about the scale of the challenge in terms of cost, feasibility of retrofitting, and extent of upskilling required.

        “It will be difficult to bring current homes up to standard, mainly due to costs…I have an older, solid stone house, which is a nightmare to heat. It’s not on the gas grid, but uses electric and coal. It comes down to funding for me.” (Participant, phase 1, workshop 3)

        In their initial reactions to the presentation, participants suggested that those profiting within the sector (landlords, energy companies, and construction companies) should bear a greater share of costs than the public should. Having heard about the costs associated with changes such as heat pumps, participants felt that financial support from the Scottish Government would be needed to help homeowners to afford those changes.

        Participants also stressed the importance homeowners receiving trustworthy advice regarding the changes required to their properties, and of contractors carrying out high quality work. The need for regulation in the private rental sector was highlighted, as a way of ensuring that landlords did not pass on the cost of upgrades to tenants.

        Vision for the built environment and construction sector discussed in phase one

        Phase one participants had a chance to view a future vision for the built environment and construction sector on the online community and again in the workshop. The vision (shown in figure 10.1 below) was based on the Scottish Government’s discussion paper for the sector. As well as sharing their own views on the vision, participants revisited the five fictional characters (show in figure 10.2) and discussed how it might impact on them.

        Figure 10.1. Vision for the built environment and construction sector

        The vision for built environment and construction in 2040 includes: buildings are more energy efficient; places are designed and used differently to cope with extreme weather; the construction sector uses more sustainable materials; and new jobs have been created in the sector.

        The role of the built environment for our characters

        Alice lives in a three-bed flat with two friends. They rent from a private landlord and share responsibility for bills. The flat has electric heating. It has double glazing but is drafty and has poor insulation. She hopes to buy her own property when she has saved enough money.

        David and Sarah live in a semi-detached house which they own. Their home has an EPC B rating. It has gas central heating, double-glazing, and loft and cavity wall insulation. They own a second property, which they rent out. This property lacks insulation and has an EPC D rating.

        Lorraine lives in a 1920s home. It does not have central hearing. She uses a wood burning stove and electric storage heaters. She has external wall insulation, but the home still has a low EPC E rating. Her daughter wants to work in construction but there are not many local training opportunities.

        Maria lives in a ground floor flat which she rents from the housing association. The flat is in a flood risk area. She requires a minimum level of warmth, meaning her heating is used all the time. The flat has an EPC C rating, with double glazing, central heating and loft insulation.

        Nadeem and Ajay live in semi-detached property. The property has solar panels and a ground source heat pump. Nadeem is a builder and is working on more new builds. He feels he needs training on new construction techniques for him and his staff.

        Who could benefit?

        Participants identified groups who would benefit from the vision, provided certain measures were in place. The construction sector was identified as potentially benefitting from the additional work involved in retrofitting buildings, which could lead to profit and the creation of new jobs. Participants noted that construction firms that were already working in line with the vision would find the transition easier than those having to change practices.

        “Most of the cost is in retrofitting older buildings. If you build a new building already to high standards the costs are reasonable. You could factor in a heat pump at the beginning. I think the building industry is perfectly able to adapt to that with minimal challenge.” (Participant, phase 1, workshop 3)

        Participants felt that those currently living in an energy inefficient home would benefit from the energy efficiency improvements proposed under this vision. It was suggested that homeowners who could afford to make those changes would likely find this aspect of the transition easiest. It was felt that home buyers would benefit from new builds being built to high energy efficiency standards, as long as those new homes were affordable.

        Participants also felt that social renters might face fewer challenges in implementing the changes needed, which was based on a perception that responsibility for making upgrades to their homes would lie with providers of social housing, such as the council. However, they also noted that a drawback for social renters was their lack of control over these types of decisions and that they would have to rely on providers of social housing to make improvements. There was equally a concern that private landlords would pass cost on to tenants.

        Who benefits?

        Nadeem was identified as benefitting from an increase in work for the construction sector and from training opportunities available on new construction techniques, provided these are accessible to him and his staff.

        Alice would benefit from improved energy efficiency, provided upgrades were carried out by her landlord and that additional costs associated with this were not passed on to her. She would also benefit if she was able to afford a high-quality new build.

        Maria was also identified as benefiting, if the housing association carries out upgrades and if appropriate measures were introduced to reduce the risk of flooding to her property.

        Who could be negatively impacted?

        Participants felt that there was potential for homeowners to be negatively impacted if they found energy efficient improvements unaffordable. There was specific concern about middle income earners, who it was felt might not qualify for financial support towards making their homes more energy efficient, yet may not be able to afford those changes.

        “The asset rich cash poor single homeowner is going to be the one that’s hit most. You apply for the grant and they’ll say you have a pension and savings but, you can’t access it in the same way a council tenant can.” (Participant, phase 1, workshop 3)

        Participants also felt that there would generally be higher costs associated with living in a rural area, which would impact on ability to afford upgrades. For example, it may cost more to transport construction materials to rural areas.

        There was concern that new builds with very high energy efficiency standards would be more expensive which would affect home buyers or self-builders’ ability to afford a new property.

        As well as barriers related to costs, participants also noted that it may not be possible to upgrade certain properties due to their age or location (e.g. listed buildings) meaning people living in these properties would not benefit from the vision. There was also concern about the possibility of property owners receiving bad advice about upgrades or work not being carried out to a high standard.

        While the construction industry was identified as benefitting overall, participants emphasised that some workers could lose out if there were no local training opportunities available to them, or if they would find it difficult to reskill given their age or need for financial support.

        Who could be negatively impacted?

        Lorraine was identified as at risk because her property had a low EPC rating and would likely require a lot of work to make it energy efficient, which she may not be able to afford.

        Reflecting the points raised above, it was felt that Alice was at risk of losing out if her landlord increased her rent to cover the costs of changes to the property. This would also affect her ability to save for a new property, especially if very high energy efficiency standards led to increased costs for new builds.

        Phase one conclusions on a fair distribution of costs and benefits

        As we transition to net zero, who should pay for the changes needed in the built environment and construction sector?

        In the workshop, the types of costs covered by the expert speakers included those associated with the construction of new buildings, those required for the retrofitting of existing buildings (e.g. through insulation or heat pumps), and the training and reskilling of the construction workforce. Participants discussions therefore centred around these broad cost categories.

        As with the transport sector, there was a sense among participants that the costs of transitioning to net zero should be shared and that no single organisation or group should bear sole responsibility. Groups that participants felt should contribute to paying for the changes included:

        • The construction sector. As noted above, it was felt that the buildings and construction industry was likely to benefit from the changes needed to reach net zero, due to demand for new homes and the retrofitting of existing homes to bring them up to standard. As the industry would likely profit from an increase in demand, it was considered fair for them to pay a share of the costs. In particular, it was felt that the industry should bear the cost of reskilling the workforce, as this would ultimately benefit them (though some suggested that the Scottish Government and colleges or universities should also share some of this cost):

        “The companies that are building the new properties should bear a reasonable chunk of [the cost] because they’re going to profit from selling the properties. And they have a duty to bring the properties up to some sort of [standard].” (Participant, phase 1, workshop 3)

        • Those owning rental properties. There was an expectation that social landlords would bear responsibility, and therefore the cost of making changes. Further, there was a strong feeling that private landlords should pay to bring those properties to a suitable energy efficiency standard. Similar to the views about the construction industry, it was felt that those generating profit from the property market should and could pay for changes needed, and that they should be held responsible for ensuring properties reach the necessary standard of energy efficiency:

        “If they can generate profit from just owning [an additional property], they should be expected to maintain the same or higher standards than private owners or council flats.” (Participant, phase 1, workshop 3)

        • Homeowners. It was generally accepted that homeowners should contribute to the costs of making changes to their properties, as this was seen as part of the responsibility of owning a property. As the cost of making changes would potentially be very high, it was suggested that financial support should be made available for homeowners, ideally in the form of grants or interest free loans. Some felt that homeowners may benefit financially in the long term, as making the improvements to the property may save money on bills or increase its value, although this would depend on local circumstances. A tiered system of payment was therefore suggested, reflecting ability to pay and other circumstances (explained further below in relation to systems of payment):

        “I think that low or no interest loans would be welcomed. It’s taken me this long to put together a 5% deposit. I’ve done the biggest bunch of [saving] that I can do … that would take the pressure off me.” (Participant, phase 1, workshop 3)

        • The Scottish Government. Due to the scale of changes required to buildings (e.g. one of the expert speakers noted that almost 2 million homes will need retrofitting) and the level of costs (e.g. installing a heat pump was described by one of the experts as potentially costing up to £15,000 for some households), it was felt that individuals would require support from the Scottish Government. Some participants shared their own experiences of looking into heat pumps, saying that they were unable to get them because they were prohibitively expensive. Government support towards this, and other costs associated with retrofitting, was therefore considered necessary:

        “I don’t think it’s doable to pay for this all on our own. Obviously this is something we all want and it needs to be done. But there does need to be funding or grants to help people.” (Participant, phase 1, workshop 3)

        How can we make sure that system of payment is fair?

        In discussing fair systems of payment, two clear themes emerged:

        1. First, that the built environment was complex, with many different players involved and different circumstances to be considered. As such, it was felt that while collective action was required to help reduce the emissions from our buildings, there was no “one size fits all” approach to covering the costs.
        2. Second, that those who were unable to afford the changes, particularly those on lower incomes, should be provided with support. Of the potential systems of payment discussed in the workshop and online community, the approach that was met with most support was one based on addressing inequality and ensuring that those on lower incomes did not get left behind.

        There was at least some level of support for the following systems of payment:

        • Ability to pay. It was felt that individuals all have a part to play, but there should be a tiered, perhaps means-tested, approach to payment. This would mean that those most able to afford changes would make higher contributions, potentially through a tax-based system of payment. There was some discussion of the pros and cons of means testing given the bureaucracy this would require, balanced with a need to act quickly in order to reach net zero by 2045.

        “The people who build the biggest and poshest houses, there should be some kind of tax on them to help insulate the people at the bottom of the market… A bit of taxation redistribution there would be useful.” (Participant, phase 1, workshop 3)

        • Profit-sharing. As noted above, a strong sentiment in the workshops was that those who made profit from buildings (both from their construction and from leasing them to tenants) could and should pay for the work needed to make those buildings adequately energy efficient.
        • Number of properties. Having more than one property was viewed, by some, as an indicator of wealth and that such individuals could afford to pay for changes to their properties. However, some challenged this by saying that having a second home did not automatically mean that they could cover the high costs of installing heat pumps or similar measures.

        “Unless there are solid reasons why the individual owns more than one home, then they should incur more cost and inconvenience than those living in properties which are appropriate to their needs.” (Participant, phase 1, online community)

        • Ability to make changes. Linked to the point above, it was felt that landlords (both private and social) have a responsibility to pay for their properties, and that tenants should not be obliged to cover the costs. It was seen as unfair for landlords to pass the costs of improvements on to tenants – otherwise, the already challenging costs of renting and attempting to purchase a home would become even more prohibitive. This led participants to suggest regulation of private landlords to ensure they bring their properties up to standard and prevent them from passing these costs on to tenants.

        “If they talk of passing on costs to the renter, if there are not things like rent controls, then the housing situation will become so bad that no one will be able to afford to live anywhere.” (Participant, phase 1, workshop 3)

        • Some participants with experience of renting or owning a property within a building with shared ownership felt it would be unfair if they had to pay costs that they had not agreed to or that would not be borne by social renters.

        Opinion was split on whether a payment system based on level of emissions (i.e. with those living in higher emitting homes paying more) was fair. On the one hand, there was a view that property owners who had neglected to make the necessary changes should, after time, be obliged to pay more. On the other hand, there was a view that those in less energy efficient properties may also be those with the lowest incomes, they should not be penalised for not being able to afford the changes needed. Indeed, it was suggested that these properties should be prioritised for support.

        “Some houses are not able to have all the new fancy equipment and insulation fitted to them… people living in such buildings should be offered more help and not penalised. However, that being said if such houses have refused to update their homes and continue to use excessive carbon emissions without trying to cut down then, yes, they should pay more.” (Participant, phase 1, online community)

        Participants also recognised that building standards have changed over time so it would not be fair to penalise owners who have “inherit[ed] decisions made by previous owners…that were taken in good faith”. More broadly, participants emphasised the need to consider links between sectors when it comes to an overall system of payment.

        “I suggest a nuanced, means-tested approach, which is tailored to each person’s circumstances. I also suggest that this approach takes into account the overall carbon emissions caused by an individual’s lifestyle…Treating these as separate issues seems to be missing the point.” (Participant, phase 1, online community)

        How can we make sure that everyone benefits?

        To ensure everyone benefits from the transition, the general feeling was that appropriate financial assistance should be provided to those on lower incomes and those with particular support needs (on account of their age, health, or disability). Participants therefore suggested financial support for homeowners to retrofit their properties, ideally in the form of a government grant reflective of ability to pay.

        Other specific suggestions included assistance in the form of a scheme similar to ‘Help to Buy’ but for energy efficient new builds, and a loan encompassed with mortgage to help owners replace heating systems.

        “The people who will find it most difficult are the people that have been in their family home for 40 years and it’s their responsibility to fit it. The support seems patchy for people trying to make these changes…so ultimately homeowners need the most help.” (Participant, phase 1, workshop 3)

        Protecting private renters was also seen as important. It was felt that private renters may be at risk of being left behind if the focus of support was on homeowners. Their concern that some landlords may not be able to afford to make the changes required to their rental property (e.g. if also making changes to the home they live in), therefore leaving renters in energy inefficient properties. To make sure that renters benefit from the changes, there was a suggestion of both regulation for landlords (outlined above) and financial support if necessary.

        The importance of awareness raising was also highlighted as a way of ensuring everyone benefits. Specifically, it was seen as important to ensure that everyone understood the EPC rating system, what changes they would need to make to achieve the new requirements, and what support would be available.

        Finally, it was noted that rural areas may need different solutions and retrofitting may be harder in rural properties. Several factors were highlighted including age of property, local climate, availability of tradespeople, and additional costs or logistics associated with each of these factors. The importance of adapting to the needs of rural areas was therefore highlighted as a way of ensuring people living in rural areas are not left behind and that people are not discouraged from moving to a rural community.

        Exploring policies related to heating systems in phase two

        In phase two, participants discussed the transition to clean heating systems in domestic properties (i.e. homes that people live in, whether owned, private-rented, or social-rented) and considered two possible approaches for funding and implementing this:

        • Widely available public funding, with stricter penalties for non-compliance.
        • Targeted public funding, with softer penalties for non-compliance.

        Participants explored each approach through scenario-based discussions and considered the implications for different people living in Scotland (using the same characters from phase one of the research).

        Initial views on the idea of a clean heat transition

        Before the two approaches were presented, participants shared their initial thoughts on the idea of transitioning domestic properties to clean heating systems and making energy efficiency improvements in principle.

        The Scottish Government support currently available for people switching to clean heating systems (in the form of grants and interest free loans) was viewed positively and the timescales for this (i.e. prohibiting polluting heating systems by 2045) were considered reasonable. However, several practical questions were raised around: how homeowners and landlords would go about installing clean hearing systems ; how suitable they would be for some types of properties (one participant had used support from Home Energy Scotland and was advised that a heat pump was not viable); how listed buildings would be protected; and what the ongoing costs of clean heating systems would be.

        The energy efficiency improvements were also viewed positively in terms of the impact they would have on properties’ ability to retain heat. These changes were also considered to be easier, cheaper and more manageable to make than the heat system changes. However, participants questioned the availability of tradespeople, with one participant having been unable to find someone to install loft insulation despite receiving support for that.

        Some broader themes also emerged that remained prominent through later discussions:

        • Concerns around the upfront costs and the impact on certain groups (e.g. students, elderly people, those with disabilities or health conditions, people with older properties, landlords[24] having to absorb the costs, and tenants who might be subject to rent increases).
        • A view that grants should be limited to those on low incomes or those in older properties who have to make the biggest changes.
        • A perception that rent freezes or caps would be necessary to prevent renters experiencing the shock of sudden rent increases.
        • An appetite for more evidence from trials and system comparisons to reassure people that the solutions proposed are the right ones and are for the long term.

        Views on widely available public funding

        Participants considered a scenario in which Scottish Government grants and loans would be available to all households to improve energy efficiency and install a clean heating system. In this scenario, there would be penalties for non-compliance by the deadlines set out (see figure 10.3 below).

        Figure 10.3: Widely available public funding with stricter penalties

        Background: all landlords are required to meet energy standards by 2028, and homeowners by 2033; polluting heat systems are prohibited after 2045; a communications campaign sets out the requirements and Home Energy Scotland offer advice. In this scenario: Scottish Government grants and loans are available to all households; landlords could receive penalties if they don't meet minimum energy standards by 2028 and clean heating systems by 2045; landlords are prevented from increasing rent after switching to a clean heating system; homeowners could receive penalties if their home doesn't meet minimum energy standards by 2033, and a clean heating system by 2045; some homeowners could be exempt from making changes; and there is an appeals process.

        It was felt that widely available funding would prompt more people to be proactive and make changes to their homes earlier rather than waiting until the last minute. This, coupled with stricter penalties, was considered an effective way of encouraging people to switch.

        The fact that exemptions would be in place for some homeowners based on certain circumstances was “heartening” for participants. It was felt that people with disabilities, health conditions, pensioners and people living in older properties (who would find the changes most difficult) should be exempt. Participants were also supportive of an appeals process being in place to enable people to challenge penalties.

        Who would be impacted more?

        Participants identified Lorraine (a rural farmer with an older property) as someone who should be exempt. In her case, being exempt was felt to be important to protect her from further financial precarity, as an older person living in an older property who was already paying off debts.

        Participants were also reassured by the fact that tenants would be protected from rent increases, although there were some concerns raised about landlords ignoring the regulations or exploiting loopholes (e.g. by increasing rents before making the required changes).

        Deadlines and penalties

        The 2028 deadline for private landlords making home energy improvements was felt to be too close, and that introducing penalties without a longer notice period would be unfair. While some welcomed the fact that landlords would not be able to pass along additional costs to tenants, others raised concerns about the potential consequences of this. One participant highlighted the risk of landlords (including her own current landlord) deciding to sell in response to the 2028 deadline, penalties and restrictions, which would mean fewer homes available to rent.

        “Very many landlords will simply sell their properties rather than fork out such a large sum of money, this will, of course remove even more homes from housing stock when there is already a housing crisis.” (Participant, phase 2, workshop 3)

        The 2033 target for homeowners to make energy efficiency improvements was also considered too soon. For this funding approach to be made fairer, participants suggested that homeowners and small business landlords should be given more time to make the necessary changes before penalties are introduced. Exemptions from penalties were also considered to be fair if homeowners and landlords could demonstrate that they had made some effort towards meeting the targets or that they cannot afford to make them.

        “If you make an effort and don’t achieve the target, it seems unfair to give you a penalty. The people who do make an effort and achieve it, fair enough. It depends if the target is achievable or not. Be fair about it all and make the target reasonable and achievable.” (Participant, phase 2, workshop 3)

        The 2045 deadline for clean heating systems to be installed, however, was considered too far away. There were concerns that this timescale would not provide enough motivation for people to act quickly.

        “How are you going to get people interested at all when the penalties don’t kick in for another 20 years?…It feels too distant.” (Participant, phase 2, workshop 3)

        While the appeals process was welcomed, there were concerns that it could be a difficult and stressful process which would be off-putting for some.

        Availability of funding

        The availability of funding to all households drew mixed views. Some participants felt this was unfair, as wealthier households could afford to make the changes without funding support, while those struggling financially would be reliant on support.

        Other participants felt that the Scottish Government should provide financial support to everyone if the changes were being made compulsory. Broader availability of funding was also considered fairer than the alternative, as there was a perceived risk that targeted funding could lead to some households not being eligible for funding but still being put under financial pressure.

        “If the government were to enforce this, I think it wouldn’t be very fair to give grants to some and some to not…If they want people to do it, they’ll need an incentive.” (Participant, phase 2, workshop 3)

        There was some discomfort around the idea of people taking out loans to cover the remaining costs, particularly for those seeking to avoid loans or already struggling with debt.

        “I went through my life trying to avoid debt. Taking on debt in your 80s, you’ve had a lifetime not owing anybody then because someone has decided your gas boiler is out of fashion you have to find £15,000.” (Participant, phase 2, workshop 3)

        If loans were to be offered, participants agreed that long repayment plans should be available to ease any financial burdens, particularly for those paying off existing debts. Among participants who preferred targeted funding, it was felt that lower income households should be given higher grants so that they would not have to take out a loan.

        “If giving you a loan, it’s on top of the debts I already have. If [repayments] don’t eat into my pay, maybe it’s manageable, but trying to squeeze the little I earn to then pay for the renovations I don’t need, it’s a bit too much.” (Participant, phase 2, workshop 3)

        Trust and transparency

        Discussions on the heat transition highlighted issues of trust in systems such as heat pumps and heat networks. Participants sought more reassurances around the efficacy of these systems and felt that there would need to be a campaigns on a continual basis to raise awareness among the public (using a range of methods such as letter, billboards, and social media). One participant suggested reaching people through alerts on their phones, highlighting the sense of urgency and scale required to make sure the public are aware so that they can start to prepare.

        While the focus of these discussions was on homeowners and landlords making the heat transition in their properties, it was also felt that housing developers should be responsible for installing heat pumps in new builds, or connecting them to heat networks. This was linked to a broader sense that these policies were placing an unfair burden on consumers without systemic action or leadership being demonstrated by industry or government.

        “They’re still putting gas boilers in. Why don’t they put heat pumps in new builds so people know how they work. It feels like it’s just the stick at the moment, there’s no carrot.” (Participant, phase 2, workshop 3)

        Views on targeted public funding

        Participants considered another scenario in which Scottish Government grants and loans would be available to households on lower incomes to improve energy efficiency and install a clean heating system (but not to higher income households, landlords or owners of second properties). In this scenario, there would be penalties for non-compliance on energy efficiency improvements, but penalties for not installing a clean heating system by 2045 would not be enforced straight away (see figure 10.4 below).

        10.4: Targeted public funding with softer penalties

        Background: all landlords are required to meet energy standards by 2028, and homeowners by 2033; polluting heat systems are prohibited after 2045; a communications campaign sets out the requirements and Home Energy Scotland offer advice. In this scenario: Scottish Government grants are available to households on lower incomes; loans are available from the Scottish Government all households; private finance opportunities are available; landlords could receive penalties if they don't meet minimum energy standards by 2028; penalties for note switching to a clean heating system heating system by 2045 would not be enforced right away; landlords are allowed to increase rent to cover the costs but there is a gap; homeowners could be subject to additional charges on council tax if their home doesn't meet minimum energy standards by 2033, but penalties for not switching to a clean heating system by 2045 would not be enforced right away; some homeowners could be exempt from making changes; and there is an appeals process.

        Those who preferred a more targeted funding approach saw this as fairer than the option of broadly available funding, as they felt it would support those who needed it most. As well as people with low incomes, people with disabilities were also identified as a group who should be eligible for grants.

        While there were concerns raised initially that private landlords being able to increase rent would negatively impact tenants, it was also recognised that tenants could benefit from their homes being made more energy efficient, which in turn could lead to better living conditions and cheaper energy bills. It was agreed that a rent cap would be important to protect tenants from sharp rent increases.

        Deadlines and penalties

        As highlighted in discussions around the timescales for implementing changes in option one, it was felt that some deadlines (e.g. 2028 for landlords to meet a minimum energy standard)) were too soon and would not provide enough notice, while others (e.g. 2045 for switching to a clean heating system) were too far away and would not instil enough of a sense of urgency in the changes required.

        In discussing the introduction of penalties for non-compliance, participants raised concerns that this would lead to people rushing to install the technologies before the deadline and mistakes being made. This prompted questions around how the clean heating systems would be installed and regulated.

        “I think penalties scare people off more and maybe they’ll do things quickly and they’ll be done wrongly. Who’s checking these things? Are there people checking it’s done correctly? It could be a cowboy builder doing things that are wrongly done and then you get penalties for something that you thought was right.” (Participant, phase 2, workshop 3)

        There was also a lack of clarity around the timings of the penalties, with some being enforced as soon as the deadline expires and others not being enforced right away. This was felt to be problematic and an ineffective way of encouraging people to act.

        “If you say you’ve got to do something by 2045 but there are no consequences for not doing it by 2045, [it] doesn’t make sense. I could say anyone has to do something but if there are no consequences, do they really have to do it?” (Participant, phase 2, workshop 3)

        Participants suggested that the penalties should be made clearer, but agreed that there should be some flexibility in how and when they are applied by taking the household’s circumstances into account first.

        Targeted funding

        Although some participants supported a more targeted funding approach, there was also a strong view that targeted funding could create financial hardship and worsen the cost of living crisis. It was also felt that targeted funding could limit the effectiveness of the policy, with those not eligible for funding being less inclined to act.

        As in the previous scenario, some were not comfortable with people being pushed into any form of debt, even with some of the costs covered by grants.

        “They’re saying 0% interest loans, but you’re putting a heap of people into debt, vulnerable people, young people. I think this would be quite horrible.” (Participant, phase 2, workshop 3)

        There were strong views against private financing, which were underpinned by a perception that private sector organisations – and energy companies in particular – were motivated solely by profit. If loans were to be made available, it was preferable that these be Scottish Government-administered and not privately financed.

        “I don’t think private sector should offer loans in the first place. The government wants you to do this so they should offer the loan themselves or provide the grant.” (Participant, phase 2, workshop 3)

        While some were not comfortable with private financing in the form of loans, there was some openness to other forms of private financing, such as discounts on energy bills in return for making energy efficiency improvements. Alternative sources of funding for the heat transition were also suggested, such as a tax on the profits of energy providers.

        Trust and transparency

        As in the previous scenario, participants felt that there would need to be clear and comprehensive communications with the public to raise awareness of the changes that homeowners and landlords would be required to make. Building on this, participants expressed a clear appetite for these communications to provide reassurances around the reliability of the clean heating systems and the ongoing running costs as well as installation costs.

        “If I knew that my energy bills were going to drop sufficiently then it wouldn’t bother me at all having to try and fund it from a low interest loan. But I would feel extremely nervous on going that it might. It’s a big jump to take just based on faith.” (Participant, phase 2, workshop 3)

        Related to this was an unease around the longevity of the policy, the risk of requirements changing in future, and the cost of this to consumers in future.

        “Scottish Government years ago encouraged people to buy diesel cars, and now diesel is dreadful, encouraged to install wood burning stoves and central heating, again now it’s wrong. How many times are the public expected to listen to the government and spend money converting to whatever it is only to be told within a short time that it’s wrong.” (Participant, phase 2, workshop 3)

         

        Appendix 3 – Land use and agriculture sector detailed findings

        This chapter discusses participants views on a just transition for land use and agriculture. As with the previous sector-focussed chapters, it describes initial views on changes needed, learning during the workshop, and conclusions in relation to the three questions. Policy options for the land and agriculture sector were not explored as part of phase two of the research, so the findings presented here are in relation to phase one only.

        In agreement with ClimateXChange and the Scottish Government, the workshop dedicated to this sector focussed on what the transition to net zero means for food production and consumption. Recognising the scale and complexity of the land and agriculture sector, this topic was chosen as an area in which participants would be able to relate to their everyday lives.

        Summary

        Participants supported the move towards more climate friendly approach to food, but were concerned the overall fairness of the vision and impact on rural communities.

        Participants felt costs should be shared between:

        • The Scottish Government
        • Farmers
        • Other businesses (e.g. supermarkets)
        • Consumers
        • Landowners

        To ensure a fair transition, in which everyone benefits, it was suggested that:

        • People’s ability to pay is taken into account, with protection in place for low-income consumers.
        • Farms are subsidised, favouring smaller farms with less income. Support payments should be specifically allocated towards covering the costs of reducing carbon emissions.
        • Farms should be given sufficient time and opportunity to change and reduce emissions before introducing any financial impacts such as additional tax.
        • Ensure that consumers have easier access to sustainable food options.

        What changes were expected?

        Before the workshop, participants used the online community to discuss the changes they thought would be needed for the land use and agriculture sector to reach net zero.

        They anticipated changes to the way we buy and eat food. There was a widespread sense that people should eat more local, seasonal and sustainable produce, with fewer products imported from abroad. Many participants interpreted this as a climate friendly diet. It was also suggested that we may need to reduce meat consumption, especially imported meat. While it was noted that these changes would likely reduce the range of foods available, participants were generally very positive about the environmental and health benefits they could bring. However, some participants felt that it would be difficult for consumers and the wider food industry to adapt to these kinds of changes, and that this could have economic consequences.

        “The range of food we have readily available may be reduced. I don’t have a problem with that and feel it is something we should make the best of in terms of reducing food miles and eating found produced as near to home as possible.” (Participant, phase 1, online community)

        Changes to farming practices were also anticipated, with a strong focus on farming practices being more “ecologically friendly”. Participants suggested that there may be move towards more organic farming, vertical farming (i.e. growing crops in vertical layers) to make space for rewilding, and regenerative practices (e.g. techniques that preserve and enhance soil quality). It was also suggested that our approach to land management more broadly may need to change, with greater emphasis on tree planting, biodiversity and creation of more carbon sinks.

        Participants were generally positive about the types of changes to food production described above, though some felt that food price rises for consumers were inevitable. Others emphasised that farming should be supported to become profitable without passing on costs to consumers. There was therefore support for subsidies for farmers, as food production was considered a “vital” industry, but not for “wealthy landowners”.

        Overview of presentations and reactions to them

        At the workshop, participants heard two presentations delivered by experts. The first outlined the Scottish Government’s vision for the future of the sector, the types of changes that would be needed to achieve it, and the benefits and challenges associated with reducing emissions in the sector. The second outlined the inequalities within the sector that would need to be addressed as part of the transition to net zero.

        Participants were struck by the complexity of the topic and emphasised a need for more public education around food production and consumption. Several participants were unaware that the sector received financial support from the Scottish Government, and were surprised at the extent to which businesses relied on this subsidy (e.g. the presentations had explained that without support payments, many farms would be in deficit). This led to a feeling that many farms were financially vulnerable and in need of ongoing support, which set the context for the later discussions around who should pay.

        “Farming is already so heavily subsidised. One can’t imagine it continuing in any shape or form without large subsidies in the future, unless we were to lose the farming industry…I can’t imagine the rug being whipped from the farming industry.” (Participant, phase 1, workshop 4)

        There was some surprise at how much food was imported, particularly fruit (the presentation explained that 16% of our fruit was produced domestically). There was also discussion on the average age of farmers, and about the need to encourage young people into the sector.

        Some participants stressed the importance of considering wider aspects of land use which they felt impacted efforts to reach net zero. This echoed their initial thoughts on changes needed and included aspects like deer management, shooting estates and carbon credits. These are explored in more detail below.

        Vision for the land use and agriculture sector

        Participants had a chance to view a future vision for the land use and agriculture sector on the online community and again in the workshop. The vision (shown in figure 11.1) was based on the Scottish Government’s discussion paper for the sector. As well as sharing their own views on the vision, participants revisited the five fictional characters and discussed how it might impact on them.

        Figure 11.1: Vision for the land use and agriculture sector

        The vision for land use and agriculture in 2040 includes: a change of land use with less land dedicated to food production and more to planting tree, peatland restoration and supporting biodiversity; people are encouraged to consider the climate impacts of food and to waste less; land and agricultural based jobs are supported to continue, whilst diversifying income.

        The role of land use and agriculture (particularly food) for our characters

        Alice picks things up on her way to and from work. She doesn’t have a lot of time to cook and gets a takeaway or delivery a few times a week. Alice feels that she spends too much on food. She would like to eat more fresh fruit and vegetables and better-quality meat, but these are not easily available in the shops close to her flat.

        David and Sarah have a large garden. They buy locally produced food as much as they can, even if it is more expensive. They get their weekly food shop from several places. They have reserved a space at a local community allotment.

        Lorraine’s farm specialises in cattle and turkeys. She is planning on making changes to the business to help reduce its emissions. These changes would increase the cost of producing food and the business would not be able to absorb these costs.

        Maria gets all her food shopping delivered from the supermarket and has a strict weekly food budget. She choses whichever products are cheaper. She tries to ensure that her daughter eats a healthy diet, but this can be difficult within her budget.

        Nadeem and Ajay have a vegan diet. They get their weekly groceries from the supermarket. Buying food that suits their diet is more important to them than where it comes from. Ajay works at a small food shop. If farmers increase their prices, the shop will increase the price it charges consumers.

        From the outset, the potentially negative impacts of the vision on rural communities were noted, particularly in relation to the suggestion that less land would be dedicated to food production. There was a sense that crofting land would not be suitable for other uses and so crofters may lose out if they are not able to continue current practices.

        “Crofting is environmentally friendly. There’s no fertiliser use, it’s a very natural way of farming and yet that’s the one that’s going to be penalised against much more intensive farming in arable areas. That’s the wrong note to hit, the wrong balance.” (Participant, phase 1, workshop 4)

        There was also some resistance to using more land for tree planting. One reason for this was the perception that would reduce the potential for farmers to earn money, as they would be giving up land used for grazing or meat production in favour of forestry. Another reason was in relation to the impacts on communities, with some participants describing how plantations had led to a sense of isolation for their community and a feeling that they were “cut off” as result of being surrounded by trees.

        Reflecting their initial thoughts on the changes needed in the sector, there was support for importing less and eating more local and seasonal produce, and for continued support for food producers. However, there was discussion of the difficulty of changing consumer habits, especially in the context of the cost-of-living crisis, and the challenges that some might face in accessing climate friendly food.

        Who could benefit?

        Under this vision, participants felt that farmers who were able to diversify could benefit if the changes resulted in a more financially sustainable business, provided there was support and advice available to help them do so.

        Participants felt that consumers could see health benefits from access to more quality, nutritious produce, and if there was more education on how to cook meals from scratch. It was also felt that communities could in turn see economic benefits from more people shopping locally.

        Participants felt that wealthier consumers would find the transition easiest as they could absorb an increase in food prices. Similarly, participants felt that wealthier farmers would be able to afford to make changes to their business. There was also a sense that the scale of change required for businesses in the wider supply chain (e.g. larger supermarkets, retailers and distributers) would be smaller than for food producers directly.

        Overall participants recognised that consumers who were already eating a sustainable diet or businesses whose practices were already in line with the vision would find the transition easier as they would need to make fewer changes.

        Who benefits?

        It was felt that David and Sarah would benefit because their lifestyle choices were already in line with the vision, and they could afford to make further changes or absorb increased costs.

        Who could lose out?

        Participants highlighted farmers and crofters who specialise in livestock may lose out, as their ability to do so may be restricted if more land is dedicated to forestry. There was a suggestion that the vision would “decimate” these communities in the north of Scotland. It was also felt that, if farmers were growing less food, there may be knock-on impacts on others working in the food sector and potentially job losses.

        Participants felt that food price rises were inevitable and therefore that people on low incomes would lose out.

        “All the changes will come with a cost. We already have a lot of food banks and people struggling. Those people will be impacted even more than they are now. It’s difficult to tell what would make it fairer. How can we help the poor more than we are helping now with food banks.” (Participant, phase 1, workshop 4)

        There was a view that consumers may lose out if they were not able to grow their own food (some participants, especially in urban areas, felt this would be difficult for them to do), or were not able to access sustainable produce.

        “Consumers are going to miss out if there are no local food co-ops, food sharing, food communities. Some people are surrounded by takeaways and corner shops. They don’t necessarily have access to local foods because of where they live.” (Participant, phase 1, workshop 4)

        Who could lose out?

        Lorraine’s livelihood was identified as being at risk given the challenges of diversification and the need to increase prices to cover the cost of making changes. Her age was also noted as a factor in that she may not have time to benefit before she retires.

        Alice and Maria were identified as at risk of losing out if prices increase because of their concern about the current cost of groceries. They may also struggle to access local produce; Maria because of her child care requirements, and Alice because of her shift patterns.

        Nadeem and Ajay may lose out if a focus on local products means they have less choice in their diet. This could be exacerbated by additional challenges transporting goods to where they live. Ajay’s job might be at risk if the viability of the shop where it works is affected by increased prices.

        As we transition to net zero, who should pay for the changes needed in the land use and agriculture sector?

        The types of costs that were outlined in the presentations and that participants explored in their discussions included: the costs associated with change the way land is used and food is produced, the costs associated with the wider food supply chain and distribution network, and the costs of food for consumers.

        Generally, it was felt that costs should be paid for by a balance between government, industry and consumers. Specific groups that they felt should be responsible for some of the costs of the transition included:

        • The Scottish Government. Farming subsidies were described as a “practical necessity” in order to sustain the industry and keep prices affordable. It was therefore felt that some level of subsidies should continue, and that these could help to fund some of the costs associated with the transition. However, it was also suggested that not all farms should be supported to the same extent and that subsidies should vary to reflect the size and financial performance of the farm (outlined further in the next section).
        • Farmers. It was felt that farmers should cover some of the costs associated with changes to land use or food production, especially if they would benefit directly from the changes (e.g. if the changes to practices helped with their operational efficiency, helped them to generate income, or added value to their business). However, participants stressed that farmers would unlikely be able to incur significant additional costs without becoming financially unviable. It was therefore felt that, as noted above, ongoing financial support for farmers would be required.

        “It will have to be [supported by] the government…I don’t see it being viable without subsidies. Loads of farms will just go out of [business].” (Participant, phase 1, workshop 4)

        • Consumers. There was a sense that an increase in food prices for consumers will be “inevitable” and that those who can afford to pay should share some of the costs. With this came a sense that consumer behaviour would also need to change, with more of a focus on eating a climate friendly diet. Some participants supported prices rises to encourage consumer behaviour change. However, there was a sense that consumers have less responsibility for paying for changes than other businesses as they do not have a direct say in the costs.

        “We eat like kings, all of us, and we need to come back to [eating] more sustainable things.” (Participant, phase 1, workshop 4)

        • Other businesses. While not a common theme, it was suggested that businesses in the wider food supply chain should also share some of the costs. In particular it was felt that large, profit-making businesses such as supermarket chains would be able to afford some of the costs (e.g. for reducing or replacing packaging), rather than farmers and consumers.

        “It’s those businesses in the middle that should pay because the consumer and the farmer don’t have the money… commercial businesses who are making big profits, they should make more of a contribution to this process to make this fairer.” (Participants, phase 1, workshop 4)

        • Landowners. From the outset, some participants raised issues with the current structure of land ownership in Scotland, with a perception that absentee landowners earn from large shares of land that might otherwise have been used for food production. It was suggested that these landowners should be taxed to help pay for some of the changes need to land use. As previously noted, there were also calls for wider land reform which, for some participants, was seen as inextricably linked to viability of the farming industry.

        “One of the biggest factors affecting the viability of Scottish farming is land ownership…the fact that huge swathes of good land are owned by…absentee landlords leaving very little for homegrown farmers.” (Participant, phase 1, online community)

        How can we make sure that system of payment fair?

        While acknowledging the scale of the challenge, participants showed at least some support for systems of payment based on:

        • Ability to pay. Consumers on lower incomes were seen as likely to find any increase in food costs most disruptive and difficult. Echoing findings from the transport and built environment workshops, participants therefore felt that a future system of payment should take into account people’s ability to pay and protect low-income consumers. At the same time there was recognition that placing a greater burden of the costs on wealthier households could discourage them from making good choices which may be counterproductive.
        • Subsidising some, but not all, farmers. As noted above, continuation of farming subsidies was considered a fair way of helping the sector to adapt to change. It was suggested that the subsidy system should favour smaller farms with less income (and therefore less ability to pay). It was also suggested that support payments should be specifically allocated towards covering the costs of reducing carbon emissions and making farming practices more sustainable. Recognising that some farms or crofts may already be operating sustainably, there was also a suggestion that a payment system should “penalise neglect”.

        “[Financial] support can help the transition but should only be given where additional costs are incurred and not where changes may actually help profitability. This is one area where justice in transition could easily be lost as large farmers, forestry companies and green investors soak up ever larger sums of public money.” (Participant, phase 1, online community)

        • Taxing larger businesses. Some participants felt that payments should be covered by larger, profit-making businesses, particularly whose practices are not climate-friendly (e.g. those who import food from overseas). They suggested taxing these businesses, or having a payment system that means these businesses absorb costs rather than passing them on to consumers. At the same time there was recognition that penalising businesses too harshly could force them to leave Scotland which would risk jobs and move carbon emissions elsewhere.

        “What about taxing the big business that’s importing things from faraway countries that they could get here? People like Maria [one of the fictional characters used as stimulus for the discussion] don’t really care much about where food is from and how it’s sourced, it’s just about feeding their family.” (Participant, phase 1, workshop 4)

        • Taxing high-carbon products. There was some support for a “food miles tax” or other form of high carbon products tax, but only if other more sustainable food options were available and affordable. It was also suggested that a tax on food waste (for supermarkets, not consumers) would help to reduce the amount of food currently wasted. However, some participants felt that it was not fair to base a payment system on emissions as some farms emit more than others depending on their produce.

        To make the transition as fair as possible, it was also stressed that farms need to be given sufficient time and opportunity to change, diversify and reduce emissions before introducing any financial impacts such as additional tax.

        How can we make sure that everyone benefits?

        As well as a reduction in carbon emissions, participants identified a range of potential benefits from the future vision for the sector including: health benefits of eating more locally grown, quality food; physical and mental health benefits for individuals and communities growing their own food; economic benefits of supporting local businesses (though business viability was also seen as a risk); a reduction in food waste; more job opportunities within the land use and agriculture sector; and financial benefits for farmers from diversification.

        An overarching message was that financial support was required to ensure that farmers and consumers could benefit from the changes. To make sure everyone benefits, participants also felt that we should:

        • Provide people with the opportunity to eat the right kinds of food. It was felt that steps should be taken to ensure that low carbons foods remain affordable for people on low incomes. It was also suggested that more access to individual and community growing spaces and food sharing initiatives may help more people to benefit from these types of food, particularly for those who do not already have access to a garden.

        “Consumers are going to miss out if there are no local food co-ops, food sharing, food communities. Some people are surrounded by takeaways and corner shops. They don’t necessarily have access to local foods because of where they live.” (Participant, phase 1, workshop 4)

        • Improve communication and engagement with the public. Participants felt that there was need for more awareness-raising about how the food system works, the types of changes that will be necessary, and what types of food are more climate-friendly, and how to make healthy affordable meals. It was stressed that the public need to understand why change is necessary before they can accept those changes. Participants also advocated more community and local government involvement in decision-making about land use.
        • Change the system of land ownership to provide more equitable access to land. A few participants felt strongly that widescale change to land ownership was required, so that smaller farms have more opportunity to be profitable and that there were more opportunities for young people to work in the sector.

         

        Appendices A-D: Research materials

        Appendix A – Structure of workshops

        Phase 1

        1. The first workshop introduced participants to the process and key concepts. This was followed by three separate workshops on transport, built environment and construction, and land use and agriculture. In these workshops participants learned about key issues associated with the transition in each sector and shared their views, before answering these overarching questions in relation to that sector.
         

        Date/time

        Objective

        Session description

        Presentations

        Session 1 – Introduction

        10 August 2023, 6pm to 9pm

        Introduction to the process and aims. Participants learn key concepts.

        Introduction to the process.

        Participant introductions.

        Presentations from expert speakers (see right).

        Small breakout discussions followed by Q&A with speakers.

        Initial thoughts on a fair transition.

        Introduction to key concepts relating to climate change, just transition, net zero and Scottish Government plans.

        Session 2 – Transport

        Session 3 – Buildings and Construction

        Session 4 – Land use and agriculture

        15 August 2023, 6pm to 9pm

        29 August 2023, 6pm to 9pm

        14 September 2023, 6pm to 9pm

        Participants develop an understanding of each sector and form initial thoughts on a fair distribution of costs and benefits for that sector.

        Presentations from expert speakers (see right).

        Breakout discussion followed by Q&A with speakers.

        Breakout discussion of future vision in relation to fictional characters.

        Breakout answers to the overarching questions in relation to the sector.

        Future vision for the sector.

        Addressing inequalities in the sector

        Session 5

        30 September 2023, 10am to 1pm

        Participants consolidate their views on a fair distribution of costs and benefits and form wider conclusions on cross-cutting elements

        Breakout discussion of future scenarios in relation to fictional characters.

        Breakout forming conclusions on a fair transition.

        No presentations

        Session 6 – Conclusions

        5 October, 2023, 6pm to 9pm

        Participants review, ratify and finalise their conclusions.

        Breakout discussion on answers to the overarching questions.

        Reflections on the process.

        Postcard to the future task.

        No presentations

        Phase 2

        The first workshop introduced participants to the process and key concepts. This was followed by two workshops, each focussing on a policy area within the transport and built environment sectors. The transport sector session focused on two possible approaches to Road User Charging; UK national road pricing or urban local charging. The built environment sector session focused on two approaches to funding the heat transition in domestic properties; widely available funding (with stricter penalties) or targeted funding (with softer penalties).

         

        Date/time

        Objective

        Session description

        Presentations

        Session 1 – Introduction

        6 March 2024, 6.30pm to 8.30pm

        Introduction to the process and aims. Participants learn key concepts.

        Introduction to the process.

        Participant introductions.

        Presentations from expert speakers (see right).

        Small breakout discussions followed by Q&A with speakers.

        Initial thoughts on a fair transition.

        Introduction to key concepts relating to climate change and the move to net zero; concept of just transition and Just Transition Plans; previous public engagement on just transition.

        Session 2 – Transport

        14 March 2024, 6.30pm to 9pm

        Participants learn about Road User Charging (RUC) and discuss how to ensure this is implemented fairly.

        Presentation (see right).

        Breakout discussion considering two approaches to RUC in relation to fictional characters.

        Breakout answers to form conclusions on RUC.

        Introduction to RUC.

        Session 3 – built environment and construction

        20 March, 6pm – 9pm

        Participants learn about clean heat transition in domestic properties and discuss how to ensure this is funded fairly.

        Presentation (see right).

        Breakout discussion considering two approaches to funding the clean heat transition in relation to fictional characters.

        Breakout answers to form conclusions on clean heat transition.

        Introduction to clean heat transition and Heat in Buildings bill.

        Appendix B – Recruitment quotas

        Phase 1

        The quota targets were based on data from the Scottish Household Survey 2019, unless otherwise stated. Groups that were over-sampled are indicated with asterisk (*).

         

        Variable

        % in population

        Target number

        Achieved number

        Age

        16-24

        11%

        4

        4

        25-34

        18%

        6

        4

        35-54

        32%

        11

        11

        55+

        38%

        12

        11

        Gender

        Woman

        52%

        17

        17

        Man

        48%

        16

        13

        Non-binary/other

        No clear data

        No target

        0

        Region of Scotland (source: NRS mid-year population estimates)

        Central

        12%

        4

        2

        Glasgow

        13%

        4

        4

        Highlands and Islands*

        8%

        5

        5

        Lothians

        15%

        5

        5

        Mid Scotland and Fife

        12%

        4

        3

        North East Scotland

        14%

        4

        4

        South

        13%

        4

        3

        West

        13%

        4

        4

        Ethnicity

        African, Caribbean, Black or Black Scottish/British*

        1%

        2

        0[25]

        Asian, Asian Scottish or Asian British*

        3%

        3

        3

        White Scottish/Other British/White Other

        96%

        27

        25

        Other ethnic group or mixed/multiple ethnic groups*

        0%

        1

        2

        Disability

        No long-term physical or mental health condition

        70%

        19

        16

        Long-term physical or mental health condition which is limiting*

        24%

        10

        10

        Long-term physical or mental health condition which is not limiting*

        6%

        4

        4

        Household income, per year

        Less than £10,000*

        9%

        4

        3

        £10,001 – £20,000*

        30%

        11

        9

        £20,001 – £30,000

        21%

        7

        6

        £30,001 – £40,000

        15%

        5

        4

        More than £40,001

        24%

        6

        8

        Attitudinal measure

        (SHS 2019):

        Which of these statements, if any, comes closest to your own view?

        Climate change is an immediate and urgent problem

        68%

        Aim for mix

        17

        Climate change is more of a problem for the future

        14%

        7

        Climate change is not really a problem

        3%

        1

        None of these / don’t know

        9%

        5

        I’m still not convinced that climate change is happening

        6%

        Excluded[26]

        0

        Phase two

        The quota targets were based on data from the Scottish Household Survey 2019, unless otherwise stated. Groups that were over-sampled are indicated with asterisk (*).

         

        Variable

        % in population

        Target number

        Achieved number

        Age

        16-24

        11%

        2

        2

        25-34

        18%

        4

        4

        35-54

        32%

        6

        7

        55+

        38%

        8

        7

        Gender

        Woman

        52%

        10

        10

        Man

        48%

        10

        10

        Non-binary/other

        No clear data

        No target

        0

        Region of Scotland (source: NRS mid-year population estimates)

        Central

        12%

        2

        2

        Glasgow

        13%

        3

        3

        Highlands and Islands

        8%

        2

        2

        Lothians

        15%

        3

        3

        Mid Scotland and Fife

        12%

        2

        2

        North East Scotland

        14%

        3

        3

        South

        13%

        3

        3

        West

        13%

        2

        2

        Urban/rural

        Urban

        83%

        15

        15

        Rural*

        17%

        5

        5

        Ethnicity

        African, Caribbean, Black or Black Scottish/British*

        1%

        2

        3[27]

        Asian, Asian Scottish or Asian British*

        3%

        2

        2

        White Scottish/Other British/White Other

        96%

        15

        14

        Other ethnic group or mixed/multiple ethnic groups*

        0%

        1

        1

        Disability

        No long-term physical or mental health condition

        70%

        12

        12

        Long-term physical or mental health condition which is limiting*

        24%

        6

        6

        Long-term physical or mental health condition which is not limiting*

        6%

        2

        2

        Household income, per year

        Less than £10,000*

        9%

        2-3

        2

        £10,001 – £20,000*

        30%

        6-7

        7

        £20,001 – £30,000

        21%

        4

        4

        £30,001 – £40,000

        15%

        3

        2

        More than £40,001

        24%

        4

        4

        Attitudinal measure

        (SHS 2019):

        Which of these statements, if any, comes closest to your own view?

        Climate change is an immediate and urgent problem

        68%

        Aim for mix

        17

        Climate change is more of a problem for the future

        14%

        3

        Climate change is not really a problem

        3%

        0

        None of these / don’t know

        9%

        0

        I’m still not convinced that climate change is happening

        6%

        Excluded[28]

        		 

        Appendix C – Discussion guides

        Phase one, session one

        Thursday 10 August 2023, 6pm-8pm

        Overarching objective: introduce participants to key concepts and familiarise them with the online discussion format and their role throughout the dialogue. Opportunity for Q&A to develop understanding before moving into focused discussion on each sector in subsequent sessions.

        Discussion structure

        Time

        Objective

        Questions and materials

        Set-up: Facilitators check-in

        25 mins

        17.30-17.50

        Set up and test tech, and team preparation

        Facilitator and tech team only

        • Test link, mic and camera.
        • Test who has the host/co-host function and ensure it is allocated to the right team member(s) for recording breakout rooms. Make all moderators Co-hosts.
        • Change screen name to NAME – Org – Chair/Moderator.
        • Check everyone is on the WhatsApp group for facilitation team to be able to ask questions, etc.
        • Meanwhile tech support is assigning participants who are in the waiting room, notetakers, moderators, experts and observers to break-out rooms.

        Participant check-in

        10 mins

        17.50-18.00

        Ensure participants are supported with set up

        Participants log into the online session

        • Participants encouraged to join the zoom session early to check-in and check their video/mic.
        • Participants encouraged to get a pen and paper, and have their participant pack with them.
        • Register as people join and change screen names as necessary to first name and first initial of surname (i.e. John H).

        Introductions and context setting

        18.00 – 18.15

        Welcome and introduction of process

        Ipsos Chair to welcome everyone to the dialogue (15 mins):

        Participants allocated to break-out groups, but not put in them.

        • Chair welcomes participants to the first online session of the Just Transition dialogue.
        • Chair introduces poll and asks participants to answer question:

        “Who do you think should take the lead in tackling climate change in Scotland?

        • All individuals living in Scotland
        • Certain groups of people living in Scotland (e.g. those with the highest carbon emissions)
        • Businesses in Scotland
        • The Scottish Government
        • All of these groups
        • None of these groups
        • Chair closes poll and comments on results before providing a summary of the overall purpose of this dialogue and why we are here. Shares aims of research:

        To explore the public’s views on the fair distribution of costs and benefits in the transition to net zero emissions, with a focus on three key sectors.

        To understand what factors influence any changes in the public’s attitudes, beliefs or values.

        • Explains who is here – our group of participants representing people from across Scotland, Ipsos facilitators, expert presenters, and any observers.
        • Explains purpose of this session is to introduce everyone to the topic, explain some key concepts and to start setting out the issues for discussion – including what we mean by just transition, the sectors that have been identified as the focus of this research and why, and the development of just transition plans for those sectors. Emphasising how valuable their role is to inform the development of these plans.
        • Show the overarching questions that we will seek to answer in each of the sectors we will be looking at:
        • As we transition to net zero, who should pay for the changes that will be needed?
        • How can we make that system of payment fair?
        • How can we make sure that everyone benefits?
        • Chair provides summary of overall process (i.e. number of future workshops and online community) and today’s agenda (including time of breaks and finishing time). Explain that today’s session will mostly be about listening and learning and encourage participants to jot down their thoughts and questions, explaining that there will be a Q&A at the end.
        • Housekeeping, ground rules – mention that plenary sessions will be recorded so to keep camera off if don’t want to be visible during that. Reminder to only have first name and first letter of surname showing.

        Move to breakout (18.15)

        Table introductions

        18.15 – 18.25

        Introducing participants to group, gathering initial thoughts and feelings.

        Break-out group introductions (10 mins)

        • FACILITATOR INTRODUCES THEMSELVES AND THANKS PARTICIPANTS FOR JOINING. COLLECTS PERMISSION/CONSENT FOR RECORDING.
        • ASK EACH PERSON TO INTRODUCE THEMSELVES AND SHARE ONE HOPE OR FEAR THEY HAVE ABOUT TAKING PART.
        • What are your initial thoughts on the chair’s introduction and the plan for the next 5 sessions?
        • Net zero was mentioned in the introduction. What does net zero mean to you?
        • Is it something you’ve thought about much before today?
        • Before being invited to this dialogue, had you come across the term “just transition to net zero?”
        • IF YES – what did you think about it?
        • IF NO – what do you think it’s about?
        • Do you have any questions at this stage? NOTE THESE DOWN AND EXPLAIN THAT THERE WILL BE A Q&A TOWARDS THE END.
        • IF TIME – What did you make of the quick polling question we asked at the start?
        • Did anything in the results surprise you? Why/why not?
        • The poll suggests that as a group we thought that [highlight most common response] should take the lead for tackling climate change – why do you think that is?
        • Do you yourself have a different view on that?

        Move to plenary (18.25)

        Presentation on climate change and the move to net zero

        18.25 – 18.35

        Introduction to key issues around climate change and the transition to net zero

        Plenary presentation 1 (10 mins):

        Climate change and the move to net zero.

        CXC

        BEFORE PRESENTATION STARTS – CHAIR TO ASK PARTICIPANTS TO WRITE DOWN ON (ON A PIECE OF PAPER, OR ON THEIR PHONE) ANY THOUGHTS OR QUESTIONS WHICH THEY WILL HAVE THE OPPORTUNITY TO SHARE LATER ON.

        Presentation to help participants understand the key concepts relating to climate change, net zero and to outline the SG’s plans generally:

        • What we know about climate change/the climate emergency and its impacts
        • Some key terms – net zero, adaptation, mitigation – and why these are happening
        • The Scottish Government’s commitment to reaching net zero by 2045 and what that means

        Stay in plenary (18.35)

        Presentation on just transition

        18.35 – 18.45

        5 minute buffer built in here to allow for intros/ crossover

        Introduction to just transition

        Plenary presentation 1 (10 mins):

        Just Transition.

        Just Transition Commission

        BEFORE PRESENTATION STARTS – CHAIR TO ASK PARTICIPANTS TO WRITE DOWN ON (ON A PIECE OF PAPER, OR ON THEIR PHONE) ANY THOUGHTS OR QUESTIONS WHICH THEY WILL HAVE THE OPPORTUNITY TO SHARE LATER ON.

        Presentation to help participants understand the concept of just transition:

        • What it means (including principles from Climate Change Act 2019)
        • Recommendations of the Just Transition Scotland
        • National Just Transition Planning Framework and outcomes
        • In relation to the participant’s task, the key things they should think about to ensure the just transition plans in each sector are fair (i.e. who will be affected and how, who can/should pay, who is responsible)

        BREAK (18.50)

        Chair displays break time on screen and encourages participants to take a screen break

        18.50-19.00 (10 mins)

        Return to plenary (19.00)

        Presentation on just transition plans

        19.00 – 19.10

        Overview of just transition plans

        Plenary presentation 1 (10 mins):

        Just Transition Plans.

        Scottish Government

        BEFORE PRESENTATION STARTS – CHAIR TO ASK PARTICIPANTS TO WRITE DOWN ON (ON A PIECE OF PAPER, OR ON THEIR PHONE) ANY THOUGHTS OR QUESTIONS WHICH THEY WILL HAVE THE OPPORTUNITY TO SHARE LATER ON.

        Summarise just transition plans in key sectors explaining:

        • The three sectors we are focussing on and why (drawing from fact sheets with salient stats for each sector)
        • Priority themes within each sector
        • What a Just Transition Plan is, and why they are needed
        • What we want the public to tell us (i.e. focusing on what would be a fair distribution of costs and benefits within each sector)

        Move to breakouts (19.10)

        Question forming

        19.10 – 19.25

        Reflect on presentations and gather questions

        Reflections on presentations (10 mins):

        FACILITATOR REMIND PARTICIPANTS THAT THE PRESENTATIONS HAVE BEEN RECORDED AND WILL BE MADE AVAILABLE TO WATCH BACK AT ANY TIME.

        AIM FOR ABOUT 3 MINS OF DISCUSSION PER PRESENTATION

        • What did you think of the presentation [CXC] gave on climate change and net zero?
        • Did anything stand out to you?
        • Did anything surprise you?
        • Was there anything that you learned that has changed your views from earlier? (refer back to initial discussion on net zero – i.e. when we asked “what does net zero mean to you”)
        • Is anything still unclear?
        • What did you think of the presentation [JTC] gave on just transition?
        • Did anything stand out to you?
        • Did anything surprise you?
        • Was there anything that you learned that has changed your views from earlier? (refer back to initial discussion on just transition i.e. when we asked what they thought this term meant)
        • Is anything still unclear?
        • What did you think of the presentation [SG] gave on just transition plans?
        • Did anything stand out to you?
        • Did anything surprise you?
        • Is anything still unclear?

        Question gathering (5 mins):

        • What questions do we have for our speakers? REMIND PARTICIPANTS THAT THEY CAN ASK QUESTIONS OF ANY PART OF THE SESSION (INCLUDING CHAIR’S INTRODUCTION, PROCESS, THEIR ROLE ETC).
        • What are our priority questions?
        • Who would like to ask this question on behalf of our group? ENCOURAGE PARTICIPANTS TO VOLUNTEER TO ASK QUESTION (OFFER TO WRITE IT OUT IN THE CHAT FOR THEM SO THEY CAN JUST READ IT OUT). CAN HAVE ONE PERSON ASK ALL OR DIFFERENT PEOPLE ASKING. FACILITATOR CAN ASK ON BEHALF OF GROUP IF NO VOLUNTEERS.

        GATHER QUESTIONS FROM ANY PART OF THE SESSION AND ASK GROUP TO PRIORITISE 2-3 FOR Q&A (REASSURE THAT OTHER QUESTIONS WILL BE PUT TO SPEAKERS AFTER SESSION AND WRITTEN RESPONSES POSTED ON ONLINE COMMUNITY OR RECAPPED IN FUTURE SESSIONS.

        Move to plenary (19.20)

        Q&A

        19.25 – 19.45

        Q&A with experts

        CHAIR TO CALL ON FACILITATORS IN TURN TO ASK QUESTIONS AND DIRECT TO RELEVANT EXPERTS (20 mins)

        Move to breakout (19.45)

        Final reflections

        19.45 – 19.55

        Final reflections and exercise

        Final reflections (5 mins)

        • What did you think of the questions asked by other groups?
        • Have any new issues emerged for you?
        • Is there anything you are still unclear about?

        Jamboard exercise (5 mins)

        SHARE SCREEN AND ASK PARTICIPANTS TO COMPLETE THE SENTENCE.

        WRITE ON DIGITAL POST-ITS WHAT EACH PARTICIPANT SAYS. EACH COLOUR POST-IT REPRESENTS A DIFFERENT GROUP’S CONTRIBUTIONS, SO PARTICIPANTS CAN SEE AND REMARK ON WHAT OTHERS ARE WRITING (NOT JUST THEIR GROUP):

        Image showing example of Jamboard exercise.

        Move to plenary (19.55)

        Wrap up

        19.55 – 20.00

        Wrap up

        Chair to close the day (5 MINS):

        • Brief overview of what has been covered.
        • Brief overview of what to expect in later workshops, highlighting the next one.
        • Introduce online community and how to get signed up.

        Phase one, session two

        Tuesday 15 August 2023, 6pm-9pm. Group of 30 participants, with 5 pre-assigned breakout groups (of 6 participants each).

        Overarching objective: Participants develop an understanding of the vision for a transition to net zero in the transport sector and an understanding of the costs, benefits and challenges associated with that transition. Participants provide views on the fair distribution of costs and benefits.

        Discussion structure

        Time allocated

        Objective

        Questions and materials

        Set-up: Facilitators check-in

        25 mins

        17.30-17.50

        Set up and test tech, and team preparation

        Facilitator and tech team only

        • Test link, mic and camera.
        • Test who has the host/co-host function and ensure it is allocated to the right team member(s) for recording breakout rooms. Make all moderators Co-hosts.
        • Change screen name to NAME – Org – Chair/Moderator.
        • Check everyone is on the WhatsApp group for facilitation team to be able to ask questions, etc.
        • Meanwhile tech support is assigning participants who are in the waiting room, notetakers, moderators, experts and observers to break-out rooms.

        Participant check-in

        10 mins

        17.50-18.00

        Ensure participants are supported with set up

        Participants log into the online session

        • Participants encouraged to join the zoom session early to check-in and check their video/mic.
        • Participants encouraged to get a pen and paper, and have their participant pack with them.
        • Register as people join and change screen names as necessary to first name and first initial of surname (i.e. John H).

        Introductions and context setting

        10 mins

        18.00 – 18.10

        Re-familiarising participants with the process, settling back in.

        Ipsos Chair to welcome the room back (10 mins):

        Participants allocated to (new) break-out groups, but not put in them.

        • Chair welcomes participants back to the second workshop.
        • Provides a reminder of the overall purpose of this dialogue and why we are here
        • Explains who is here – our group of participants representing people from across Scotland, Ipsos facilitators, expert presenters, and any observers.
        • Summarises what was covered in session 1 and recaps on key topics – including what we mean by just transition, the sectors that have been identified as the focus of this research and why, and the development of just transition plans for those sectors.
        • Explains that today we will be focussing on the first of those sectors – transport – and that their views will help feed into the development of the JTP for transport. Emphasising how valuable their role is.
        • Show the overarching questions that we will seek to answer today:

        As we transition to net zero…

        • Who should pay for the changes that will be needed to our transport system?
        • How can we make that system of payment fair?
        • How can we make sure that everyone benefits?
        • Chair provides re-cap of overall process (i.e. number of future workshops and online community) and today’s agenda (including time of breaks and finishing time).
        • Housekeeping, ground rules, confidentiality

        Move to breakout (18.10)

        Table introductions

        10 mins

        18.10 – 18.20

        Introducing participants to new group and reflections on previous workshop.

        Break-out group introductions and warm-up

        FACILITATOR INTRODUCES THEMSELVES AND THE GROUP’S NOTE TAKER, THANKS FOR CONTINUED PARTICIPATION. COLLECTS PERMISSION/CONSENT FOR RECORDING.

        • Please tell everyone your name and where you live
        • As you heard, today we will be discussing transport. So let’s start off by understanding the ways that everyone uses transport at the moment. What forms of transport do you regularly use? PROBE FOR DETAILS e.g. what types of public transport, what types of car (electric, hybrid, petrol/diesel)
        • We will be discussing some of the changes to our transport system that will be required to reach net zero. What do you think some of these might be? PROMPT IF NOT MENTIONED And what changes to people’s behaviours might be required?
        • And how do you feel about those potential changes? IF THERE IS MENTION OF ISSUES OF FAIRNESS OR INEQUALITY, DRAW OUT DETAILS ON THIS.
        • What sorts of impacts would those changes have on you and your household?
        • What sorts of impacts would those change have on the job you have or would like to have?

        Move to plenary (18.20)

        Future transport system

        10 mins

        18.20 – 18.30

        To introduce the types of changes needed and why they are necessary

        Plenary presentation:

        Vision for a future transport system. (University of Stirling)

        Presentation to help participants understand the current plans for just transition and the types of changes that are likely. Covering:

        • What do we want to achieve? (include specific targets e.g. 20% reducing in car kilometres)
        • What needs to happen for us to get there? (including changes to behaviours and to jobs and skills)
        • Aim and themes of the JTP so far
        • Likely costs and benefits have been identified
        • What input from the public is needed?

        Move to breakouts (18.30)

        Future transport system -discussion

        15 mins

        18.30 – 18.45

        Initial views on future costs and their fairness.

        Opportunity to clarify any points from presentation

        We have the opportunity now to reflect on that presentation and to ask questions.

        • What stood out to you from that presentation?
        • What did you think of the changes to transport that [speaker] mentioned?
        • What aspects stood out?
        • What was appealing about it?
        • What was not appealing about?
        • What did you think about the likely costs of achieving net zero?
        • PROMPT IF NEEDED: This included the costs of electric vehicles, of charging those vehicles, and improvements to the public transport system, for example).
        • How fair or unfair do you think those costs are?
        • We will cover this in more detail later, but at the moment who do you think would be able to pay those costs?
        • And who do you think should pay those costs?
        • How fair or unfair do you think that would be?
        • Has this raised any initial thoughts about how we might make those costs fairer?
        • What questions does this raise, that you would like to ask [speaker]?
        • What makes that question important to you?

        FACILITATOR TO PREPARE TOP QUESTION (WITH TWO BACK-UP). ENCOURAGE VOLUNTEERS TO ASK QUESTIONS ON BHEALF OF GROUP.

         

        How different groups might be impacted

        10 mins

        18.45 – 18.55

        To help participants understand potential inequalities

        Plenary presentation

        Addressing transport inequalities (Public Health Scotland)

        • Highlighting current inequalities in transport and issues such as transport poverty
        • Outlining what those inequalities might look like in future, as we transition to net zero
        • To include reference to individuals, communities, and industry
        • Highlights the types of factors that participants might therefore want to consider as they think about fair distribution of costs and benefits

        Move to breakouts (18.55)

        How different groups might be impacted by the transition- discussion

        15 mins

        18.55-19.10

        Initial views on impact on different groups.

        Opportunity to clarify any points from presentation

        We have the opportunity now to reflect on that presentation and to ask questions.

        • What stood out to you from that presentation?
        • Has this raised any new issues for you?
        • What did you think of the potential inequalities that might exist as we transition to net zero?
        • Any issues, or groups, that you were surprised to hear about?
        • Has this changed how you think about how fair or unfair the changes needed in the transport sector are? In what way?
        • How do you now feel about the costs of making those?
        • And has it raised any thoughts about how we might make those costs fairer?
        • What questions does this raise, that you would like to ask [speaker]?
        • What makes that question important to you?

        FACILITATOR TO PREPARE TOP QUESTION (WITH TWO BACK-UP). ENCOURAGE VOLUNTEERS TO ASK QUESTIONS ON BEHALF OF GROUP.

        BREAK

        19.10 – 19.20

        BREAK

        Break (10 mins)

        Chair to present screen advising on time to return from break.

        Move to plenary (19.20)

        Q&A

        20 mins

        19.20 – 19.40

        Q&A

        Q&A in panel-style, with both presenters

        CHAIR TO FACILITATE Q&A SESSION, WITH FACILITATORS ASKING THE QUESTIONS FROM THEIR BREAK-OUT GROUP OR CALLING ON PARTICIPANTS TO.

        Move to breakouts (19.40)

        Deliberation on key issues

        30 mins

        19.40 – 20.10

        Deliberation on key issues – changes required, impact on different groups, and how changes could be made fairly

        [10 MINS]

        We’re now going to look at a Vision for 2040, which describes a future, decarbonised transport system. This Vision is based on the changes that the Scottish Government believes are necessary if we are to reach net zero. I will put this on screen and read through this for you. Remember, we are not aiming to understand how likely or unlikely these changes are, but we are interested in your views on how we ensure these types of changes are as fair as possible.

        SHOW SLIDE WITH THE “VISION FOR TRASPORT IN 2040” AND READS THROUGH.

        • Under this vision, who do you think would benefit most?
        • How do you feel about that?
        • What would make that feel fairer to you?
        • Under this vision, who do you think would be at risk of losing out or being left behind?
        • How do you feel about that?
        • What would make that feel fairer to you?

        NOTE: IF ASKED, ROAD USER CHARGING INCLUDES CONGESTION CHARGING, DISTANCE-BASED CHARGING, PARKING CHARGES, ROAD TOLLS AND LOW EMISSION ZONES (THESE ARE NOT SET IN STONE OR DECIDED, BUT IN THIS FUTURE VISION, WE SHOULD ASSUME SOME FORM OF CHARGING IS IN PLACE.)

        [20 MINS]

        • Let’s now think about what life with this new transport system would be like for some specific types of people. I’ll show these on screen and will read through them with you.

        SEE SLIDES LABELLED – “CHARACTERS – TRANSPORT”. SHOW THESE ON SCREEN. FOCUS ON 2-3 CHARACTERS DEPENDING ON TIME. ORDER OF CHARACTERS VARIES BY FACILITATOR.

        • How do you think this person would feel about this future transport system?
        • In what ways might their needs differ to others?
        • In what way might they be impacted differently to others?
        • How do you feel about that?
        • Of the costs we discussed earlier, which would be most relevant to this person? PROMPT IF NEEDED e.g. costs of improving public transport, electric vehicles, cycling infrastructure?
        • Bearing all that in mind, should this person be responsible for the costs associated with the transition?
        • (IF THEY SHOULD) What makes you say that? In what way would it be acceptable for them to contribute to the costs?
        • (IF NOT) What makes you say that? And who would be better placed to contribute to those costs?
        • What would help to ensure this person benefits from the changes to the transport?

        BREAK

        20.10 – 20.20

        BREAK

        Break (10 mins)

        Facilitator to advice their group on the return time (NO PLENARY).

        Deliberation on key issues

        25 mins

        20.20-20.45

        Deliberation on key issues – specific costs areas and how they should be shared fairly

        DURING THESE FINAL DISCUSSIONS ENCOURAGE PARTICIPANTS TO REFLECT ON THEIR OWN CIRCUMSTANCES, THOSE OF THE OTHER PARTICIPANTS IN THEIR GROUP, AND THE TYPES OF PEOPLE THEY DISCUSSED IN THE PREVIOUS EXERCISE.

        We are going to use this final discussion to bring together everything we have been discussing so far. Remember, for tonight, we’re focussing only on the changes that will be needed in the transport sector.

        • Thinking about the costs of the transition to net zero in transport, who do you now think should pay those costs?
        • PROMPT IF NEEDED: Should it be government, businesses, the public? Should it be certain groups within the public?
        • What has lead you to say that?
        • Has your opinion on that changed at all since we started the session? IF YES What information, or what point in the discussion, has led you to change your mind?
        • Is your view the same for all of the costs, or are there some costs that you think should be paid for differently?
        • How can we make that system of payment fair?

        IF NOT COVERED ABOVE: Should the system of payment be:

        • Based on levels of emission?
        • Based on need? e.g. those most in need to access to a public transport system?
        • Based on level of impact likely to be experienced? e.g. costs associated with the level of reskilling needed being incurred by business/individuals within that industry?
        • Based on feasibility e.g. level of access to a transport system, access to local amenities, or ability to charge EVs?
        • Based on addressing inequality and ensuring people do not get left behind? e.g supporting those on lower income, those most in need to transport etc.
        • Based on something else? (PROBE FULLY FOR DETAILS)
        • How can we make sure that everyone benefits?
        • What particular groups might require additional time and resource to be spent to ensure they benefit from the new transport system?
        • What sorts of barriers need to be removed to ensure benefits are shared fairly?
        • Finally, I’d like to revisit the exercise we did the first session when we described what a just transition means to each of use. Based on everything we have discussed so far, I want you to answer the same question – but this time, if you can, try thinking about the transport sector specifically.
        Image showing example of Jamboard exercise.

        Move to plenary (20.45)

        Feedback in plenary

        20.45-20.55

        Participants hear from each other

        Each facilitator to give a recap on the key themes coming out of their breakout discussions – focussing on the key themes of how we share costs and benefits fairly.

        Close

        5 mins

        20.55-21.00

        Close

        Chair to close the day:

        • Brief overview of what has been covered.
        • Brief overview of what to expect in later workshops, highlighting the next one.
        • Encourage participants to speak to family and friends and see if they have similar/different views on the key issues.
        • Invite participants to go to the online community to rewatch any presentation and keep the discussion going
        • Summary of next steps, reminder of how important continued engagement is.

        Thank participants and close

        Phase one, session three

        29 August 2023, 6pm-9pm. Group of 30 participants, with 5 pre-assigned breakout groups (of 6 participants each).

        Overarching objective: Participants develop an understanding of the vision for a transition to net zero in the built environment and construction sectors and an understanding of the costs, benefits and challenges associated with that transition. Participants provide views on the fair distribution of costs and benefits.

        Discussion structure

        Time allocated

        Objective

        Questions and materials

        Set-up: Facilitators check-in

        25 mins

        17.30-17.50

        Set up and test tech, and team preparation

        Facilitator and tech team only

        • Test link, mic and camera.
        • Test who has the host/co-host function and ensure it is allocated to the right team member(s) for recording breakout rooms. Make all moderators Co-hosts.
        • Change screen name to NAME – Org – Chair/Moderator.
        • Check everyone is on the WhatsApp group for facilitation team to be able to ask questions, etc.
        • Meanwhile tech support is assigning participants who are in the waiting room, notetakers, moderators, experts and observers to break-out rooms.

        Participant check-in

        10 mins

        17.50-18.00

        Ensure participants are supported with set up

        Participants log into the online session

        • Participants encouraged to join the zoom session early to check-in and check their video/mic.
        • Participants encouraged to get a pen and paper, and have their participant pack with them.
        • Register as people join and change screen names as necessary to first name and first initial of surname (i.e. John H).

        Introductions and context setting

        10 mins

        18.00 – 18.10

        Re-familiarising participants with the process, settling back in.

        Ipsos Chair to welcome the room back (10 mins):

        Participants allocated to (new) break-out groups, but not put in them.

        • Chair welcomes participants back to the workshop.
        • Provides a reminder of the overall purpose of this dialogue and why we are here
        • Briefly explain who is here – our group of participants representing people from across Scotland, Ipsos facilitators, expert presenters, and any observers.
        • Summarises what was covered in session 2 and recaps on key topics – highlighting the suggestions the group made for ensuring costs and benefits were shared fairly.
        • Summarises any findings from the online community, include findings from any polling questions.
        • Explains that today we will be focussing on the second of the three sectors – the built environment and construction – and that their views will help feed into the development of the JTP for the built environment and construction sector. Emphasising how valuable their role is.
        • Emphasise that they should approach this topic with open minds – although we reached some conclusions in session 2 about transport, they might think differently when it comes to this sector. So they have the opportunity to suggest different ideas today.
        • Show the overarching questions that we will seek to answer today:

        As we transition to net zero…

        • Who should pay for the changes that will be needed to our homes and buildings?
        • How can we make that system of payment is fair?
        • How can we make sure that everyone benefits?
        • Chair provides re-cap of overall process (i.e. number of future workshops and online community) and today’s agenda (including time of breaks and finishing time).
        • Housekeeping, ground rules, confidentiality

        Move to breakout (18.10)

        Table introductions

        5 mins

        18.10 – 18.15

        Introducing participants to new group and reflections on previous workshop.

        Break-out group introductions and warm-up

        FACILITATOR INTRODUCES THEMSELVES AND THE GROUP’S NOTE TAKER, THANKS FOR CONTINUED PARTICIPATION. COLLECTS PERMISSION/CONSENT FOR RECORDING.

        • Please introduce yourself, and share one thing that stood out most from the previous session.

        Move to plenary (18.15)

        Future built environment and construction sector

        10 mins

        18.15– 18.25/30

        To introduce the types of changes needed and why they are necessary

        CHAIR TO INTRODUCE SPEAKER – ASK PARTICIPANTS TO NOTE DOWN ANY THOUGHTS AND/OR QUESTIONS AS THEY LISTEN, WHICH WE WILL RETURN TO LATER

        Plenary presentation:

        Vision for a future built environment and construction sector (University of Edinburgh)

        Presentation to help participants understand the current plans for just transition and the types of changes that are likely. Covering:

        • What do we want to achieve? (include Vision for 2040 and specific targets)
        • What needs to happen for us to get there?
        • Aim and themes of the JTP so far
        • Likely costs and benefits have been identified
        • What input from the public is needed?

        How different groups might be impacted by the transition

        10 mins

        5 minute buffer built in

        18.25/30 – 18.40

        To help participants understand potential inequalities, that the just transition hopes to address

        CHAIR TO GIVE PARTICIPANTS A MINUTE TO REFLECT ON PRESENTATION 1 AND WRITE DOWN ANY BURNING THOUGHTS/QUESTIONS BEFORE INTRODUCING SPEAKER

        Plenary presentation:

        Addressing inequalities in the built environment and construction sectors (Uni of Strathclyde).

        • Highlighting current inequalities in building and in construction sector
        • Outlining what those inequalities might look like in future, as we transition to net zero
        • To include reference to individuals, communities, and industry (potential inequalities in the move to green jobs and skills)
        • Highlights the types of factors that participants might therefore want to consider as they think about fair distribution of costs and benefits

        Move to breakouts (18.40)

        Future built environment and construction sector -discussion

        25 mins

        18.40 – 19.05

        Initial views on future costs and their fairness.

        Opportunity to clarify any points from presentation

        We have the opportunity now to reflect on that presentation and to ask questions.

        • What did you think of the Vision for 2040 that [speaker] presented?
        • What was appealing about it?
        • What was not appealing about?
        • Both [speakers] referred to the likely costs associated with achieving net zero, such as making buildings more energy efficient, changing heating systems, and building new homes. What did you think about those?
        • Who do you think would be able pay those costs?
        • And who do you think should pay for those costs?
        • Have you any initial thoughts on how might we make those costs fairer?
        • [Speaker discussed the potential inequalities that might exist as we transition to net zero – what did you think about that?
        • Has this changed how you think about how fair or unfair the changes needed are?
        • How might we make those changes fairer?
        • What did you think about the benefits of the just transition mentioned in the presentations, including reducing fuel poverty, making buildings healthier and increasing local jobs?
        • Did these raise any new issues for you?
        • Have you any initial thoughts on how we might share the benefits fairly?
        • What questions would like to ask [the speakers]?

        FACILITATOR TO PREPARE TOP QUESTION (WITH TWO BACK-UP). ENCOURAGE VOLUNTEERS TO ASK QUESTIONS ON BEHALF OF GROUP.

        BREAK

        19.05 – 19.15

        BREAK

        Break (10 mins)

        Chair to present screen advising on time to return from break.

        Move to plenary (19.15)

        Q&A

        20 mins

        19.15 – 19.35

        Q&A

        Q&A in panel-style, with both presenters.

        CHAIR TO FACILITATE Q&A SESSION, WITH FACILITATORS ASKING THE QUESTIONS FROM THEIR BREAK-OUT GROUP OR CALLING ON PARTICIPANTS TO ASK THEIR QUESTION.

        Move to breakouts (19.35)

        Deliberation on key issues

        30 mins

        19.35 – 20.05

        Deliberation on key issues – changes required, impact on different groups, and how that could be made more fair

        [10 MINS]

        We’re now going to look at a Vision for 2040, which describes a future built environment and construction sector. This Vision is based on the changes that the Scottish Government believes are necessary if we are to reach net zero, and some of these have been mentioned already by [speakers]. FACILITATOR SHOWS THE SLIDE WITH THE “VISIION FOR BUILT ENVIRONMENT AND CONSTRUCTION IN 2040” AND READS THROUGH. REMIND PARTICIPANTS THAT THE SCENARIO IS BASED ON A VISION FOR SCOTLAND’S FUTURE BUILT ENVIRONMENT AND CONSTRUCTION SYSTEM. OUR TASK IS NOT TO THINK ABOUT HOW FEASIBLE OR LIKELY THIS IS, BUT TO THINK ABOUT HOW WE GET TO THIS POINT IN A WAY THAT IS FAIR.

        SHOW SLIDE WITH THE “VISION FOR TRASPORT IN 2040” AND READS THROUGH.

        • As we work towards achieving this vision, who do you think would find the transition easiest? How do you feel about that?
        • What would make that feel fairer to you?
        • As we work towards this vision, who do you think would be at risk of losing out or being left behind?
        • How do you feel about that?
        • What would make that feel fairer to you?

        [20 MINS]

        • Let’s now think about what life with this new built environment and construction sector would be like for some specific types of people.
        • We are going to revisit the characters that you met in the last session, and you are going to find out more about them. This time, you will hear more about their homes about some of their jobs.
        • Let’s look at the first one…

        SEE SLIDES LABELLED – “CHARACTERS – TRANSPORT”. SHOW THESE ON SCREEN. AIM TO COVER 2 CHARACTERS (BUT CAN MOVE ONTO A 3RD THERE IS TIME).

        • How do you think this person would feel about the future vision for the built environment and construction sector?
        • In what way might they be impacted differently to others?
        • What sorts of costs might have an impact on this person?
        • PROMPT IF NEEDED/RELEVANT: Remember we are talking about costs such as
        • Making existing buildings more efficient (e.g. insultation, triple glazing) (ALL)
        • Replacing heating systems in existing buildings (ALL)
        • Building new homes that are more energy efficient (ALICE)
        • Making areas more adaptable to flood risk (MARIA)
        • Retraining construction workers with new skills (NADEEM & AJAY, LORRAINE)
        • Bearing all that in mind, should this person be responsible for the costs associated with the transition?
        • (IF THEY SHOULD) What makes you say that? Which costs?
        • (IF NOT) What makes you say that? And who would be better placed to contribute to those costs?
        • What would help to ensure this person benefit from the changes to the built environment and construction sector, and isn’t left behind or disadvantaged?

        BREAK

        20.05 – 20.15

        BREAK

        Break (10 mins)

        Facilitator to advice their group on the return time (back into plenary).

        Deliberation on key issues

        30 minutes

        20.15-20.45

        Deliberation on key issues – specific costs areas and how they should be shared fairly

        DURING THESE FINAL DISCUSSIONS ENCOURAGE PARTICIPANTS TO REFLECT ON THEIR OWN CIRCUMSTANCES, THOSE OF THE OTHER PARTICIPANTS IN THEIR GROUP, AND THE TYPES OF PEOPLE THEY DISCUSSED IN THE PREVIOUS EXERCISE.

        We are going to use this final discussion to bring together everything we have been discussing so far. We will do this in the same way we did in the previous session. Remember, for tonight, we’re focussing only on the changes that will be needed in the built environment and construction sector.

        • Thinking about the costs of the transition to net zero in this sector, who do you now think should pay those costs?
        • PROMPT IF NEEDED:
        • Should it be government, businesses, the construction sector, the public?
        • What about whether someone owns their home or not?
        • What about if their home is in a shared building (e.g. tenement or block of flats)?
        • What about how old the property is?
        • Has your opinion on that changed since we started the session? IF YES What has led you to change your mind?
        • Is your view the same for all of the costs, or are there some costs that you think should be paid for differently?
        • PROMPT IF NEEDED: What about the costs of:
        • Retrofitting existing buildings?
        • Ensuring new buildings are energy efficient?
        • Reskilling the construction workforce?
        • How can we make that system of payment fair?

        IF NOT COVERED ABOVE: Should the system of payment be based on:

        • Levels of emission?
        • Ability to pay?
        • Ability to make changes / have a say on changes to their home?
        • Value of property?
        • Addressing inequality? (PROBE FOR DETAILS)
        • Something else? (PROBE FULLY FOR DETAILS)
        • How can we make sure that everyone benefits?
        • What groups might require additional time and resource to be spent to ensure they benefit from the new built environment and construction sector?
        • What sorts of barriers need to be removed to ensure benefits are shared fairly?
        • Finally, I’d like to revisit the exercise we did the first session when we described what a just transition means to each of use. Based on everything we have discussed so far, I want you to answer the same question – but this time, if you can, trying thinking about the built environment and construction sector specifically.
        Image showing example of Jamboard exercise.

        Move to plenary (20.45)

        Feedback in plenary

        20.45-20.55

        Participants hear from each other

        Each facilitator to give a recap on the key themes coming out of their breakout discussions – focussing on the key themes of how we share costs and benefits fairly.

        Close

        5 mins

        20.55-21.00

        Close

        Chair to close the day:

        • Brief overview of what has been covered.
        • Brief overview of what to expect in later workshops, highlighting the next one.
        • Encourage participants to speak to family and friends and see if they have similar/different views on the key issues.
        • Invite participants to go to the online community to rewatch any presentation and keep the discussion going
        • Summary of next steps, reminder of how important continued engagement is.

        Thank participants and close

        Phase one, session four

        14 September 2023, 6pm-9pm. Group of 30 participants, with 5 pre-assigned breakout groups (of 6 participants each).

        Overarching objective: Participants develop an understanding of the vision for a transition to net zero in the land and agriculture sector (with a particular focus on food production) and an understanding of the costs, benefits and challenges associated with that transition. Participants provide views on the fair distribution of costs and benefits.

        Discussion structure

        Time allocated

        Objective

        Questions and materials

        Set-up: Facilitators check-in

        25 mins

        17.30-17.50

        Set up and test tech, and team preparation

        Facilitator and tech team only

        • Test link, mic and camera.
        • Test who has the host/co-host function and ensure it is allocated to the right team member(s) for recording breakout rooms. Make all moderators Co-hosts.
        • Change screen name to NAME – Org – Chair/Moderator.
        • Check everyone is on the WhatsApp group for facilitation team to be able to ask questions, etc.
        • Meanwhile tech support is assigning participants who are in the waiting room, notetakers, moderators, experts and observers to break-out rooms.

        Participant check-in

        10 mins

        17.50-18.00

        Ensure participants are supported with set up

        Participants log into the online session

        • Participants encouraged to join the zoom session early to check-in and check their video/mic.
        • Participants encouraged to get a pen and paper, and have their participant pack with them.
        • Register as people join and change screen names as necessary to first name and first initial of surname (i.e. John H).

        Introductions and context setting

        10 mins

        18.00 – 18.10

        Re-familiarising participants with the process, settling back in.

        Ipsos Chair to welcome the room back (10 mins):

        Participants allocated to (new) break-out groups, but not put in them.

        • Chair welcomes participants back to the workshop.
        • Provides a reminder of the overall purpose of this dialogue and why we are here
        • Briefly explain who is here – our group of participants representing people from across Scotland, Ipsos facilitators, expert presenters, and any observers.
        • Summarises what was covered in session 3 and recaps on key topics – highlighting the suggestions the group made for ensuring costs and benefits were shared fairly.
        • Explains that today we will be focussing on the third and final of the three sectors – land use and agriculture and that their views will help feed into the development of the JTP for the land and agriculture sectors. Emphasising how valuable their role is.
        • Highlight that the topic of land use and agriculture is a big and complex one, and that it might seem a bit removed for some participants – for example, if they do not live in a rural area or have not had much dealings with either land use or agriculture, they might feel that the topic is less relevant to them, compared with transport and buildings. So for the purposes of this session, we will be exploring what land and agriculture means for the food that we eat – that is something that hopefully everyone can relate to. We will therefore explore what the transition to net zero means for how food is produced, through to what types of food we buy and eat.
        • Emphasise that they should approach this topic with open minds – although we reached some conclusions in last two sessions, they might think differently when it comes to this sector. So they have the opportunity to suggest different ideas today.
        • Show the overarching questions that we will seek to answer today:

        As we transition to net zero…

        • Who should pay for the changes that will be needed to our land use and agriculture, including changes that impact on our food?
        • How can we make that system of payment is fair?
        • How can we make sure that everyone benefits?
        • Chair provides re-cap of overall process (i.e. number of future workshops and online community) and today’s agenda (including time of breaks and finishing time).
        • Housekeeping, ground rules, confidentiality

        Move to breakout (18.10)

        Table introductions

        5 mins

        18.10 – 18.15

        Introducing participants to new group and reflections on previous workshop.

        Break-out group introductions and warm-up

        FACILITATOR INTRODUCES THEMSELVES AND THE GROUP’S NOTE TAKER, THANKS FOR CONTINUED PARTICIPATION. COLLECTS PERMISSION/CONSENT FOR RECORDING.

        • Please introduce yourself, and share one thing that stood out most from the previous session.

        Move to plenary (18.15)

        Future land and agriculture sector

        10 mins

        18.15 – 18.25/30

        To introduce the types of changes needed and why they are necessary

        CHAIR TO INTRODUCE SPEAKER – ASK PARTICIPANTS TO NOTE DOWN ANY THOUGHTS AND/OR QUESTIONS AS THEY LISTEN, WHICH WE WILL RETURN TO LATER

        Plenary presentation:

        Vision for a future land use and agriculture (Scotland’s Rural College)

        Presentation to help participants understand the land and agriculture sector, the changes that are likely to be needed, and how this impacts on food. Covering:

        • An overview of Scotland’s land and agriculture sector
        • And overview of where our food comes from
        • Future – where we need to get to in order to reach net zero
        • The likely costs and benefits associated with those changes

        How different groups might be impacted by the transition

        10 mins

        5 minute buffer built in

        18.25/30 – 18.40

        To help participants understand potential inequalities, that the just transition hopes to address

        CHAIR TO GIVE PARTICIPANTS A MINUTE TO REFLECT ON PRESENTATION 1 AND WRITE DOWN ANY BURNING THOUGHTS/QUESTIONS BEFORE INTRODUCING SPEAKER.

        Plenary presentation:

        Impacts of the transition on different groups (Climate Change Committee).

        To help participants to understand the impacts of the transition, covering:

        • What challenges does the transition present for different groups
        • What opportunities does the transition present?
        • Factors for participants to consider as they think about fair distribution of costs and benefits.

        Move to breakouts (18.40)

        Future land and agriculture sector -discussion

        25 mins

        18.40 – 19.05

        Initial views on future costs and their fairness.

        Opportunity to clarify any points from presentation

        We have the opportunity now to reflect on that presentation and to ask questions.

        • What did you think of the future changes that were outlined in the presentations?
        • What was appealing about those changes?
        • What was not appealing about them?
        • You heard that land will need to be used differently, meaning costs for farmers, businesses and consumers. What did you think about those costs?
        • Who do you think would be able pay those costs?
        • And who do you think should pay for those costs?
        • Have you any initial thoughts on how might we make those costs fairer?
        • [Speaker] discussed the different groups that might be impacted as we transition to net zero – what did you think about that?
        • Has this changed how you think about how fair or unfair the changes needed are?
        • How might we make those changes fairer?
        • What did you think about the benefits, or opportunities, of the just transition mentioned in the presentations?
        • Did these raise any new issues for you?
        • Have you any initial thoughts on how we might share the benefits fairly?
        • What questions would like to ask [the speakers]?

        FACILITATOR TO PREPARE TOP QUESTION (WITH TWO BACK-UP). ENCOURAGE VOLUNTEERS TO ASK QUESTIONS ON BEHALF OF GROUP.

        BREAK

        19.05 – 19.15

        BREAK

        Break (10 mins)

        Chair to present screen advising on time to return from break. TECH TEAM KEEP BREAK OUTS OPEN UNTIL END OF THE BREAK.

        Move to plenary (19.15)

        Q&A

        20 mins

        19.15 – 19.35

        Q&A

        Q&A in panel-style, with both presenters.

        CHAIR TO FACILITATE Q&A SESSION, WITH FACILITATORS ASKING THE QUESTIONS FROM THEIR BREAK-OUT GROUP OR CALLING ON PARTICIPANTS TO.

        Move to breakouts (19.35)

        Deliberation on key issues

        30 mins

        19.35 – 20.05

        Deliberation on key issues – changes required, impact on different groups, and how that could be made more fair

        [10 MINS]

        We’re now going to look at a Vision for 2040, which describes a future land use and agriculture sector. This Vision is based on the changes that the Scottish Government believes are necessary if we are to reach net zero, and some of these have been mentioned already by [the speakers].

        FACILITATOR SHOWS THE SLIDE WITH THE “VISION FOR LAND USE AND AGRICULTURE IN 2040” AND READS THROUGH. REMIND PARTICIPANTS THAT THE SCENARIO IS BASED ON A VISION FOR SCOTLAND’S FUTURE LAND AND AGRICULTURE SYSTEM, PARTICULARLY HOW THAT IMPACTS ON FOOD.

        • As we work towards achieving this vision, who do you think would find the transition easiest?
        • How do you feel about that?
        • What would make that feel fairer to you?
        • As we work towards this vision, who do you think would be at risk of losing out or being left behind?
        • How do you feel about that?
        • What would make that feel fairer to you?

        [20 MINS]

        • Let’s now think about what life would be like for some specific types of people as we adapt to these changes.
        • We are going to revisit our characters from the previous sessions, and find out a bit more about them. This time, we will understand a bit more about what role food plays in their lives.
        • Let’s look at the first one…

        SEE SLIDES LABELLED – “CHARACTERS – LAND USE AND AGRICULTURE”. SHOW THESE ON SCREEN. AIM TO COVER 2 CHARACTERS IF THERE IS TIME.

        • How do you think this person would feel about the future vision for the land and agriculture sector, and the changes it means to our food?
        • In what way might they be impacted differently to others? PROBE ON ASPECTS SUCH AS BEING ENCOURAGED TO THINK ABOUT THE CLIMATE IMPACTS OF FOOD AND WASTING LESS FOOD
        • What sorts of costs might have an impact on this person?
        • PROMPT IF NEEDED/RELEVANT DEPENDING ON THE CHARACTER YOU ARE COVERING: Remember we are talking about costs such as
        • Changing farming practices to make them more sustainable (LORRAINE)
        • Cost of producing and selling food (LORRAINE, NADEEM & AJAY)
        • Buying more locally produced, quality, sustainable food (ALICE, MARIA, DAVID & SARAH, NADEEM & AJAY)
        • Having access to space to grow food (DAVID & SARAH)
        • Bearing all that in mind, should this person be responsible for the costs associated with the transition?
        • (IF THEY SHOULD) What makes you say that? Which costs?
        • (IF NOT) What makes you say that? And who would be better placed to contribute to those costs?
        • What would help to ensure this person benefits from the changes to the land and agriculture sector, and isn’t left behind or disadvantaged?

        BREAK

        20.05 – 20.15

        BREAK

        Break (10 mins)

        Facilitator to advice their group on the return time (back into plenary).

        Deliberation on key issues

        30 minutes

        20.15-20.45

        Deliberation on key issues – specific costs areas and how they should be shared fairly

        DURING THESE FINAL DISCUSSIONS ENCOURAGE PARTICIPANTS TO REFLECT ON THEIR OWN CIRCUMSTANCES, THOSE OF THE OTHER PARTICIPANTS IN THEIR GROUP, AND THE TYPES OF PEOPLE THEY DISCUSSED IN THE PREVIOUS EXERCISE.

        We are going to use this final discussion to bring together everything we have been discussing so far. We will do this in the same way we did in the previous session. Remember, for tonight, we’re focussing only on the changes that will be needed in the land and agriculture sector.

        • Thinking about the costs of the transition to net zero in this sector, who do you now think should pay those costs?
        • PROMPT IF NEEDED:
        • Should it be government, farmers, food producers, the public?
        • What about a food producer who passes the costs on and increases food prices?
        • What about someone who chooses to buy food that is not locally produced?
        • What about someone who has specific needs in their diet?
        • Has your opinion on that changed at all since we started the session? IF YES What has led you to change your mind?
        • Is your view the same for all of the costs, or are there some costs that you think should be paid for differently?
        • How can we make that system of payment fair?

        IF NOT COVERED ABOVE: Should the system of payment be based on:

        • Levels of emission?
        • Ability to pay?
        • Ability to choose?
        • Ability to make changes / have a say on what food they buy?
        • Addressing inequality? (PROBE FOR DETAILS)
        • Something else? (PROBE FULLY FOR DETAILS)
        • How can we make sure that everyone benefits?
        • What particular groups might require additional time and resource to be spent to ensure they benefit from these changes?
        • What sorts of barriers need to be removed to ensure benefits are shared fairly?
        • Finally, I’d like to revisit the exercise we did the first session when we described what a just transition means to each of use. Based on everything we have discussed so far, I want you to answer the same question – but this time, if you can, trying thinking about the land and agriculture sector and specifically focus on food.

         

        Move to plenary (20.45)

        Feedback in plenary

        20.45-20.55

        Participants hear from each other

        Each facilitator to give a recap on the key themes coming out of their breakout discussions – focussing on the key themes of how we share costs and benefits fairly.

        Close

        5 mins

        20.55-21.00

        Close

        Chair to close the day:

        • Brief overview of what has been covered.
        • Brief overview of what to expect in later workshops, highlighting the next one.
        • Invite participants to go to the online community to rewatch any presentation and keep the discussion going
        • Summary of next steps, reminder of how important continued engagement is.

        Thank participants and close

        Phase one, session five

        30 September 2023, 10am – 1pm. Group of 30 participants, with 5 pre-assigned breakout groups (of 6 participants each).

        Overarching objective: Participants consolidate their views on the costs, benefits and challenges associated with the transition and form wider conclusions on the cross-cutting elements relating to a just transition (i.e. fairness). Findings from this session will feed into the final concluding session.

        Discussion structure

        Time allocated

        Objective

        Questions and materials

        Set-up: Facilitators check-in

        25 mins

        09.30-09.50

        Set up and test tech, and team preparation

        Facilitator and tech team only

        • Test link, mic and camera.
        • Test who has the host/co-host function and ensure it is allocated to the right team member(s) for recording breakout rooms. Make all moderators Co-hosts.
        • Change screen name to NAME – Org – Chair/Moderator.
        • Check everyone is on the WhatsApp group for facilitation team to be able to ask questions, etc.
        • Meanwhile tech support is assigning participants who are in the waiting room, notetakers, moderators, experts and observers to break-out rooms.

        Participant check-in

        10 mins

        09.50-10.00

        Ensure participants are supported with set up

        Participants log into the online session

        • Participants encouraged to join the zoom session early to check-in and check their video/mic.
        • Participants encouraged to get a pen and paper, and have their participant pack with them.
        • Register as people join and change screen names as necessary to first name and first initial of surname (i.e. John H).

        Introductions and context setting

        10 mins

        10.00 – 10.10

        Re-familiarising participants with the process, settling back in.

        Ipsos Chair to welcome the room back (10 mins):

        Participants allocated to (new) break-out groups, but not put in them.

        • Chair welcomes participants back to the workshop.
        • Provides a reminder of the overall purpose of this dialogue and why we are here
        • Briefly explain who is here – our group of participants representing people from across Scotland, Ipsos facilitators, expert presenters, and any observers.
        • Summarises what was covered in session 4 and recaps on key topics – highlighting the suggestions the group made for ensuring costs and benefits were shared fairly in the L&A sector (including findings from the online community).
        • Explains that today we will be switching the focus from specific sectors to broader themes, focusing on how we ensure the costs and benefits of the transition to net zero are distributed fairly. Explain purpose of this session is to help us start to bring everything together and form conclusions (in preparation for the final session).
        • Show the overarching questions that we are seeking to answer at the end of the process:
        • As we transition to net zero, who should pay for the changes that will be needed?
        • How can we make that system of payment is fair?
        • How can we make sure that everyone benefits?
        • Chair provides re-cap of overall process (i.e. number of future workshops and online community) and today’s agenda (including time of breaks and finishing time).
        • Recap on sector sessions and playback broad themes emerging. Explain that the purpose of today’s session is to start to look at how changes in these sectors might interact with each other and their impacts on peoples’ everyday lives.
        • Housekeeping, ground rules, confidentiality.

        Move to breakout (10.10)

        Table introductions

        15 mins

        10.10 – 10.25

        Introducing participants to new group and initial discussions around fairness.

        Break-out group introductions and warm-up

        FACILITATOR INTRODUCES THEMSELVES AND THE GROUP’S NOTE TAKER, THANKS FOR CONTINUED PARTICIPATION. COLLECTS PERMISSION/CONSENT FOR RECORDING.

        • Please introduce yourself, and share one thing that stood out most from the last session.
        • Throughout this process we’ve talked about ways to ensure a just transition to net zero, which means making sure the costs and benefits are distributed fairly. We will come back to this later in the session, but for now I just want to ask, based on everything you’ve heard so far about the transition to net zero, what does the word ‘fairness’ mean to you?

        ALLOW PARTICIPANTS A MINUTE TO REFLECT ON THAT QUESTION, AND NOTE DOWN THEIR THOUGHTS ON A PIECE OF PAPER BEFORE ASKING THEM TO SHARE.

        • FACILIATTOR SHARE FIRST PART OF THE MIRO BOARD AND ADD ON POST-ITS THE WORDS/PHRASES THAT COME UP.
        • What words or phrases come to mind?
        • (IF NOT COVERED ABOVE) What does it mean for the run up to 2040, and the changes needed to achieve the visions we’ve been looking at?
        • What about after 2040?
        • You might remember in session 1 we asked who you thought should take the lead in tackling climate change. Should those who take the lead also make the decisions about how we tackle climate change?
        • IF YES – Who do you think should take a lead and make the decisions?
        • IF NO – Who do you think should take the lead? And who should make the decisions?
        • Does something being fair depend more on who decides, or what the decision is? Or is it about both? What makes you say that?
        • IF TIME – What did you think of the chair’s recap?
        • Did it seem an accurate summary of what you’ve been hearing/saying during these discussions?
        • Was there anything missing?

        Move to plenary (10.25)

        Introduce future scenarios

        10 mins

        10.25 – 10.35

        To introduce the future scenarios

        Plenary presentation:

        Future scenarios (Ipsos chair)

        The chair will talk everyone through the future scenarios and provide a brief explanation of the plan for the remainder of the session (emphasising that it is largely over to them now to deliberate, with the help of Ipsos facilitators). An overview of the scenarios are:

        • Scenario 1 – those who earn the most pay the most
        • Scenario 2 – those who emit the most pay the most
        • Scenario 3 – there are incentives for making low carbon choices

        Chair will explain that the scenarios are based on the sorts of changes we have been discussing in the sector sessions, and the different ways in which these changes might be brought about. The chair will emphasise that these are all things that are being considered or are already being done around the world, and are options that could be considered in Scotland.

        The chair will remind participants that the task is not to focus so much on how likely or desirable the changes are in Scotland, but how we make sure the costs and benefits of these changes are distributed fairly IF they were to happen.

        Will also emphasise that the aim is not for participants to choose the “best” scenario or decide which once should be implemented – we are using these as a way of helping participants to think differently about the three big questions we are trying to answer.

        Move to breakouts (10.35)

        Future scenarios – part 1 discussion

        40 mins

        10.35 – 11.15

        Exploring first scenario in detail

        SCENARIOS SUMMARY. EACH FACILITATOR TO FORCUS ON TWO SCENARIOS, BUT WITH THE OPTION TO COVER THE OTHERS WITH ANY REMAINING TIME:

        FACILITATORS TAKE ASSIGNED SCENARIO FOR FIRST BREAKOUT:

        FACILITATOR SHARE SCREEN AND GO TO FIRST SCENARIO IN MIRO, USING DIGITAL POST-ITS TO RECORD CROSS-CUTTING THOUGHTS / EMERGING CONCLUSIONS THAT ARISE DURING DISCUSSION, PLAYING THESE BACK TO PARTICIPANTS.

        The first scenario we are going to look at is [read title]. We’ll read through it together and then have a discussion about it. FACILITATOR READ THROUGH SCENARIO AND ALLOW TIME FOR PARTICIPANTS TO REFLECT/NOTE THINGS DOWN.

        Initial reactions to scenario (10 mins)

        • Before we go into the detail, I want to get your initial reactions to this scenario. How did you feel listening to it?
        • What made you feel this way?
        • Which parts of the scenario really stand out to you? Why?
        • Is there anything that surprises you?
        • What aspects – if any – are appealing?
        • What aspects – if any – are not appealing?
        • How fair or unfair does this scenario seem to you? What makes you say that?
        • PROBE ON:
        • What aspects in particular seem fair?
        • What aspects in particular seem unfair?
        • Who is it unfair to?

        Scenario + individual impacts (15 mins)

        Let’s now think about this scenario in terms of your own live, if you are comfortable sharing.

        • First, thinking about where you live (including the type of home you live in and other buildings you visit around where you live: e.g. where you work, taking your children to school, where you go for medical appointments, where you go for leisure activities), how if at all would these changes impact you? FACILITATOR REFER TO ELEMENTS OF SCENARIO RELATING TO BUILT ENVIRONMENT SECTOR IF NEEDED.
        • Would these changes potentially cost you money?
        • Does this seem fair or unfair? Why?
        • Now thinking about how you travel around, how if at all would these changes impact you? FACILITATOR REFER TO ELEMENTS OF SCENARIO RELATING TO TRANSPORT SECTOR IF NEEDED.
        • Would these changes potentially cost you money?
        • Does this seem fair or unfair? Why?
        • And now thinking about food – what you buy and where you buy it from – how if at all would these changes impact you? FACILITATOR REFER TO ELEMENTS OF SCENARIO RELATING TO LAND/AGRI SECTOR IF NEEDED.
        • Would these changes potentially cost you money?
        • Does this seem fair or unfair? Why?

        Scenario + character impacts (15 mins)

        Now let’s look at this scenario in relation to our characters. FACILITATOR MOVE ALONG ON MIRO BOARD TO CHARACTER SUMMARY CARDS AND READ THROUGH THESE, THEN MOVE ALONG TO SCENARIO AND CHARACTERS SHOWN TOGETHER WITH ICONS.

        FACILITATOR REFER TO EACH BOX IN SCENARIO AND ASK:

        • Who (if anyone) do you think could benefit from this?
        • In what ways?
        • [IF ONLY DISCUSSED ONE CHARACTER, CHECK] Could anyone else benefit?
        • Who (if anyone) do you think could lose out from this?
        • In what ways?
        • [IF ONLY DISCUSSED ONE CHARACTER, CHECK] Could anyone else lose out?

        PLACE GREEN CHARACTER ICONS ON PARTS OF SCENARIO WHERE PARTICIPANTS THINK THEY WILL BENEFIT.

        PLACE RED CHARACTER ICONS ON PARTS OF SCENARIO WHERE PARTICIPANTS THINK THEY WILL LOSE OUT.

        • Who (i.e. which character) do you think would pay:
        • The biggest share of the costs for this? PLACE LARGE MONEY PILE NEXT TO CHARACTER ICON
        • The smallest share of the costs for this? PLACE SMALL MONEY PILE NEXT TO CHARACTER ICON

        LET PARTICIPANTS KNOW THAT THEY MIGHT NOT THINK ANY OF THE CHARACTERS SHOULD PAY, AND THEY CAN ADD GROUPS THAT THEY THINK SHOULD PAY USING POST-ITS (E.G. GOVERNMENT, BUSINESS, OTHER GROUPS OF PEOPLE).

        • Is that fair or unfair?
        • [IF UNFAIR] What would need to happen to make this fairer?
        • What would you change about this scenario to make it fairer?
        • Would you take anything away?
        • Would you add anything in?
        • And what would need to happen to make sure everyone benefits from these changes? ASK OPENLY FIRST, THEN PROBE ON:
        • Is there any other support (not financial) that you think would be important? (IF NEEDED, for example, information sharing or advice services)
        • What would this support look like as part of a just transition?

        Stay in breakouts (11.15)

        BREAK

        11.15 – 11.25

        BREAK

        Facilitator sends own group on break and advises on return time (ensuring everyone gets at least 10 minutes)

        Stay in breakouts (11.25)

        Future scenarios – part 2 discussion

        40 mins

        11.25 – 12.05

        Exploring second scenario in detail

        SCENARIOS SUMMARY. EACH FACILITATOR TO FORCUS ON TWO SCENARIOS, BUT WITH THE OPTION TO COVER THE OTHERS WITH ANY REMAINING TIME:

        FACILITATORS TAKE ASSIGNED SCENARIO FOR SECOND BREAKOUT:

        FACILITATOR TO USE DIGITAL POST-ITS TO RECORD CROSS-CUTTING THEMES THAT EMERGE DURING DISCUSSION, PLAYING THESE BACK TO PARTICIPANTS.

        The first scenario we are going to look at is [read title]. We’ll read through it together and then have a discussion about it. FACILITATOR READ THROUGH SCENARIO AND ALLOW TIME FOR PARTICIPANTS TO REFLECT/NOTE THINGS DOWN.

        Initial reactions to scenario (10 mins)

        • Before we go into the detail, I want to get your initial reactions to this scenario. How did you feel listening to it?
        • What made you feel this way?
        • Which parts of the scenario really stand out to you? Why?
        • Is there anything that surprises you?
        • What aspects – if any – are appealing?
        • What aspects – if any – are not appealing?
        • How fair or unfair does this scenario seem to you? What makes you say that?
        • PROBE ON:
        • What aspects in particular seem fair?
        • What aspects in particular seem unfair?
        • Who is it unfair to?

        Scenario + individual impacts (15 mins)

        Let’s now think about this scenario in terms of your own lives, if you are comfortable sharing.

        • First, thinking about where you live (including the type of home you live in and other buildings you visit around where you live: e.g. where you work, taking your children to school, where you go for medical appointments, where you go for leisure activities), how if at all would these changes impact you? FACILITATOR REFER TO ELEMENTS OF SCENARIO RELATING TO BUILT ENVIRONMENT SECTOR IF NEEDED.
        • Would these changes potentially cost you money?
        • Does this seem fair or unfair? Why?
        • Now thinking about how you travel around, how if at all would these changes impact you? FACILITATOR REFER TO ELEMENTS OF SCENARIO RELATING TO TRANSPORT SECTOR IF NEEDED.
        • Would these changes potentially cost you money?
        • Does this seem fair or unfair? Why?
        • And now thinking about food – what you buy and where you buy it from – how if at all would these changes impact you? FACILITATOR REFER TO ELEMENTS OF SCENARIO RELATING TO LAND/AGRI SECTOR IF NEEDED.
        • Would these changes potentially cost you money?
        • Does this seem fair or unfair? Why?

        Scenario + character impacts (15 mins)

        Now let’s look at this scenario in relation to our characters. FACILITATOR MOVE ALONG ON MIRO BOARD TO CHARACTER SUMMARY CARDS AND READ THROUGH THESE, THEN MOVE ALONG TO SCENARIO AND CHARACTERS SHOWN TOGETHER WITH ICONS.

        FACILITATOR REFER TO EACH BOX IN SCENARIO AND ASK:

        • Who (if anyone) do you think could benefit from this?
        • In what ways?
        • [IF ONLY DISCUSSED ONE CHARACTER, CHECK] Could anyone else benefit?
        • Who (if anyone) do you think could lose out from this?
        • In what ways?
        • [IF ONLY DISCUSSED ONE CHARACTER, CHECK] Could anyone else lose out?

        PLACE GREEN CHARACTER ICONS ON PARTS OF SCENARIO WHERE PARTICIPANTS THINK THEY WILL BENEFIT.

        PLACE RED CHARACTER ICONS ON PARTS OF SCENARIO WHERE PARTICIPANTS THINK THEY WILL LOSE OUT.

        • Who (i.e. which character) you think would pay:
        • The biggest share of the costs for this? PLACE LARGE MONEY PILE NEXT TO CHARACTER ICON
        • The smallest share of the costs for this? PLACE SMALL MONEY PILE NEXT TO CHARACTER ICON

        LET PARTICIPANTS KNOW THAT THEY MIGHT NOT THINK ANY OF THE CHARACTERS SHOULD PAY, AND THEY CAN ADD GROUPS THAT THEY THINK SHOULD PAY USING POST-ITS (E.G. GOVERNMENT, BUSINESS, OTHER GROUPS OF PEOPLE).

        • Is that fair or unfair?
        • [IF UNFAIR] What would need to happen to make this fairer?
        • What would you change about this scenario to make it fairer?
        • Would you take anything away?
        • Would you add anything in?
        • And what would need to happen to make sure everyone benefits from these changes?
        • ASK OPENLY FIRST, THEN PROBE ON:
        • Is there any other support (not financial) that you think would be important? (IF NEEDED, for example, information sharing or advice services)
        • What would this support look like as part of a just transition?

        Stay in breakouts (12.05)

        BREAK

        10 mins

        12.05 – 12.15

        BREAK

        Facilitator sends group on break.

        Halfway through break, tech support to close breakouts and bring everyone back to plenary.

        Move to plenary (12.15)

        Feedback

        12.15 – 12.25

        Participants hear from others

        Chair invites facilitator to feedback on group discussions, briefly summarising scenarios explored and what the group’s conclusions were around how fair/unfair they are and what would need to be in place to ensure fairness.

        Move to breakouts (12.25)

        Emerging conclusions

        12.25 – 12.55

        Emerging conclusions captured (preparing for final session)

        Reflections on feedback (5 mins)

        Before we get into our final task, I just want to get your thoughts on what the other groups have been discussing:

        • Did you hear anything that surprised you?
        • Was there anything you particularly agreed or disagreed with?
        • Did you hear anything that raises new issues for you? FACILITATOR NOTE DOWN ANY NEW ISSUES RAISED.

        Forming conclusions (20-25 mins)

        We’re now going to revisit the discussion we had earlier about what fairness means, to help us start forming conclusions around how we ensure the costs and benefits of the transition to net zero – in each of the sectors we’ve been looking at – are fair.

        FACILITATOR SHARE DIGITAL WHITEBOARD AND READ OUT POST-ITS THAT WERE WRITTEN AT THE START. THEN BRING IN POST-ITS THAT HAVE BEEN WRITTEN OVER THE COURSE OF THE SESSION.

        Our final task is to start to tidy these up into conclusions, i.e. what we think the Scottish Government should consider as they draft the Just Transition Plans for each sector.

        • Is there anything here that we want to change or reword?
        • IF YES – What would you like it to say instead?
        • Does this apply to all the sectors?
        • IF NO – which sectors does it apply to?
        • Is there anything here that we’re happy with as it is?
        • What makes you say that?
        • Is there anything we want to add? REFER TO ANY NEW ISSUES RAISED.
        • IF YES – What should we write?
        • Does this apply to all the sectors?
        • IF NO – which sectors does it apply to?
        • Of everything here, what is most important to you? Why is that?

        Revisit S1 Jamboard (5 mins)

        IF TIME, FACILITATOR SHOW JAMBOARD FROM SESSION 1 SHOWING INITIAL THOUGHTS ON WHAT A FAIR TRANSITION TO NET ZERO MEANS.

        • Looking at this again, now that we’re further through the process, do you think what we’ve written down today is similar or different to what we said at the beginning?
        • What are the similarities?
        • What are the differences?
        • IF ANY DIFFERENCES – Why do you think this is different now?

        Move to plenary

        Close

        5 mins

        12.55-13.00

        Close

        Chair to close the day:

        • Brief overview of what has been covered.
        • Invite participants to go to the online community for final activities before last session
        • Summary of next steps (final session) and what to expect in final session.

        Thank participants and close

        Phase one, session six

        5 October 2023, 6-9pm. Group of 30 participants, with 5 pre-assigned breakout groups (of 6 participants each).

        Overarching objective: Participants review, ratify and finalise their conclusions.

        Discussion structure

        Time allocated

        Objective

        Questions and materials

        Set-up: Facilitators check-in

        25 mins

        17.30-17.50

        Set up and test tech, and team preparation

        Facilitator and tech team only

        • Test link, mic and camera.
        • Test who has the host/co-host function and ensure it is allocated to the right team member(s) for recording breakout rooms. Make all moderators Co-hosts.
        • Change screen name to NAME – Org – Chair/Moderator.
        • Check everyone is on the WhatsApp group for facilitation team to be able to ask questions, etc.
        • Meanwhile tech support is assigning participants who are in the waiting room, notetakers, moderators, experts and observers to break-out rooms.

        Participant check-in

        10 mins

        17.50-18.00

        Ensure participants are supported with set up

        Participants log into the online session

        • Participants encouraged to join the zoom session early to check-in and check their video/mic.
        • Participants encouraged to get a pen and paper, and have their participant pack with them.
        • Register as people join and change screen names as necessary to first name and first initial of surname (i.e. John H).

        Introductions and context setting

        15 mins

        18.00 – 18.15

        Re-familiarising participants with the process, settling back in.

        Ipsos Chair to welcome the room back (15 mins):

        Participants allocated to (new) break-out groups, but not put in them.

        • Chair welcomes participants back for the final workshop.
        • Provides a reminder of the overall purpose of this dialogue and why we are here
        • Briefly explain who is here – our group of participants representing people from across Scotland, Ipsos facilitators, expert presenters, and any observers.
        • Summarises what was covered in previous sessions and recaps on key points.
        • Explains that today we will be bringing everything together to answer the overarching questions and will spend most of our time in breakouts:
        • As we transition to net zero, who should pay for the changes that will be needed?
        • How can we make that system of payment is fair?
        • How can we make sure that everyone benefits?
        • Recap on x-cutting session and present summary of the conclusions that the group started to form (from S5 post-its, which Ipsos will have combined into one set and presented as responses to each of the overarching Qs). Explain that the purpose of today’s session is to bring everything together and finalise these conclusions that we have started to form.
        • Chair to explain how the conclusions will be developed from here – today is the chance for everyone to have their say on the what the conclusions should say, with the wording that is most suitable etc. But acknowledge that there may be points where views differ, and some of the groups may come up with different wording from each other. Although it would be great if everyone agreed, it’s okay if they don’t. In the final report that Ipsos produce, we will make clear any differences in view around these conclusions.
        • Housekeeping, ground rules, confidentiality.

        Move to breakout (18.15)

        Table introductions and ratifying conclusions on Q1

        20 mins

        18.15 – 18.35

        Introducing participants to new group and ratifying conclusions on Q1

        Break-out group introductions and warm-up

        FACILITATOR INTRODUCES THEMSELVES AND THE GROUP’S NOTE TAKER, THANKS FOR CONTINUED PARTICIPATION. COLLECTS PERMISSION/CONSENT FOR RECORDING.

        • Please introduce yourself and where you currently live

        As the chair said, we’re going to spend most of this workshop finalising our conclusions on each of the overarching questions. As we do this, we’ll think about each of the sectors too.

        FACILITATOR SHARE SCREEN WITH DRAFT RESPONSES TO FIRST QUESTION: As we transition to net zero, who should pay for the changes that will be needed?

        This is a summary of responses that we have pulled together based on what you’ve said in previous sessions. These conclusions should be in your words, so I’m going to ask what (if anything) you’d like to change, add or take away to make sure it reflects what you think, based on what you’ve heard throughout this process. If we don’t agree on anything, that’s absolutely okay, we will discuss it as a group if that’s the case

        FACILITATOR TO CONTINUALLY CHECK WHETHER THERE IS AGREEMENT ON ANY CHANGES OR IF THERE ARE DIFFERENT VIEWS. IF THERE IS DISAGREEMENT, CAPTURE DIFFERENT VERSIONS TO REFLECT DIFFERENT PERSPECTIVES.

        • Is there any wording you want to change that’s written here?
        • What would you like it to say instead?
        • Why is that change important to you?
        • IF NOT CLEAR – Is this something that applies to all the sectors we’ve looked at, or is it more applicable to one (or more) in particular?
        • Is there any wording you’re happy with as it is?
        • What makes you say that?
        • IF NOT CLEAR – Is this something that applies to all the sectors we’ve looked at, or is it more applicable to one (or more) in particular?
        • Is there anything you’d like to add that isn’t here?
        • What would you like to add?
        • What makes you say that?
        • IF NOT CLEAR – Is this something that applies to all the sectors we’ve looked at, or is it more applicable to one (or more) in particular?
        • What do you think about the statements related to how…
        • The Scottish Government should pay?
        • Businesses should pay?
        • Citizens should pay?
        • Of everything that’s written here, what feels the most important to you?
        • What makes you say that?

        Move to plenary (18.35)

        Feedback on Q1

        10 mins

        18.35 – 18.45

        Feedback on Q1

        Chair invites each facilitator to share screen and summarise the group’s changes / reasoning.

        Move to breakout (18.45)

        Reflections on Q1 edits and ratifying conclusions on Q2

        10 mins

        18.45 – 18.55

        Reflections on Q1 edits and ratifying conclusions on Q2

        Reflecting on other edits (10 mins)

        • Before we get into the next question, what – if anything – stood out most to you from the edits made by other groups?
        • Does anything surprise you? What makes you say that?
        • Is there a change/lack of change you agree with? What makes you say that?
        • Was there a change/lack of change you disagree with? What makes you say that?

        IF NEEDED, FACILITATOR TO REITERATE CHAIR’S REMARKS ABOUT HOW THE FINAL CONCLUSIONS WILL BE PRESENTED IN THE REPORT (I.E. THEY WILL REFLECT THE GROUP’S EDITS BUT ALSO THE RANGE OF VIEWS AROUND THEM, SO IT’S IMPORTANT TO HEAR FROM ANYONE WHO DISAGREES WITH PARTICULAR WORDING SO THAT WE CAN EXPLAIN THIS IN THE REPORT).

        • Before we take a quick break, I just wanted to check that we’re still happy with our own edits, or do we want to make any further changes? FACILITATOR SHARE SCREEN WITH GROUP’S EDITS IF GROUP WISHES TO MAKE CHANGES. PROBE ON REASONS FOR ANY FURTHER CHANGES AND CHECK ON AGREEMENT.

        Ratifying conclusions on Q2

        20 mins

        18.55- 19.15

        Ratifying conclusions on Q2

        FACILITATOR SHARE SCREEN WITH DRAFT RESPONSES TO SECOND QUESTION: How can we make that system of payment is fair?

        Moving onto question 2, this is a summary of responses that we have pulled together based on what you’ve said in previous sessions.

        FACILITATOR TO CONTINUALLY CHECK WHETHER THERE IS AGREEMENT ON ANY CHANGES OR IF THERE ARE DIFFERENT VIEWS. IF THERE IS DISAGREEMENT, CAPTURE DIFFERENT VERSIONS TO REFLECT DIFFERENT PERSPECTIVES.

        • Is there any wording you want to change that’s written here?
        • What would you like it to say instead?
        • Why is that change important to you?
        • IF NOT CLEAR – Is this something that applies to all the sectors we’ve looked at, or is it more applicable to one (or more) in particular?
        • Is there any wording you’re happy with as it is?
        • What makes you say that?
        • IF NOT CLEAR – Is this something that applies to all the sectors we’ve looked at, or is it more applicable to one (or more) in particular?
        • Is there anything you’d like to add that isn’t here?
        • What would you like to add?
        • What makes you say that?
        • IF NOT CLEAR – Is this something that applies to all the sectors we’ve looked at, or is it more applicable to one (or more) in particular?
        • If these points were all put in place, would this feel like a fair system of payment?
        • What, if anything, is missing?
        • Of everything that’s written here, what feels the most important to you?
        • What makes you say that?

        Stay in breakouts (19.15)

        BREAK

        10 mins

        19.15 – 19.30

        BREAK

        Facilitator to advise on time to return from break

        Move to plenary (19.30)

        Feedback on Q2

        10 mins

        19.30 – 19.40

        Feedback on Q2

        Chair invites each facilitator to share screen and summarise the group’s changes / reasoning.

        Chair introduces poll and asks participants to answer this question again:

        “Who do you think should take the lead in tackling climate change in Scotland?

        • All individuals living in Scotland
        • Certain groups of people living in Scotland (e.g. those with the highest carbon emissions)
        • Businesses in Scotland
        • The Scottish Government
        • All of these groups
        • None of these groups

        Chair closes poll but results not shown. Chair explains that they will be presented again later.

        Move to breakouts (19.40)

        Reflections on Q2 edits

        10 mins

        19.40 – 19.50

        Reflections on Q2 edits
        • We’ll move onto the final question soon. Before we do, what – if anything – stood out most to you from the edits made by other groups?
        • Does anything surprise you? What makes you say that?
        • Is there a change/lack of change you agree with? What makes you say that?
        • Was there a change/lack of change you disagree with? What makes you say that?

        IF NEEDED, FACILITATOR TO REITERATE CHAIR’S REMARKS ABOUT HOW THE FINAL CONCLUSIONS WILL BE PRESENTED IN THE REPORT (I.E. THEY WILL REFLECT THE GROUP’S EDITS BUT ALSO THE RANGE OF VIEWS AROUND THEM, SO IT’S IMPORTANT TO HEAR FROM ANYONE WHO DISAGREES WITH PARTICULAR WORDING SO THAT WE CAN EXPLAIN THIS IN THE REPORT).

        • We’ll take a break shortly, but before that I just wanted to check that we’re still happy with our own edits, or do we want to make any further changes? FACILITATOR SHARE SCREEN WITH GROUP’S EDITS IF GROUP WISHES TO MAKE CHANGES. PROBE ON REASONS FOR ANY FURTHER CHANGES AND CHECK ON AGREEMENT.

        Stay in breakouts (19.55)

        Ratifying conclusions on Q3

        20 mins

        19-50-20.10

        Ratifying conclusions on Q3

        FACILITATOR SHARE SCREEN WITH DRAFT RESPONSES TO THIRD QUESTION: How can we make sure that everyone benefits?

        Moving onto our final question, this is a summary of responses that we have pulled together based on what you’ve said in previous sessions.

        FACILITATOR TO CONTINUALLY CHECK WHETHER THERE IS AGREEMENT ON ANY CHANGES OR IF THERE ARE DIFFERENT VIEWS. IF THERE IS DISAGREEMENT, CAPTURE DIFFERENT VERSIONS TO REFLECT DIFFERENT PERSPECTIVES.

        • Is there any wording you want to change that’s written here?
        • What would you like it to say instead?
        • Why is that change important to you?
        • IF NOT CLEAR – Is this something that applies to all the sectors we’ve looked at, or is it more applicable to one (or more) in particular?
        • Is there any wording you’re happy with as it is?
        • What makes you say that?
        • IF NOT CLEAR – Is this something that applies to all the sectors we’ve looked at, or is it more applicable to one (or more) in particular?
        • Is there anything you’d like to add that isn’t here?
        • What would you like to add?
        • What makes you say that?
        • IF NOT CLEAR – Is this something that applies to all the sectors we’ve looked at, or is it more applicable to one (or more) in particular?
        • If these points were all put in place, would you feel like everyone has been given the opportunity to benefit?
        • What, if anything, is missing?
        • Of everything that’s written here, what feels the most important to you?
        • What makes you say that?

        Move to plenary (20.10)

        Feedback on Q3 edits and poll

        10 mins

        20.10 – 20.20

        Feedback on Q3 edits and poll

        Chair invites each facilitator to share screen and summarise the group’s changes / reasoning.

        Chair presents slide showing S1/S6 poll and comments on results/any shifts. Introduces final breakout.

        Move to breakouts (20.20)

        Reflections on Q3 edits, poll results and projective exercise

        10-15 mins (Facilitators to judge length based on how much they say in the reflections section)

        20.20 – 20.30-35

        Participants hear from others

        Reflections on Q3 edits (5-10 mins)

        • What – if anything – stood out most to you from the edits made by other groups?
        • Does anything surprise you? What makes you say that?
        • Is there a change/lack of change you agree with? What makes you say that?
        • Was there a change/lack of change you disagree with? What makes you say that?
        • And are still happy with our own edits, or do we want to make any further changes? FACILITATOR SHARE SCREEN WITH GROUP’S EDITS IF GROUP WISHES TO MAKE CHANGES. PROBE ON REASONS FOR ANY FURTHER CHANGES AND CHECK ON AGREEMENT

        Poll results and reflections on process (5-10 mins)

        • What did you make of the poll results? FACILITATOR SHARE SLIDE WITH POLL RESULTS FROM S1 AND S6
        • Did these surprise you? Why/why not?
        • What do you think of the results this time compared with session 1?
        • Thinking about this poll, has your own view changed on who should take the lead, or has it stayed the same? Why is that?
        • IF CHANGED – At what point in this process would you say your view changed? What prompted the change?
        • IF NOT CHANGED – Were there any points in the process that strengthened your view?
        • And now thinking more broadly about a fair distribution of costs and benefits, has your view changed at any point during this process? Why is that?
        • IF CHANGED – At what point in this process would you say your view changed? What prompted the change?
        • IF NOT CHANGED – Were there any points in the process that strengthened your view?

        IF ANY TIME REMAINING: Before we finish, I’d be interested in hearing your reflections on this process overall.

        • What, if anything, have you enjoyed most about being on this panel?
        • What, if anything, have you not enjoyed as much?
        • What, if anything, has been the most challenging part?

        Move to plenary (20.30/35)

        Close

        20.30/35 – 20.40/45

        Thank participants

        Chair to thank participants for their efforts over the 6 sessions, explain next steps including final online community activity (see below*), and reporting. Ipsos to thank participants and close the session.

        Final activity for the online community

        On the online community, we will ask you to write a postcard to yourself as if you were in the year 2040. Imagine you are writing back to yourself in the current moment – in 2023 – about the changes that have been made in Scotland: what has it meant for how you travel around in 2040? The house you live in? The food you eat? And how you feel about these changes?

        Phase two, session one

        Wednesday 6 March 2024, 6.30pm-8.30pm

        Overarching objective: introduce participants to key concepts and familiarise them with the online discussion format and their role throughout the dialogue. Opportunity for Q&A to develop understanding before moving into focused discussion on each sector in subsequent sessions.

        Discussion structure

        Time

        Objective

        Questions and materials

        Set-up: Facilitators check-in

        20 mins

        18.00-18.20

        Set up and test tech, and team preparation

        Facilitator and tech team only

        • Test link, mic and camera.
        • Test who has the host/co-host function and ensure it is allocated to the right team member(s) for recording breakout rooms. Make all moderators Co-hosts.
        • Change screen name to NAME – Org – Chair/Moderator.
        • Check everyone is on the WhatsApp group for facilitation team to be able to ask questions, etc.
        • Meanwhile tech support is assigning participants who are in the waiting room, notetakers, moderators, experts and observers to break-out rooms.

        Participant check-in

        10 mins

        18.20-18.30

        Ensure participants are supported with set up

        Participants log into the online session

        • Participants encouraged to join the zoom session early to check-in and check their video/mic.
        • Participants encouraged to get a pen and paper.
        • Register as people join and change screen names as necessary to first name and first initial of surname (i.e. John H).

        Introductions and context setting

        10 mins

        18.30 – 18.40

        Welcome and introduction of process

        Ipsos Chair to welcome everyone to the dialogue (10 mins):

        Participants allocated to break-out groups, but not put in them.

        • Chair welcomes participants to the session.
        • Chair provides a summary of the overall purpose of this dialogue and why we are here. Shares aim of research:

        To explore the public’s views on how the changes in the transport and the built environment sectors are done fairly to ensure a just transition to net zero.

        • Explains who is here – our group of participants representing people from across Scotland, Ipsos facilitators, expert presenters, and any observers.
        • Explains purpose of this session is to introduce everyone to the topic, explain some key concepts and to start setting out the issues for discussion – including what we mean by net zero and just transition, why these sectors and the development of just transition plans, and how these workshops fit into other public engagement that has been happening on Scotland’s just transition to net zero. Emphasising how valuable their role is to inform the development of these plans.
        • Chair shows overarching plan for each session:
        • Session 1 – introduction
        • Session 2 – transport focus
        • Session 3 – built environment focus
        • Chair provides summary of overall process (i.e. number of future workshops and online community) and today’s agenda (including time of breaks and finishing time). Explain that today’s session will mostly be about listening and learning and encourage participants to jot down their thoughts and questions, explaining that there will be a Q&A at the end.
        • Housekeeping, ground rules – mention that plenary sessions will be recorded so to keep camera off if don’t want to be visible during that. Reminder to only have first name and first letter of surname showing.

        Move to breakout (18.40)

        Table introductions

        18.40 – 18.50

        Introducing participants to group, gathering initial thoughts and feelings.

        Break-out group introductions (10 mins)

        • FACILITATOR INTRODUCES THEMSELVES AND THANKS PARTICIPANTS FOR JOINING. COLLECTS PERMISSION/CONSENT FOR RECORDING.
        • ASK EACH PERSON TO INTRODUCE THEMSELVES AND SHARE ONE HOPE OR FEAR THEY HAVE ABOUT TAKING PART.
        • As you heard in the introduction, we are here to discuss Scotland’s Just Transition to Net zero and you’ll learn more about that this evening. But before we get into it, what does “net zero” mean to you?
        • Is it something you’ve thought about much before today?
        • And before being invited to this discussion, had you come across the term “just transition to net zero?”
        • IF YES – what did you think about it?
        • IF NO – what do you think it’s about?
        • Do you have any questions at this stage? NOTE THESE DOWN AND EXPLAIN THAT THERE WILL BE A Q&A TOWARDS THE END.

        Move to plenary (18.50)

        Presentation on climate change and the move to net zero

        10 mins

        18.50 – 19.00

        Introduction to key issues around climate change and the transition to net zero

        Plenary presentation 1 (10 mins):

        Climate change and the move to net zero.

        CXC

        BEFORE PRESENTATION STARTS – CHAIR TO ASK PARTICIPANTS TO WRITE DOWN ON (ON A PIECE OF PAPER, OR ON THEIR PHONE) ANY THOUGHTS OR QUESTIONS WHICH THEY WILL HAVE THE OPPORTUNITY TO SHARE LATER ON.

        Presentation to help participants understand the key concepts relating to climate change, net zero and to outline the SG’s plans generally:

        • What we know about climate change/the climate emergency and its impacts
        • Some key terms – net zero, adaptation, mitigation – and why these are happening
        • The Scottish Government’s commitment to reaching net zero by 2045 and what that means
        • High emitting sectors: highlighting that transport, the built environment and construction, land and agriculture, and energy are highest emitting in Scotland (to set context for our focus on the first two).

        Stay in plenary (19.00)

        Presentation on just transition

        10 mins

        19.00 – 19.15

        5 minute buffer built in here to allow for intros/ crossover

        Introduction to just transition

        Plenary presentation 2 (10 mins):

        Just Transition and JTPs.

        Scottish Government

        BEFORE PRESENTATION STARTS – CHAIR TO ASK PARTICIPANTS TO WRITE DOWN ON (ON A PIECE OF PAPER, OR ON THEIR PHONE) ANY THOUGHTS OR QUESTIONS WHICH THEY WILL HAVE THE OPPORTUNITY TO SHARE LATER ON.

        Presentation to help participants understand the concept of just transition:

        • A brief history of Just Transition and what it means
        • The two sectors we are focussing on and why (drawing from fact sheets with salient stats for each sector)
        • Priority themes within each sector
        • What a Just Transition Plan is, and why they are needed in these sectors
        • Current status of the plans and a reminder of what we want the public to tell us (i.e. to share views on policies that could be adopted as part of the JTP in the transport and built environment sectors)

        BREAK (19.15)

        Chair displays break time on screen and encourages participants to take a screen break

        19.15-19.25 (10 mins)

        Return to plenary (19.25)

        Presentation on public engagement so far

        19.25 – 19.35

        Overview of the range of public engagement already carried out

        Plenary presentation 3 (10 mins):

        Findings from public engagement so far.

        Chair, Ipsos Scotland

        BEFORE PRESENTATION STARTS – CHAIR TO ASK PARTICIPANTS TO WRITE DOWN ON (ON A PIECE OF PAPER, OR ON THEIR PHONE) ANY THOUGHTS OR QUESTIONS WHICH THEY WILL HAVE THE OPPORTUNITY TO SHARE LATER ON.

        Provide an overview of what public engagement has happened so far, and what it’s told us:

        • Summarising findings from phase 1 of the Just Transition Dialogue, which answered these overarching questions:
        • Who should pay for the changes that will need to be made
        • How do we make that system of payment fair
        • How do we make sure everyone benefits
        • Summarising findings from wider public engagement
        • Highlighting the gaps / what we don’t yet know enough about i.e. views on some of the specific policies or actions that might be put into place in Scotland. Explaining that this is what the group will be focussing on.

        Move to breakouts (19.35)

        Reflections and question forming

        25 mins

        19.35 – 20.00

        Reflect on presentations and gather questions

        Reflections on presentations (15 mins):

        FACILITATOR REMIND PARTICIPANTS THAT THE PRESENTATIONS HAVE BEEN RECORDED AND WILL BE MADE AVAILABLE TO WATCH BACK AT ANY TIME.

        AIM FOR ABOUT 5 MINS OF DISCUSSION PER PRESENTATION.

        ORDER FOR GROUPS 1-2: CXC, SG, IPSOS

        ORDER FOR GROUP 3: IPSOS, SG, CXC

        • What did you think of the presentation [CXC] gave on climate change and net zero?
        • Did anything stand out to you?
        • Did anything surprise you?
        • Was there anything that you learned that has changed your views from earlier? (refer back to initial discussion on net zero – i.e. when we asked “what does net zero mean to you”)
        • Is anything still unclear?
        • FACILITATOR MAKE NOTE OF POSSIBLE QUESTIONS
        • What did you think of the presentation [SG] gave on just transition and the just transition plans?
        • Did anything stand out to you?
        • Did anything surprise you?
        • Was there anything that you learned that has changed your views from earlier? (refer back to initial discussion on just transition i.e. when we asked what they thought this term meant)
        • Is anything still unclear?
        • FACILITATOR MAKE NOTE OF POSSIBLE QUESTIONS
        • What did you think of the presentation [Ipsos] gave on findings from previous public engagement?
        • Did anything stand out to you?
        • Did anything surprise you?
        • Is anything still unclear?
        • FACILITATOR MAKE NOTE OF POSSIBLE QUESTIONS

        Question gathering (5 mins):

        • What questions do we have for our speakers? REMIND PARTICIPANTS THAT THEY CAN ASK QUESTIONS OF ANY PART OF THE SESSION (INCLUDING CHAIR’S INTRODUCTION, PROCESS, THEIR ROLE ETC).
        • What are our priority questions?
        • Who would like to ask this question on behalf of our group? ENCOURAGE PARTICIPANTS TO VOLUNTEER TO ASK QUESTION (OFFER TO WRITE IT OUT IN THE CHAT FOR THEM SO THEY CAN JUST READ IT OUT). CAN HAVE ONE PERSON ASK ALL OR DIFFERENT PEOPLE ASKING. FACILITATOR CAN ASK ON BEHALF OF GROUP IF NO VOLUNTEERS.

        GATHER QUESTIONS FROM ANY PART OF THE SESSION AND ASK GROUP TO PRIORITISE 2-3 FOR Q&A (REASSURE THAT OTHER QUESTIONS WILL BE PUT TO SPEAKERS AFTER SESSION AND WRITTEN RESPONSES PROVIDED OVER EMAIL OR RECAPPED IN NEXT SESSION).

        Move to plenary (20.00)

        Q&A

        20 mins

        20.00 – 20.20

        Q&A with experts

        CHAIR TO CALL ON FACILITATORS IN TURN TO ASK QUESTIONS AND DIRECT TO RELEVANT EXPERTS

        Stay in plenary (20.20)

        Final reflections and wrap up

        10 mins

        20.20 – 20.30

        Final reflections and exercise

        Chair to thank experts and participants for taking part in the discussion and introduce final plenary exercise ( 5 mins)

        On screen, you’ll see a sentence and all we want you to do is complete this sentence in your own words based on what you’ve heard tonight. There is a character limit so try and keep it short and snappy!

        To me, a just transition to net zero means…

        Chair to comment on results before closing the session (5 mins):

        • Brief overview of what has been covered.
        • Brief overview of what to expect in later workshops, highlighting the date/time of the next one.

        Phase two, session two

        Thursday 15 March 2024, 6.30pm-9pm

        Overarching objective: To introduce potential changes to our transport system including road user charges, and to test views on different approaches to this in terms of their fairness.

        Discussion

        Time

        Objective

        Questions and materials

        Set-up: Facilitators check-in

        20 mins

        18.00-18.20

        Set up and test tech, and team preparation

        Facilitator and tech team only

        • Test link, mic and camera.
        • Test who has the host/co-host function and ensure it is allocated to the right team member(s) for recording breakout rooms. Make all moderators Co-hosts.
        • Change screen name to NAME – Org – Chair/Moderator.
        • Check everyone is on the WhatsApp group for facilitation team to ask questions, etc.
        • Meanwhile tech support is assigning participants who are in the waiting room, notetakers, moderators, and observers to break-out rooms.

        Participant check-in

        10 mins

        18.20-18.30

        Ensure participants are supported with set up

        Participants log into the online session

        • Participants encouraged to join the zoom session early to check-in and check their video/mic.
        • Register as people join and change screen names as necessary to first name and first initial of surname (i.e. John H).

        Introductions and context setting

        10 mins

        18.30 – 18.40

        Welcome and introduction to this session

        Ipsos Chair to welcome everyone

        Participants allocated to break-out groups, but not put in them.

        • Chair welcomes participants back.
        • Chair provides a summary of the overall purpose of the process, and why we are here:
        • To learn about the transition to net zero, focussing on the transport and built environment sectors.
        • To discuss how the transition to net zero in those sectors can be as fair as possible.
        • To help the Scottish Government make some important decisions as it plans for net zero.
        • Explains who is here – our group of participants representing people from across Scotland, Ipsos facilitators, note-takers and any observers.
        • Shows overarching plan/outcome for each session:
        • Session 1 – Introduction
        • Session 2 – Transport
        • Session 3 – Built environment and construction
        • Recap on what was discussed last week, including any strong themes from the Q&A.
        • Explains purpose of this session is to focus on the transport sector. Participants will learn more about why we need to make changes to our transport system, what sorts of changes they might be, and some specific approaches that the SG are interested in your views on. Emphasise that the purpose of these discussion is to think about how fair these change are, as this is central part of achieving a just transition. Findings from this session will help SG to understand how fair, or unfair, you feel certain actions are – and to hear your ideas about how to make them fair.
        • Summary of today’s agenda (including time of breaks and finishing time).
        • Housekeeping, ground rules – mention that plenary sessions will be recorded so to keep camera off if don’t want to be visible during that. Reminder to only have first name and first letter of surname showing.

        Move to breakout (18.40)

        Role of transport in your life

        15 mins

        18.40 – 18.55

        Introducing participants to group, understanding their current transport behaviour

        Break-out group introductions and warm-up

        FACILITATOR INTRODUCES THEMSELVES AND THE GROUP’S NOTE TAKER, THANKS FOR CONTINUED PARTICIPATION. COLLECTS PERMISSION/CONSENT FOR RECORDING.

        • Please tell everyone your name and where you live.
        • As you heard, today we will be discussing transport. So let’s start off by understanding the ways that everyone uses transport at the moment. What forms of transport do you regularly use? PROBE FOR DETAILS e.g. what types of public transport, whether petrol/electric car etc
        • We will be discussing some of the changes to our transport system that will be required to reach net zero. What do you think some of these might be? PROMPT IF NOT MENTIONED And what changes to people’s behaviours might be required?
        • How do you feel about those potential changes?
        • Do they feel fair to you? PROBE ON REASONS

        Move to plenary (18.55)

        Presentation on road user charging

        10 mins

        18.55 – 19.05

        Help participants understand why charging is necessary

        Plenary presentation: How can we reduce our reliance on cars?

        Presentation to help participants understand why we are focussing on actions related to road users and to introduce road user charging.

        Coverage of presentation:

        • What needs to change? – why we need to reduce our reliance on cars
        • What are the solutions? – encourage sustainable transport and discouraging car use
        • Transport Demand Management – what it is and how it works
        • Current taxation (to highlight that this is separate from RUC)
        • Examples of RUC

        Move to breakout (19.05)

        Discussion on road user charging

        15 mins

        19.05 – 19.20

        To understand overall views on charging and to set up key considerations for the discussion on specific policies.

        We have the opportunity now to reflect on and discuss your views on what you heard.

        We are going to look at some specific examples of road user charging later, so that we can discuss how it might work. But first…

        • How do you feel about the idea of road user charging in general?
        • PROBE
        • What are the benefits, if any?
        • What are the drawbacks, if any?
        • Who would be most/least impacted? PROBE around dependency on cars vs choosing to drive, urban/rural location, access to other form of transport, higher/lower income etc
        • How fair or unfair does it generally feel?
        • What makes you say that? PROBE around what is driving their views on fairness – affordability, location, ability to choose, equal treatment, paying for what you contribute?
        • What would make road user charging fair? IF NECESSARY What would a “best case” charging scenario look like for you?

        NOTE – IF PARTICIPANTS RAISE CONCERNS ABOUT 20 MIN NEIGHBOURHOODS, OR HAVE THE IMPRESSION THAT THEY MEAN RESTRICTING WHERE WE CAN DRIVE, YOU CAN SAY:

        “The idea behind 20 minute neighbourhoods is to create thriving, positive places and tackle inequalities by improving access to local facilities. It is not about restricting movement or ability to travel, but is based on better provision of local services and amenities that reduce the need to travel. The idea is flexible and should be adapted to support local needs and context, and effective community engagement is a key part of it.”

        BREAK 19.20-19.30 (10 mins)

        Return to breakouts (19.30)

        Reviewing different charging approaches

        45 mins

        19.30 – 20.15

        To test the acceptability and fairness of policy options

        We are now going to look at how road user charging might be applied in Scotland.

        The Scottish Government is currently exploring options for how car demand management could be applied in future. It has carried out research exploring how different options could work, and is reviewing the existing powers that local authorities have to ensure these are fit for purpose in the future.

        As part of these considerations we are now interested in your views on road user charging options, including what they might mean for you and your household, and for other people across Scotland.

        There are two potential approaches that we are going to look at. These are based on approaches that have happened elsewhere. I am going to show you each option on screen, and after each one we will have a discussion about it.

        As you will see, these are fairly brief descriptions and are not shown as fully formed ideas. That is because we want to open up discussion about how approaches like these might work, how fair they feel, and what else you think should be considered. These workshops are part of the process of developing these policies, so we do invite questions and even challenge about these.

        ORDER OF THE OPTIONS TO BE ROTATED BETWEEN GROUPS

        FACILITATOR TO HAVE SLIDES THAT HAVE MOCKED-UP DESCRIPTIONS OF THE TWO OPTIONS, INCLUDING THE FOLLOWING INFORMATION:

        Option 1: UK National road pricing.

        • This would involve a charge on drivers based on distance driven. The pricing system would cover all of Scotland’s roads, but the cost would vary depending on factors like the weight of the vehicle and the user’s disability status and place of residence – for example, urban residents may be charged at a different level than rural residents.
        • It would be measured and monitored using vehicle tracking technology or mile logging (at MOT control)
        • The amount paid would range from 3-10p per miles driven. Money raised would be invested in improvements in public transport and active travel infrastructure.
        • Electric vehicles would not be exempt.
        • This type of system would be implemented by the UK Government.

        NOTE: If asked about how this apples to SG, explain that “The Scottish Government would be involved in discussions about future systems, and would use any evidence (such as what this group tells us) to continue to press the UK Government for a fair and progressive future transport finance system.”

        Option 2: Urban local road user charging.

        • This would involve a charge to drive into specific parts of an urban area. When it is in place would depend on the local circumstances – for example, it may be applied at certain times of the day to coincide with when public transport is available.
        • This could apply to large urban and suburban areas such as Edinburgh or Glasgow metropolitan areas.
        • It would be measured and monitored using number plate recognition or vehicle tracking technology.
        • The charge would be approximately £5-15 per day. Money raised would be invested in improvements in public transport and active travel infrastructure.
        • Electric vehicles would not be exempt.
        • Similar systems are already in place in London and Milan.
        • This type of system would be implemented by local authorities (they already have the power to do this).

        AFTER EACH OPTION, ASK THE FOLLOWING:

        • What do you think of this option? Why do you feel that way?
        • What are the benefits?
        • What groups might benefit from this? PROBE Cyclists, pedestrians, EV owners, people living urban/rural areas, local residents?
        • What are the drawbacks?
        • What groups might be negatively impacted? PROBE Petrol/diesel owners, local residents, people living urban/rural areas, people travelling to/from urban areas etc?
        • Overall, how fair or unfair does it feel?
        • If this was to be put in place, what would make it more fair?
        • PROBE What about:
        • Where it applies?
        • When it applies (days, times, etc)?
        • Who it applies to / who is exempt?
        • The way it is implemented / monitored?
        • How much is charged?
        • How the money is used?
        • Information and communication about it?

        CHARACTERS

        AFTER GOING THROUGH EACH OPTION, FACILITATOR INTRODUCES THE CHARACTERS

        • Let’s now think about what this would mean for some specific types of people. I’ll show these on screen and will read through them with you.

        SHOW CHARECTORS ON SCREEN, ONE BY ONE, EACH GROUP COVERING 1-2 CHARACTERS. ORDER:

        • How do you think this person would feel about Option 1 / Option 2?
        • Would it be fair that this person pays / doesn’t pay?
        • What would make that more fair?

        BREAK 20.15-20.25 (10 mins)

        Move to breakouts (20.25)

        Conclusion-forming

        25 mins

        20.25-20.50

        To bring everything together and form conclusions

        We are going to use this final discussion to bring together everything we have been discussing so far.

        Working together, I’d like you answer this question: “If road user charging is introduced, what needs to be in place to make it fair?”

        REMIND PARTICIPANTS THAT IN THIS FINAL SECTION WE ARE TALKING ABOUT ROAD USERS CHARGING IN GENERAL, NOT ONE OF THE SPECIFIC OPTIONS ABOVE (BUT THEY CAN REFER TO THOSE IF THEY LIKE).

        ASK PARTICIPANTS TO COME UP WITH THREE STATEMENTS IN RESPONSE TO THIS OVERARCHING QUESTIONS.

        PARTICIPANTS START BY CALLING OUT THEIR RESPONSES, WHICH ARE NOTED DOWN ON VIRTUAL POST ITS. THEY THEN DISCUSS / RANK THE 3 THAT THEY FEEL ARE MOST IMPORTANT. FACILITATOR HAS THESE 3 STATEMENTS WRITTEN UP (ON THE MIRO BOARD, OR ON 3 BULLET POINTS ON A SLIDE), READY TO FEEDBACK IN PLENARY.

        Move to plenary (20.50)

        Feedback and wrap up

        10 mins

        20.50 – 21.00

        Final reflections and exercise

        CHAIR THANKS EVERYONE

        INVITES FEEDBACK FROM EACH OF THE THREE GROUPS, CONCENTRATING ON THEIR 3 CONCLUDING STATEMENTS THEY CREATED.

        BRIEF RECAP ON NEXT STEPS, THANK AND CLOSE.

        Phase two, session three

        Wednesday 20 March 2024, 6pm-9pm

        Overarching objective: To introduce changes required to transition to clean heating in homes, and to test views on different financing approaches to this in terms of their fairness.

        Discussion

        Time

        Objective

        Questions and materials

        Set-up: Facilitators check-in

        20 mins

        17.30-17.50

        Set up and test tech, and team preparation

        Facilitator and tech team only

        • Test link, mic and camera.
        • Test who has the host/co-host function and ensure it is allocated to the right team member(s) for recording breakout rooms. Make all moderators Co-hosts.
        • Change screen name to NAME – Org – Chair/Moderator.
        • Check everyone is on the WhatsApp group for facilitation team to ask questions, etc.
        • Meanwhile tech support is assigning participants who are in the waiting room, notetakers, moderators, and observers to break-out rooms.

        Participant check-in

        10 mins

        17.50-18.00

        Ensure participants are supported with set up

        Participants log into the online session

        • Participants encouraged to join the zoom session early to check-in and check their video/mic.
        • Register as people join and change screen names as necessary to first name and first initial of surname (i.e. John H).

        Introductions and context setting

        10 mins

        18.00 – 18.10

        Welcome and introduction to this session

        Ipsos Chair to welcome everyone

        Participants allocated to break-out groups, but not put in them.

        • Chair welcomes participants back.
        • Chair provides a summary of the overall purpose of the process, and why we are here:
        • To learn about the transition to net zero, focussing on the transport and built environment sectors
        • To discuss how the transition to net zero in those sectors can be as fair as possible.
        • To help the Scottish Government make some important decisions as it plans for net zero.
        • Explains who is here – our group of participants representing people from across Scotland, Ipsos facilitators, note-takers and any observers.
        • Shows overarching plan/outcome for each session:
        • Session 1 – Introduction
        • Session 2 – Transport
        • Session 3 – Built environment and construction
        • Recap on what was discussed last week, including a summary of top conclusions reached on this question: “If road user charging is introduced, what needs to be in place to make it fair?”
        • Explains purpose of this session is to focus on the built environment sector, specifically our homes. Participants will learn more about why we need to change how we heat our homes, what sorts of changes they might be, and some specific approaches to paying for these changes that the SG are interested in your views on. Emphasise that the purpose of these discussion is to think about how fair these payment options are, as this is a central part of achieving a just transition. Findings from this session will help SG to understand how fair, or unfair, you feel certain actions are – and to hear your ideas about how to make them fair.
        • Chair introduces some quick polling to capture initial views on this…

        Thinking about the energy efficiency of your home, which of these statements – if any – comes closest to your own view or experience?

        • I had not thought about it before taking part in these workshops
        • I would like to make improvements, but haven’t yet
        • I have already made improvements
        • I have considered making improvements, but don’t want to
        • None of these

        If you were considering making changes to the energy efficiency of your home over the next decade, which of these – if any – would be the biggest factor in your decision to go ahead or not?

        • The time it would take
        • Knowing what changes are needed
        • Knowing how to go about it
        • How much it would cost
        • Something else
        • Don’t know
        • Summary of today’s agenda (including time of breaks and finishing time).
        • Housekeeping, ground rules – mention that plenary sessions will be recorded so to keep camera off if don’t want to be visible during that. Reminder to only have first name and first letter of surname showing.

        Move to breakout (18.10)

        Role of transport in your life

        15 mins

        18.10 – 18.25

        Introducing participants to group, understanding their current transport behaviour

        Break-out group introductions and warm-up

        FACILITATOR INTRODUCES THEMSELVES AND THE GROUP’S NOTE TAKER, THANKS FOR CONTINUED PARTICIPATION. COLLECTS PERMISSION/CONSENT FOR RECORDING.

        • Please tell everyone your name and where you live.
        • What did you think of the conclusions reached at the end of the transport session?
        • Is there anything missing that you feel it’s important the Scottish Government considers if RUC was to be introduced?
        • We will be discussing the changes to how we heat our homes and why this will be needed to help us reach net zero. What do you think some of these changes might be? PROMPT IF NOT MENTIONED And what changes to people’s behaviours might be required?
        • How do you feel about those potential changes?
        • Do they feel fair to you? PROBE ON REASONS

        Move to plenary (18.25)

        Presentation on energy transition in homes

        10 mins

        18.25 – 18.35

        Help participants understand why heat transition is necessary and options for financing it

        Plenary presentation: How can we fairly transition our homes to clean energy?

        Presentation to help participants understand why we are focussing on heat transition in homes and different approaches to paying for this.

        Coverage of presentation:

        • What needs to change? – why we need to transition to clean heating
        • What are the solutions? – improve energy efficiency and convert to clean heating systems
        • What are clean heating systems? – polluting heat (gas, oil) v. clean heat (heat pumps, heat networks)
        • What are the benefits / challenges of switching to a clean heating system?
        • What is the HiB bill? – summarise contents of the bill and consultation that has been taking place around it
        • What is it going to cost? – £27bn for homes (£33bn across all buildings, avg £14,000 per home)
        • How are we going to pay for this? – introduce public and private financing options

        Move to breakout (18.35)

        Discussion on clean heating

        20 mins

        18.35 – 18.55

        To understand overall views on charging and to set up key considerations for the discussion on specific policies.

        We have the opportunity now to reflect on and discuss your views on what you heard.

        We are going to look at some specific approaches for making these changes later, so that we can discuss how it might work. But first…

        • How do you feel about the idea of changing how you heat your home?
        • PROBE
        • What would it mean for your household?
        • What are the benefits, if any?
        • What are the drawbacks, if any?
        • And how do you feel about the idea of improving the energy efficiency of your home?
        • PROBE
        • What would it mean for your household?
        • What are the benefits, if any?
        • What are the drawbacks, if any?
        • What types of people would be most/least impacted by these changes? PROBE around types of homes (flats, detached houses), size of homes, occupants (families, couples, elderly), urban/rural location, higher/lower income etc.
        • How fair or unfair does it generally feel?
        • What makes you say that? PROBE around what is driving their views on fairness – affordability, timescales, options available, reliability/efficacy of the technology?
        • What, if anything, would make the transition to clean heating fair? IF NECESSARY What would a “best case” charging scenario look like for you?

        BREAK 18.55-19.05 (10 mins)

        Return to breakouts (19.05)

        Reviewing different financing approaches to heat transition

        55 mins

        19.05 – 20.00

        To test the acceptability and fairness of policy options

        We are now going to look at how the transition to more energy efficient homes could be achieved in Scotland.

        The Scottish Government is currently exploring options for how the transition to clean heating and more energy efficient homes can be financed, recognising that it will be unaffordable to finance this through public funding alone. The Scottish Government is considering how best to make use of the public and private funding options available.

        As part of these considerations we are now interested in your views on approaches to paying for these changes to homes, including what different payment options might mean for you and your household, and for other people across Scotland, as well as the timescales for making changes.

        There are two potential approaches that we are going to look at. I am going to show you each option on screen, and after each one we will have a discussion about it.

        ORDER OF THE OPTIONS TO BE ROTATED BETWEEN GROUPS

        FACILITATOR TO HAVE SLIDES THAT HAVE MOCKED-UP DESCRIPTIONS OF THE TWO OPTIONS, INCLUDING THE FOLLOWING INFORMATION:

        Option 1: More widely available public financing, stricter penalties (approx. 20 mins)

        • All landlords are required to meet a reasonable minimum energy standard by 2028, with all homeowners required to do this by 2033. This would be measured by a standard list of measures roughly equivalent to the Energy Performance Certificate (EPC)* used now. All polluting heat systems (e.g. oil and gas) will be prohibited after 2045.
        • There is a national communications campaign to set out the requirements. Home Energy Scotland offer free home energy checks which include recommendations on making energy improvements to your home.
        • Scottish Government grants and loans will be available to all households to improve energy efficiency and install a clean heating system.
        • Landlords could receive civil penalties if they don’t meet the minimum energy standard by 2028 and further penalties if they don’t have a clean heating system by 2045. There would be regulation in place to prevent landlords from increasing rent after switching to a clean energy system.
        • Homeowners may also receive civil penalties if their home doesn’t meet the minimum energy standard by 2033 and further penalties if they don’t have a clean heating system by 2045. Some homeowners could be exempt from making some of the changes, based on things like personal circumstances or the nature of the property.
        • There is an appeals process in place to make it easy for those who feel the requirements have been incorrectly or unfairly applied to them.

        *If asked about the EPC rating, facilitators to read out: An Energy Performance Certificate (EPC) gives a property an energy efficiency rating from A (most efficient) to G (least efficient) and is valid for 10 years.

        *If asked about penalties, facilitators to read out: For landlords, civil penalties might include a fine for not responding to a compliance notice, and the landlord may not be able to let the property after 2028 if the required energy efficiency rating isn’t met by then, For homeowners, civil penalties could include a fine if the property does not meet required energy efficiency rating by 2033.

        Option 1 discussion:

        • What do you think of this option? Why do you feel that way?
        • What are the benefits? PROBE ON WHO BENEFITS
        • What are the drawbacks? PROBE ON WHO MIGHT BE NEGATIVELY IMPACTED
        • Overall, how fair or unfair does it feel?
        • PROBE: What about in terms of:
        • [SKIP IF ALREADY COVERED IN PREVIOUS OPTION] Replacing energy systems being a requirement for landlords and homeowners by 2045?
        • [SKIP IF ALREADY COVERED IN PREVIOUS OPTION] Making energy efficiency improvements by 2028 for landlords, and 2033 for homeowners?
        • Financial support being available to everyone?
        • Landlords not being allowed to increase rent?
        • [SKIP IF ALREADY COVERED IN PREVIOUS OPTION] The penalties for not meeting the required energy efficiency standard by 2028 (landlords) / 2033 (homeowners)?
        • The penalties for not installing a clean heating system by 2045?
        • If these requirements were introduced, what would need to be in place to make it more fair?
        • PROBE What about:
        • Sources of information/advice? What sources would you trust?
        • Support options? How should these be communicated?
        • Who Scottish Government funding is available to?
        • Repayment plans / timescales?
        • What about for the energy efficiency improvements (by 2028/2033)?
        • What about the clean heating system (by 2045)?
        • The penalty for not meeting energy efficient standards by 2028/2033?
        • The penalty for not switching to clean heating by 2045?
        • Protections and warranties?

        Option 2: More targeted public financing, softer penalties (approx. 20 mins)

        • All landlords are required to meet a reasonable minimum energy standard by 2028, with all homeowners required to do this by 2033. This would be measured by a standard list of measures roughly equivalent to the Energy Performance Certificate (EPC)* used now. All polluting heat systems (e.g. oil and gas) will be prohibited after 2045.
        • There is a national communications campaign to set out the requirements. Home Energy Scotland offer free home energy checks which include recommendations on making energy improvements to your home.
        • Scottish Government grants are available to households on lower incomes, but not to higher income households, landlords, or owners of second properties.
        • Low or zero interest loans are available from the Scottish Government to all households (including landlords and second property owners).
        • Private finance opportunities are also available, including long term repayment plans from energy companies or manufacturers of heating systems and from banks or other traditional lenders (meaning customers can avoid large upfront fees).
        • Landlords could start to receive civil penalties if they don’t meet the minimum energy standard by 2028, but penalties for not switching to a clean heating system by 2045 would not be enforced right away to allow more time. Landlords are allowed to increase rent to help cover the costs, but there is a cap in place.
        • Homeowners could be subject to additional charges on council tax if their home doesn’t meet the minimum energy standard by 2033, but penalties for not switching to a clean heating system by 2045 would not be enforced right away to allow more time. Some homeowners could be exempt from making some of these changes, based on things like personal circumstances or the nature of the property.
        • There is an appeals process in place to make it easy for those who feel the requirements have been incorrectly or unfairly applied to them.

        *If asked about the EPC rating, facilitators to read this out: An Energy Performance Certificate (EPC) gives a property an energy efficiency rating from A (most efficient) to G (least efficient) and is valid for 10 years.

        *If asked about penalties, facilitators to read out: For landlords, civil penalties might include a fine for not responding to a compliance notice, and the landlord may not be able to let the property after 2028 if the required energy efficiency rating isn’t met by then.

        Option 2 discussion:

        • What do you think of this option? Why do you feel that way?
        • What are the benefits? PROBE ON WHO BENEFITS
        • What are the drawbacks? PROBE ON WHO MIGHT BE NEGATIVELY IMPACTED
        • Overall, how fair or unfair does it feel?
        • PROBE: What about in terms of:
        • [SKIP IF ALREADY COVERED IN PREVIOUS OPTION] Replacing energy systems being a requirement for landlords and homeowners by 2045?
        • [SKIP IF ALREADY COVERED IN PREVIOUS OPTION] Making energy efficiency improvements by 2028 for landlords, and 2033 for homeowners?
        • More financial support for low income households, but less for others?
        • The availability of private finance options?
        • Landlords being allowed to increase rent with a cap?
        • [SKIP IF ALREADY COVERED IN PREVIOUS OPTION] The penalties for not meeting the required energy efficiency standard by 2028 (landlords) / 2033 (homeowners)?
        • The penalties for not installing a clean energy system by 2045 not being enforced right away?
        • If these requirements were introduced, what would need to be in place to make it more fair?
        • PROBE What about:
        • Sources of information/advice? What sources would you trust?
        • Support options? How should these be communicated?
        • Who Scottish Government funding is available to?
        • IF LOTS OF GROUPS MENTIONED – which groups are most important?
        • Repayment plans / timescales?
        • What about for the energy efficiency improvements (by 2028/2033)?
        • What about the clean heating system (by 2045)?
        • The penalty for not meeting energy efficient standards by 2028/2033?
        • And the exemptions – who should be exempt and why?
        • The penalty for not switching to clean heating after 2045…
        • when should these kick in?
        • And the exemptions – who should be exempt and why?
        • Protections and warranties?

        CHARACTERS (approx. 15 mins)

        AFTER GOING THROUGH EACH OPTION, FACILITATOR INTRODUCES THE CHARACTERS

        • Let’s now think about what this would mean for some specific types of people. I’ll show these on screen and will read through them with you.

        SHOW CHARECTORS ON SCREEN, ONE BY ONE, EACH GROUP COVERING 1-2 CHARACTERS. ORDER:

        • How do you think this person would feel about Option 1 / Option 2?
        • What aspects seem fair?
        • What aspects seem unfair?
        • What would make that more fair?

        BREAK 20.00-20.10 (10 mins)

        Move to breakouts (20.10)

        Conclusion-forming

        30 mins

        20.10-20.40

        To bring everything together and form conclusions

        We are going to use this final discussion to bring together everything we have been discussing so far.

        Working together, I’d like you answer this question: “If all households are going to be required to improve their home’s energy efficiency and switch to clean heating, what needs to be in place to make how we pay for it fair?”

        REMIND PARTICIPANTS THAT IN THIS FINAL SECTION WE ARE TALKING ABOUT CHANGES TO HEATING SYSTEMS IN GENERAL, NOT ONE OF THE SPECIFIC OPTIONS ABOVE (BUT THEY CAN REFER TO THOSE IF THEY LIKE).

        ASK PARTICIPANTS TO COME UP WITH THREE STATEMENTS IN RESPONSE TO THIS OVERARCHING QUESTIONS.

        PARTICIPANTS START BY CALLING OUT THEIR RESPONSES, WHICH ARE NOTED DOWN ON VIRTUAL POST ITS. THEY THEN DISCUSS / RANK THE 3 THAT THEY FEEL ARE MOST IMPORTANT. FACILITATOR HAS THESE 3 STATEMENTS WRITTEN UP (ON 3 BULLET POINTS ON A SLIDE), READY TO FEEDBACK IN PLENARY.

        (IF TIME)

        Reflections on the process

        With the few minutes remaining, I’d be interested to hear your thoughts on this process and your participation…

        • Taking a minute, I’d like you to think of one word or phrase that best describes your experience taking part in these discussions… ALLOW PARTICIPANTS TIME TO THINK AND THEN INVITE PARTICIPANTS TO SHARE WHAT THEIR WORD/PHRASE (IF THEY’D LIKE TO).
        • What, if anything, have you enjoyed most about being part of these discussions?
        • What, if anything, have you not enjoyed as much?
        • What, if anything, has been the most challenging part?
        • What, if anything, will you take away from the process?

        Move to plenary (20.40)

        Feedback and wrap up

        10 mins

        20.40 – 20.50

        Final reflections and exercise

        CHAIR THANKS EVERYONE

        INVITES FEEDBACK FROM EACH OF THE THREE GROUPS, CONCENTRATING ON THEIR 3 CONCLUDING STATEMENTS THEY CREATED.

        CHAIR CONDUCTS END OF SESSION POLL.

        Thinking about the changes that will be required to how people heat their homes, and your own personal view on the issues we’ve discussed this evening, which of these statements would you agree with more?

        • Public funding should be available to all households, with less time to make the changes
        • Public funding should be available to particular groups (e.g. households on lowest incomes), with more time to make the changes

        I agree with A more than B

        I agree with B more than A

        I don’t agree with either

        I’m not sure

        THANKS PARTICIPANTS FOR THEIR CONTRIBUTIONS, EXPLAIN NEXT STEPS FOR REPORTING AND THAT WE WILL SEND AN EMAIL TO CHECK PREFERENCES FOR KEEPING IN TOUCH ABOUT THAT, AND POTENTIAL FUTURE OPPORTUNITIES TO TAKE PART IN PUBLIC ENGAGEMENT ON THIS. INVITE REP FROM CXC/SG TO SAY CLOSING REMARKS. THANK AND CLOSE.

        Appendix D – Characters

        The following character descriptions were provided to participants in the sector specific workshops to aide their deliberations. The characters were created by Ipsos, with input from Scottish Government and ClimateXChange, and were used as stimulus to help participants consider a range of different experiences from across Scotland. The design of the dialogue and development of characters was informed by interviews with stakeholders in each of the sectors who identified several groups who would be more likely to be impacted by the changes.

        Phase 1

        Image summarising stimulus that was used during workshops in phase 1. This describes the character Alice and includes details about her living arrangements, housing situation, modes of transport, and shopping behaviours.

        Image summarising stimulus that was used during workshops in phase 1. This describes the characters David and Sarah and includes details about their living arrangements, housing situation, modes of transport, and shopping behaviours.

        Image summarising stimulus that was used during workshops in phase 1. This describes the character Lorraine and includes details about her living arrangements, housing situation, modes of transport, and shopping behaviours.

        Image summarising stimulus that was used during workshops in phase 1. This describes the character Maria and includes details about her living arrangements, housing situation, modes of transport, and shopping behaviours.

        Image summarising stimulus that was used during workshops in phase 1. This describes the characters Nadeem and Ajay and includes details about their living arrangements, housing situation, modes of transport, and shopping behaviours.

        Phase 2

        Image summarising stimulus that was used during workshops in phase 2. This describes the character Alice and includes details about her living arrangements, housing situation, and modes of transport.

        Image summarising stimulus that was used during workshops in phase 2. This describes the characters David and Sarah and includes details about their living arrangements, housing situation, and modes of transport.

        Image summarising stimulus that was used during workshops in phase 2. This describes the character Nadeem and includes details about his work, and modes of transport.

        Image summarising stimulus that was used during workshops in phase 2. This describes the character Lorraine and includes details about her housing situation.

         

         

        © The University of Edinburgh, 2024
        Prepared by Ipsos on behalf of ClimateXChange, The University of Edinburgh. All rights reserved.

        While every effort is made to ensure the information in this report is accurate, 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://www.gov.scot/publications/securing-green-recovery-path-net-zero-update-climate-change-plan-20182032/documents/ ↑



        2. https://www.legislation.gov.uk/asp/2019/15/enacted ↑



        3. https://www.gov.scot/publications/transition-commission-national-mission-fairer-greener-scotland/documents/ ↑



        4. National Just Transition Planning Framework – Just Transition – A Fairer, Greener Scotland: Scottish Government response – gov.scot (www.gov.scot) ↑



        5. https://www.gov.scot/publications/draft-energy-strategy-transition-plan/ ↑



        6. https://www.gov.scot/publications/net-zero-nation-public-engagement-strategy-climate-change/ ↑



        7. https://www.climatexchange.org.uk/media/4231/understanding-and-engaging-the-public-on-climate-change.pdf; https://www.theccc.org.uk/publication/the-role-of-deliberative-public-engagement-in-climate-policy-development-university-of-lancaster/ ↑



        8. https://sciencewise.org.uk/about-sciencewise/our-guiding-principles/ ↑



        9. https://www.gov.scot/publications/transition-transport-sector-discussion-paper/; https://www.gov.scot/publications/transition-built-environment-construction-sector-discussion-paper/; https://www.gov.scot/publications/transition-land-use-agriculture-discussion-paper/ ↑



        10. Participants felt a fair tax system would be required, whereby those who can afford to pay a higher share. ↑



        11. Discussions on a fair system of payment also led some participants to call for wider overhauls of the existing tax system, which they felt should be fairer and more equitable. However, this broader point fell beyond the remit of this dialogue. ↑



        12. When discussing protecting those on low incomes, some felt that this should be widened to say “support those on differing incomes”. The point was that people not defined as “low income” may also need support. These two positions did not necessarily conflict, as both were based on the principle of protecting those who could not afford to make changes. However, the group that suggested “differing incomes” wanted to stress the point (made earlier in the report) that income was not the only determinant of ability of pay. ↑



        13. In discussion about informing the public on the changes needed, it was specified that this should highlight how the changes will positively impact the future of transport, home energy and food production/consumption. ↑



        14. In discussion about their aspirations related to leadership and accountability, one group suggested that there should be measures in place to prevent future leaders from totally reversing changes that have been agreed on. However, they also said leaders should have some flexibility to change the approach. They also hoped for cross-party consensus if possible. ↑



        15. This conclusion built on discussions from previous sessions, and those who suggested it saw the role of a non-political body as providing independent monitoring of the transition and associated costs, ensuring that people are treated fairly. It was described as something akin to Ofgem (the independent energy regulator) but specifically for the transition to net zero. ↑



        16. While participants did not specify what exact sources they would consider “credible”, they noted specific media outlets which they personally would not trust (which are not named in this report). They also suggested that specialist advisers should be placed in Citizen’s Advice Bureaux, in Job Centres, or at community meetings. This highlights some of the sources that they felt would be useful means of disseminating information. ↑



        17. Some felt that empowerment would only be achieved through the use of incentives and not through the use of charges or penalties. They therefore suggested changing the language from “Empower people” to “Encourage people”. As this was only suggested by one group, the original language was kept but their views are noted here. ↑



        18. It was emphasised that carrots should be identified based on investment in research. It was felt that sticks need to be carefully thought about in terms of where they should fall – e.g. taking into account individual circumstances. One group felt that certain industries should be exempt (from the sticks) where it is technically not possible to reduce emissions. They used the example of steel manufacturers, which falls outside of the remit of this research. ↑



        19. https://www.futureeconomy.scot/publications/59-measuring-carbon-inequality-in-scotland ↑



        20. https://www.gov.scot/publications/transition-fairer-greener-scotland/pages/5/ ↑



        21. https://www.justtransition.scot/publication/time-to-deliver-annual-report-2023/ ↑



        22. https://es.catapult.org.uk/project/electrification-of-heat-demonstration/ ↑



        23. Public Health Scotland define transport poverty as the lack of transport options that are available, reliable, affordable, accessible or safe that allow people to meet their daily needs and achieve a reasonable quality of life, see: https://publichealthscotland.scot/publications/transport-poverty-a-public-health-issue/transport-poverty-a-public-health-issue/ ↑



        24. Please note that participants did not generally distinguish between private landlords and the social rented sector when discussing issues relating to those in rental properties. The type of landlord is specified where participants did make this distinction. ↑



        25. The achieved number of African, Caribbean, Black or Black Scottish/British participants was zero in phase one due to a last minute dropout. Additional targets were set in phase two to ensure representation from this ethnic minority group. ↑



        26. Anyone agreeing with the statement “I’m still not convinced that climate change is happening” was screened out at the recruitment stage to help ensure that those convened for the dialogue could focus on how the costs/benefits of the changes could be distributed fairly to reach net zero (not whether changes should happen at all, though views on this – where expressed – were noted). ↑



        27. A particular focus and boost was placed on the African, Caribbean, Black or Black Scottish/British minority ethnic group due to lack of representation of this group in phase one. ↑



        28. Anyone agreeing with the statement “I’m still not convinced that climate change is happening” was screened out at the recruitment stage to help ensure that those convened to engage in the dialogue could focus on how the costs/benefits of the changes could be distributed fairly to reach net zero (not whether changes should happen at all, though views on this – where expressed – were noted). ↑


        Research completed in September 2024

        DOI: http://dx.doi.org/10.7488/era/4915

        This work was carried out in accordance with the requirements of the international quality standard for Market Research, ISO 20252.

        Executive summary

        This report sets out key findings from an exercise that mapped public engagement activities on the heat transition in Scotland.

        The aim of the research was to help inform the delivery of the Heat in Buildings Public Engagement Strategy by addressing questions related to who delivers engagement activities and to whom, the type of activities and messages, and gaps in engagement.

        We conducted a web search, interviews with experts from organisations involved in the heat transition and an online survey of organisations delivering public engagement activity.

        Findings

        Overview of ongoing activities:

        • A wide range of organisations across the public, private and charitable sectors have been delivering public engagement activities on the heat transition in Scotland.
        • The types of public engagement have also been varied, with the most common being advice services, workshops and information sharing online.

        Target audience, messaging and accessibility as discussed by experts and organisations:

        • Engagement activities were mostly open to the general public. There were also some specific target groups identified, including residents within a specific geographic area, homeowners, people in fuel poverty, low-income households and energy sector professionals.
        • Despite attempts to engage a broad range of audiences, those actually engaged in the activities were typically more climate aware than the general public overall.
        • Messaging that was focused on home energy efficiency and reducing energy bills, rather than the adoption of clean heating systems, resonated better with wider audiences in the context of the cost of living.
        • Engagement on “simple fixes” (e.g. turning boiler temperature down) was therefore more widespread than messaging around bigger steps (e.g. installing a heat pump).
        • Activities delivered through trusted messengers and existing local channels were accessible forms of engagement.
        • Tailoring messages to the specific target audience was an effective approach to accessible engagement as it helped to improve understanding.

        Gaps in public engagement identified by experts and organisations:

        • Audiences under-engaged on the heat transition included private landlords, renters, professionals in the energy sector, young people and the digitally excluded.
        • Lack of regulatory clarity on clean heat and energy efficiency was a key reason for the engagement gap among landlords and the energy sector.
        • The upfront costs of transitioning were a barrier to widening reach among the general public, especially in the context of the cost of living crisis.
        • Key messaging gaps in public engagement included:
          • A lack of public understanding of heating systems.
          • Insufficient practical and transparent advice on installing and operating clean heating systems.
            • Interviewees thought that certain aspects of the transition, such as what clean heating systems are and how to install them, were not successfully communicated to the wider public due to their perceived complexity.
            • They felt that communication about the efficacy of clean heating systems, based on real use cases, was lacking.
        • There was a shortage of trusted messengers providing reliable, impartial advice, as well as a lack of tradespeople able to provide technical support on the practical aspects of the transition.

        Conclusions

        To ensure that public engagement on the heat transition builds on what has been done before and is effective in prompting action, consider:

        • Prioritising the private rented sector, professionals in the energy sector and those who are digitally excluded:
        • Firstly, engage with the energy and private rented sectors to drive engagement and action forward, for example by sharing information and practical advice among the wider public.
        • Secondly, engage with the general public, emphasising the experiences of early adopters to build trust in the efficacy of clean heating systems.
        • Tailoring messages to the audience:
        • For industry professionals, provide clarity on the changes required and reassurance on the support available.
        • For the general public, make it easier for those who are more highly motivated by the climate crisis to take action, so that there are more operational examples to encourage those who may be more hesitant to take action.
        • Highlight the financial benefits and availability of grants and loans.
        • Building trust:
        • Improve the baseline public understanding of clean heating systems.
        • Communicate transparently around the needs, benefits and risks of transitioning to a clean heating system.
        • Use trusted messengers who are already embedded in local communities.
        • Providing regulatory clarity, as organisations feel they cannot deliver effective public engagement activities without knowing if and when clean heat and energy efficiency regulations will come into force, and what specific changes will be required.

        Introduction

        This report presents the findings from research conducted by Ipsos on behalf of ClimateXChange and the Scottish Government, mapping public engagement on the heat transition in Scotland.

        Background

        Scotland’s climate change legislation sets a target date for net zero emissions of all greenhouse gases by 2045. The Scottish Government reports that domestic buildings account for around 12% of Scotland’s greenhouse gas emissions, and non-domestic buildings contribute another 7%. Urgently reducing emissions from Scotland’s buildings is therefore a crucial part of achieving net zero, and will require the majority of households in Scotland to change their heating systems. Plans for this are set out in the Scottish Government’s Heat in Buildings Strategy (HiBS). The process of transitioning heating from using fossil fuels to using clean heating systems, is often referred to as the ‘heat transition’.

        To ensure success in decarbonising Scotland’s home heating, public engagement is key. Existing research by Consumer Scotland highlights a general lack of awareness among the Scottish public about the heat transition, clean heating systems, and low-carbon technology. Building on this, research conducted for ClimateXChange included recommendations about the ways in which messages around the heat transition should be communicated to the public, including making a positive case for change in a highly visible way, harnessing the influence of existing trusted messengers to deliver information consistently, and giving plenty notice in advance of any legislation being announce. The Existing Homes Alliance Scotland published a report in July 2023 which highlighted the need for clear and tailored messaging, backed up with accessible resources, to encourage action at the scale and pace required to reach net zero.

        In this context, the Scottish Government published its Heat Transition Public Engagement Strategic Framework in December 2023 to guide its engagement work around clean heat and energy efficiency. The Framework aims to ensure the Scottish public are aware of and understand the changes required in the heat transition, know how to access support, can actively participate in shaping policy, legislation and delivery schemes, and importantly can take action in decarbonising their homes.

        Research aims

        ClimateXChange and the Scottish Government commissioned Ipsos Scotland to map existing public engagement on the heat transition in Scotland to help inform the delivery of the Heat in Buildings Public Engagement Strategy.

        This public engagement mapping aimed to address the following research questions:

        Who is delivering engagement activities?

        What types of activities are being delivered?

        Which audiences are being targeted?

        What types of messages are being communicated?

        How accessible are messages and activities?

        Where are the gaps in engagement?

        Method

        The research involved three strands:

        A web search to identify public engagement activities.

        Interviews with 10 experts representing a range of organisations involved in the heat transition.

        An online survey of organisations delivering public engagement activity.

        A brief overview of each strand is provided below, and a more detailed methodology can be found in Appendix A.

        Web search

        First, a web search was conducted using defined search parameters and search strings (see Appendix B) in May 2024. The web search included a traditional search using Google and Google Scholar, and Ipsos’s proprietary social media listening tool, Synthesio.[1]

        Over 2,500 references to public engagement across social media channels were reviewed and, from those initial results, 62 instances of engagement matched the inclusion criteria and were included in the analysis. The results from the web search also informed the sample development for the expert interviews and online survey, and the design of the interview topic guide and questionnaire.

        Expert interviews

        Interviews were conducted with 10 organisations involved in the Scottish heat transition from 30 May to 7 Aug 2024 (identified via web search and recommendations from the Scottish Government and ClimateXChange). The profile of expert organisations included a mix of charities/advice services, climate hubs, private companies, non-government organisations and industry bodies.

        This strand of the research explored the different types of public engagement activities currently being delivered in Scotland in more detail. A topic guide was developed by the Ipsos research team and reviewed by ClimateXChange and the Scottish Government (see Appendix C). Interviews also helped to identify potential organisations for inclusion in the online survey sample.

        Online survey

        The third strand of the research involved a five-minute online survey with organisations delivering public engagement activities in Scotland to explore the purpose and nature of these activities. The questions were designed by Ipsos and reviewed by ClimateXChange and the Scottish Government (see Appendix D).

        An initial sample of 78 contacts was generated by Ipsos through the web search and interviews, and the survey link was also shared by ClimateXChange and the Scottish Government, through various email networks and communications channels, to broaden participation.

        The survey was live for five weeks, from 19 June to 24 July 2024, and 34 completed responses were received. Of these, 25 organisations reported that they had delivered some form of public engagement in the last three years.

        Analysis

        The data generated from the web search, interviews and online survey was used to map the range of activities (including details such as the type of activity, who delivered it, when it happened, who it was aimed at, and the topics covered). More reflective themes relating to impact, challenges and possible gaps in engagement were drawn from online survey results and the interviews.

        Scope and limitations

        The web search identified a wide range of public engagement activities across Scotland over a number of years. However, this search was not exhaustive, as it was limited to what was available online, and provided varying levels of detail depending on what was published. Data collected from interviews with experts provided more in-depth and reflective insights from a range of perspectives, but on a much smaller range of activities than that of the web search. Meanwhile the online survey provided insights on activities across a wider range of activities, but not in as great a depth, as those gathered from the interviews.

        Using multiple data sources has enabled a more comprehensive understanding of public engagement activity in Scotland than any one source would be able to provide. However, it is important to acknowledge that the research parameters may have overlooked some forms of public engagement (particularly those at a small community level or those not promoted online). Furthermore, not all perspectives on the heat transition (such as those of the intended target audiences) have been captured.

        The online survey was an open link and responses were gathered anonymously. This means that the data may contain multiple responses from the same organisation and duplication of responses between the survey and web searches. Interviews were also conducted confidentially, and so their views have been reported anonymously. Any examples or organisations mentioned in the report are taken from publicly available information and it should not be assumed that they correlate with organisations taking part in either the depth interviews or online survey. Where more detailed case studies are provided (e.g. in relation to Impacts), these have been shared with the permission of the main delivery organisation responsible.

        Lastly, online survey results are based on a small sample and so should be read and interpreted with this in mind. Where percentage figures don’t sum to 100, this is due to computer rounding. Where counts do not sum to the base, this is due to questions allowing multiple responses.

        Public engagement on the heat transition

        This chapter provides an overview of the types of public engagement that have taken place in Scotland between October 2021 and May 2024 and the organisations delivering them. It addresses the following research questions:

        • Who is delivering current heat transition-related engagement activities and messaging in Scotland?
        • What types of activities are being delivered?

        This chapter also explores awareness of the Scottish Government’s Heat in Buildings Strategy among the organisations delivering public engagement.

        Key findings

        • A wide range of organisations from across the public, private and charitable sectors, have been delivering public engagement activities on the heat transition in Scotland.
        • The types of public engagement have also been varied, with the most common being advice services, workshops and information sharing online.
        • Awareness of the HiBS is high among those delivering public engagement.

        Who is delivering current heat transition-related engagement activities and messaging in Scotland?

        The web search, survey and expert interviews identified a range of organisations delivering public engagement activities in relation to the heat transition since October 2021, including:

        • Charities, such as One Parent Families Scotland, Age Scotland, Under One Roof, and Community Energy Scotland.
        • Non-profit organisations and social enterprises, such as Nesta, Scarf and Energy Action Scotland.
        • Community groups, such as climate hubs and local interest groups.
        • Private sector organisations, such as UK energy companies.
        • Advice and support bodies, such as Energy Savings Trust (who administer the Scottish Government’s Home Energy Scotland service).
        • Collectives, consortiums, networks or member groups that include organisations representing a range of sectors (e.g. Built Environment-Smarter Transformation and the Poverty Alliance).
        • Local authorities.
        • Education and research institutes, such as the University of Strathclyde and the Energy Training Academy.

        The Synthesio (social media listening) search provided an indication of the extent of activity and messaging from particular organisations, based on volume of online mentions (see Figure 1). This does not necessarily mean that these organisations have delivered more engagement, but rather reflects higher levels of posts on the heat transition by organisations directly or by other actors citing them.

        Figure 1. Organisations delivering public engagement by volume of online mentions

        Bar chart showing organisations delivering public engagement by volume of online mentions found via web search. The organisation with the most mentions is Built Environment - Smarter Transformation with 516 and the one with the least mentions is the Centre for Energy Policy at U of Strathclyde with 16.

        What types of activities are being delivered?

        The types of activities being delivered were broad, and included advice services, workshops and various types of information and knowledge sharing. The online survey data and Synthesio search provided a snapshot of this range (see Figure 2), which was also reflected in the interviews.

        Figure 2. Types of public engagement activities

        Bar chart showing types of public engagement activities. There are two bars for each type, a lighter blue bar shows the number of activities by type found in the online survey and a darker blue bar shows the number of activities by type found in the web search.

        Among the most common types of public engagement activity were advice and support services, which have been delivered by a range of organisations (including non-profits, non-government bodies, charities and community groups). This was a broad category encompassing free impartial advice on energy saving measures and keeping homes warm, through to practical advice on installing renewable technologies and verifying providers of retrofitting work. A range of advice and support services were accessible online, in-person and via telephone.

        Advice and support services example

        Energy Saving Trust is an independent organisation supporting households and businesses towards decarbonisation, and is one of the Scottish Government’s main partners in addressing the climate emergency.

        Their Green Homes Network connects those interested in low carbon heating with householders who have installed clean heating systems through a database. Households give permission to post case studies so others can find out about their journeys and contact them for further advice. Households may also be invited to speak at webinars or to the press about their conversion to a new heating system.

        Workshops were delivered by a range of actors (including local authorities, charities, non-government organisations, social enterprises and community groups). Some were one-off events while others were run as a series of workshops. The aims of the workshops included: to generally increase knowledge and understanding around the Scottish Government’s heat policy, to help community groups and individuals reduce costs, and to inform individuals on the availability of grant funding for heat transition projects and energy efficiency improvements.

        Workshop example

        Transition Black Isle is a community group that aims to help Black Isle communities respond to the climate emergency and to encourage non-car travel, local food production and energy saving measures. The group organised a series of workshops in March 2022 on low carbon home heating which involved expert speakers and group discussions:

        • Session 1 explored ways to make houses warmer and cheaper to heat without compromising air quality or risking damage to building fabric.
        • Session 2 identified various low carbon methods of home heating and circumstances which suit each approach.
        • Session 3 covered managing these changes, including financial support, choosing contractors and incorporated advice from those who had already been through the process.

        Lectures and talks were delivered by organisations of all types. Some events were open to the public, either as stand-alone events or pop-ups as part of other events or festivals, and provided opportunities to learn about opportunities and risks in making properties more energy efficient. Others engaged industry professionals specifically and provided information on the Scottish Government’s energy policy, availability of funding, best practice for retrofitting schemes and challenges in heat pump deployment. There was also evidence of employee engagement, with organisations being invited to give talks to advise employees on ways to save energy at home.

        Training and knowledge sharing were typically targeted at industry and policy makers. These took the form of panel discussions and events, as well as online networks/hubs to facilitate knowledge exchange and practical training modules on aspects of the heat transition.

        Training and knowledge sharing example

        HeatSource is a programme funded by Scottish Enterprise that aims to better equip companies involved in manufacturing, installation, training and the wider supply chain to deliver clean heating systems.

        The programme seeks to support the decarbonisation of Scotland’s built environment through the creation of an online information hub to help industry maximise the opportunities around new zero carbon heating.

        Various organisations have provided information online and delivered public information campaigns aimed at the general public, including:

          • Get a Heat Pump – a website that provides information on what a heat pump is, how to get one installed and the associated costs (Nesta).
          • Heat pump heroes – an annual awareness-raising campaign to promote conversion to heat pumps (Home Energy Scotland).
          • Money-saving boiler challenge – a public-facing campaign which aimed to raise awareness about how to use energy more efficiently and save on bills (set in the context of the cost of living crisis) (Nesta).

        Other public engagement activities included:

        • Showcases, including live demonstrations and trial installations of heat pumps in different types of homes to gather user feedback.
        • Consultations, typically delivered by community groups to gather responses to the Heat in Buildings (HiBs) proposal and the Scottish Local Heat and Energy Efficiency Strategies (LHEES).
        • Advocacy work, such as speaking up for consumers who have had issues with clean heating systems (e.g. increased energy costs) and opinion pieces published in media outlets to raise awareness and tackle myths around the heat transition.

        Awareness of Heat in Buildings Strategy

        Among organisations that have delivered public engagement activity and responded to the online survey, the majority (88%) reported knowledge of the HiBS, of which just under two-thirds (64%) said they knew a fair amount or great deal about it. Just over one in ten (12%) had either heard of the strategy but knew nothing about it, or had never heard of it (see Figure 3).

        Figure 3. Awareness of the HiB strategy among survey participants

        Horizontal stacked bar chart showing levels of awareness among online survey participants about the Scottish Government's Heat in Buildings Strategy.

        Experts interviewed for the research also reported that their organisations had high levels of awareness and understanding of the HiBS. This was based on their existing relationships with the relevant policy teams in Scottish Government, involvement in the initial consultation process, and/or providing responses to it. Other ways in which experts mentioned becoming familiar with the strategy included through the introduction of new build heat standards and working with local authorities.

        Target audiences and messaging

        This chapter provides an overview of the types of public engagement that have taken place between October 2021 and May 2024 and the organisations delivering them. It addresses the following research questions:

        • Who is the target audience of these activities?
        • What types of messages are being communicated?
        • How accessible are the activities being delivered?

        Key findings

        • Activities were mostly open to the general public, however, there were some target groups identified (e.g. residents within a specific geographic area, homeowners, people in fuel poverty, low-income households and energy sector professionals).
        • Messaging focused on home energy efficiency and reducing energy bills, rather than the adoption of clean heating systems, was felt to resonate more with wider audiences.
        • Engagement on “simple fixes” (e.g. turning boiler temperature down) was therefore more widespread than practical messaging around bigger steps (e.g. installing a heat pump).
        • Activities delivered through trusted messengers and existing local channels were felt to be more accessible forms of engagement. Tailoring messages to the specific target audience was also a key consideration.
        • However, there was a clear distinction between intended target audiences and those actually being engaged, who typically were those who were already more climate aware in any case.

        Who is the target audience of these activities and messaging?

        Public engagement activities were mostly targeted at a broad, general public audience. Evidence gathered from the Synthesio search, interviews and survey showed that activities were often advertised as open to all, rather than targeting a specific demographic. This was driven by the understanding that there are high levels of concern about climate change among the general public (an assertion supported by public opinion research), and that the environmental impact of energy use affects everyone, which requires a wide reaching approach to engagement.

        However, the research highlighted a clear distinction between audiences being targeted and audiences actually being engaged.

        Intended target audiences

        While most engagement activities were targeted at the general public, the research also found evidence of some activities targeted at specific groups, including local residents of a specific geographic area, people in fuel poverty and low-income households, homeowners, and energy sector professionals (see Figure 4).

        However, it should be noted that delivery organisations responding to the online survey often mentioned targeting multiple different groups rather than one group in particular.

        Figure 4. Target audiences (number of mentions by organisations delivering public engagement activities)

        Bar chart showing target audiences, with lighter blue bars showing target audiences found in the online survey and darker blue bars showing target audiences found in the web search.

        Public engagement at regional or local levels was found to be happening across Scotland, with most events concentrated in Edinburgh and Glasgow and a smaller number of activities being delivered in East Lothian, Falkirk, Perth and Kinross, Dundee, West of Scotland, Fife, Aberdeen and Aberdeenshire, and Highlands. There was some evidence of public engagement activities happening on the islands, highlighted by experts, however this was more limited (which could reflect the fact that engagement was more localised and less promoted online).

        People in fuel poverty and low-income households were frequently identified as a key target group for engagement activities. However, evidence from the Synthesio search and from the interviews indicated that the primary focus of those activities was encouraging simple energy efficiency changes that would lead to lower energy bills rather than promoting a transition to clean heating systems.

        There was also some evidence of engagement targeting energy sector professionals (e.g. through conferences, knowledge-sharing and training). However, there was a broad view among experts that this group had not been sufficiently engaged (see Gaps).

        Audiences actually being engaged

        While activities were advertised as open to all (with some targeting), experts observed that they tended to draw interest from those who were typically more climate aware, highly engaged on the topic of sustainable home energy solutions, and more involved in their community anyway. This is consistent with earlier research conducted for ClimateXChange which found that early adopters tend to have higher than average knowledge of, and interest in, climate change as well as time and willingness to research energy alternatives.

        In line with this research, the demographic profile of those who experts perceived to be more engaged was described as homeowners over the age of 40 with disposable income. It was also suggested that men were more likely to be interested in installing low-carbon heating technology than women. Experts cited lower attendance rates among other groups as a particular challenge to widening reach (see challenges).

        What types of messages are being communicated?

        Messaging around the heat transition mainly focused on energy efficiency rather than the adoption of clean heating systems, according to both the survey (see Figure 5) and Synthesio findings.

        The focus on energy efficiency measures was seen to be driven by the cost of living crisis and rising energy prices. Experts highlighted energy efficiencies and reducing energy bills as messaging that had resonated most with the public and led to greater engagement. Some examples of this type of messaging included:

        • “Warmer Homes, Cheaper Bills, Greener Lives” (an event organised by Sustaining Musselburgh and advertised on Eventbrite).
        • “How to save cash with a single change to your boiler settings” (from Nesta’s Money-saving boiler challenge).
        • “To help you lower your energy bills and have more energy efficient homes, whilst also reducing your carbon footprint” (from Thurso Community Development Trust’s home energy advice webpage).

        Organisations that had delivered engagement activities with more of a focus on retrofit and the installation of heat pumps reported using the benefit of cheaper bills as a “pitch” to increase engagement among the wider public. This type of messaging was considered to resonate more with the public than messaging around heating systems.

        There was also a perception among experts that the public have a limited understanding of their current heating systems. Experts felt that this, coupled with existing financial pressures, was contributing to a lack of curiosity about installing greener alternative systems. As highlighted in the examples above, some delivery organisations have focused on smaller, easier steps to address this and encourage engagement.

        Organisations reported that they had found messaging focused on easy steps and “simple fixes”, such as turning down the flow temperature of a boiler, to be more effective than discussions around new heating systems. This reflects other recent research findings on heat transition communication, which suggested that messaging should be breaking down behaviour into small steps. Experts also felt that ensuring a basic understanding of how existing heating solutions affect bills would be an essential first step to engaging households about further decarbonisation measures beyond energy efficiency.

        The web search and online survey found more limited evidence of practical messaging around bigger steps such as how to install and operate clean heating systems like a heat pump. Experts felt that this type of messaging was primarily engaging people who were already motivated to change their heating system.

        How accessible are messages and activities being delivered?

        Delivering engagement through trusted messengers was highlighted by experts as one of the more effective approaches in terms of accessibility. For example, engaging the public through existing community networks was a way in which some organisations had engaged hard-to-reach demographics, such as older people, people in poverty and vulnerable groups.

        “That type of engagement [with vulnerable demographics] has to come from local trusted messengers – it’s about building that relationship. It’s not going to come from anywhere else for the most vulnerable. I think that is where there’s a role for community organisations to play.”

        Climate Hub (interview)

        Experts also highlighted local community events that are already well-attended by local residents as an effective way of promoting transition messaging to the broader public and extending the reach of engagement beyond the climate aware audiences. For example, one organisation had delivered entertainment for children at family-friendly local events to engage parents.

        Synthesio search findings suggest that most activities had been held either online or in hybrid form and experts felt that this had promoted greater accessibility across Scotland. Social media was also used as a method of advertising and delivering engagement, particularly to reach younger demographics more effectively. Nevertheless, while the value of online activity for promoting wider reach was acknowledged, face-to-face engagement was still widely considered by experts to be the most effective.

        Among the activities delivered, there was also evidence of public awareness campaigns utilising TV and printed media to reach a broad audience, including Nesta’s “Money Saving Boiler Challenge”, Citizens Advice Scotland’s “Big Energy Saving Winter” and Smart Energy GB’s “Smart Energy Heroes”. According to experts, wider public campaigns (in combination with simple and accessible messaging) have been most accessible for members of the public not already aware of, or engaged on, energy and climate issues.

        Delivery organisations also reported the use of simple and clear messages to improve the accessibility of their public engagement activities. Experts felt that emphasising the energy efficient changes that individuals could easily adopt in their homes and outlining the financial benefits of making them was most effective in improving understanding of the impact of heating systems on the climate. In particular, the importance of clearly presenting the financial case for change was highlighted, recognising the challenges people face currently with their energy bills.

        “The challenge is making sure the information is really simple and easy to access and reflects the fact that people are in crisis at the time – just transition terminology, for example, doesn’t work.”

        Charity (interview)

        Using informal (“chatty”) language in communication with the wider public on energy advice was felt to have promoted both accessibility and trust. The importance of positive, hopeful and uplifting rhetoric was highlighted, such as an emphasis on the short-term benefits (e.g. immediate decrease in energy bills). This was seen as particularly effective for effectively reaching low-income households and those in fuel poverty.

        “The scale of the transition is immense and the potential opposition to some of what’s needed is also significant, so there’s a need to make sure that there are as many positive and supportive voices as possible to counter the noisy negativity.” Charitable organisation (interview)

        Experts also emphasised the importance of tailoring messages to the specific target audience as a way to improve accessibility and understanding of information. For example, one expert described how their organisation changed the focus and language of any transition-focused activity depending on who they were aiming to reach. When speaking to tenants, they would highlight the links between climate change and heating and assert the case for the need for transition, while when addressing flat owners, they would discuss the specific challenges this group faces and focus on heat networks rather than heat pumps as a solution.

        Some experts reported offering advice and information services in different languages and providing materials accessible to people with different reading abilities. However, among those delivering engagement, evidence of organisations making these accessibility considerations was limited.

        Despite these considerations for delivering accessible engagement, our interviews identified accessibility as a challenge. This related primarily to the complexity of the topic and the highly technical language of certain aspects of the heat transition which was widely considered to be inaccessible and, therefore, limiting the reach of engagement beyond those who are already engaged on climate issues. Some examples that were recognised as particularly difficult for the wider public to understand included EPC ratings and the practicalities of choosing and installing clean heating systems. This is discussed in more detail in the following chapter.

        Reflections on the effectiveness of public engagement

        This chapter reflects on the perceived impact of public engagement activity and the challenges that delivery organisations have experienced, before summarising any future public engagement being considered or planned by delivery organisations who participated in this research.

        Key findings

        Impacts

        • Simple messaging that focuses on easy energy efficiency actions and outlines financial benefits were felt to be the most effective forms of public engagement, building trust through the use of trusted messengers.
        • Building trust with the audience was identified as one of the most important aspects of delivering successful engagement. Community-level engagement was seen as an effective way to foster that trust and reach hard-to-reach groups.

        Challenges

        • Lack of regulatory clarity on clean heat and energy efficiency was identified as the main barrier to delivering effective engagement.
        • Misconceptions and lack of public awareness around sustainable heating solutions was also seen as a challenge.
        • The cost of living crisis was recognised as a barrier to widening the reach of engagement. In this context, the general public was seen as unwilling to accept the upfront cost of transitioning.
        • Certain aspects of the transition, such as installation of clean heating systems, were not seen to have been successfully communicated to the wider public due to topic complexity and specialised language that is not widely understood.

         

        Impacts

        Those delivering public engagement largely felt that their activities had had a positive impact on people’s understanding of issues relating to the heat transition in Scotland (see Figure 5). Among those taking part in the online survey, 89% reported that their audience’s understanding of the topic had improved as a result of engagement. There was less certainty over the extent to which public engagement had led to action, with fewer than half of organisations (44%) reporting that those activities had led to action and 26% reporting that individuals had decided to switch to a clean heating system as a result of the engagement.

        Figure 5. Perceptions of impact Three pie charts showing the extent to which online survey participants agreed that their activities had improved the audience's understanding of the topic, had led to action, or had led to participants deciding to change their heating system.

        Both the interviews and the Synthesio search also identified a number of impactful initiatives centred around simple energy efficiency actions that organisations felt had been effective at reaching the broader public and prompting people to action small changes, often framed around saving money as well as reducing carbon emissions (see Figure 6).

        “The stuff that lands better with people, unsurprisingly, is – there’s a pretty quick fix that you can organise yourself and it saves you money.” Charity (interview)

        Community-driven engagement was also highlighted by sector experts as a success factor in terms of reaching certain demographic groups, such as older people, families in in-work and fuel poverty and vulnerable groups (see figure 6). This was felt to be important because of the perception that community organisations enjoy high levels of trust from members of the community. Building trust was identified as one of the most important aspects of delivering effective engagement.

        Figure 6. Evidence of impact

        Money Saving Boiler Challenge Campaign

        The campaign was delivered by Nesta, in partnership with energy providers and other organisations in the energy industry, which focused on providing basic and simple energy efficiency advice. The activity aimed to reach the general public and convince people to turn down flow temperature on their boiler, thus reducing carbon emissions and energy costs.

        The campaign also aimed to promote better understanding of existing heating systems and their environmental impact among the general public. This activity was part of a wider campaign on decarbonisation.

        Following the campaign, close to 240,000 households turned their boiler flow temperature down, resulting in savings of £112 per year for an average household and a reduction of carbon emissions by 37,000 tonnes.[2]

        Success factors:

        • Simple and straightforward messaging that resonated with people in the context of the cost of living crisis.
        • Promoted small and easy changes.
        • Partnership with trusted voices – public-facing organisations offering energy advice and energy providers.
        • Clearly communicated individual financial benefits of making the changes.
        • A wide public campaign that was advertised on TV and mainstream media.

        Home Energy Advice Portal

        The web portal was developed by Thurso Community Development Trust together with the Highlands and Islands Climate Hub.[3] The website aims to improve pathways to support and uptake of grants by providing energy advice and a comprehensive overview of the energy support services available to residents in Scotland. The portal is accessible to all but is aimed primarily at local community organisations. It provides training to staff and volunteers in offering energy advice, recognise struggling households most in need of energy support, how to approach them and signpost residents to local energy service providers and financial support.

        As of May 2024, 435 community groups in the region had been trained on the portal, which has led to improved knowledge and confidence among staff on the topic of energy. The portal has been actively used, with an average of 3,000 hits per month and approximately 5,000 people supported through it to date. It has also reached some hard-to-reach and vulnerable groups, including older people and low-income families.

        Success factors:

        • Clear and accessible messaging.
        • Community-based engagement.
        • Use of trusted voices in the community.

        Challenges

        The research identified a range of challenges in delivering engagement that were perceived to have negatively impacted attendance rates and limited overall effectiveness.

        A perceived lack of clarity around clean heat and energy efficiency regulations was one of the key challenges identified in the interviews. There was a shared sense that public engagement activities would be limited in their effectiveness until the legislative requirements are known. Experts felt there had been frequent changes in proposed legislation in the past and that there is currently a lack of clarity around the requirements for properties, which has created confusion among some groups and limited the reach and effectiveness of some engagement activities. Landlords in particular were identified as a group at risk of disengaging on the topic until there is clarity on what they will be required to do. The perceived frequency of changes in proposals was felt to have made it difficult for organisations to deliver effective public engagement because they feel they are unable to provide straightforward advice.

        “Until there’s clarity on what the requirements are going to be, it’s difficult to go out there with firm messaging. You always have to caveat your messaging with “it’s just a proposal and it might change.”

        Private company (interview)

        It was also suggested in the interviews that the concern over further changes in requirements has caused hesitation among organisations to engage with the public until the legislation is finalised.

        “[When] things can still change, that’s a disincentive to people actually doing works in their properties. Because they don’t know if the money they’re going to spend and the improvements they’re going to make are going to be beneficial when it comes to complying with possible future standards because we still don’t know what those possible future standards are going to be.” Private company (interview)

        Representatives of the homebuilding sector highlighted that while homebuilders “are ready, understand and are committed to what needs done in supporting the transition”, there are concerns within the sector regarding limited communication from the Scottish Government about availability of the technology required to support the transition.

        At the same time, interviewees stressed that there are still misconceptions, misinformation and lack of public awareness around sustainable heating solutions. It was suggested that the general public is still widely uninformed about the costs associated with the transition and whether low-carbon technology would be an effective heating solution for their home. Moreover, some stakeholders suggested that there is confusion around the different regulations in England and Scotland.

        “…There’re still too many barriers to retrofitting – heat pumps are still considered pretty unusual and there’s a lot of myths, misinformation and misconceptions around how effective low-carbon tech is, which highlights the need for the public engagement strategy.” Membership organisation (interview)

        The wider socio-economic context of the cost of living crisis was highlighted by experts as the key structural barrier to engaging the general public in the conversation about the heat transition and decarbonisation, particularly given the upfront costs of retrofitting and installing clean heating systems. They felt that, for most people, the kinds of interventions that will be required for the transition would be unaffordable.

        “There is certainly a general gap in terms of people wanting to decarbonise their homes because of cost.” Private company (interview)

        It was suggested that the public would be largely unprepared and unwilling to accept the cost of transitioning upfront based on a promise of future energy savings.

        “We’re considering how we can get that messaging out to the public to make the public aware of the changes that will be required of them – yes, it might cost them more upfront but it should create longer- term benefits – but I don’t think the public is ready to make that connection yet and I don’t think any government messaging that I’ve seen to date has been explicit about that.” Private company (interview)

        The complexity of the changes required and language accessibility around those changes was also identified by experts as a significant challenge. It was suggested that the language around the heat transition (e.g. clean heating systems) is specialised and requires a certain level of knowledge on the subject. It was therefore felt to be less accessible to people who don’t already have awareness on the topic.

        “The challenge is making sure the information is really simple and easy to access and reflects the fact people are in crisis at the time – just transition terminology, for example, doesn’t work.” Statutory body (interview)

        Despite attempts by organisations delivering engagement to address this challenge, such as by delivering energy advice through simple messaging, it was felt that other aspects of the transition such as installation of new heating systems have not been successfully communicated in a way that can be more widely understood. One expert, reflecting on their own experience installing a clean heating system, commented that even they found it difficult to navigate existing advice despite being highly engaged and knowledgeable on the topic.

        “The challenge is that we were asking people to do the absolute low-hanging fruit thing in terms of decarbonisation of heating. So, it’s not as simple to take that framing – do this simple thing and save money – to almost any other part of the heat transition. The rest of the message is much harder.” Charity (interview)

        Notwithstanding these challenges, over half of organisations who completed the survey (59%) and several of the interviewees said their organisations planned to deliver public engagement activities on the heat transition in Scotland in the future. These were mainly charities, but also included a range of other organisation types mentioned in Chapter 3. The types of activities planned included a continuation of existing advice and support services and information sharing campaigns, as well as further workshops or knowledge sharing events and new pilot schemes (such as for retrofitting).

        Delivery organisations mentioned that these future activities would be open to all, but some specific target groups included homeowners, the social rented sector (landlords and tenants), those in fuel poverty, those living in flats, people with protected characteristics, and small businesses. It was felt that schemes like the Green Homes Network and Heat Pump Heroes should be promoted more widely to encourage further uptake of clean heating systems.

        However, there was also reluctance among delivery organisations to carry out further public engagement until more is known about Scottish Government policy on the heat transition and the specific requirements needed for the different target groups.

        “It is not worth individuals investing in bespoke renewables or low carbon heating systems. We need to know more about when the heat networks will be coming.” Charity (online survey)

        Overall, while public engagement efforts have made good progress in raising awareness of the heat transition, substantial challenges remain in translating understanding into widespread action.

        Gaps in public engagement

        This chapter addresses the final research question: where are the gaps in engagement?

        While the research has identified a range of different engagement activities that are reaching the broader public as well as targeted demographic groups, it has also identified some clear gaps in engagement. The identified gaps broadly relate to target audiences and messaging, but also relate to potential messengers (i.e. those who could have a role in supporting public engagement on the heat transition).

        Key findings

        • Audiences identified as having been under-engaged on the heat transition included private landlords, renters, professionals in the energy sector, young people and the digitally excluded.
        • The key messaging gaps in public engagement include addressing the general lack of understanding among the public about current heating systems, as well as insufficient practical and transparent advice on installing and operating clean heating systems.
        • Using existing case studies was also felt to be lacking, but could provide an opportunity to show how the technologies have been implemented in Scotland and elsewhere.
        • A general lack of trusted messengers providing reliable and impartial advice was also identified, as well as those able to provide technical support on the practical aspects of the transition.

        Target audience

        Delivery organisations responding to the online survey felt that most groups of people would benefit from support or information on the heat transition in Scotland, with young people being a notable exception (Figure 7). Experts interviewed suggested that, although public engagement activities have largely been open to all because the transition is seen as an issue that will affect everyone, there were some groups who should be prioritised. The top four groups who would benefit from more information on the topic, as identified in the survey, were people in fuel poverty, homeowners, low-income households and landlords (see Figure 7).

        Figure 7. Groups who would benefit from support

        Bar chart showing which groups online survey participants thought would benefit from more support or information on the heat transition in Scotland.

        As highlighted in the previous chapter, experts suggested that there had been limited engagement with private landlords. This was reflected in the survey results too, with 77% of participants highlighting landlords as one of the groups who would benefit from support or information on the heat transition. This was seen as an important gap to address, since private landlords are expected to play an essential role in driving the heat transition forward and to be directly affected by the upcoming regulations around clean heat and energy efficiency under the current HiBS.

        Experts perceived that the benefits of making the transition were not clear to landlords who would be bearing the costs of retrofit, leading to a reluctance to engage on the subject. Stakeholders who had conducted activities aimed at this group said that engaging with them had proven particularly difficult because of the sector’s resistance to being regulated, with both individual landlords (and some organisations representing them) pushing back and advocating against the legislation.

        However, it was also acknowledged that responses to the HiBS have varied across this group. Some landlords, particularly the more climate conscious, were described as “very keen” to make sustainable improvements, but it was felt that a lack of clear and consistent information on the extent of upcoming regulations has held them back from taking action.

        “It’s such a shame because people will phone us up – they have the money and the inclination to do the work and I have to tell them – actually, you’re better off not doing the work and spending the money just now because we don’t know what the requirements are going to be.”

        Membership organisation (interview)

        Lack of information and means to take action were felt to be even more of an issue in relation to renters. Out of all 62 public engagement activities identified through the Synthesio search, only two were targeted directly at tenants. Moreover, 66% of survey participants believed that private renters would benefit from more advice on the heat transition and 63% said the same in relation to social housing renters. Experts interviewed for this research felt that renters have been widely disengaged from the topic because they feel very limited in their power to make any changes in a rented home and the resources advising them are sparse. Moreover, it was suggested that renters were largely apprehensive about discussing the transition with their landlords due to concerns about losing housing in a competitive rental market.

        “Those in rented accommodation often don’t know who to turn to – you may know that certain property standards exist but are not necessarily able to enforce them. In a rental market where renters are under pressure and aware that there is competition to rent, it doesn’t encourage you to speak to your landlord about these additional measures, for fear of losing housing.” Charity (interview)

        Experts therefore perceived that those renting from private landlords would benefit from more sources offering practical advice on what changes they can make and how to discuss these with their landlords. In relation to social housing tenants, experts suggested that messaging should focus on building a stronger case for the need for transition. They felt that it was important to ensure that social housing tenants understood why retrofitting works were being carried out in their homes and what the benefits would be, and that they did not feel like the changes were being imposed on them. This echoes findings from the 2024 research on social housing decarbonisation conducted for ClimateXChange which highlighted the importance of tenant engagement and agreement prior to conducting decarbonisation works.

        Limited engagement with professionals working in the energy sector was highlighted as a substantial gap in engagement on the heat transition. The Synthesio search and expert interviews identified some activities targeted at industry professionals being delivered, including professional conferences, training and workshops. However, it was widely felt by experts that this group has not been sufficiently engaged.

        Industry-level engagement was described as a missed opportunity by experts who considered industry professionals and energy service providers as trusted messengers. It was felt they could provide technical and tailored advice to the public to mitigate the challenge highlighted earlier of poor understanding of clean heat technologies (see Challenges).

        Beyond being a potential engagement opportunity, this gap was also seen by some experts as a risk; for example, if heat engineers do not understand clean heating systems themselves, they may provide incorrect advice to consumers. A comprehensive nationwide effort was deemed necessary to address the gap, and a particular focus on addressing any training or skills gap in rural areas.

        Across the interviews, there is a widely shared sentiment that young people were one of the groups who have been least engaged on the heat transition. Experts suggested this related to the cost of living and the availability of affordable housing being more prevalent and pressing challenges for this group. It was also partly explained by young people in the rented market having limited agency to make any energy saving changes to their homes (with that responsibility resting upon the landlord) and therefore considering the heat transition as having limited personal relevance.

        “Young people are not thinking about how they heat a home because they’re just trying to find a home in the first place. […] There’re so many issues in terms of housing for young people – particularly, if they are in the rented sector, they usually have no control over how that home may be heated.” Climate Hub (interview)

        Despite these reflections expressed during the interviews, survey findings suggest that organisations involved in delivering engagement did not consider young people as a group that would benefit from more advice on the heat transition, with no participants identifying this as a priority group.

        While it was felt that activities being delivered online have enabled broader participation (see Accessibility), it was also acknowledged by experts that those who are digitally excluded are potentially being left out of the conversation. Although organisations such as Scarf and HES do provide multimodal advice (via telephone, in-person, or online), these are often promoted online which experts felt could be limiting reach.

        Messaging

        One of the main perceived messaging gaps was addressing the lack of understanding among the general public about their existing heating systems. It was felt that this lack of awareness could act as an obstacle to the success of the longer-term strategy for decarbonisation, as people are unlikely to take action on changing their boiler to a different heating system if they do not fully understand the current one. Experts highlighted that energy efficiency advice promoting better understanding of how heating systems work and their impact on the climate should be a pre-requisite for any required action on the transition.

        Interviewees also widely felt across interview that insufficient practical advice had been offered to the wider public around how to install and operate clean heating systems. This gap was closely linked to the limited engagement with the energy sector professionals who are seen as the key actors who would be able to offer such advice. Experts contrasted the availability of sources offering grant and funding support – which was felt to be plentiful – with the lack of reliable sources offering tailored practical advice.

        “If you’ve got a property and you have absolutely no idea whether it has a wall that can be insulated, there are few sources that you can go to for advice – some of them are great and some of them aren’t so great. So, it’s very difficult when it comes to actually making changes.” Membership organisation (interview)

        It was also stressed by some experts that there needs to be transparency in the practical advice about the things that can go wrong and any potential risks around the transition to ensure that consumers are making an informed choice and are equipped with the practical knowledge of what to do if issues arise. For example, some experts reported engaging with members of the public who had transitioned to clean heating systems and had experienced issues such as an increase in energy bills but did not know how to deal with those issues and could not find information about them. It was suggested that the lack of transparency around potential risks, coupled with negative experiences such as these, could limit progress on the heat transition.

        “Once something has been installed, people need to be clearly shown how to use this system and that they’re not left with something that they don’t know how to work. […] we risk putting people into more expensive systems when they’ve been told they’ll be able to save money […] We’re sitting on quite a lot of evidence around where things aren’t working particularly well or where they can act against the just transition, e.g. increasing costs.” Statutory body (interview)

        However, experts also emphasised the importance of demonstrating the efficacy of these heating systems, by showing how they have been implemented in homes across Scotland and in other countries. It was also felt that the experiences of those adopting low-carbon heating technologies could be amplified. By drawing on and learning from real-life experiences, whether positive or negative, it was felt that this could help to build trust in the systems and encourage more widespread uptake over time.

        One expert also suggested that public engagement on the heat transition should focus more on heat networks. This was felt to be lacking in current discussions but a likely solution for lots of people, particularly those living in flats.

        Messengers

        When it comes to those delivering engagement and communicating these messages, despite sharing some examples of engagement activities delivered through trusted messengers, experts shared a view that there is a general lack of impartial and reliable sources offering tailored practical advice on managing clean heating systems. This was seen as significant given the importance of building trust in, and understanding of, clean heating systems for effective engagement (see Section 5.2).

        Experts defined trusted messengers in different ways. Some considered private energy providers and installers of clean heating systems to be trusted voices given their technical expertise on the matter and consumer-facing branding. Others felt that local community organisations trained in providing energy advice should play that role as they are embedded in communities already and seen as trusted sources.

        Another suggestion was that there should be a separate group of messengers who are impartial (i.e. not private contractors) and able to provide technical and tailored advice to people depending on their property, location, and circumstances. This group was seen as a missing link in the process which could help connect people with verified installers.

        “If someone approached us asking if we could recommend someone they could speak to about insulating their property, I honestly don’t know where the best place for them to go to would be. It would be nice if somebody could tell us where we can signpost them to. You don’t necessarily want a contractor, you want someone who could give you independent advice on what you best options are, what the likely cost would be and ideally signpost you to some reliable contractors. It feels like there is a missing stage in the process.” Membership organisation (interview)

        Reflecting on the gaps in audiences, messages, and messengers, there was a dominant perspective that more needed to be done to drive effective public communication and engagement activity on the heat transition in Scotland. One expert suggested that they would benefit from more guidance and insight into the effectiveness of the Scottish Government’s own engagement on the topic, as this would help organisations when developing their own engagement strategies.

        Conclusions

        This research has identified several considerations for ensuring future public engagement on the heat transition builds on what has be done before and is effective in prompting action.

        Prioritising groups

        Delivery organisations felt that public engagement activities should be open to all on the basis that the heat transition will affect everyone some way. However, certain priority groups were identified, including:

        • The private rented sector, as landlords will be expected to play an essential role in driving the heat transition forward under the current HiBs proposals, which would require landlords to make energy efficiency improvements by 2028, and tenants will be affected by the changes.
        • Professionals in the energy sector, including energy providers and engineers who can be trained in clean heating systems, amplifying messaging around the transition, and providing tailored technical advice to households.
        • Those who are digitally excluded, who may not be accessing the full range of engagement activities given so much of it is being promoted online.

        It was suggested that there should first be a focus on engaging professionals in the energy sector (e.g. providers and engineers) and housing sector (e.g. landlords and housing associations). This was based on the view that they represent groups who have been under-engaged but who will be key to driving the transition forward. It was also felt that engagement with industry professionals first would present an opportunity to harness their influence among wider groups, to encourage action by sharing information and practical advice, and helping to tackle the spread of misinformation.

        With the support of these sectors, focus should then be given to engaging the general public. There was a view among experts that focusing on early adopters first could help to encourage action among other more hesitant groups by building up a larger body of evidence of successful examples across different types of properties. This was seen as key to building trust in the efficacy of clean heating systems.

        Tailoring messages

        For engaging with industry professionals, it was felt that messages should provide clarity on the changes required and reassurance on the support available, as well as addressing any issues or hesitations that might be prevalent among these groups. An in-person approach to engagement with this group was considered necessary for this, to ensure any barriers are addressed directly.

        For engaging the general public it was recognised that framing activities around the climate benefits would engage those who are already highly motivated by the climate crisis and more likely to be early adopters. It was felt that making it easier for them to take action (with clear and consistent messaging and practical advice) would in turn make it even easier for those less motivated by the climate crisis to take action as they could benefit from the experiences and knowledge of those who have already done it.

        Highlighting the financial benefits and availability of grants and loans was identified as a key message that could be amplified more. This was seen to be particularly important for engaging members of the public for whom the upfront costs would be off-putting or those who are struggling with their energy bills already.

        It was also felt that messages should be tailored, based on an understanding that different solutions will be needed for different groups and that the benefits/challenges associated will also be different depending on people’s circumstances (e.g. for those in houses compared to those in flats, and for those living in urban areas compared to those living in rural areas).

        Overall, experts were in favour of more national-level campaigning – coordinated between the Scottish Government and key stakeholders – to raise awareness around the HiBs proposal and emphasise positive messaging around the heat transition. It was also felt that this would need to be supported by local-level public engagement that is tailored to, and addresses, the needs of different groups.

        Building trust

        There was a broad sense that any public engagement activity on the heat transition needs to first build a baseline understanding of heating systems, before engaging on transitioning between current and future systems. It was felt that priority should be given to improving basic understanding among general public about how boilers operate and start with simple changes they can make their homes more energy efficient.

        Building on this, it was felt that public engagement should emphasise the needs and benefits of the transition to clean heating systems. At the same time, the importance of transparency in communicating the potential risks was also highlighted. Ensuring the availability of practical advice on how to navigate these risks and deal with challenges (particularly around installation and unforeseen costs), was felt to be missing from engagement currently.

        Using trusted messengers – whether organisations already embedded in communities, those with technical knowledge (e.g. industry professionals), or a new group of independent advisers from a range of backgrounds – was seen as an effective vehicle for communicating these aspects of the transition. Experts interpreted trusted messengers in a range of ways, and further research would be beneficial to determine who the public would trust to deliver messages.

        Regulatory clarity

        Organisations delivering public engagement reported feeling limited in what they can deliver until it is clearer when the regulations will come into force, and what the regulations will include (i.e. the changes that people will be required to make in relation to clean heat and energy efficiency). There was a general understanding of the direction of travel, but it was felt that a lack of detailed information was limiting the effectiveness of communication and engagement on the heat transition in Scotland.

        Regulatory clarity was therefore widely called for, although it was recognised that this would be difficult to provide until the legislation is finalised. Nevertheless, it was strongly suggested that regulatory and financial decisions need to be made first. Organisations delivering public engagement activities felt they needed clarity on what the regulations will be, when they will come into force, and what financial support will be available, so that they can be equipped to support their members, service users and the general public through the transition.

        Appendices

        Appendix A – detailed methodology

        The research involved three strands:

        • A web search to identify public engagement activities.
        • Interviews with 10 experts representing a range of organisations involved in the heat transition.
        • An online survey of organisations delivering public engagement activity.

        Web search

        The web search was initially conducted using a traditional online search method, whereby “Boolean search strings” were used in Google and Google Scholar. Search strings were created beforehand and then refined throughout the search process where necessary, to improve the relevance of results (see Appendix B for the full list of search strings used).

        Ultimately, the traditional online search results were limited, and the majority of public engagement examples analysed were identified through using Ipsos’ proprietary social listening software, Synthesio. The software works by identifying mentions of specified terms (in a similar way as search strings) across the web, including platforms such as X (formerly Twitter), Facebook, YouTube, Instagram and Facebook.

        The initial Synthesio search (using the search string listed in Appendix B) produced around 2,500 references to public engagement across these social media channels, which were reviewed by the research team. Through search refinement using key word filtering and further manual review, most mentions were ultimately excluded due to duplication or being out of scope.

        An analysis of 62 instances of engagement that matched the inclusion criteria (as specified below). Details of these engagement examples were recorded in a mapping spreadsheet in Excel, by the research team. Examples from a previous, brief web search by the Scottish Government that did not appear in Ipsos’ web search were also included in the spreadsheet, along with a very small number of activities that Ipsos were already aware of.

        Expert interviews

        A longlist of potential organisations was generated by Ipsos following an initial web search and initial recommendations from the Scottish Government and ClimateXChange, and was reviewed by ClimateXChange and the Scottish Government. Organisations were selected on the basis that they could comment on public engagement on the heat transition (either from direct delivery experience or from involvement on the heat transition in other ways) and that they represented a range of perspectives. Experts were invited to take part via email and the profile of expert organisations included a mix of charities/advice services, climate hubs,[4] private companies, non-government organisations and industry bodies.

        This strand of the research explored the different types of public engagement activities in more detail. A topic guide was developed by the Ipsos research team and reviewed by ClimateXChange and the Scottish Government (see Appendix C). Interviews lasted around 45 minutes each, and covered public engagement activities/communications recently delivered or known about, target audiences, perceived impact of engagement, any future activities planned, and views on current gaps in engagement.

        Interviews also helped to identify potential organisations for inclusion in the online survey sample. Interviews were originally planned to be completed before the online survey fieldwork began. However, the decision was made to hold four interviews back until the online survey was underway. This decision was partly practical to be flexible around participants’ availability, but also to allow for survey responses to inform discussions and identify potential organisations to interview for a broader range of perspectives.

        Online survey

        The third strand of the research involved a five-minute online survey with organisations delivering public engagement activities in Scotland to explore the purpose and nature of these activities (e.g. key topics, target audience and impact). The questions were designed by Ipsos and reviewed by ClimateXChange and the Scottish Government (see Appendix D).

        An initial sample of 78 contacts was generated by Ipsos through the web search and interviews, and the survey link was also shared by ClimateXChange and the Scottish Government through various email networks and communications channels, such as X (formerly Twitter) and the CXC newsletter, to broaden participation.

        Two reminder emails were sent to the sample during the fieldwork period to boost response rates. The survey was live for five weeks, from 19 June to 24 July, and 34 completed responses were received. Of these, 25 organisations reported that they had delivered some form of public engagement in the last three years.

        Appendix B – overview of web search

        Web search strings

        The following strings were placed into Google or Google Scholar:

        • ‘Public engagement’ AND ‘Scotland’ AND [heat transition/ heat decarbonisation/ clean heating/ energy efficiency/ net zero heating/ green heating/ zero emission heating/ zero direct emission heating/ fabric first] OR
        • ‘Public participation’ AND ‘Scotland’ AND [heat transition/ heat decarbonisation/ clean heating/ energy efficiency/ net zero heating/ green heating/ zero emission heating/ zero direct emission heating/ fabric first] OR
        • ‘Deliberative/deliberation’ AND ‘Scotland’ AND [heat transition/ heat decarbonisation/ clean heating/ energy efficiency/ net zero heating/ green heating/ zero emission heating/ zero direct emission heating/ fabric first] OR
        • ‘Public consultation’ AND ‘Scotland’ AND [heat transition/ heat decarbonisation/ clean heating/ energy efficiency/ net zero heating/ green heating/ zero emission heating/ zero direct emission heating/ fabric first] OR
        • ‘Public dialogue’ AND ‘Scotland’ AND [heat transition/ heat decarbonisation/ clean heating/ energy efficiency/ net zero heating/ green heating/ zero emission heating/ zero direct emission heating/ fabric first] OR
        • ‘Citizen engagement’ AND ‘Scotland’ AND [heat transition/ heat decarbonisation/ clean heating/ energy efficiency/ net zero heating/ green heating/ zero emission heating/ zero direct emission heating/ fabric first] OR

        The following string was placed into Synthesio

        (Scotland OR Edinburgh OR Glasgow OR Aberdeen OR Aberdeenshire OR Dundee OR Inverness OR Isles OR Isle OR Ayrshire OR Arran OR Islands OR Lothian OR Fife OR Highlands OR Perth OR “Outer Hebrides” OR Shetland OR Orkney OR Stirling OR Angus OR Dumfries OR Galloway OR Argyll) NEAR/5 (advice* OR consultation* OR discussion* OR event* OR conference* OR talk* OR “public service” OR report* OR session* OR lecture* OR conversation* OR public OR forum* OR seminar* OR workshop* OR outreach OR community OR engagement OR dialogue OR meeting* OR briefing* OR presentation* OR program* OR survey* OR roadshow* OR “public outreach”)) AND (“heat transition” OR “heat decarbonisation” OR “clean heating” OR “energy efficiency” OR “net zero heating” OR “green heating” OR “zero emission heating” OR “zero direct emission heating” OR “fabric first” OR “#EnergyEfficiency”)

        Parameters

        Across both searches, the following inclusion criteria were used:

        1. Topic: Public engagement related to heat transition/ energy efficiency. The research team included public engagement that is wider than just the Heat in Buildings agenda, but focused on engagement that is exclusively focused on the heat transition. (The relative focus on the heat transition in general climate change engagement was also mapped where relevant).
        • Date: From October 2021 onwards (introduction of the Heat in Buildings Strategy in Scotland). This was reviewed during initial stages of searching and was deemed to be appropriate based on the volume of material available. The final eligible date for inclusion was 20th May 2024, corresponding with when the web review strand of the research ended.
        •  
        • Methodology: “For the purposes of this research, “Public engagement” was understood as including various forms (e.g. public participation, public consultation, public dialogue) and methods.
        •  
        • Geographical coverage: Scotland.
        • Level: National- and potentially regional-level public engagement was initially prioritised for this project, rather than community-level. However, much of the engagement examples identified were at the more local, community-level and so relevant examples of these were also reviewed and included in the mapping.
        • Language: English language (it was agreed that the research team would also record any search results in Gaelic, but this was not called for).

        Appendix C – Topic guide for expert interviews

        Introduction (3 mins)

        Ipsos has been commissioned by ClimateXChange and the Scottish Government to conduct research into public engagement on the heat transition in Scotland.

        As part of the research, we are conducting interviews with organisations across Scotland who have carried out, been involved in, or have a good awareness of, engagement activities with the public on the heat transition. This includes engagement on topics like clean heating and energy efficiency, low carbon technology and zero direct emissions heating systems. These interviews will help us obtain a fuller understanding about the types of activities that have been carried out so far.

        The research will inform the delivery of the Scottish Government’s Heat in Buildings Public Engagement Strategy.

        The interview should last about 45 minutes and everything you say will be treated in the strictest confidence. No identifying information about individuals will be included in the report, for example, if we would like to quote you, we will do it anonymously. ClimateXChange and the Scottish Government will not receive notes from individual interviews or attributable comments.

        Participation is voluntary and you can change your mind at any time, up until the report is published.

        1. We would like to record the discussion for analysis purposes. It will not be provided to anyone outside of the Ipsos research team. The recordings will be securely stored and will be destroyed three months after we have completed the evaluation.

        Do I have your permission to record?

        Turn on the recorder and record consent to take part and for the discussion to be recorded.

        Do you have any questions before we begin? Are you happy to proceed?

        Background (3-5 mins)

        To start with, can you tell me a bit about yourself and your role at [organisation].

        What, if anything, do you know about the Scottish Government’s Heat in Buildings Strategy?

        IF NECESSARY: The strategy was published in October 2021, and sets out how the Scottish Government will achieve warmer, greener and more energy efficient heating in domestic and non-domestic buildings in Scotland. It established a target of decarbonising all properties in Scotland by 2045, including the approximately 2 million homes that currently use mains gas as their primary heating fuel.

        And what, if anything, do you know about the Scottish Government’s Heat in Buildings Public Engagement Strategy?

        IF NECESSARY: The Heat in Buildings Public Engagement Strategy provides an overview of how Scottish Government will work with other stakeholders to deliver a programme of public awareness raising, education and participation around clean heat and energy efficiency, in order to meet targets set out in the Heat in Buildings Strategy.

        PROBE:

        • General views on strategy – any positives, negatives
        • Does organisation have a specific strategy / business plans in relation to this?

        Overview of activities (10-15 mins)

        We are interested in finding out about the different types of activities organisations may have carried out over the last three years to engage members of the public in relation to the heat transition to net zero emissions in Scotland. Can you tell me about any activities that your organisation has…

        1. Carried out over the last three years to engage the public on this topic?
        2. Contributed to or supported in some way?
        3. Been aware of (but not been involved in)?

        Interviewer: note down examples initially raised by stakeholder, then gather information about each one in relevant section (apportioning time on each section depending on the number of examples relavant to each).

        At this stage probe for brief details about each activity (explain you will ask for more detail after you’ve heard about all the different types of activities carried out):

        • what was it about?
        • what did it involve / how was it carried out?
        • who was it carried out with? target audience?
        • was anything published / any information available online?
          • (if yes – interviewer does not need to spend time collecting factual information that will likely be in the report – focus on key questions instead).

        Note to interviewer: if there are lots of activities to discuss and the stakeholder is not able to stay on the call, ask if they would be willing to share details of the remaining examples by email.

        A – Information about activities the organisation delivered themselves (10-15 mins)

        I’d now like to ask you a bit more about the [activity/activities] you mentioned.

        It would be useful to know more about what took place, and your thoughts on how well you think this method of engagement worked and any impact it may have had.

        You might not have all the answers, which is absolutely fine.

        Interviewer: ask about each (relevant) activity mentioned in turn with remaining time. ask or adapt questions depending on the type and format of engagement activity being described. if short on time or if there are lots of examples, prioritise those that are newly uncovered, unpublished or that we have not collected details about already.

        ensure that you leave five minutes at end to ask the future engagement section.

        • What was the purpose or overall aim of the activity?
        • Who was the activity aimed at? General public or specific groups?

        Probe on groups such as:

        • Particular geographical areas;
        • Socio-economic groups;
        • People living in particular types of properties
        • Homeowners/landlords/renters
        • Based on protected characteristics – disability, ethnicity
        • other groups
        • Why were you interested in engaging with [this group / these groups] in particular? Why was this important?

        PROBE IF NECESSARY:

        • How did you identify there was a need to engage with this group?

        I’d now like to ask about the topics that were covered and the way those topics were communicated to the public…

        • What areas / topics did the activity cover?

        PROBE:

        • What were the main / key messages being communicated / delivered by the activity?
        • Why were these particular messages chosen?
        • And were any steps taken to make it easier for people to take part or engage with the activity?

        PROBE:

        • Design of materials
        • Language (e.g. use of plain English; terminology used; Gaelic)
        • Location of activity (any considerations for urban/rural audiences)
        • How engaged / method of engagement
        • Why did you do this? Were there any groups of people you thought may have struggled to understand/engage with the activity otherwise?
        • What is your understanding of the impact this activity has had? Did it achieve its goals/aims?
          • If yes – In what ways would you say the activity was successful?
          • If too early to tell / not sure:
            • Why is that? (clarify whether activity was too recent, or if the impact is expected to be over longer term e.g. it will take a while for people to install heat pumps)
            • What do you hope that the impact of the activity will be?
          • PROBE: Was the impact or success of the activity measured in any way?
          • Why do you think it was successful / unsuccessful?
        • If not previously mentioned: And do you think it was it successful at reaching the target audience?
          • Were there any groups of people missing?
          • IF YES: What were the reasons for that?
        • Does your organisation have any future plans to further engage the public on the heat transition to net zero emissions?
          • IF YES:
          • What? When?
          • Who is the target audience (and why)?
        • Are these plans based on learnings from any previous engagement?

        B – Information about activities the organisation contributed to in some way (5-10 mins)

        Thinking now about the other [activity], which you mentioned being involved in.

        • If not covered already – What was involved in the activity?
        • What was the purpose or overall goal of the activity?
        • If not covered already – What was your organisation’s involvement?
        • What were the main / key messages being communicated / delivered by the activity?
        • Who was the activity aimed at? General public or specific groups? Probe on reasons for this (if known)
        • Do you know if the target audience was reached successfully?
          • Any groups not reached successfully?
        • Do you think it was it easy or difficult for people to take part and engage with the information provided [or to attend the activity]?
        • What is your understanding of the impact the activity had? Probe on what went well, any challenges, what could be improved

        C – Information about activities that the organisation is aware of (5-10 mins)

        Moving onto [activity], which you said you were aware of.

        • If not covered already – What was involved in the activity?
        • If not covered already – Who delivered the activity?
        • What were the main / key messages being communicated / delivered by the activity?
        • Who was the activity aimed at? General public or specific groups? Probe on reasons for this (if known)
        • Do you know if the target audience was reached successfully?
          • Any groups not reached successfully?
        • Do you think it was it easy or difficult for people to take part and engage with the information provided [or to attend the activity]?
        • What is your understanding of the impact the activity had? Probe on what thought went well, any challenges, what could be improved

        Engagement gaps (5 minute)

        Interviewer: ask all

        Finally, I’d like to ask if you think there are any gaps in the engagement activities that have been carried out so far on the heat transition. For example, in terms of the groups of people being targeted or the types of activities being carried out.

        • First of all, as far as you are aware, are there any groups of people you think are missing from the activities that have been carried out the heat transition in Scotland so far?

        Probe:

        • Why do you think this is?
        • Are there any groups of people that your organisation would have liked to have engaged but have been unable to so far?
        • And are there any particular types of public engagement activities not currently happening that you think should be?
          • If yes: What? When? Who should the target audience be (and why)?
        • Do you think you would benefit from any advice or support on public engagement in relation to the heat transition in Scotland?
          • If yes: What would you find useful?

        Close (3 mins)

        That’s all the questions I wanted to ask you today, unless you think there is anything else we might have missed which would be useful for us to know?

        Thanks. In the next few weeks, we will be conducting follow up research among organisations across Scotland responsible for delivering public engagement activities on the heat transition. This will comprise a short, 5-minute online survey asking about activities or communications being delivered. Would you, or someone else from your organisation, be willing to take part in the survey?

        If yes: take contact details (name, email)

        We are keen to invite as many organisations as possible to take part in the survey. Can I check, are there any other organisations or people you are aware of who are delivering public engagement activities on the heat transition that you think we should invite to take part in the survey?

        Finally, the ClimateXChange and Scottish Government research teams may wish to conduct follow up research about this topic within the next 2 years. Are you willing to have your name and contact details passed on to the ClimateXChange and Scottish Government teams for this purpose?

        Thank you so much for taking the time to speak to me today, it’s been really helpful.

        Appendix D – online survey questionnaire

        ASK ALL.

        QWORK: First of all, which of the following best describes who you work for?

        • Charitable organisation
        • Community group
        • Education or research institute
        • Local authority
        • Non-Governmental organisation
        • Non-profit organisation
        • Private sector organisation
        • Scottish Government department
        • Social enterprise
        • Other – please specify:
        • Don’t know

        ASK ALL.

        How much, if anything, would you say you currently know about the Scottish Government’s Heat in Buildings Strategy?

        1. A great deal
        2. A fair amount
        3. Just a little
        4. Heard of it but know nothing about it
        5. Never heard of it

        ASK ALL.

        Q1. As you may know, the Scottish Government’s Heat in Buildings Strategy aims to transform Scotland’s buildings and the systems that supply their heat, as part of the transition to net zero emissions by 2045. This includes working to support the rapid adoption of zero emissions systems for home heating, such as heat pumps and district heat networks.

        Have you, or your organisation, carried out any activities over the last three years to engage members of the public about changing their home heating systems?

        • Yes
        • No
        • Don’t know

        IF YES AT Q1.

        Q2. Which of the following categories would those activities most closely fall under? MULTICODE

        • Workshops
        • Public information campaigns
        • Open days or showcases
        • Lectures / talks
        • Training or knowledge-sharing sessions
        • Providing information online
        • Consultations
        • Citizens Panel
        • Advice service (in person)
        • Advice service (online)
        • Advice service (telephone)
        • Other – please specify:

        ASK IF YES AT Q1

        Thinking about the most recent activity that you / your organisation carried out…

        Q3. Which of the following topics, if any, were covered by the activity? MULTICODE

        • General provision of energy efficiency advice/information
        • Information about Scottish Government’s Climate Change Plan / net zero targets
        • Improving the energy efficiency of households (such as through improving home insulation)
        • Installing air source or ground source heat pumps
        • District heating networks
        • Other types of clean heating systems*
        • Provision of information about grants / loans
        • Other – please specify:
        • Don’t know

         

        ASK IF YES AT Q1

        Q4. Which groups, if any, was the activity targeted at? MULTICODE

        • General public (no specific target groups) at national level
        • General public (no specific target groups) at regional or local level
        • Businesses or people working in the energy sector
        • Homeowners
        • Private renters
        • Those renting their home from a local authority or housing association
        • Landlords
        • Low-income households
        • Households in urban areas
        • Households in rural areas
        • Households using gas/oil heating
        • People with protected characteristics (e.g. disabled people, minority ethnic groups)
        • People in fuel poverty
        • Older people
        • Younger people
        • Other – please specify:
        • Don’t know

        Q5. What was the main reason or reasons for focusing the activity on those groups in particular?

        • OPEN TEXT
        • Don’t know / not sure

        ASK IF CODE 1 AT Q1.

        Q6. To what extent do you agree or disagree with the following statements about the activity?

        • The activity was effective at reaching its target audience.
        • The activity was effective at improving the target audience’s awareness / understanding of the issue.
        • Members of the public took action as a result of engaging with the activity.
        • Members of the public decided to change their home heating system to a zero direct emissions heating system as a result of engaging with the activity.
        • It was easy for members of the public to take part and engage with the activity / the information provided.

        ANSWER OPTIONS

        • Strongly agree
        • Tend to agree
        • Neither agree nor disagree
        • Tend to disagree
        • Strongly disagree
        • Too early to tell
        • Not relevant
        • Don’t know

        ASK IF YES AT Q1.

        Q7a Has your organisation carried out an evaluation of any of its public engagement activities?

        • Yes
        • No
        • Don’t know

        ASK IF YES AT Q7a.

        Q7b. Would you be willing to share this information with the ClimateXChange and Scottish Government research team, to allow them to understand more about the impact of public engagement activities on this topic? SINGLE CODE

        • Yes
        • No
        • Don’t know

        SHOW IF CODE 1 AT Q7b

        Thank you, please send this information to UK-PA-HeatTransition@ipsos.com and let us know if there is anything you would not like to be shared with the ClimateXChange and Scottish Government research team.

        Select ‘Next’ to move on to the next question.

        ASK ALL.

        Q8. Do you or your organisation have any plans to deliver public engagement activities on the heat transition in Scotland in the future?

        • Yes
        • No
        • Don’t know

        ASK IF CODE 1 AT Q8

        Q9. Could you tell us more about your future plans, including what the activities will involve and who they will be targeted at?

        • OPEN TEXT
        • Don’t know / not sure

        ASK ALL.

        Q10: Are you aware of any activities that have been carried out over the last three years by other organisations to engage members of the public in relation to the heat transition to net zero emissions in Scotland?

        • Yes
        • No
        • Don’t know / Can’t remember

        IF YES AT Q10.

        Q11. What types of public engagement activities are you aware of that have been carried out over the last three years? MULTICODE.

        • Workshops
        • Public information campaigns
        • Open days or showcases
        • Lectures / talks
        • Training or knowledge-sharing sessions
        • Providing information online
        • Consultations
        • Citizens Panel
        • Advice service (in person)
        • Advice service (online)
        • Advice service (telephone)
        • Other – please specify:

        ASK IF CODE 1 AT Q10.

        Q12. What topics did that activity / did those activities relate to? MULTICODE

        • General provision of energy efficiency advice/information
        • Information about Scottish Government’s Climate Change Plan / net zero targets
        • Improving the energy efficiency of households (such as through improving home insulation)
        • Installing air source or ground source heat pumps
        • District heating networks
        • Other types of clean heating systems*
        • Provision of information about grants / loans
        • Other – please specify:
        • Don’t know

        ASK IF CODE 1 AT Q10.

        Q13. And, as far as you are aware, which of the following groups of people / households did this activity/ those activities focus on? MULTICODE

        • General public (no specific target groups) at national level
        • General public (no specific target groups) at regional or local level
        • Businesses or people working in the energy sector
        • Homeowners
        • Private renters
        • Those renting their home from a local authority or housing association
        • Landlords
        • Low-income households
        • Households in urban areas
        • Households in rural areas
        • Households using gas/oil heating
        • People with protected characteristics (e.g. disabled people, minority ethnic groups)
        • People in fuel poverty
        • Older people
        • Younger people
        • Other – please specify:
        • Don’t know

        ASK ALL

        Q14. Which of the following groups of people, if any, do you think would benefit from more support or information on the heat transition in Scotland? MULTICODE

        • General public (no specific target groups) at national level
        • General public (no specific target groups) at regional or local level
        • Businesses or people working in the energy sector
        • Homeowners
        • Private renters
        • Those renting their home from a local authority or housing association
        • Landlords
        • Low-income households
        • Households in urban areas
        • Households in rural areas
        • Households using gas/oil heating
        • People with protected characteristics (e.g. disabled people, minority ethnic groups)
        • People in fuel poverty
        • Older people
        • Younger people
        • Other – please specify:
        • Don’t know

        © The University of Edinburgh
        Prepared by Ipsos Scotland 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. Synthesio is an Ipsos proprietary tool that trawls the social web and mainstream media to monitor online presence and identify posts, re-posts and tags on a given topic (in this case, public engagement on the heat transition in Scotland). ↑


        2. https://moneysavingboilerchallenge.com/ ↑


        3. https://www.thursocdt.co.uk/helpandsupport ↑


        4. Climate hubs are volunteer-led networks that supports community-led action across Scotland’s regions: https://www.gov.scot/policies/climate-change/community-led-climate-action/ ↑


        Research completed: October 2024

        DOI: http://dx.doi.org/10.7488/era/5354

        Executive summary

        Scotland has set ambitions in its Hydrogen Action Plan to install at least 5 gigawatts of renewable and low-carbon hydrogen production capacity by 2030, and 25 gigawatts by 2045. Given Scotland’s hydrogen export ambitions, it is critical to understand any barriers to compliance with standards in potential markets, as well as Scotland’s international competitiveness as a hydrogen exporter.

        Aims of the project

        The main objectives of this study are to compare existing and developing hydrogen sustainability standards globally; and to compare the greenhouse gas (GHG) emissions of hydrogen and derivatives exported from Scotland to the EU market with those from other regions in meeting EU requirements.

        Findings and recommendations

        Key hydrogen standards globally already set out different GHG calculation methodologies and compliance requirements for producers. Hydrogen imported to the EU market currently must comply with rules set by the EU Renewable Energy Directive (RED) and the EU Gas Directive, if they are to contribute towards targets set under these policies. While an international standard is being developed (ISO 19870), it is unclear if the UK or EU will align with it in the future.

        With regard to GHG emissions, electrolytic hydrogen produced in Scotland and exported to the EU market could be one of the most competitive from the countries we studied. Today, electrolytic hydrogen produced from renewable electricity in Scotland can already meet the EU RED GHG emission threshold (Figure 1). We refer to the GHG intensity of electricity used for Scotland pathways as the “Scottish grid” and use the National Grid country GHG intensity for Scotland rather than the GB grid electricity average GHG intensity. Of the other countries we considered, only Norway, with a grid that uses mainly hydro-electric power, can deliver electrolytic hydrogen to the EU with lower GHG emissions than Scotland. Further grid decarbonisation would increase the likelihood of compliance for hydrogen made from grid power, known as grid-connected electrolysis, by 2030. This would be the case even if, under EU rules, the Great Britain (GB) grid average factor has to be used instead of the (much lower) Scottish grid average.

        When transported over short distances as compressed hydrogen via pipelines or ships, electrolytic hydrogen produced using low-carbon electricity is expected to meet the EU GHG threshold. This is applicable in both 2023 and 2030 to renewable hydrogen produced in Scotland, Norway and Morocco, and to hydrogen produced from nuclear power in France (Figure 1).

        Transporting hydrogen as ammonia leads to significantly higher GHG emissions. Producers who rely on ammonia for long-distance transport from countries such as Chile and the USA may need to reduce emissions further to comply with EU policies, particularly if ammonia is reconverted to hydrogen for final use. Over shorter distances, hydrogen produced in Scotland or Norway using renewable electricity and transported as ammonia is likely to comply with the EU GHG emission threshold by 2030 (Figure 1). France will only meet the EU threshold if ammonia is used as the end-product in 2030 due to additional emissions from nuclear electricity inputs. Meeting the threshold requires further emission reduction measures such as using renewable electricity for hydrogen distribution.

        Only countries with a high share of low-carbon electricity on their grid can meet the EU GHG emission threshold for hydrogen produced from grid electricity. In 2023, hydrogen produced from grid electricity in Norway could already meet the EU threshold when transported as compressed hydrogen. This could also be achieved in Scotland if compressed hydrogen is transported via pipelines. In 2030, all production pathways in Scotland can meet the EU threshold if the GHG emission intensity of grid electricity (emissions per kilowatt-hour of electricity generated) specific to Scotland decreases in line with policy aspirations. If using the GB grid emission intensity, only the pipeline transport pathway could meet the threshold by 2030, with grid decarbonisation in line with policy ambitions. Hydrogen produced from grids heavily reliant on fossil fuels such as those in Morocco, Chile and the USA will not be compliant (Figure 2).

        Many natural gas pathways modelled will not comply with the EU Gas Directive threshold. These pathways are highly sensitive to the GHG intensity of upstream natural gas production, which is uncertain and can be highly variable depending on the source (e.g. imported LNG with high intensities). Based on the default upstream natural gas intensity published in the EU RED Delegated Act 2023/1185 (as the EU Gas Directive Delegated Act is not yet finalised), hydrogen produced from natural gas in the UK could be compliant when piped or shipped as compressed hydrogen (Figure 3). This would give it an emissions advantage over US natural gas-derived hydrogen, which is transported via ammonia.

        GB’s electricity grid as a whole has a significantly higher GHG intensity than Scotland, so further clarity on the definition of bidding zones in the EU RED Delegated Act is critical. Using the GB grid GHG intensity average for grid-electrolysis projects in Scotland results in high risk of non-compliance with the EU GHG threshold whereas using data specific to Scotland would confer significant advantages on grid electrolysis projects, including exemptions from some EU requirements.

        This GHG emission analysis could be combined with the previous ClimateXChange cost analysis to evaluate the overall competitiveness of these hydrogen pathways. Further work could provide a view on the costs of adopting renewable electricity across all the post-production supply chain steps, alternative renewable heat for the ammonia cracking step of relevant pathways and/or switching in 2030 to using only zero emission marine fuels for shipping pathways. Implementing the hydrogen and ammonia pathways modelled in this study may require significant investment in new infrastructure for some countries, and these infrastructure needs and any first-mover advantages could be investigated further.

        Figure 1: Renewable electrolysis hydrogen GHG emission breakdown including distribution to the EU and refinery boiler use

        Figure 2: Grid electrolysis hydrogen GHG emission breakdown including distribution to the EU and refinery boiler use

        Figure 3: Hydrogen produced using natural gas (autothermal reforming with carbon capture and storage of emissions) – GHG emission breakdown including distribution to the EU and refinery boiler use

         

        Abbreviations table

        ATR

        Autothermal Reforming

        CCR

        Carbon Capture and Replacement

        CCS

        Carbon Capture and Storage

        CCU

        Carbon Capture and Utilisation

        CfD

        Contract for Difference

        CO2

        Carbon Dioxide

        DA

        Delegated Act

        DESNZ

        Department for Energy Security and Net Zero

        EU RED

        European Union Renewable Energy Directive

        H2

        Hydrogen

        GB

        Great Britain

        GH2

        Green Hydrogen Standard

        GHG

        Greenhouse Gas

        GO

        Guarantee of Origin

        GREET

        Greenhouse gases, Regulated Emissions and Energy use in Transportation model

        GTP

        Global Temperature Potential

        GWP

        Global Warming Potential

        IPHE

        International Partnership for Hydrogen and Fuel Cells in the Economy

        IRA

        Inflation Reduction Act

        ISO

        International Organization for Standardization

        LCHS

        Low Carbon Hydrogen Standard

        LHV

        Lower Heating Value

        MJ

        Megajoule

        MPa

        Megapascal

        PPA

        Power Purchase Agreement

        PTC

        Production Tax Credit

        RCF

        Recycled Carbon Fuel

        REC

        Renewable Energy Certificate

        RES

        Renewable Energy Source

        RFNBO

        Renewable Fuel of Non-Biological Origin

         

        Introduction

        In the 2022 Hydrogen Action Plan, Scotland set ambitions to install at least 5 gigawatts of renewable and low-carbon hydrogen production capacity by 2030, and 25 gigawatts by 2045 (Scottish Government, 2022). Given Scotland’s significant potential for hydrogen production using renewable electricity, the government has also published its Hydrogen Sector Export Plan (HSEP).

        Low-carbon hydrogen is a nascent market, as most hydrogen used today is derived from fossil sources. As such, regulations, standards and schemes are being put in place globally to promote the use of low-carbon hydrogen, as well as to ensure that its production and use are sustainable. For example, in the UK, the Low Carbon Hydrogen Standard (DESNZ, 2023) has been established and continues to evolve. EU rules exist for renewable hydrogen pathways and are being developed for non-renewable pathways. Additionally, a global standard for hydrogen lifecycle GHG emissions is under development.

        The main objective of this study is to compare existing and developing hydrogen lifecycle GHG standards globally and quantify how the GHG emissions (including not only carbon dioxide but other GHGs such as methane and nitrous oxide) of Scottish exports to the EU, in various forms, would compare against those from other regions in meeting EU requirements. Results from this report supported the development of the Hydrogen Sector Export Plan (HSEP) by identifying potential barriers to compliance with standards in potential markets, as well as Scotland’s international competitiveness as a hydrogen exporting country.

        This report is a follow-up to a previous CXC project: “Cost reduction pathways of green hydrogen production in Scotland – total costs and international comparisons” (Arup, 2024).

        International hydrogen standards

        Several hydrogen standards, sustainability schemes and policies have recently been developed to support the implementation of national hydrogen strategies around the world. These standards typically set out a GHG emission calculation methodology and (where applicable) a maximum GHG emission intensity, as well as broader sustainability criteria and evidence requirements for eligible hydrogen pathways to comply with.

        This section provides summary tables of those standards/schemes/relevant policies (referred to as standards thereafter when referenced collectively) listed in Table 1 and provides a snapshot of the key criteria. A detailed review of each standard can be found in Appendix B which focuses the discussion on key differences, along with key uncertainties and potential changes. The UK Low Carbon Hydrogen Standard (LCHS) is used as a benchmark for this comparison, as it sets the requirements for producers in Scotland receiving UK Government support. This review includes:

        The scope of each standard, including:

        • The type of standard (mandatory, voluntary), and who it was developed by.
        • Geographies covered.
        • Implementation status.

        Eligibility criteria:

        • Conversion technology or feedstock restrictions, including any biomass feedstock sustainability rules.
        • Any GHG emission intensity thresholds.
        • Any categories of hydrogen labelled by the standard.

        GHG calculation methodology, including:

        • System boundary – which parts of the supply chain are in or out of scope of the GHG emissions calculations. This can vary between standards, thereby potentially omitting or including significant emissions, and making comparison of results challenging between different standards.
        • Splitting of emissions across co-products. When systems produce multiple outputs (product, co-products, wastes, residues, etc.), GHG emissions must be assigned between them. This can be done through various approaches, including through an allocation of emissions based on the relative masses, energy contents or economic value of the (co-)products. This can also be done by looking at the products these co-products would replace in the market (via system expansion) to assign substitution credits. Typically, wastes and residues are not assigned emissions. A full discussion of the various methods is provided in Appendix A.
        • Reference flow – a set pressure and/or purity for the hydrogen product. Hydrogen produced at a lower pressure or purity may be required to account for the emissions for theoretical compression and/or purification to reach the reference flow, and in some standards, hydrogen produced at a higher pressure and/or purity than the reference may be given an emissions credit.

        Other relevant requirements, such as:

        • Chain of custody. This is the process of following and evidencing materials through steps of the supply chain, which provides insights into the product’s origin, components, processes, and handlers. As illustrated in Appendix A, there are different chain of custody models, and while some standards are explicit and prescriptive in their requirements on how to trace feedstocks and hydrogen products, others are not; and
        • Renewable electricity sourcing. Some standards may impose requirements to ensure the use of renewable electricity for hydrogen production does not negatively impact the wider grid. These can include temporal correlation (matching generation with consumption over defined time periods), geographical correlation (rules about locations and grid connections) and “additionality” (hydrogen production contracting with new, rather than existing, renewable electricity generation).

        In addition to national or regional standards and policies, and several voluntary schemes[1], a global hydrogen lifecycle GHG standard is also currently being developed by the International Organization for Standardization (ISO). This could enable greater harmonisation of GHG emission calculation methodologies across the globe. The implications of this scenario will be explored further in Chapter 3.

        Region

        Relevant hydrogen standards[2]

        UK
        • Low Carbon Hydrogen Standard

        EU
        • Renewable Energy Directive (RED)
        • Common rules for the internal markets for renewable gas, natural gas and hydrogen (Gas Directive)
        • CertifHy (non-government certificate scheme)
        • France Energy Code

        US
        • Inflation Reduction Act 45V (Clean Hydrogen Production Tax Credit)

        International
        • International Partnership for Hydrogen and Fuel Cells in the Economy (IPHE)
        • ISO 19870 (under development)
        • TÜV SÜD
        • TÜV Rheinland
        • GH2 Green Hydrogen Standard
        Table 1: Hydrogen standards reviewed in this study

         

        Summary of hydrogen standards

        Standard

        Geographic scope

        Type of standard

        Status

        System boundary

        UK LCHS

        UK producers

        Mandatory government standard for accessing subsidy schemes

        Implemented. V3 is live (Dec 2023)
        V4+ under development

        Cradle to production gate

        EU RED

        Hydrogen consumed in the EU

        Directive (with Delegated Acts)

        REDII (Dec 2018) is fully transposed into Member State legislation and Delegated Acts (Feb 2023) are live. REDIII implemented (Oct 2023) but still being transposed

        Cradle to use

        EU Gas Directive

        Hydrogen consumed in the EU

        Directive (with draft Delegated Act)

        Implemented (July 2024), but still being transposed into Member State legislation. Delegated Act is pending, due by July 2025

        Cradle to use

        CertifHy

        Hydrogen producers in EU, EEA and CH

        Voluntary standard, industry developed

        Implemented. V2 is live (April 2022)

        Cradle to production gate

        France Energy Code L. 811-1

        Hydrogen consumed in France

        Mandatory standard for accessing subsidies, Government developed

        Implemented. V1 is live (July 2024)

        Cradle to use

        US IRA 45V

        US producers

        Tax credit

        Implemented. March 2024 revision is live

        Cradle to production gate

        IPHE

        Global producers and consumers

        Voluntary transnational effort on GHG methodology harmonisation

        Implemented. V3 is live (July 2023)

        Cradle to use

        ISO 19870

        Global producers

        Voluntary standard, ISO developed

        Technical Specification published in Dec 2023, full standard 19870-1 under revision during 2024, due to be finalised in 2025

        Cradle to production gate. ISO 19870 series will next look at downstream hydrogen vectors

        TÜV SÜD

        Global producers

        Voluntary standard, industry developed

        Implemented. V 11/2021 is live (Nov 2021)

        Cradle to production gate (GreenHydrogen), or to point of use (GreenHydrogen+)

        TÜV Rheinland

        Global producers

        Voluntary standard, industry developed

        Implemented. V2.1 is live (March 2023)

        Cradle to production gate or to point of use

        GH2

        Global producers

        Voluntary standard, industry developed

        Implemented. V2 is live (Dec 2023)

        Cradle to production gate

        Table 2: Scope of reviewed Hydrogen Standards

        Scheme

        GHG threshold

        Category

        Eligible pathways

        Eligible main inputs

        Biomass sustainability

        UK LCHS

        20 gCO₂e/MJLHV

        “Low carbon”

        Electrolysis, Fossil/Biogenic gas reforming with CCS, Biomass/Waste gasification, Gas splitting producing Solid Carbon. Pathways can be added

        Electricity (all types), Fossil fuels, Biomass, Bio/fossil wastes & residues

        Biomass inputs must meet relevant Forestry, Land and/or Soil Carbon criteria, and report indirect land use change GHGs

        EU RED

        28.2 gCO₂e/MJLHV

        “Biofuel”, “RFNBO”, “RCF”

        All production pathways eligible but feedstock dependent

        Renewable electricity, Biomass & Fossil wastes

        Biomass feedstocks must meet relevant Forestry, Land and/or Soil Carbon criteria

        EU Gas Directive

        28.2 gCO₂e/MJLHV

        “Low carbon fuel”

        All pathways eligible

        Non-renewable energy sources

        Follows RED, where applicable

        CertifHy

        36.4 gCO₂e/MJLHV

        “Green”

        All pathways eligible

        Renewable energy sources

        Not specified

        “Low-carbon”

        Non-renewable sources

        France Energy Code L. 811-1

        28.2 gCO₂e/MJLHV

        “Renewable”,
        “Low-carbon”

        RFNBOs, RCF, nuclear-based

        Follows EU RED and adds nuclear electricity

        Follows EU RED

        US IRA 45V

        Increasing tax credits at 33.3, 20.6, 12.5 or 3.75 gCO₂e/MJLHV

        “Clean”

        All pathways eligible. Those not in 45V-GREET can apply for a “provisional emissions rate”

        Electricity (all types), Fossil fuels, Biomass

        None

        IPHE

        None, only a method

        No categories

        Electrolysis, steam cracking, fossil gas reforming + CCS, coal or biomass gasification + CCS, biomass digestion + CCS. More will be added

        Fossil fuel, Biomass, Bio/fossil wastes & residues

        Not specified

        ISO 19870

        None, only a method

        No categories

        All pathways eligible

        Feedstock neutral

        None

        TÜV SÜD

        28.2 gCO₂e/MJLHV

        “Green”

        Electrolysis, Biomethane steam reforming, Glycerine pyro-reforming

        Renewable electricity, Bio waste/residue, Biomass

        Biomass feedstocks must meet EU RED criteria

        TÜV Rheinland

        28.2 gCO₂e/MJLHV

        “Renewable”

        Renewable electrolysis

        Renewable electricity

        Not specified

        “Low-carbon”

        All production pathways

        Feedstock neutral

        GH2

        8.33 gCO₂e/MJLHV

        “Green”

        Electrolysis

        Renewable electricity
        Biomass to power

        Low iLUC risk, non-biodiverse land

        Table 3: Eligibility criteria for reviewed Hydrogen Standards

        Scheme

        Chain of Custody

        Co-product allocation

        Reference flow

        Renewable power evidence

        UK LCHS

        Mass balance used, but cannot blend biomethane with nat gas (upstream)

        LHV energy allocation (Carnot efficiency for heat), plus system expansion for waste fossil feedstock counterfactual

        3 MPa, 99.9 vol% purity. If below, adjustment required

        Additionality not required. PPA with 30-minute temporal correlation from UK generator needed, or avoided curtailment proof

        EU RED

        Mass balance (H2 + upstream)

        LHV energy allocation (Carnot efficiency for heat). If co-product ratio can change, physical causality used. If co-product has zero LHV, economic allocation used

        None

        Renewable PPAs complying with additionality, temporal and geographic correlation rules

        EU Gas Directive

        Mass balance (H2 + upstream)

        Assumed to follow EU RED

        None

        In line with EU RED Delegated Act for RFNBOs

        CertifHy

        Book & Claim as GOs allowed (upstream)

        Defined approach for each pathway broadly follows EU RED. O2 method TBC

        Same as UK LCHS

        GOs are allowed. No additional requirements.

        France

        Follows EU RED

        Follows EU RED

        None

        Follows EU RED

        US IRA 45V

        None specified, but proposed mass balance for biomethane (upstream)

        System expansion. Restrictions placed on the size of steam co-product credit

        2 MPa, 100% purity. Adjustment required for higher/lower

        PPAs complying with additionality, temporal and geographic correlation

        IPHE

        None specified but GOs allowed (upstream)

        Follows hierarchy but recommended approach for each pathway differs

        Not specified

        GOs are allowed. Additionality not required.

        ISO 19870

        None specified but GOs allowed (upstream)

        Can be system expansion or attributional. Approach defined for pathways differ

        None. GHG increase to reflect impurities and their release

        Grid GOs are allowed if ISO 14064-1 “proper quality criteria” are met

        TÜV SÜD

        Mass balance (H2 + upstream)

        Follows EU RED, but chlor-alkali has choice of energy allocation, economic allocation or system expansion

        Same as UK LCHS

        GreenHydrogen must follow EU RED. GreenHydrogen + must meet more stringent additionality rules.

        TÜV Rheinland

        None specified but assumed to follow EU RED & Gas Directive

        Assumed to follow EU RED & Gas Directive

        None

        PPAs to have temporal correlation (up to yearly) and geographic correlation within the same country. Additionality not required.

        GH2

        Follows IPHE

        System expansion recommended, as oxygen nil LHV

        Same as UK LCHS

        Additionality, temporal and geographical correlations are allowed but not required

        Table 4: GHG calculation methodology and key evidence for reviewed Hydrogen Standards

        Lifecycle GHG emission intensity of hydrogen pathways for import to the EU market

        The GHG emission intensity of various hydrogen pathways from Scotland and other exporting countries were calculated using ERM’s in-house GHG assessment model. The hydrogen pathways modelled used a combination of the production, distribution, and use steps, set out in Table 5 below. For a comprehensive list of the GHG pathways modelled, refer to Appendix D, and see Table 8 for the assumptions and references used in the modelling process.

        Production location

        Hydrogen production types

        Hydrogen transport

        Final use

        Scotland

        Norway

        France

        Morocco

        USA

        Chile

        UK

        Electrolysis using grid electricity

        Electrolysis using renewable electricity (excluding France)

        Electrolysis using nuclear electricity (only in France)

        Natural gas autothermal reforming with carbon capture & sequestration (ATR + CCS)

        Ammonia shipping

        Ammonia shipping with reconversion to hydrogen

        Compressed hydrogen shipping

        Compressed hydrogen pipeline

        Hydrogen in refinery boiler

        Ammonia in marine vessel

        Table 5: Summary of hydrogen pathways

        Methodologies used to model lifecycle GHG emission intensity of imported hydrogen pathways

        Section 2 detailed the various GHG calculation methodologies and compliance requirements set by key hydrogen standards that are currently active globally. In the EU market, EU RED and the EU Gas Directive currently set the eligibility criteria and the methodology for calculating the GHG emission intensity for imported hydrogen. As the hydrogen market becomes more established and globalised, there could be growing interest globally in harmonising approaches for GHG accounting (e.g. through alignment with ISO 19870). However, the EU has not yet expressed any intentions to do so. As such, two scenarios can be envisioned regarding possible evolutions of the EU’s approach for calculating life-cycle GHG emissions of hydrogen:

        • Business-as-usual: The EU RED and EU Gas Directive will continue to apply for hydrogen imported in the EU, regardless of global methodologies such as ISO 19870.
        • International alignment: The EU aligns with ISO 19870 at some future point in time, after publication.

        The components of calculating the GHG emissions under these scenarios can be found in Appendix C. The key methodological differences considered during modelling include:

        • System boundary: The system boundary for EU policies is ‘cradle-to-use’, whereas ISO/TS 19870 uses ‘cradle-to-production gate’. Results under scenario 2 therefore exclude potentially significant emissions from distribution of hydrogen to the EU.
        • GHG threshold: EU sets a GHG threshold of 28.2 gCO2eq/MJLHV hydrogen, whereas ISO does not set a GHG threshold. As such, compliance with GHG thresholds were only carried out for results using the EU methodology.
        • Reference flow: EU RED and the EU Gas Directive do not set a reference flow. The reference flow under ISO 19870 is set by the end-user but the GHG intensity is adjusted upwards for (project specific) impurities and their release.
        • Co-product emission assignment: For electrolysis with co-product oxygen sales, economic allocation is required by EU RED, whereas ISO/TS 19870 currently recommends economic allocation or system expansion. For fossil gas reforming, the EU Gas Directive DA currently uses LHV energy allocation (with steam Carnot efficiencies), whereas ISO/TS 19870 has sub-division then LHV energy allocation (using steam enthalpy changes) or else system expansion. However, as no co-products are modelled for either electrolysis or reforming pathways in this study (it is assumed for simplicity there are no oxygen or steam customers), 100% of emissions in both scenarios are assigned to the hydrogen product.

        At the time of writing this report, a draft version of the EU Gas Directive DA had been released for consultation and is still therefore subject to revision. This report follows the draft DA methodology to assess the GHG emissions of fossil natural gas hydrogen pathways under the BAU scenario (as outlined in Appendix C). However, due to uncertainty about the timings of reporting under the EU Methane Regulations, this report does not apply conservative default values for upstream natural gas emissions from the draft DA, and instead relies on the upstream natural gas GHG intensity given in the final published RED DA.

        GHG emission intensity results

        This section presents GHG emission results for various hydrogen production pathways under EU and ISO methodologies, including hydrogen used in refinery boilers and ammonia for marine vessels. Modelling have been carried out for production in 2023 and 2030 to reflect potential impacts from decarbonisation projections (e.g. grid decarbonisation, increased use of renewable fuels in transport), and technology improvements.

        Specifically for the modelling of hydrogen production in Scotland, the National Grid country GHG intensity for Scotland is used, rather than the GB grid electricity average GHG intensity. From this point forward, the GHG intensity of electricity used for Scotland pathways is referred to as the “Scottish grid”.

        In addition, a sensitivity analysis was conducted on the following parameters:

        • Using renewable electricity across the entire pathway
        • Using renewable heat for the ammonia cracking step of relevant pathways
        • Using low-carbon marine fuel for shipping pathways
        • Using the UK vs Scottish grid average intensity

        Further details and results of this sensitivity analysis are given in Appendix F. These results are used in the GHG emission compliance scoring matrix to assess whether a previously non-compliant production pathway can adopt mitigation measures to meet the EU GHG threshold. This matrix can be found in Appendix G.

        GHG emission results for pathways producing hydrogen for use in a refinery boiler under EU methodologies

        A breakdown of the GHG emissions at each stage of the hydrogen production life-cycle is provided in Figure 1, Figure 2 and Figure 4. The value chain steps included in each stage include:

        Feedstock emissions: this is only relevant to natural gas pathways (Figure 3), and accounts for the upstream emissions of natural gas inputs (e.g. extraction, transport, pre-processing, including methane leakage).

        Hydrogen production emissions: these arise from the electrolysis or natural gas autothermal reforming with carbon capture (ATR+CCS) processes. Sources of emissions include electricity consumption, uncaptured fossil CO2 and chemical inputs.

        Distribution emissions: these include compression, transport, storage, reconversion and downstream emissions. The emissions depend significantly on the hydrogen transport pathways.

        • Ammonia pathways include conversion of hydrogen to ammonia, transport via truck to a port, port storage, shipping to Rotterdam, port storage, reconversion/cracking ammonia to hydrogen (requiring heating and catalysts), transport via pipeline to a refinery, and end use of hydrogen in a refinery combustion boiler.
        • A separate end use case is modelled where instead of cracking and hydrogen transport, ammonia stored in Rotterdam is loaded onto a maritime vessel for combustion in the propulsion engines.
        • The compressed hydrogen shipping pathways include compression of hydrogen for trucking, transport of hydrogen via truck to a port, port storage, shipping to Rotterdam, port storage, transport via pipeline to a refinery, and use of hydrogen in refinery combustion boiler.
        • The compressed hydrogen pipeline pathways include compression of hydrogen, piping to Rotterdam, transport via pipeline to a refinery, and end use of hydrogen in a refinery combustion boiler.
        • Transport to the EU via pipeline or via compressed hydrogen shipping were not modelled for the USA and Chile due to the long transport distance making these options unviable, following the previous ClimateXChange report.

        The input values and assumptions used in the GHG modelling are detailed in Appendix E.

        Figure 1 represents the GHG intensity of pathways that use renewable electricity for electrolytic hydrogen production, followed by distribution to the EU (using grid electricity and gas), before use of gaseous hydrogen in a refinery boiler. The exception is nuclear electricity with an emission factor of 3.64 gCO2e/MJ elec[3] being assumed to be used for electrolysis in France, which leads to higher production emissions compared to other regions using renewable electrolysis (0 gCO2e/MJ elec).

        These results show that hydrogen produced from renewable electricity-based electrolysis is likely to meet the EU GHG threshold when transported as compressed hydrogen. However, transporting compressed hydrogen via ships generates higher emissions compared to transport via pipeline due to the fuel used for trucking and shipping, plus additional electricity requirements for storage at the shipping ports.

        A screenshot of a computer screen Description automatically generated
        Figure 1: Renewable electrolysis hydrogen GHG emission breakdown including distribution to the EU and refinery boiler use

        Emission intensities of hydrogen using ammonia as an intermediary vector are significantly higher than those of gaseous hydrogen pathways and may not meet the EU threshold in 2030. This is primarily due to the use of grid electricity in distribution steps, the efficiency losses in the (re)-conversion steps, and the release of nitrous oxide during ammonia production. Only Norway and Scotland might comply by 2030, due to low enough emission grid electricity in these countries. Emissions from the conversion step (ammonia production) remain significant in 2030 due to the release of nitrous oxide emissions, and the ammonia cracking step uses Netherlands grid electricity which has a high GHG intensity (although this improves significantly by 2030).

        Figure 2 below shows the GHG intensity results if grid electricity is used for electrolysis instead of renewable electricity. Note the change in x-axis scale between the two graphs.

        In these pathways, the emissions factor of the grid is the most important contributor to overall GHG emissions intensity of delivered hydrogen. Decarbonisation of electricity grids in some countries (i.e. Scotland and France) may enable some of the pathways to achieve the EU GHG threshold in 2030. However, gaseous pathways from Norway are expected to already comply.

        For Scottish pathways, the average grid factor for Scotland was used in the GHG modelling (see Appendix E for details). This assumes that the Scottish grid intensity could be used under EU rules instead of the GB grid average, however, it remains unclear how EU rules on bidding zones apply to Scotland. A sensitivity analysis in Appendix F explores the GHG impact of using the GB grid average compared to the Scottish grid average. The results in Figure 2 show that using the Scottish grid factor in electrolysis results in the GHG emission intensity of piped and shipped compressed hydrogen pathways close to the EU GHG threshold in 2023 but easily achieving it by 2030 as the Scottish grid decarbonises. Ammonia pathways from Scotland may just meet the threshold in 2030 as electricity grids in Scotland and the Netherlands decarbonise.

        Pipeline hydrogen pathways are all expected to fall below the EU GHG threshold in 2030 as electricity grids decarbonise, except for Morocco, which has a significantly higher grid GHG intensity compared with other countries. Hydrogen production in countries with high shares of fossil fuel power generation in their grid mix will have to rely on renewable electricity (Figure 1 results) to export to EU markets. For example, neither of the grid electrolysis pathways from Chile or the USA are expected to be able to meet the EU threshold, due to both high grid GHG intensities and additional emission arising from ammonia supply chains.

        It is important to note that hydrogen produced from grid electricity is likely to have both renewable and non-renewable consignments. Both consignments will have the same GHG intensity under EU rules, and if this is low enough to meet the EU GHG threshold, the renewable fraction may be eligible as a RFNBO under EU RED, and the non-renewable fraction may be eligible under the EU Gas Directive.

        A screenshot of a computer screen Description automatically generated
        A screenshot of a computer Description automatically generated
        Figure 2: Grid electrolysis hydrogen GHG emission breakdown including distribution to the EU and refinery boiler use

        As shown in Figure 3, natural gas reforming with CCS pathways may struggle to meet the EU Gas Directive’s GHG emission threshold (same as the EU RED threshold). The emissions of hydrogen produced from these pathways are very sensitive to upstream natural gas intensities, which are highly uncertain and can be highly variable depending on the source of natural gas (e.g. imported LNG can have much higher intensities than domestic gas supplies used for hydrogen production).

        The European Commission is expected to establish a methodology for calculating the methane emissions of fossil feedstocks (including natural gas) at a producer level by 2027. In the absence of this more accurate data, an upstream natural gas intensity of 12.7 gCO2e/MJLHV natural gas was used to model both USA and UK reforming pathways, based on the published generic value in the EU RED DA. However, individual producers or countries could have intensities significantly above this value. This value will likely need to be updated as more accurate, audited data is reported by the fossil gas industry.

        In the UK, pathways with compressed shipping or pipeline could meet the EU GHG emission threshold. In contrast, long transport distances from the USA to the EU means that it is not feasible to transport hydrogen via compressed shipping or pipeline (requiring large additional emissions from ammonia distribution), leading to the UK natural gas pathways via compressed hydrogen distribution having a significant GHG advantage compared with ammonia pathways from the USA.

        A screenshot of a video game Description automatically generated
        Figure 3: Hydrogen produced using natural gas (autothermal reforming with carbon capture and storage of emissions) – GHG emission breakdown including distribution to the EU and refinery boiler use

        GHG emission results for pathways producing ammonia for use in a marine vessel under EU methodologies

        Ammonia was also modelled as the end-product for use in a marine vessel in Rotterdam. As shown below in Figure 4, Figure 5 and Figure 6, GHG emissions of these ammonia use pathways are lower than pathways with hydrogen as the end-product because ammonia reconversion back to hydrogen is not required. As in the previous analysis, grid electricity is assumed to be used for ammonia distribution (conversion, storage, reconversion) in both grid and renewable electricity-based electrolysis pathways.

        Ammonia produced using renewable electricity (Figure 4) is likely to comply with the EU GHG threshold in 2023 and 2030 in both Scotland and Norway, and may just comply in France by 2030. Similar to the earlier analysis, production in the US and Chile may still struggle to comply, as the conversion step (ammonia production) accounts for a significant portion of the total pathway emissions. This is due to the release of nitrous oxide emissions, the use of grid electricity in distribution and losses in conversion efficiency.

        Grid electricity-based ammonia produced in all countries modelled in this study (Figure 5) is unlikely to meet the threshold, except for Norway in both years and for Scotland in 2030. As discussed in the previous section, only the renewable portion of the ammonia would likely qualify under EU RED, the remaining portion would need to qualify under the EU Gas Directive. As shown in Figure 6, even avoiding emissions from reconversion of ammonia to gaseous hydrogen does not sufficiently reduce the emissions of natural gas reforming pathways via ammonia to comply with the EU GHG threshold.

        Figure 4: Renewable electrolysis hydrogen GHG emission breakdown including ammonia distribution to the EU and direct use in a marine vessel

        Figure 5: Grid electrolysis hydrogen GHG emission breakdown including ammonia distribution to the EU and direct use in a marine vessel

        gCO2e/MJ (LHV)

        Processing

        Conversion

        Compression

        Transport

        Storage

        Reconversion

        Downstream

        Figure 6: Hydrogen produced using natural gas (autothermal reforming with carbon capture and storage of emissions) – GHG emission breakdown including ammonia distribution to the EU and direct use in a marine vessel

        GHG emission results for hydrogen production pathways under ISO 19870 methodology

        The GHG emission intensities of pathways modelled under the ISO methodology are shown below in Figure 7. Only emissions from feedstock and hydrogen production are modelled given the current ISO 19870 system boundary is “cradle to production gate” and does not include any downstream steps. There is also no GHG emissions threshold under ISO 19870, so compliance is not assessed.

        Emissions for renewable electrolysis pathways are close to zero because there are only very small emissions for consumed water and minor chemicals. Emissions for delivered wind, hydro and solar electricity are considered to be zero, as in EU RED. Once again, grid electricity intensities dominate the grid electrolysis results.

        For the natural gas reforming pathways, the difference in emissions between the UK and USA is mainly due to differences in upstream natural gas emissions intensities and grid electricity intensities. Under the ISO methodology, which allows producer, region or country-specific data to be used, the upstream natural gas intensities in the ISO analysis are assumed to be 8.7 and 9.2 gCO2e/MJLHV natural gas for the UK and USA respectively, based on current published UK and US government data.

        These values could be significantly underestimating true upstream emissions, including the impact of LNG imports and methane leakage rates, and are lower than the generic single value the EU RED DA applies to all natural gas supplies (12.7 gCO2e/MJLHV natural gas). However, UK and US government data is likely to be updated more frequently (e.g. annually) in light of new evidence or updated gas source mixes compared to the single value published in the EU RED DA (which is based on the JEC WTT v5 study from 2020).

        Those applying the ISO methodology are not required to use government estimates and could use other credible sources, including producer-specific data. This means that natural gas intensities under the ISO method are likely to vary significantly between projects, although where several credible options exist, there may be pressure from projects to choose lower values. In contrast, the EU Gas Directive requires the phasing in of producer-specific methane intensity data and does not give a choice as to which dataset to use.

        The ISO 19870 method requires adjustments upwards for impurities by mass, and applies GWPs assuming the impurities are released. This may slightly affect the results, depending on the project-specific impurities. The engineering design data used assumes high purities (>99.9% by volume), so hydrogen product compositions were not modelled. However, for hydrogen production facilities that generate hydrogen at lower purities (e.g. 95-99% by volume), these impurity adjustments have a more significant impact, as hydrogen purity by mass is significantly lower than purity by volume.

        Figure 7: Hydrogen GHG emission breakdown under ISO methodology (to production gate only)[4]

        Conclusions and recommendations

        Key hydrogen standards globally already set out different GHG calculation methodologies and compliance requirements for producers. Hydrogen imported to the EU market must comply with rules set by the EU Renewable Energy Directive (RED) and the EU Gas Directive, if they are to contribute towards targets set under these policies. While an international standard is being developed (ISO 19870), it is unclear if the UK or EU will align with it in the future.

        With regard to GHG emissions, electrolytic hydrogen produced in Scotland and exported to the EU market could be one of the most competitive among the countries we studied. Today, electrolytic hydrogen produced from renewable electricity in Scotland can already meet the EU RED GHG emission threshold. Further grid decarbonisation would increase the likelihood of compliance for grid connected electrolysis by 2030, even if the GB grid average factor has to be used under EU rules instead of the (much lower) Scottish grid average. Of the other countries considered in this study, only Norway with its hydro-electric dominated grid can deliver electrolytic hydrogen to the EU with lower GHG emissions than Scotland.

        When transported over short distances as compressed hydrogen via pipelines or ships, electrolytic hydrogen produced using low-carbon electricity is expected to meet the EU GHG threshold. This applies in both 2023 and 2030 to renewable hydrogen produced in Scotland (930 km), Norway (1,312 km) and Morocco (2,747 km by ship, 1,930 km by pipeline), as well as nuclear electricity-derived hydrogen from France (261 km by ship, 435 km by pipeline).

        Transporting hydrogen as ammonia leads to significantly higher GHG emissions. Producers relying on ammonia for long-distance transport from countries such Chile and the USA may need to adopt additional emission reduction measures to comply with EU policies, particularly if ammonia is reconverted to hydrogen for final use. Over shorter distances, hydrogen produced in Scotland or Norway using renewable electricity and transported as ammonia is likely to comply with the EU GHG emission threshold by 2030. However, in France, ammonia pathways will only meet the EU threshold if ammonia is used as the end-product in 2030 due to additional emissions from nuclear electricity inputs. Meeting the threshold requires further emission reduction measures such as using renewable electricity for hydrogen distribution.

        Only countries with a high share of low-carbon electricity on their grid can produce grid-based electrolytic hydrogen meeting the EU GHG threshold. In 2023, grid electricity-based hydrogen from Norway can already meet the EU threshold when transported as compressed hydrogen. Scotland could also achieve compliance if compressed hydrogen is transported via pipelines. By 2030, all production pathways in Scotland can meet the EU threshold if the GHG intensity of grid electricity specific to Scotland decarbonises in line with policy aspirations. However, if GB’s grid emission intensity is used, only the hydrogen pipeline transport pathway could meet the threshold by 2030, assuming the grid decarbonises as planned. Hydrogen produced from fossil heavy electricity grid mixes such as those in Morocco, Chile and the USA will not be compliant.

        Many natural gas pathways modelled will not comply with the EU Gas Directive threshold. These pathways are highly sensitive to the upstream GHG intensity of natural gas, which is uncertain and can be highly variable depending on the natural gas source (e.g. imported LNG with high intensities). Based on the default upstream natural gas intensity published in the EU RED Delegated Act 2023/1185 (as the EU Gas Directive Delegated Act is not yet finalised), natural-gas derived hydrogen produced in the UK could be compliant when piped or shipped as compressed hydrogen, giving it an emissions advantage over US natural gas-derived hydrogen (transported via ammonia).

        GB’s electricity grid has a significantly higher GHG intensity than Scotland, so further clarity on the definition of bidding zones in the EU RED Delegated Act is critical. Using the GB grid average for grid-electrolysis projects in Scotland results in high risk of non-compliance with the EU GHG threshold (see Appendix F for results of this analysis), whereas use of grid GHG intensity data specific to Scotland would confer significant advantages on grid electrolysis projects, including exemptions from some EU requirements.

        This GHG emission analysis could be combined with the previous CXC cost analysis to evaluate the overall competitiveness of these hydrogen pathways. Further work could also provide a view on the costs of adopting the different emission reduction measures discussed in the sensitivity analysis section of this report. Appendix H provides an abatement cost methodology, to calculate the minimum cost of compliance for those pathways above the EU GHG threshold but where emissions reduction measures could lead to compliance. We also note that implementation of the hydrogen and ammonia pathways modelled in this study may require significant investment in new infrastructure for some countries, and these infrastructure needs and any first-mover advantages could be investigated further.

        Recommended next steps

        The following recommendations could be considered for follow-on work:

        • Expand the sensitivity analysis to cover additional sensitivities:
        • Low-emission trucking
        • Nitrous oxide mitigation
        • Sensitivities in 2023, given several grid-electrolysis pathways do not consider any sensitivities in 2023
        • Expand the analysis to include:
        • Other distribution options e.g. methanol, liquid organic hydrogen carriers (LOHC)
        • Additional time periods e.g. 2040 and 2050
        • Additional emerging export regions e.g. Oman, Egypt, Australia, Namibia
        • Combine the previous CXC cost analysis with the GHG emission analysis in this study to evaluate the overall competitiveness of the hydrogen and ammonia pathways
        • Integrate upstream fossil fuel emissions intensity data once more reliable data is available e.g. EU methane regulations, any UK studies

        We also suggest engagement with policymakers on the following aspects:

        • Confirm with the European Commission whether Scotland counts as a country with its own GHG intensity or whether the GB grid bidding zone takes priority
        • The EU Gas Directive Delegated Act as it is finalised and published, as interpretation of these rules could significantly impact fossil pathways
        • The potential impacts of ISO 19870 once published, including the level of EU engagement or willingness to align with the standard, and when downstream hydrogen vectors e.g. ammonia will be included in future iterations of ISO 19870.

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        Ding, Y., Baldino, C. and Zhou, Y. (2024). Understanding the proposed guidance for the Inflation Reduction Act’s Section 45V Clean Hydrogen Production Tax Credit. Available at: https://theicct.org/wp-content/uploads/2024/03/ID-132-%E2%80%93-45V-hydrogen_final2.pdf

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        European Union. (2024d). Regulation (EU) 2024/1787 of the European Parliament and of the Council of 13 June 2024 on the reduction of methane emissions in the energy sector and amending Regulation (EU) 2019/942. Available at: https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=OJ:L_202401787

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        Martin, P. (2023). France to launch €4bn contracts-for-difference programme to support clean hydrogen production | Hydrogen Insight. Available at: https://www.hydrogeninsight.com/policy/france-to-launch-4bn-contracts-for-difference-programme-to-support-clean-hydrogen-production-reports/2-1-1508431

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        US Department of Energy (DOE). (2024). Guidelines to Determine Well-to-Gate Greenhouse Gas (GHG) Emissions of Hydrogen Production Pathways using 45VH2-GREET Rev. March 2024. Available at: https://www.energy.gov/sites/default/files/2024-05/45vh2-greet-user-manual_may-2024.pdf

        Appendices

        Appendix A Definitions

        Chain of custody

        There are 4 types of chain of custody models to trace sustainability throughout supply chains. They are listed below in order of high to low level of physical connection required (Circularise, 2022).

        Identify preservation – this model does not allow the certified product from a certified site to mix with other certified sources. It requires tracking the actual molecule of the material as they move through the supply chain.
        Identity preservation model

        Segregation – this model requires the certified product from a certified site to be kept separately from non-certified sources. However, it allows different certified sources to be mixed if they share the same defined standard.
        Segregation model

        Mass balance – this model tracks the total amount of sustainable content through virtual balancing of physical allocation. It allows the mixing of sustainable and non-sustainable materials producers and end-users must operate within the same ecosystem (e.g. gas grid).
        Mass Balance model

        Book-and-claim – the sustainable attributes are tracked virtually where sustainable and non-sustainable materials flow freely through the supply chain without the requirement of them being supplied and used in the same ecosystem.
        Book and claim model

        In addition to the 4 types of chain of custody models, some hydrogen standards also use Environmental Attribute Certificates (EAC). This is a mechanism to demonstrate to end-users that a product (e.g. hydrogen, electricity, biogas) is produced from renewable sources. EACs enable the decoupling of physical goods from their environmental attributes, and can take the form of guarantees of original (GOs), renewable electricity certificates (RECs), etc. EACs could adopt either a mass balance or book-and-claim chain of custody model, or a combination of both. As such and where possible, the report uses terms referenced directly in the hydrogen standards.

        Emission allocation methods

        Hydrogen production pathways can generate co-products. Consequently, the total emissions resulting from the hydrogen production (and its upstream emissions) should be divided between the hydrogen and its co-products where these co-products are valorised. Outputs that would normally be discarded or that do not carry any economic value are considered as wastes or residues and do not receive any emissions burden. There are multiple methods of assigning emissions to the co-products, as described below.

        System expansion – In this method, co-products are considered alternatives to other products on the market. The emissions avoided as a result of this replacement is subtracted from the product system, whereby the remaining net emissions are assigned to the main product (e.g. hydrogen). This requires understanding of the counterfactuals (i.e. the GHG emission of the products being replaced).

        Energy allocation – Emissions are assigned to each co-product based on their energy content (generally on the basis of lower heating values). This can also include application of Carnot efficiencies or enthalpy changes to only account for the useful heat contained within any steam/heat co-products.

        Physical causality – This allocation method is specifically mentioned in EU RED for processes where the ratio of the co-products produced can be changed. In these processes, the allocation should be determined based on physical changes in emissions, by incrementing the output of just one co-product whilst keeping the other outputs constant.

        Economic allocation – Emissions are allocated in proportion to the (co-)product economic values based on total revenues obtained for each.

        Mass allocation – Rarely used, but emissions would be allocated in proportion to the (co-)product mass flows.

        Appendix B Detailed review of international hydrogen standards

        UK Low Carbon Hydrogen Standard (LCHS)

        The UK’s Low Carbon Hydrogen Standard (LCHS) was published in 2022 to support the implementation of the UK Hydrogen Strategy, setting requirements that UK hydrogen projects must meet to access revenue support under the Hydrogen Production Business Model and/or the Net Zero Hydrogen Fund (DESNZ, 2023).

        Eligibility

        The LCHS is feedstock neutral, but hydrogen must be produced via an eligible pathway as shown in the summary table in Table 3. New pathways can apply to be added to this list.

        The LCHS sets a maximum GHG emission threshold of 20 gCO2e/MJLHV of hydrogen product (DESNZ, 2023). This threshold is applicable to a ‘cradle-to-production gate’ system boundary, which includes emissions from feedstock production up to and including hydrogen production.

        Hydrogen derived from biogenic inputs is required to satisfy biomass feedstock Sustainability Criteria (Land, Soil Carbon and/or Forest Criteria, following those established in EU RED), and >50% of any biogenic hydrogen must be derived from waste or residue feedstocks. Indirect land use change emissions are also required to be reported separately.

        GHG calculation methodology principles

        Under the LCHS, hydrogen producers using electricity must demonstrate one of the following electricity supply configurations:

        • Power Purchase Agreement (PPA) with a specific generator or private network. Here, physical delivery including losses and 30 minute temporal correlation (showing delivered volumes of electricity at least match the electricity consumption) is required for producers to use the GHG intensity of that generator or private network; or
        • Grid electricity supply, where the GHG intensity is determined by the 30 minute average grid factor (GB or Northern Ireland, as applicable); or
        • Grid electricity that would otherwise have been curtailed, which is permitted to use nil GHG intensity.

        Proof of renewable electricity additionality is not a requirement of the UK LCHS (e.g. new windfarms do not have to be built to supply a hydrogen production facility). The LCHS requires that the contracted electricity generator must be located within the UK but does not impose further geographical correlation rules.

        The LCHS uses energy allocation to assign GHG emissions based on (co-)products’ lower heating value energy contents. When heat or steam are produced as co-products, Carnot efficiencies[5] are applied for the energy allocation. However, the LCHS also requires that pathways using waste fossil feedstocks account for their displaced counterfactual emissions (i.e. the emissions that would have occurred if the feedstock had not been diverted to hydrogen production), which is a partial inclusion of a system expansion method.

        A pressure of 3MPa and purity of 99.9% by volume is used as a reference flow under the LCHS. If the hydrogen produced is below these values, the theoretical emissions from compression and/or purification required to reach the reference flow need to be added. No adjustment is made if hydrogen is produced above the reference flow values.

        Other requirements

        Under the UK LCHS, mass balance chain of custody is generally used for upstream supply chains. However, the LCHS also currently states that biomethane cannot be mixed with fossil natural gas at any point, i.e. imposing an identity preserved chain of custody for biomethane feedstocks.

        Uncertainties and future direction

        Uncertainties in the LCHS include if/when downstream emissions from producer to user might be included within the system boundary, if/when hydrogen producers will be able to report producer-specific upstream natural gas GHG intensities (given the current lack of methodology and paucity of fossil industry data), plus when fugitive hydrogen emissions might be accounted for (and at what Global Warming Potential). It is also unclear how the UK LCHS will interact with ISO-19870 once published.

        EU Renewable Energy Directive (RED)

        Under EU law, regulations are directly applicable and binding in all Member States without the need for national implementation. Directives, on the other hand, set goals that Member States must achieve, and require Member States to first transpose them into national law, which allows for differences in policy mechanisms to arise in how these goals are met.

        The Renewable Energy Directive (RED) is the legal framework for the development of clean energy across all sectors of the EU economy which Member States must transpose into national law (European Union, 2023a). Unlike the UK LCHS which currently only determines the eligibility for domestic UK hydrogen production to receive financial support, the RED mandates renewable energy consumption more broadly. Under EU RED, both domestically produced and imported hydrogen can contribute towards Member States’ compliance with renewable energy targets (European Union, 2023a).

        Eligibility

        EU RED does not prescribe a list of eligible technology pathways but evaluates eligibility based on fuel type, which is defined by the feedstock used to produce hydrogen.

        • Biofuel – hydrogen produced from biomass that meets RED sustainability criteria;
        • Recycled carbon fuels (RCF) – hydrogen produced from waste streams of non-renewable origin (European Union, 2023a);
        • Renewable fuel of non-biological origin (RFNBO) – hydrogen derived from renewable energy sources other than biomass.

        When used in transport, biofuels, RCFs and RFNBOs must achieve at least 70% GHG emissions savings (variable depending on year of commissioning) compared to the fossil fuel comparator of 94 gCO2eq/MJ. This means that lifecycle GHG emissions must be below 28.2 gCO2eq/MJLHV hydrogen. This threshold is measured on a ‘cradle-to-use’ system boundary, which goes beyond the UK LCHS’s ‘cradle-to-production gate’ system boundary.

        GHG calculation methodology principles

        In the EU, rules determining the GHG emission intensity of electricity inputs are set by the Delegated Act (DA) on renewable electricity under EU RED (European Union, 2023b). This states that renewable electricity from direct connections and PPAs need to meet additionality requirements to be considered to have nil GHG impact. Grid connected facilities with PPAs must also fulfil temporal and geographical correlation requirements, with some exceptions.

        • Additionality: Requires that hydrogen production is connected to new (i.e. less than 36 months before the electrolyser starts operation), rather than existing, renewable energy generation assets. Additionality is not required before 2028, and for plants built before 2028, it is only required starting in 2038. This is different to the UK LCHS, which does not have additionality requirements.
        • Temporal correlation: Until 2030, this rule requires that hydrogen must be produced within the same calendar month as the renewable electricity used to produce it, and hourly thereafter (European Union, 2023b). This is more relaxed than the 30-minute requirement in the UK LCHS.
        • Geographical correlation: Requires that the hydrogen producer must be in the same bidding zone as the renewable energy installation or in an interconnected bidding zone with day ahead prices higher than that of the renewable generation asset.
        • Exceptions: Additionality is not required for renewable PPAs with temporal and geographical correlation where the emission intensity of the bidding zone is <18gCO2/MJe. Bidding zones with >90% renewables do not have to meet any of these three criteria provided that the load hours of the hydrogen production plant are lower than the grid’s renewability share.

        Similar to the UK LCHS, the default allocation method for hydrogen production pathways under EU RED is based on lower heating value (LHV) energy content for any co-product fuel, electricity or heat/steam (applying Carnot efficiencies). However, EU RED states that if the plant can change the ratio of the co-products produced, physical causality allocation is used (see definition in Appendix A). If co-products are produced that have no LHV energy content (e.g. oxygen, chlorine), GHG emissions are shared among co-products through economic allocation, based on the average factory-gate values of the (co-)products over the last three years. As with the UK LCHS, waste fossil feedstocks used for RCF production account for their displaced counterfactual emissions. EU RED sets no reference flow, with purity and pressure requirements only determined by the end user.

        Uncertainties and future direction

        According to the DA on renewable electricity (European Union, 2023b), the GHG emission intensity of grid electricity is determined at the level of countries or at the level of bidding zones. Different bidding zones do not currently exist in the GB power grid, but it is unclear how the DA defines a country. If Scotland is defined as a country under the DA, grid electrolysis projects could claim nil emissions for their input electricity without having to meet rules on additionality, temporal and geographical correlation, as Scotland’s grid has more than 90% renewables (Scottish Renewables, 2021). This would be a significant advantage and allow these projects to reduce their input electricity costs due to the lower regulatory burden. But if not defined as a country under the DA, these projects would have to take the GHG intensity of the GB grid, which only had an approximately 50% renewable share in 2023 (Ember, n.d.), requiring producers to instead procure renewable electricity PPAs that meet additionality, temporal and geographical correlation rules to claim nil emissions for the input electricity.

        There are also uncertainties as to how individual Member States will implement the latest revised version of the RED, given that there is a May 2025 deadline for RED III to be transposed into national laws. Even within the confines of RED III, the policy mechanisms created and pathways deemed eligible by Member States can vary across the EU.

        EU Gas Directive

        The EU Gas Directive (formally called the Directive on common rules for the internal markets for renewable gas, natural gas and hydrogen) was published in July 2024 as part of the Hydrogen and Decarbonised Gas Market Package, it established a framework for the development of the future gas market in the EU, and its scope includes renewable and low-carbon hydrogen. Renewable hydrogen is defined as bio-hydrogen and RFNBO hydrogen, which must follow RED requirements (European Union, 2024a), whereby the EU Gas Directive sets requirements for low-carbon nuclear and fossil-fuel based pathways (outside of fossil waste derived RCFs) that are not currently covered by RED. This policy shares many similarities with the methodology set under RED, including a GHG emission threshold of 28.2 gCO2e/MJLHV and a ‘cradle-to-use’ system boundary.

        The European Commission has until July 2025 to adopt a Delegated Act (DA) specifying the GHG methodology for low-carbon fuels (other than RCFs) (European Union, 2024b). On September 27, 2024, a draft version of this DA was released for public consultation (European Union, 2024c).

        This draft version sticks to the same RED renewable power sourcing rules (and does not expand them to nuclear or fossil + CCS generator PPAs), but also appears to have several differences to the RED methodology for RFNBOs. For example, carbon capture and utilisation (CCU) in permanently chemically bound products is currently permitted in the draft DA, and there are also more detailed CCS requirements including allowing solid carbon sequestration, but ruling out enhanced oil & gas recovery (European Union, 2024c). Upstream natural gas emissions are to be based on reported producer values under EU methane regulations (European Union, 2024d), but before these are available, a conservative value from the DA is to be used. However, it is unclear how the existing use/fate of fossil fuel feedstocks is to be interpreted, and whether this counterfactual term is to be ignored or would generate a large emissions penalty or a large credit – both latter options would be a major departure from the attributional GHG methodology used in the RED and other EU legislation. Given the current consultation stage, other significant changes to the DA before final publication are possible, which also adds uncertainty.

        CertifHy

        CertifHy is an industry developed voluntary Guarantee of Origin (GO) certificate scheme within the EU, the European Economic Area and Switzerland. The CertifHy GO scheme verifies the origin (e.g. production location, production technology, feedstocks etc.) and GHG emissions of hydrogen products (CertifHy, n.d.). Rather than a set of legislative requirements, it is a scheme that producers can choose to participate in to demonstrate sustainability to their end-users.

        Eligibility

        CertifHy hydrogen can be labelled “green hydrogen” which covers renewable pathways, or “low-carbon hydrogen” which covers low-carbon fossil and nuclear pathways. For both, a GHG emissions threshold of 36.4gCO2e/MJ LHV hydrogen applies, which is measured on the same ‘cradle-to-production gate’ system boundary as the UK LCHS. This represents a reduction of 60% compared to the benchmark fossil process of 91gCO2e/MJLHV hydrogen product (via steam reforming of natural gas) (CertifHy, 2022).

        GHG calculation methodology principles

        When producing hydrogen from the electricity grid, the renewable origin can be established by cancelling of GOs[6]. Unlike the UK LCHS and EU RED, CertifHy does not specify further requirements such as additionality, temporal or geographical correlation.

        Under CertifHy, co-products are dealt in different ways and are defined based on the production pathways. For pathways producing steam as a co-product, CertifHy requires its producers and consumers to use the same allocation method. Economic allocation is applied for hydrogen produced from chlor-alkali processes and its co-products. However, the method for allocating emissions to any co-produced oxygen from electrolysis is yet to be adopted (CertifHy, 2023).

        Other requirements

        The CertifHy GO scheme allows for the decoupling of physical hydrogen supply and its environmental attributes, via a book & claim system.

        Uncertainties and future direction

        The future use of this voluntary scheme and others such as TÜV SÜD and TÜV Rheinland could be impacted by the potential future alignment with ISO 19870.

        France Energy Code L. 811-1

        In July 2024, France transposed the definition of renewable hydrogen in alignment with EU RED under L. 811-1 of the Energy Code (République Francaise, 2024). It is a government developed standard and mandatory for accessing subsidy schemes.

        Eligibility

        As it is a transposition of EU RED, requirements for renewable hydrogen follow EU RED. The Energy Code also specifies the GHG methodology for low-carbon hydrogen, which is based on EU RED rules, but allows electricity from nuclear power generation.

        Uncertainties

        Recent Government changes in France resulted in a pause in publishing the new hydrogen strategy and subsequent Government funding in the form of a CfD for hydrogen developers producing renewable or low-carbon hydrogen. It is also currently unclear if France permits RCFs to count towards the REDIII renewable energy target (Martin, P., 2023).

        United States Inflation Reduction Act 45V Tax Credit

        The Inflation Reduction Act (IRA) introduced the Clean Hydrogen Production Tax Credit (PTC) (45V) to promote the production of low-carbon hydrogen in the US. This tax credit can be claimed by producers for every kilogram of eligible hydrogen they produce in the US. The value of the tax credit is determined by a tiered approach based on the GHG emissions intensity of the hydrogen with significant multipliers also available if the production facility meets the labour requirements set out under the tax credit.

        Eligibility

        Eligibility for 45V is determined by whether the produced hydrogen meets GHG emission thresholds, which is measured on a ‘cradle-to-production gate’ system boundary. The maximum GHG threshold is defined at 4 kgCO2e/kg H2. Hydrogen produced with lower GHG emissions is eligible for higher support, which is determined by a percentage of the maximum credit value[7] as seen in table below.

        kgCO2e/kg hydrogen

        gCO2e/MJLHV

        % of Production Tax Credit value

        >4

        >33.3

        0%

        2.4 to 4

        20 to 33.3

        20%

        1.5 to 2.5

        12.5 to 20

        25%

        0.45 to 1.5

        3.8 to 12.5

        33.4%

        <0.45

        <3.8

        100%

        Table 6: Hydrogen GHG emissions intensity bands and their respective incentives under 45V

        GHG calculation methodology principles

        For electricity input for electrolytic hydrogen, rules to demonstrate renewability are similar to requirements set under EU RED’s DA. Producers must procure PPAs for renewable electricity that demonstrate incrementality (new generation capacity must begin operations within 3 years of hydrogen facility being placed into service, this is similar to the additionality concept in the EU), deliverability (clean power must be sourced from the same region), and temporal correlation (annual matching is until 2028, with hourly matching thereafter).

        The reference flow is set at 2MPa at 100% purity, rather than 3MPa and purity of 99.9% under the UK LCHS. Producing hydrogen below/above this reference flow means the GHG intensity is adjusted higher/lower. By contrast, only upwards adjustments are required for the UK LCHS.

        Further differences include the allocation approach. In the US, a system expansion (displacement) approach is generally used for co-product allocation, instead of energy allocation as in the UK LHCS. The US method can therefore give significantly negative GHG intensities for hydrogen produced from organic waste based biomethane[8]. Additionally, 45V places a cap on the amount of steam that can claimed as co-product from natural gas reforming to avoid incentivising over-production of steam to lower hydrogen GHG emissions (US DOE, 2024).

        Uncertainties and future direction

        45V is currently undergoing consultation to seek industry opinion on methods to enable a virtual tracking system for both direct connection and mass balancing for biomethane and fugitive methane. This includes counterfactual assumptions for biomethane feedstocks, treatment of fugitive emissions, and how to track and verify biomethane through virtual systems. It appears likely that 45V will impose “incrementality” (additionality), temporal matching and deliverability requirements for biomethane but details are unknown at present (Ding et al., 2024). More broadly, while the IRA has been signed into law, a change in US administration could create instability regarding the future of this tax credit.

        International Partnership for Hydrogen and Fuel Cells in the Economy (IPHE)

        IPHE is an international inter-governmental partnership, which aims to develop a set of mutually agreed methodologies and an analytical framework to determine the GHG emissions of hydrogen production. Use of this methodology is voluntary and differs from other standards reviewed as it serves as a framework for determining GHG emissions of hydrogen production only and does not set any eligibility criteria.

        Version 3 of IPHE defines GHG methodologies for electrolysis, steam cracking, fossil gas reforming with CCS, fossil (coal) gasification with CCS, biomass biodigestion (anaerobic digestion to biomethane) with CCS, and biomass gasification with CCS. The methodologies for other pathways will be developed in the future. Unlike other standards, IPHE does not provide guidance on any categories (e.g., “renewable” or “low-carbon”), and it does not stipulate any GHG emission intensity threshold. (IPHE, 2023). This is expected to be done by individual countries participating in IPHE, if they wish to do so.

        GHG calculation methodology principles

        The current IPHE guidance covers a ‘cradle-to-point of use’ system boundary, which includes supply chain steps to transport hydrogen from the producer to the end user, but not the final use of the hydrogen. This goes beyond the UK LCHS system boundary, but not quite as far as EU RED.

        Market-based emissions accounting approach such as renewable energy certificates (RECs) can be used to substantiate electrolytic hydrogen production from renewable electricity. There are no requirements on additionality, temporal correlation and geographic correlation criteria.

        IPHE provides pathway-specific recommendations for splitting GHG emissions between co-products, following a hierarchy of options (i.e. allocation based on LHV energy content, followed by system expansion, then economic value). However, certain allocation methods are deemed not appropriate for certain pathways (e.g. energy allocation is not recommended for electrolysis and chloralkali pathways.

        Key uncertainties and future direction

        The latest IPHE Working Paper (Version 3) was released in July 2023. It is unclear if additional versions will be published, or whether future IPHE developments will be incorporated within the ISO 19870 process, since ISO is developing a global standard starting from the IPHE V3 methodology.

        ISO 19870

        The IPHE methodology V3 was used as the basis of a draft ISO Technical Specification (ISO/TS 19870) published in late 2023 (ISO, 2023). This is now being further developed into an ISO International Standard on the “Methodology for determining the greenhouse gas emissions associated with the production, conditioning and transport of hydrogen to consumption gate”. This standard is due to be published in 2025. This first ISO hydrogen standard (ISO 19870-1) will cover cradle to production gate, but future standards in the series may cover downstream steps including hydrogen conversion and distribution.

        Similar to IPHE, ISO 19870-1 will not provide any threshold values or define any hydrogen categories, labels or colours. All pathways are eligible, but detailed guidance will be provided for a number of pathways. Given the focus is purely on GHG emissions, sustainability requirements are not currently set for biomass feedstocks.

        GHG calculation methodology principles

        Onsite/direct connection to renewable generators are allowed provided no contracts are sold to a third party. Alternatively, power may be purchased from the grid with a contract and energy attribute certificates (e.g. RECs, GOs) provided ISO 14064-1 (part E.2.2) quality criteria are met (ISO, 2018).

        No reference flow is set in ISO/TS 19870, with pressure and purity only set by the next user in the supply chain. However, the GHG emissions intensity shall be adjusted upwards to reflect the presence of impurities in the hydrogen product (e.g. water, nitrogen, carbon dioxide, carbon monoxide, methane etc), and their release to atmosphere.

        Other requirements

        Chain of custody requirements are not specified, but energy sourcing allows grid purchase with Guarantees of Origin (GOs). Production batches can be any length of time chosen by the operator. GHG emissions of capital equipment are to be reported separately.

        Uncertainties

        ISO 19870-1 is still under development, therefore significant uncertainties exist, particularly around the (multiple) allocation methodologies that will be recommended for each individual pathway, and the level of detail required for evidence. Whilst ISO standards flow into national standards, Governments are not required to adopt or use a national standard. As a result, how countries/regions choose to align their policies with the new ISO standard once published is unclear (International PtX Hub, 2023). This may depend on whether ISO 19870-1 remains broad in simultaneously accommodating different methodology choices (e.g. consequential or attributional allocation) or becomes more prescriptive with a single methodology and more detailed evidence requirements.

        TÜV SÜD

        TÜV SÜD is an industry developed, voluntary standard which provides a guaranteed proof of origin alongside certification for renewable hydrogen. The present standard is based on European legislation but is in principle applicable worldwide. A certificate for the production of hydrogen from renewable energy sources labelled “GreenHydrogen” can be issued if all requirements are met (TÜV SÜD, 2021).

        Eligibility

        The GHG emission threshold follows EU RED, though it accepts two system boundaries which are ‘cradle-to-point of use’ (GreenHydrogen+) or ‘cradle-to-production gate’ (GreenHydrogen) if delivered at the plant gate or injected in a transmission grid. TÜV SÜD also requires that during periods when hydrogen production is not certified as “GreenHydrogen”, emissions still remain below 91 gCO₂e/MJLHV. The scheme currently covers four production pathways, all of which are renewable. Biomass feedstocks used for hydrogen production must meet relevant RED sustainability criteria.

        GHG calculation methodology principles

        Proof of renewable electricity for electrolysis hydrogen production can be provided by purchasing and retiring GOs or comparable certificates (RECs) which follow EU RED rules though it is unclear if this refers to the renewable electricity DA. GreenHydrogen+ imposes further requirements which includes additionality (new power production must have commissioned no later/earlier than 11 months following the hydrogen production facility installation), temporal correlation (every 15 minutes) and geographical correlation. These rules are more stringent than the UK LCHS and EU RED. The approach to allocating emissions between co-products follows EU RED, although where hydrogen is produced as a by-product such as in chlor-alkali electrolysis, it is possible to allocate emissions using energy allocation, economic allocation or system expansion.

        Uncertainties and future direction

        The future use of this voluntary scheme and others such as CertifHy and TÜV Rheinland could be impacted by the potential future alignment with ISO 19870.

        TÜV Rheinland

        TÜV Rheinland is an industry developed, voluntary standard similar to TÜV SÜD, but has an expanded scope which covers both “Renewable Hydrogen” and “Low Carbon Hydrogen”. The present standard is based on European legislation but is in principle applicable worldwide (TÜV Rheinland, 2023).

        Eligibility

        The GHG emission threshold follows EU RED for both hydrogen categories. Though the system boundary is defined by the user (e.g., cradle to production gate or to point of use). “Renewable hydrogen” has two sub-categories, “Green Hydrogen” and “RFNBO (RED II)”. Eligible pathways for both are electrolytic hydrogen produced from renewable (non-biogenic) electricity and water or aqueous solutions (e.g. chlor-alkali electrolysis) but have different renewable power purchasing requirements. For low-carbon hydrogen, all pathways are eligible e.g., steam reforming, electrolysis, pyrolysis etc.

        GHG calculation methodology principles

        To be certified as “Green Hydrogen”, renewable electricity can be supplied via a direct connection or the electricity grid (with PPA). The renewable electricity is not required to be additional, but if sourcing via the grid, must have temporal matching on an annual basis and located within the same country. “RFNBO (RED II)” certification requires RED II renewable electricity rules are met.

        Green Hydrogen Standard (GH2)

        The Green Hydrogen Organisation (GH2) is an industry developed voluntary standard (non-profit foundation) based in Switzerland. Green hydrogen projects that meet the requirements will be licensed to use the label “GH2 Green Hydrogen” and will be eligible to generate and trade GH2 certificates of origin (GH2 Standard, 2023).

        Eligibility

        GH2 only allows electrolytic hydrogen produced from 100% renewable energy supplied via a direct connection or the electricity grid (with PPA). It sets a significantly lower GHG emissions threshold than the UK LCHS, of 8.33 gCO2e/MJ LHV hydrogen product on a ‘cradle-to-production gate’ basis. Hydrogen developers have the option to calculate and report on embodied emissions including construction emissions.

        Where biomass is used in electricity generation, hydrogen developers are required to demonstrate a low risk of indirect land use change, including verifying that production of feedstock does not take place on land with high biodiversity, that land with a high amount of carbon has not been converted for feedstock production. Additionally, hydrogen developers are required to address any risks relating to the displacement of crops for food and feed. Adherence to the EU Commission Delegated Regulation 2019/807 (criteria for determining the high ILUC-risk feedstock) or an equivalent national standard will satisfy this requirement.

        GHG calculation methodology principles

        Under GH2 the same ‘cradle-to-production gate’ system boundary as the UK LCHS is used. Renewable electricity through RECs are allowed but not required to meet additionality, temporal and geographical correlation. Co-product allocation is not specifically mentioned but given GH2 applies the methodology for the electrolysis production pathway as per IPHE, it is assumed that this will also follow IPHE. For electrolysis, the use of system expansion is recommended for co-product allocation between hydrogen and oxygen products as energy allocation is not appropriate for this co-product.

        Uncertainties and future direction

        The scheme may expand to include nuclear and other forms of energy production with low emissions but the timeframe for this is currently unknown.

        Appendix C GHG calculation methodology

        EU RED

        Biofuel: E = eec + el + ep + etd + eu – esca – eccs – eccr

        Where,

        E

        =

        total emissions from the use of the fuel;

        eec

        =

        emissions from the extraction or cultivation of raw materials;

        el

        =

        annualised emissions from carbon stock changes caused by land-use change;

        ep

        =

        emissions from processing;

        etd

        =

        emissions from transport and distribution;

        eu

        =

        emissions from the fuel in use;

        esca

        =

        emission savings from soil carbon accumulation via improved agricultural management;

        eccs

        =

        emission savings from CO2 capture and geological storage; and

        eccr

        =

        emission savings from CO2 capture and replacement.

        RFNBO and RCF: E = ei + ep + etd + eu – eccs

        Where,

        E

        =

        total emissions from the use of the fuel;

        ei

        =

        emissions from supply of inputs = ei elastic + ei rigid – e ex-use;

        ei elastic

        =

        emissions from elastic inputs;

        ei rigid

        =

        emissions from rigid inputs;

        e ex-use

        =

        emissions from inputs’ existing use or fate;

        ep

        =

        emissions from processing;

        etd

        =

        emissions from transport and distribution;

        eu

        =

        emissions from the fuel in use;

        eccs

        =

        emission savings from CO2 capture and geological storage

        EU Gas Directive

        E = ei + ep + etd + eu – eccs – eccu

        Where,

        E

        =

        total emissions from the use of the fuel;

        ei

        =

        emissions from supply of inputs = ei elastic + ei rigid – e ex-use;

        ei elastic

        =

        emissions from elastic inputs;

        ei rigid

        =

        emissions from rigid inputs;

        e ex-use

        =

        emissions from inputs’ existing use or fate;

        ep

        =

        emissions from processing (including captured carbon);

        etd

        =

        emissions from transport and distribution;

        eu

        =

        emissions from the fuel in use;

        eccs

        =

        net emission savings from CO2 capture and geological storage;

        eccu

        =

        net emission savings from CO2 captured and permanently chemically bound in long-lasting products.

        ISO/TS 19870

        E = ecombustion emissions + efugitive emissions + eindustrial process emissions + eenergy supply emissions + eupstream emissions

        Where,

        ecombustion emissions

        =

        combustion of relevant solid, liquid and/or gaseous fuels

        efugitive emissions

        =

        leakages and accidental losses, as well as other losses due to incorrect management of plant operations

        eindustrial process emissions

        =

        specific GHG gases used across a number of industry activities (e.g., hydrofluorocarbons (HFCs) used in industrial refrigeration and/or cooling systems, and sulphur hexafluoride (SF6) used in electrical switchgear).

        eenergy supply emissions

        =

        emissions associated with the supply of energy

        eupstream emissions

        =

        emissions relating to the upstream extraction of resources

         

        Appendix D Hydrogen pathways modelled

        Hydrogen production pathway

        Hydrogen production country

        Distribution pathway to Rotterdam

        End product

        Electrolysis using renewable electricity

        Scotland, Norway, Morocco, Chile, USA

        Ammonia shipping with reconversion to hydrogen

        Hydrogen

        Electrolysis using renewable electricity

        Scotland, Norway, Morocco, Chile, USA

        Ammonia shipping

        Ammonia

        Electrolysis using renewable electricity

        Scotland, Norway, Morocco

        Compressed hydrogen shipping

        Hydrogen

        Electrolysis using renewable electricity

        Scotland, Norway, Morocco

        Compressed hydrogen pipeline

        Hydrogen

        Electrolysis using nuclear electricity

        France

        Ammonia shipping with reconversion to hydrogen

        Hydrogen

        Electrolysis using nuclear electricity

        France

        Ammonia shipping

        Ammonia

        Electrolysis using nuclear electricity

        France

        Compressed hydrogen shipping

        Hydrogen

        Electrolysis using nuclear electricity

        France

        Compressed hydrogen pipeline

        Hydrogen

        Electrolysis using grid electricity

        Scotland, Norway, France, Morocco, Chile, USA

        Ammonia shipping with reconversion to hydrogen

        Hydrogen

        Electrolysis using grid electricity

        Scotland, Norway, France, Morocco, Chile, USA

        Ammonia shipping

        Ammonia

        Electrolysis using grid electricity

        Scotland, Norway, France, Morocco

        Compressed hydrogen shipping

        Hydrogen

        Electrolysis using grid electricity

        Scotland, Norway, France, Morocco

        Compressed hydrogen pipeline

        Hydrogen

        Natural gas ATR+CCS

        UK, USA

        Ammonia shipping with reconversion to hydrogen

        Hydrogen

        Natural gas ATR+CCS

        UK, USA

        Ammonia shipping

        Ammonia

        Natural gas ATR+CCS

        UK

        Compressed hydrogen shipping

        Hydrogen

        Natural gas ATR+CCS

        UK

        Compressed hydrogen pipeline

        Hydrogen

        Table 7: Summary of the hydrogen production, distribution and use pathways modelled.

        *In the case of France, electrolytic hydrogen production was modelled using electricity from nuclear sources instead of renewable sources

        Appendix E Modelling assumptions

        Parameter

        Location

        Assumption

        2023

        2030

        References

        Hydrogen production location

        USA

        The Northeast region of the US was used in the 2023 CXC report but no specific location was stated. To align with the CXC report and based on likely shipping ports, New Jersey has been assumed for the production location (and electricity grid factor), and Port Newark for the export location.

        –

        –

        CXC, 2023

        Shipping distances/days

        All

        The shipping distances from Scotland, Norway, Morocco and Chile to Rotterdam, were taken from the 2023 CXC report. A shipping distance for the US was not given, so has been calculated from Port Newark to Rotterdam. The shipping time (days) has been calculated based on a ship speed of 29.6 km/hr (JRC, 2024) and calculated using Sea-Distances, 2024. The shipping distance for France was 38.2 km in the CXC report – assumed this is a typo given the shortest shipping distance between France and Rotterdam is from Port of Dunkirk (261 km).

        Scotland: 930 km / 1.3 days

        Norway: 1,312 km / 1.8 days

        France (Port of Dunkirk): 261 km / 0.4 days

        Morocco: 2,747 km / 3.9 days

        USA (Port Newark): 6,265 km / 14 days

        Chile: 17,970 km / 25.3 days

        Scotland: 930 km / 1.3 days

        Norway: 1,312 km / 1.8 days

        France (Port of Dunkirk): 261 km / 0.4 days

        Morocco: 2,747 km / 3.9 days

        USA (Port Newark): 6,265 km / 14 days

        Chile: 17,970 km / 25.3 days

        CXC, 2023, pg41

        JRC, 2024, Environmental life cycle assessment (LCA) comparison of hydrogen delivery options within Europe

        Sea-Distances, 2024

        Pipeline distances

        All except USA & Chile

        The pipeline distances from Scotland, Norway, France and Morocco to Rotterdam, were taken from the 2023 CXC report.

        Scotland: 930 km

        Norway: 1,312 km

        France: 435 km

        Morocco: 1,930 km

        Scotland: 930 km

        Norway: 1,312 km

        France: 435 km

        Morocco: 1,930 km

        CXC, 2023, pg41

        Electricity grid GHG intensity

        Scotland

        Average annual grid generation intensity recorded for 2023 taken as current value (45.9 gCO2/kWh) (National Grid ESO, 2024). gCO2/kWh value increased by 1% to derive gCO2e/kWh value based on the difference between gCO2 and gCO2e intensities reported in UK Gov Conversion Factors, 2024. Given EU RED and ISO/TS 19870 requirements, upstream emissions were added for Scottish generators, calculated (as 3.61 gCO2e/MJ elec currently) using the electricity generation mix from DESNZ, 2023 and applying the fuel emission factors in Table 3 of the RED Delegated Act on GHG methodology for RCFs and RFNBOs. Imports of electricity into Scotland were ignored in the upstream calculations.

        Scottish electricity grid in 2030 is estimated to reach 120 TWh/yr generation and emit 1025 ktCO2e/yr (Scottish Government, 2024). Upstream emissions were estimated for 2030 by applying the same ratio as the generation emissions for 2023 compared to 2030.

        16.5 gCO2e/MJ elec

        3.0 gCO2e/MJ elec

        National Grid ESO, 2024, Country Carbon Intensity Forecast

        UK Gov, 2024, Greenhouse gas reporting: conversion factors 2024

        DESNZ, 2023, Energy Trends https://www.gov.scot/policies/renewable-and-low-carbon-energy

        Scottish Government, 2024, Greenhouse gas emissions projections

        Electricity grid GHG intensity

        Norway

        2023 grid mix taken from Ember (Ember, 2024). Generation and upstream emissions were calculated using the fuel combustion and upstream emission factors in Table 1 and Table 3 of the RED Delegated Act on GHG methodology for RCFs and RFNBOs and generator efficiencies from JRC (2020). Norway renewables capacity is expected to increase by 40 TWh in Norway in 2030 (DLA Piper, 2023).

        2.46 gCO2e/MJ elec

        1.95 gCO2e/MJ elec

        Ember, 2024, World

        European Commission, 2023, Delegated Act 2023/1185.

        JRC, 2020, JEC-Well-to-Tank report v5

        DLA Piper, 2023, The Norwegian Energy Commission’s report

        Electricity grid GHG intensity

        France

        2023 grid mix taken from Ember (Ember, 2024). Generation and upstream emissions were calculated using the fuel combustion and upstream emission factors in Table 1 and Table 3 of the RED Delegated Act on GHG methodology for RCFs and RFNBOs and generator efficiencies from JRC (2020). France aims for 34% renewable electricity in 2030 compared to currently 24.7% (IEA, 2024).

        17.3 gCO2e/MJ elec

        15.7 gCO2e/MJ elec

        Ember, 2024, World

        European Commission, 2023, Delegated Act 2023/1185.

        JRC, 2020, JEC-Well-to-Tank report v5

        IEA, 2024, France

        Electricity grid GHG intensity

        Morocco

        2023 grid mix taken from Ember (Ember, 2024). Generation and upstream emissions were calculated using the fuel combustion and upstream emission factors in Table 1 and Table 3 of the RED Delegated Act on GHG methodology for RCFs and RFNBOs and generator efficiencies from JRC (2020). Current renewables capacity is ~38%, aiming to increase to 52% by 2030 (International Trade Administration, 2024). This anticipated percentage increase in renewables capacity was used to estimate the grid emission factor for 2030.

        188.4 gCO2e/MJ elec

        162.1 gCO2e/MJ elec

        Ember, 2024, World

        European Commission, 2023, Delegated Act 2023/1185.

        JRC, 2020, JEC-Well-to-Tank report v5

        International Trade Administration, 2024, Morocco

        Electricity grid GHG intensity

        USA (New Jersey)

        Latest year grid mix for the RFC East subregion in which New Jersey is in (EPA, 2022). Generation and upstream emissions were calculated using the fuel combustion and upstream emission factors in Table 1 and Table 3 of the RED Delegated Act on GHG methodology for RCFs and RFNBOs and generator efficiencies from JRC (2020). New Jersey is targeting 50% reduction in electricity generation emissions by 2030 compared to 2005 (climate-Xchange.org, 2024, NJ DEP, 2024). This emissions reduction was applied to the 2023 generation emissions to calculate the 2030 generation emissions. To estimate the 2030 upstream emissions, the 2023 upstream to generation emissions ratio was applied.

        68.2 gCO2e/MJ elec

        34.1 gCO2e/MJ elec

        EPA, 2022, eGRID.

        European Commission, 2023, Delegated Act 2023/1185.

        JRC, 2020, JEC-Well-to-Tank report v5

        climate-Xchange.org, 2024, New Jersey

        NJ DEP, 2024, NJ Greenhouse Gas Emissions Inventory Report Years 1990-2021

        Electricity grid GHG intensity

        Chile

        2023 grid mix taken from Ember (Ember, 2024). Generation and upstream emissions were calculated using the fuel combustion and upstream emission factors in Table 1 and Table 3 of the RED Delegated Act on GHG methodology for RCFs and RFNBOs and generator efficiencies from JRC (2020). By 2030, Chile aims to reduce emissions by 84% compared to 2021 (Wartsila, 2022) – 2021 grid mix used to estimate 2030 grid emission factor (Ember, 2024).

        72.7 gCO2e/MJ elec

        19.1 gCO2e/MJ elec

        Ember, 2024, World

        European Commission, 2023, Delegated Act 2023/1185.

        JRC, 2020, JEC-Well-to-Tank report v5

        Wartsila, 2022, Chile

        Electricity grid GHG intensity

        UK

        2023 factor calculated based on the GB generation intensity data from National Grid ESO (2024). Given EU RED and ISO/TS 19870 requirements, upstream emissions were added, calculated using the GB electricity generation mix (DESNZ, 2023) and applying the fuel upstream emission factors from UK Gov (2024), and generator efficiencies from JRC (2020). Upstream emissions of imported electricity were calculated using the same approach, using country electricity grid generation mixes (IEA, 2023) for France, Belgium, Netherlands and Norway, weighted by the proportion of imported electricity from UK Gov Energy Trends (2024).

        2030 generation factor calculated based National Grid Future Energy Scenarios (FES) following the Holistic Transition scenario. The upstream emissions factors from GB generation were calculated using the 2030 GB electricity generation mix (National Grid ESO, 2024).

        Transmission and distribution losses (7.5%) were included for all upstream emissions calculations (National Grid ESO, 2024), to give consistent gCO2e/kWh delivered values. For simplicity, GB factors taken for UK.

        53.8 gCO2e/MJ elec delivered

        (11.4 upstream + 42.4 generation)

        16.7 gCO2e/MJ elec delivered

        (5.0 upstream + 11.6 generation)

        National grid ESO, 2024, ESO’s Carbon Intensity Dashboard.

        European Commission, 2023, Delegated Act 2023/1185.

        UK Gov, 2024, Greenhouse gas reporting: conversion factors 2024

        UK Gov, 2024, Energy Trends: UK electricity

        IEA, 2023, Energy Statistics Data Browser

        JRC, 2020, JEC-Well-to-Tank report v5

        National Grid ESO, 2024, Future Energy Scenarios: Pathways to Net Zero.

        Electricity grid GHG intensity

        Netherlands

        2023 grid mix taken from Ember (Ember, 2024). Generation and upstream emissions were calculated using the fuel combustion and upstream emission factors in Table 1 and Table 3 of the RED Delegated Act on GHG methodology for RCFs and RFNBOs and generator efficiencies from JRC (2020). The 2030 Netherlands grid mix is taken from the JRC and upstream and combustion emission factors from the RED were applied to estimate the 2030 grid emission factor (JRC, 2024).

        81.2 gCO2e/MJ elec

        31.6 gCO2e/MJ elec

        Ember, 2024, World

        JRC, 2020, JEC-Well-to-Tank report v5

        JRC, 2024, Environmental life cycle assessment (LCA) comparison of hydrogen delivery options within Europe

        Renewable electricity GHG intensity

        All

        Generation and upstream emissions for wind, hydro and solar electricity are considered as zero, as per EU RED and ISO/TS 19870.

        0 gCO2e/MJ elec

        0 gCO2e/MJ elec

        European Commission, 2023, Delegated Act 2023/1185.

        Nuclear electricity GHG intensity

        France

        Emission factor for nuclear fuel is taken from Table 3 from RED Delegated Act on GHG methodology for RCFs and RFNBOs (1.2 gCO2e/MJ LHV fuel) (European Commission, 2023). Nuclear power plant LHV efficiency of 33% then applied (JRC, 2020).

        3.64 gCO2e/MJ elec

        3.64 gCO2e/MJ elec

        European Commission, 2023, Delegated Act 2023/1185.

        JRC, 2020, JEC WTT v5 – NUEL chain (Pathways 6 Electricity workbook)

        Natural gas grid GHG intensity

        Netherlands, UK & USA (following EU RED DA methodology)

        Natural gas supply and combustion emissions are taken from RED Delegated Act on GHG methodology for RCFs and RFNBOs (European Commission, 2023), given the factors in the Delegated Act do not distinguish between different countries (including those outside of the EU). In the absence of 2030 intensity projections by country, assumed the same GHG intensity for 2030.

        Upstream: 12.7 gCO2e/MJ LHV

        Combustion: 56.2 gCO2e/MJ LHV

        Upstream: 12.7 gCO2e/MJ LHV

        Combustion: 56.2 gCO2e/MJ LHV

        European Commission, 2023, Delegated Act 2023/1185.

        Natural gas grid GHG intensity

        Netherlands (following ISO/TS 19870 methodology)

        Natural gas supply and combustion emissions are taken from RED Delegated Act on GHG methodology for RCFs and RFNBOs (European Commission, 2023). In the absence of 2030 intensity projections by country, assumed the same GHG intensity for 2030.

        Upstream: 12.7 gCO2e/MJ LHV

        Combustion: 56.2 gCO2e/MJ LHV

        Upstream: 12.7 gCO2e/MJ LHV

        Combustion: 56.2 gCO2e/MJ LHV

        European Commission, 2023, Delegated Act 2023/1185.

        Natural gas grid GHG intensity

        UK (following ISO/TS 19870 methodology)

        Upstream natural gas emissions taken from the UK Low Carbon Hydrogen Standard V3 (DESNZ, 2023). In the absence of 2030 intensity projections by country, assumed the same GHG intensity for 2030.

        Upstream: 8.7 gCO2e/MJ LHV

        Combustion: 56.2 gCO2e/MJ LHV

        Upstream: 8.7 gCO2e/MJ LHV

        Combustion: 56.2 gCO2e/MJ LHV

        DESNZ, 2023, Low Carbon Hydrogen Standard – Data Annex

        Natural gas grid GHG intensity

        USA (following ISO/TS 19870 methodology)

        Upstream natural gas CO2 emissions taken from GREET (16.52 gCO2/kWh natural gas). The methane leakage rate (7.5 gCH4/kg natural gas) is based on the Pennsylvania region in Sherwin et al. (2024) given this is the closest region to New Jersey. The natural gas LHV applied to convert units is from UK Gov Conversion Factors (2024). Combustion emissions were based on RED Delegated Act on GHG methodology for RCFs and RFNBOs. In the absence of 2030 intensity projections by country, assumed the same GHG intensity for 2030.

        Upstream: 9.2 gCO2e/MJ LHV

        Combustion: 56.2 gCO2e/MJ LHV

        Upstream: 9.2 gCO2e/MJ LHV

        Combustion: 56.2 gCO2e/MJ LHV

        R&D GREET, 2023, NA NG from Shale and Conventional Recovery

        Sherwin et al, 2024

        UK Gov, 2024, Greenhouse gas reporting: conversion factors 2024

        European Commission, 2023, Delegated Act 2023/1185.

        Electrolyser inputs

        All

        Assume PEM electrolyser with current LHV efficiency 61% and output pressure at 30 bar (CXC, 2022 – aligns with DESNZ, 2023; IEA, 2019; Element Energy, 2019). 2030 value assumed to reach 66% efficiency (CXC, 2022) – this aligns with other sources (IEA, 2019).

        CXC assume 25 kg H2O/kg H2 in water consumption for current year (CXC, 2023) and assumed remains constant to 2030.

        Chemical inputs (hydrochloric acid and sodium hydroxide) required to deionise water are based on industry data. The emissions associated with these chemical inputs are very small.

        Electrolyser efficiency: 61%

        Water consumption: 25 kg H2O/kg H2

        Chemical inputs:

        1.8 x10-6 kg NaOH/MJ H2

        1.6 x10-6 kg HCl/MJ H2

        Electrolyser efficiency: 66%

        Water consumption: 25 kg H2O/kg H2

        Chemical inputs:

        1.8 x10-6 kg NaOH/MJ H2

        1.6 x10-6 kg HCl/MJ H2

        CXC, 2023, pg37

        CXC, 2022, Table 13, pg 42

        IEA, 2019, The Future of Hydrogen

        DESNZ, 2023, Data Annex

        Element Energy, 2018, Hydrogen supply chain evidence base prepared for BEIS

        CXC, 2023, pg37

        ATR + CCS inputs

        UK, USA

        ATR+CCS plant LHV efficiency from Environment Agency (2023) and electricity input and water consumption from the same reference. These values align with other sources (Element Energy, 2018).

        Included grid electricity for ATR+CCS operations (JRC, 2020). Hydrogen output from ATR assumed to be at 20 bar (Element Energy, 2018) – hence included electricity for additional hydrogen compression to 30 bar (DESNZ, 2023).

        Emissions of fugitive methane and N2O, and consumption of MEA catalyst are from industry data.

        CO2 capture rate of 95% (Environmental Agency, 2023; Element Energy, 2018).

        All inputs assume to remain constant to 2030. Assume same inputs for US and UK.

        LHV efficiency: 80.6%

        ATR electricity: 8.8 MJ elec/kg H2

        Electricity for nat gas compression: 0.0059 MJ elec/MJLHV nat gas

        Additional electricity for hydrogen compression: 0.0068 MJ elec/MJLHV H2

        Water consumption: 3.8 kg H2O/kg H­2

        Catalyst consumption: 0.000081 kg MEA/MJLHV H2

        CO2 capture rate: 95%

        Fugitive emissions:

        0.00071 gCH4/MJLHV H2

        0.0028 gN2O/MJLHV H2

        LHV efficiency: 80.6%

        ATR electricity: 8.8 MJ elec/kg H2

        Electricity for nat gas compression: 0.0059 MJ elec/MJLHV nat gas

        Additional electricity for hydrogen compression: 0.0068 MJ elec/MJLHV H2

        Water consumption: 3.8 kg H2O/kg H­2

        Catalyst consumption: 0.000081 kg MEA/MJLHV H2

        CO2 capture rate: 95%

        Fugitive emissions:

        0.00071 gCH4/MJLHV H2

        0.0028 gN2O/MJLHV H2

        JRC, 2020, JEC-Well-to-Tank report v5

        Element Energy, 2018, Hydrogen supply chain evidence base prepared for BEIS

        DESNZ, 2023, Data Annex

        Environment Agency, 2023, Review of emerging techniques for hydrogen production from methane and refinery fuel gas with carbon capture

        Hydrogen compression before pipeline transport

        Scotland, Morocco, Norway, France, UK

        Hydrogen assumed to be produced at 30 bar. Compression required to reach 100 bar for injecting in transmission pipeline network (Element Energy, 2018). Electricity required for compressing hydrogen from 30 bar to 100 bar calculated using formula in DESNZ, 2023.

        0.78 kWh/kg H2

        0.78 kWh/kg H2

        Element Energy, 2018, Hydrogen supply chain evidence base prepared for BEIS

        DESNZ, 2023, Data Annex

        Pipeline transport

        Scotland, Morocco, Norway, France, UK

        Offshore subsea pipelines assumed for Scotland, and Norway; onshore pipelines will be used for France; and both onshore and offshore pipelines will be used for Morocco. Pipelines have been excluded for Chile and the USA due to the distances required.

        Dedicated pipeline compressor ratings in the CXC report were used and pipeline throughput from European Hydrogen Backbone report for 36-inch pipeline at 75% capacity. Assume losses in pipeline transport of 1% (JRC, 2024).

        Scotland: 36 MWe/1000 km

        Norway: 60 MWe/1000 km

        France: 45 MWe/1000 km

        Morocco: 40 MWe/1000 km

        Pipeline losses: 1%

        36-inch pipeline throughput at 75% capacity: 3600 MWLHV H2

        Scotland: 36 MWe/1000 km

        Norway: 60 MWe/1000 km

        France: 45 MWe/1000 km

        Morocco: 40 MWe/1000 km

        Pipeline losses: 1%

        36-inch pipeline throughput at 75% capacity: 3600 MWLHV H2

        CXC, 2023, pg38

        European Hydrogen Backbone 2021.

        JRC, 2024, Environmental life cycle assessment (LCA) comparison of hydrogen delivery options within Europe

        Hydrogen compression before trucking

        All (expect USA and Chile)

        Hydrogen assumed to be produced at 30 bar. Compression required to reach 500 bar (JRC, 2020) for trucking of hydrogen and storage of hydrogen (Element Energy, 2018) at either side of the shipping port. Electricity required for compressing hydrogen from 30 bar to 500 bar calculated using formula in DESNZ, 2023.

        2.34 kWh/kg H2

        2.34 kWh/kg H2

        JRC, 2020, JEC-Well-to-Tank report v5

        Element Energy, 2018, Hydrogen supply chain evidence base prepared for BEIS

        DESNZ, 2023, Data Annex

        Compressed hydrogen trucking

        All (expect USA and Chile)

        Hydrogen trucked at 500 bar, from hydrogen plant to port. Trucks are assumed to use diesel with biofuel blend in the current year based on UK Gov conversion factors (2024). By 2030, assume trucks use a 12% biofuel blend (LHV basis) in 2030 based on DfT targets (2021), and for simplicity, this applies to all regions. For all pathways, assume a trucking distance of 50 km between hydrogen production site and port (JRC, 2020). Standard truck fuel use was taken from JEC (2020) and an adjustment factor was applied to account for trucking hydrogen. The leakage rate for compressed hydrogen trucking is assumed to be the same as for storage (Frazer-Nash, 2022) therefore assumed 0.24% leakage per day during trucking.

        Distance: 50 km

        Payload: 0.955 tonne H2 payload

        Capacity: 28 tonne tank mass

        Losses: 0.24%/day

        Fuel use: 0.81 MJ diesel/tonne.km

        Distance: 50 km

        Payload: 0.955 tonne H2 payload

        Capacity: 28 tonne tank mass

        Losses: 0.24%/day

        Fuel use: 0.81 MJ diesel/tonne.km

        UK Gov, 2024, Greenhouse gas reporting: conversion factors 2024

        DfT, 2021, Targeting net zero

        JRC, 2020, JEC-Well-to-Tank report v5

        Frazer-Nash Consulting, 2022, Fugitive Hydrogen Emissions in a Future Hydrogen Economy

        Compressed hydrogen storage

        All (expect USA and Chile)

        Hydrogen stored in gaseous form at 500 bar. The leakage rate ranges from 0.12% – 0.24% per day depending on the storage pressure, cylinder and valve material, and the size of the cylinder. Assume a smaller cylinder is required due to hydrogen being stored at high pressure therefore expect the leakage rate to be at the top end of this range (0.24%). Average duration of compressed hydrogen delivery is 2 – 30 days (Frazer-Nash, 2022). Here assume 20 days storage.

        Losses: 0.24%/day

        Storage time: 20 days

        Losses: 0.24%/day

        Storage time: 20 days

        Frazer-Nash Consulting, 2022, Fugitive Hydrogen Emissions in a Future Hydrogen Economy

        Hydrogen decompression

        All (expect USA and Chile)

        Assumed no heat required for decompression of gaseous hydrogen from high pressure.

        –

        –

        		 

        Compressed hydrogen shipping

        All (expect USA and Chile)

        Hydrogen shipped at 250 bar on ship with capacity (1370 t H2) and fuel usage (534 kt diesel/Mt H2) taken from JRC (2024). Fuel usage converted to MJ diesel/km assuming 29.1 ships deliver 1 Mt H2/yr over distance of 2,500 km (JRC, 2024). Assumed current shipping runs on fossil marine diesel oil (not biodiesel as in JRC source), and by 2030, 25% of hydrogen carrying vessels are assumed to be running on external sources of zero carbon hydrogen (so effectively 25% lower fossil marine diesel oil use by 2030).

        Ship speed (29.6 km/hr) taken from JRC (2024).

        The leakage rate for compressed hydrogen shipping is assumed to be the same as for storage (Frazer-Nash, 2022) therefore assumed 0.24% leakage per day during shipping.

        Return ship journeys always assumed to be empty (IEA, 2019).

        Ships: 100% fossil marine diesel oil

        Fuel usage: 437 MJ diesel/km

        Ships: 75% fossil marine diesel oil, 25% zero carbon hydrogen

        Fuel usage: 328 MJ diesel/km

        JRC, 2024, Environmental life cycle assessment (LCA) comparison of hydrogen delivery options within Europe

        Capacity: 1370 tonne H2

        Vessel speed: 29.6 km/hr

        Losses: 0.24%/day

        Capacity: 1370 tonne H2

        Vessel speed: 29.6 km/hr

        Losses: 0.24%/day

        Frazer-Nash Consulting, 2022, Fugitive Hydrogen Emissions in a Future Hydrogen Economy

        IEA, 2019, The Future of Hydrogen

        Ammonia production

        All

        Data for ammonia production taken from JRC, 2024. Includes inputs of electricity, iron-based catalyst, and water consumption (150 L/kg ammonia used for cooling where 9% is consumed and the rest is recycled in the process; 1.9 L/kg ammonia used for water deionisation). Also, ammonia emissions and nitrous oxide emissions are included.

        Electricity requirement: 0.81 kWh/kg NH3

        Catalyst: 0.055 g catalyst/kg NH3

        Water consumption: 15.4 L H­2O/kg NH3

        Fugitive emissions:

        1.63 gNH3/kgNH3

        1.0 gN2O/kgNH3

        Electricity requirement: 0.81 kWh/kg NH3

        Catalyst: 0.055 g catalyst/kg NH3

        Water consumption: 15.4 L H­2O/kg NH3

        Fugitive emissions:

        1.63 gNH3/kgNH3

        1.0 gN2O/kgNH3

        JRC, 2024, Environmental life cycle assessment (LCA) comparison of hydrogen delivery options within Europe

        Ammonia trucking

        All

        Trucks are assumed to use diesel with biofuel blend in the current year based on UK Gov conversion factors (2024). By 2030, assume trucks use a 12% biofuel blend (energy basis) in 2030 based on UK targets (DfT, 2021). No boil-off assumed (IEA, 2020). For all pathways a trucking distance of 50 km has been assumed from ammonia plant to port (JRC, 2020). Standard truck fuel use taken from JEC (2020) and an adjustment factor was applied to account for trucking ammonia, with the truck payload calculated based on an equivalent 2.6 tonne H2 capacity per ammonia truck (IEA, 2020) converted to 14.7 tonnes of ammonia using molar masses (JRC, 2020).

        Distance: 50 km

        Payload: 14.7 tonne NH3 payload

        Capacity: 28 tonne tank mass

        Losses: 0%/day

        Fuel use: 0.81 MJ diesel/tonne.km

        Distance: 50 km

        Payload: 14.7 tonne NH3 payload

        Capacity: 28 tonne tank mass

        Losses: 0%/day

        Fuel use: 0.81 MJ diesel/tonne.km

        UK Gov, 2024, Greenhouse gas reporting: conversion factors 2024

        DfT, 2021, Targeting net zero

        JRC, 2020, JEC-Well-to-Tank report v5

        IEA, 2020, The Future of Hydrogen assumptions annex

        Ammonia storage

        All

        0.005 kWh/kg ammonia electricity required for storage at export terminal and 0.02 kWh/kg ammonia required for storage at import terminal. Assume 0%/day boil-off rate and 20 days storage time (IEA, 2020).

        Electricity for export terminal: 0.005 kWh/kg NH3

        Electricity for import terminal: 0.02 kWh/kg NH3

        Losses: 0%/day

        Storage time: 20 days

        Electricity for export terminal: 0.005 kWh/kg NH3

        Electricity for import terminal: 0.02 kWh/kg NH3

        Losses: 0%/day

        Storage time: 20 days

        IEA, 2020, The Future of Hydrogen assumptions annex

        Ammonia shipping

        All

        Ammonia ship capacity and fuel use are calculated using the JRC, 2024 report. The ship capacity is based on compressed hydrogen ship capacity, applying the ratio of ships required to deliver 1 Mt H2/yr using compressed hydrogen (29.1 ships) compared to ammonia (4.5 ships). Fuel usage (57 kt diesel/Mt H2) assumed over shipping distance of 2,500 km. Assumed current shipping runs on fossil marine diesel oil, and by 2030, 25% of ammonia carrying vessels are assumed to be running on external sources of zero carbon ammonia (so effectively 25% lower fossil marine diesel oil use by 2030). Boil off rate assumed to be 0.02%/day (JRC, 2024). Ship speed (29.6 km/hr) taken from JRC, 2024. Return ship journeys always assumed to be empty (IEA, 2019).

        Fuel use: 100% fossil marine diesel oil,

        302 MJ diesel/km

        Capacity: 8,859 tonne NH3

        Vessel speed: 29.6 km/hr

        Losses: 0.02%/day

        Fuel use: 75% fossil marine diesel oil, 25% zero carbon ammonia, so 226.5 MJ diesel/km

        Capacity: 8,859 tonne NH3

        Vessel speed: 29.6 km/hr

        Losses: 0.02%/day

        JRC, 2024, Environmental life cycle assessment (LCA) comparison of hydrogen delivery options within Europe

        IEA, 2019, The Future of Hydrogen

        Ammonia cracking

        All

        Data for ammonia cracking is based on JRC, 2024. Assume part of ammonia delivered to the cracker is used for heating (1.63 kg ammonia/kg H2), in addition to 5.67 kg ammonia/kg H2 feedstock use, used to calculate LHV efficiency of this step, given ammonia LHV = 18.6 MJ/kg. Hydrogen produced from ammonia cracking is assumed to be at 99.97% purity and 240 bar. No additional electricity required to compress hydrogen further for downstream usage.

        Ammonia input: 7.3 kg ammonia/kg H2

        Electricity: 4.86 kWh/kg H2

        Nickel-based catalyst: 1.46 g catalyst/kg H2

        Zeolite powder: 0.88 g zeolite/kg H2

        Fugitive emissions:

        Ammonia: 7.05 mg/kg H2

        N2O: 4.89 mg N2O/kg H2

        Ammonia input: 7.3 kg ammonia/kg H2

        Electricity: 4.86 kWh/kg H2

        Nickel-based catalyst: 1.46 g catalyst/kg H2

        Zeolite powder: 0.88 g zeolite/kg H2

        Fugitive emissions:

        Ammonia: 7.05 mg/kg H2

        N2O: 4.89 mg N2O/kg H2

        CXC, 2023, pg38

        JRC, 2024, Environmental life cycle assessment (LCA) comparison of hydrogen delivery options within Europe

        Piping of hydrogen to hydrogen user

        Netherlands

        Transport of hydrogen via pipeline from port storage to the refinery was assumed to be 50 km. Hydrogen transferred from storage to pipeline assumed to be at sufficient pressure, so no additional compression electricity required (Element Energy, 2018). Pipeline compressor rating and throughput from European Hydrogen Backbone report for 36-inch pipeline at 75% capacity (similar to country specific ratings in the CXC 2023 report). Assume some losses in pipeline transport (JRC, 2024) with fugitive losses 1%

        Pipeline distance: 50 km

        Pipeline losses: 1%

        Pipeline distance: 50 km

        Pipeline losses: 1%

        Element Energy, 2018, Hydrogen supply chain evidence base prepared for BEIS

        JRC, 2024, Environmental life cycle assessment (LCA) comparison of hydrogen delivery options within Europe

        European Hydrogen Backbone 2021.

        Element Energy, 2021, Zemo WTT pathways study

        Hydrogen user

        Netherlands

        In Rotterdam, there is a large focus on using hydrogen in industry, including petrochemical terminals and refineries. To align with a hydrogen application in Rotterdam, usage of gaseous hydrogen in a refinery was selected as the downstream application.

        For hydrogen use in a refinery boiler, N2O emissions have been included (0.272 mgN2O/kWh) (Scottish Government, 2023) with hydrogen losses of 0.5% (JRC, 2024). The input hydrogen pressure was assumed to be 10 bar (HyNet, 2022).

        N2O emissions: 0.272 mgN2O/kWh H2

        Hydrogen losses: 0.5%

        N2O emissions: 0.272 mgN2O/kWh H2

        Hydrogen losses: 0.5%

        Rotterdam Maritime Capital, Europe’s Hydrogen Hub

        Scottish Government, 2023, Nitrous Oxide emissions associated with 100% hydrogen boilers: research

        JRC, 2024, Environmental life cycle assessment (LCA) comparison of hydrogen delivery options within Europe

        HyNet, 2022, HyNet Industrial Fuel Switching

        Ammonia user

        Netherlands

        Main uses of ammonia are in fertilisers, with shipping proposed as a major future market. Given the significance of the maritime sector in Rotterdam, usage of ammonia in shipping was selected as the downstream application. No further transport of ammonia before the final user Accounted for nitrous oxide emissions (0.061 gN2O/kWh) releasing during shipping (Maersk Mc-Kinney Moller Center, 2023).

        N2O emissions: 0.061 gN2O/kWh NH3

        N2O emissions: 0.061 gN2O/kWh NH3

        Rotterdam Maritime Capital, Europe’s Hydrogen Hub

        Maersk Mc-Kinney Moller Center, 2023, Managing Emissions from Ammonia-Fueled Vessels

        Table 8: Modelling assumptions

        Appendix F Sensitivity Analysis

        Sensitivity 1: All renewable electricity

        The baseline results shown in Section 3.2 assume grid electricity in the relevant country is used whenever electricity is consumed in any of the steps downstream of hydrogen production, and that grid electricity is also used during hydrogen production via natural gas ATR+CCS.

        This sensitivity tests the impact of using renewable electricity for all steps of the value chain, including hydrogen distribution (e.g. compression, ammonia production, cracking, storage etc) as well as for hydrogen production via ATRCCS. However, no change was made to the electrolysis input electricity source, and this sensitivity was not applied to grid electrolysis pathways as these pathways are unlikely to adopt fully renewable electricity for downstream steps outside of their control when the electrolysis is using grid average electricity.

        Results in Figure 8 and Figure 9 below show that all renewable electrolysis pathways could fall even further below the GHG emission threshold in 2023 and 2030 when this sensitivity is applied. Compared to the baseline renewable electrolysis pathways (without the sensitivity applied), the emission intensity reduces by up to 46 gCO2e/MJLHV when utilising renewable electricity – this largest reduction is achieved for renewable electrolytic hydrogen produced in Morocco and transported as ammonia.

        After application of this sensitivity, the main remaining emissions for the renewable electrolysis pathways will be the release of nitrous oxide in ammonia pathways, and the shipping fuels used for transporting ammonia or compressed hydrogen. The difference between 2023 and 2030 results is due to the decarbonisation of trucks and ships using cleaner fuels.

        All renewable ammonia pathways are also expected to meet the EU GHG threshold. However, these pathways will still have significantly higher emissions compared to the gaseous hydrogen shipping pathways due to efficiency losses in the (re-)conversion steps and release of nitrous oxide.

        Compared to the baseline, hydrogen produced in the UK or USA via natural gas pathways and transported as ammonia still exceeds the EU GHG threshold due to the upstream emissions and emissions associated with ammonia (re-)conversion. However, the emissions from producing hydrogen in the UK via natural gas ATR+CCS and transported via compressed shipping or pipeline could just meet the GHG threshold in 2023. The UK could therefore have an emissions advantage over the USA if comparing natural gas reforming pathways.

        Figure 8: Renewable electrolysis hydrogen GHG intensity using renewable electricity for hydrogen production and during distribution steps to EU, and refinery boiler use of gaseous hydrogen

        Figure 9: Natural gas ATR+CCS hydrogen GHG intensity using renewable electricity for hydrogen production and during distribution steps to EU, and refinery boiler use of gaseous hydrogen

        Sensitivity 2: GB vs Scotland grid electricity

        In the baseline, Scottish grid electricity GHG intensities are modelled for Scottish production, although under EU RED or the EU Gas Directive, the European Commission are yet to confirm whether the Scottish or GB (or even average UK) grid intensity should be used. The GB grid electricity GHG intensity is significantly higher than that of Scotland’s due to the GB grid electricity mix consisting of a higher contribution from natural gas (~40% compared to ~10% in Scotland’s grid mix) and a lower contribution from renewable sources (~40% compared to ~70% in Scotland’s grid). Scotland is expected to have a much lower grid GHG intensity compared to GB until full decarbonisation of the GB grid is achieved. The UK Government have set a target to decarbonise the electricity grid by 2030 but for modelling purposes, the projected GHG intensity of the UK electricity grid is based on the grid mix data in the National Grid’s Future Energy Scenarios (~70% reduction in the electricity grid GHG intensity in 2030 compared to today). The GHG intensities modelled for the GB and Scottish grids include upstream emissions in line with EU RED requirements. As shown in Figure 10, all Scottish electrolysis and distribution pathway combinations using GB grid electricity intensities are expected to be above the EU GHG threshold in 2023, and only the compressed pipeline pathway may just comply in 2030.

        The added emissions from the higher GB grid intensity are particularly significant for pathways transporting hydrogen via ammonia, increasing by over 100% compared to the same pathway using the Scottish grid factor.

        Scottish producers would therefore gain a significant advantage if the Commission were to allow a Scottish grid factor to be used (and under EU RED rules, this decision would also become more likely if zonal pricing across GB is introduced, provided there are one or more zones in Scotland).

        Figure 10: Hydrogen GHG emission from Scottish or GB grid electrolytic hydrogen pathways including distribution to EU and refinery boiler use of gaseous hydrogen

        Sensitivity 3: Low-carbon shipping fuel

        In the baseline, ships are assumed to use fossil marine diesel fuel exclusively in 2023, but in 2030, 25% of the fleet is assumed to be fuelled by zero emission hydrogen or ammonia. As a sensitivity, we explored switching to 100% zero emission shipping fuel (such as renewable ammonia) in 2030, when supply is expected to be more readily available. For simplicity, this zero emission fuel is assumed to be sourced from supplies other than the shipping cargo, so as to not impact the chain efficiencies. The resulting sensitivity results show a modest reduction in emissions across all shipping pathways but is more noticeable in pathways with high shipping distances such as from Chile.

        Compared to the baseline, using 100% zero emissions shipping fuel to transport renewable or grid electricity based ammonia from Chile to Rotterdam could reduce the total pathway emissions by 18% or 8% respectively in 2030, or by 6% for US renewable ammonia pathways in 2030. This sensitivity for the Chile and USA renewable electrolysis pathways would enable compliance with the EU GHG threshold in 2030.

        However, for hydrogen production in countries other than Chile and USA (using renewable electricity and ammonia distribution), decarbonising shipping fuel in 2030 is unlikely to be significant enough to enable previously non-compliant pathways to fall below the GHG threshold.

        Figure 11: Renewable electrolysis hydrogen production in 2030, using zero emissions shipping fuel during shipping to the EU, and refinery boiler use of gaseous hydrogen

        Figure 12: Grid electrolysis hydrogen production in 2030, using zero emissions shipping fuel during shipping to the EU, and refinery boiler use of gaseous hydrogen

        Figure 13: Natural gas ATR+CCS hydrogen production in 2030, using zero emissions shipping fuel during shipping to the EU, and refinery boiler use of gaseous hydrogen

        Sensitivity 4: Renewable heat

        In the baseline, the ammonia pathways that require reconversion to gaseous hydrogen are assumed to consume some of the shipped ammonia to provide heat for the cracking process. For this sensitivity, utilisation of renewable industrial heat (from an alternative source with zero emissions) instead of self-consumption of ammonia was modelled.

        Figure 14 shows that using alternative renewable heat for renewable ammonia cracking could enable production in Norway to achieve compliance with the threshold in 2023, but not other countries. However, as shown in Figure 15, this sensitivity does not sufficiently reduce the GHG intensity to achieve compliance with the EU GHG threshold for any grid-based ammonia pathways in 2023. But by 2030, decarbonisation of Scotland’s grid may be enough to enable the Scottish grid-based ammonia pathway to comply.

        Figure 14: Renewable electrolysis hydrogen GHG intensity using (alternative) renewable heat for ammonia cracking, and including refinery boiler use of gaseous hydrogen

        Figure 15: Grid electrolysis hydrogen GHG intensity using (alternative) renewable heat for ammonia cracking, and including refinery boiler use of gaseous hydrogen

        Figure 16: Natural gas ATR+CCS hydrogen GHG intensity using (alternative) renewable heat for ammonia cracking, and including refinery boiler use of gaseous hydrogen

        Appendix G GHG Emission Compliance Scoring Matrix

        The GHG intensity calculated for each pathway in 2023 and in 2030 were compared against the EU GHG emissions threshold of 28.2 gCO2e/MJLHV to evaluate the risk of non-compliance for each potential hydrogen exporting country. The table below summarises the results from the GHG intensity scoring including justification for the scores. A selection of GHG reduction measures were modelled in the sensitivity analysis to evaluate the impact of using renewable electricity across all the post-production supply chain steps, using (alternative) renewable heat for the ammonia cracking step of relevant pathways, and/or switching in 2030 to using only zero emission marine fuels for shipping pathways. See Appendix F for further details. Scottish vs GB grid results are given below as separate pathways scores. Those scores marked with a * do not have any relevant sensitivities modelled that reduce their emissions, so cannot be medium risk. The following scoring was used:

        L

        Low risk: Likely to comply with GHG threshold set under EU RED and EU Gas Directive

        M

        Medium risk: Could comply if relevant GHG reduction measures modelled in the sensitivity analysis are applied

        H

        High risk: Likely to not comply, even with relevant GHG reduction measures modelled in the sensitivity analysis

        Country

        Hydrogen Value Chain

        2023

        2030

        Reasoning

        Scotland

        Ammonia (Scottish grid factor), shipping, cracking, H2 use

        M

        L

        2023 can comply if renewable electricity is used throughout the chain. In 2030, Dutch electricity grid decarbonisation reduces cracking impact allowing compliance.

        Scotland

        Ammonia (Scottish grid factor), shipping, Ammonia use

        L

        L

        Below the threshold, despite emissions arising from conversion steps.

        Scotland

        Compression (Scottish grid factor), shipping, H2 use

        L

        L

        Well below the threshold

        Scotland

        Compression (Scottish grid factor), shipping, H2 use

        L

        L

        Well below the threshold

        Scotland

        Ammonia (GB grid factor), shipping, cracking, H2 use

        M

        L

        2023 can comply if renewable electricity is used throughout the chain. In 2030, Dutch electricity grid decarbonisation reduces cracking impact allowing compliance.

        Scotland

        Ammonia (GB grid factor), shipping, ammonia use

        L

        L

        Below the threshold, despite conversion emissions.

        Scotland

        Compression (GB grid factor), H2 use

        L

        L

        Well below the threshold

        Scotland

        Compression (GB grid factor), pipeline, H2 use

        L

        L

        Well below the threshold

        Norway

        Ammonia, shipping, cracking, H2 use

        M

        L

        Using renewable heat or renewable electricity in 2023 can enable compliance.

        Norway

        Ammonia, shipping, ammonia use

        L

        L

        Below the threshold, despite conversion emissions.

        Norway

        Compression, shipping, H2 use

        L

        L

        Well below the threshold

        Norway

        Compression, pipeline, H2 use

        L

        L

        Well below the threshold

        France (nuclear)

        Ammonia, shipping, cracking, H2 use

        M

        M

        Threshold can be met in 2023 and 2030 by using renewable electricity for ammonia cracking.

        France (nuclear)

        Ammonia, shipping, ammonia use

        M

        L

        Using renewable electricity throughout chain enables compliance in 2023. 2030 is just compliant due to decarbonisation of the Dutch electricity grid.

        France (nuclear)

        Compression, shipping, H2 use

        L

        L

        Well below the threshold, even with some nuclear electricity emissions.

        France (nuclear)

        Compression, pipeline, H2 use

        L

        L

        Well below the threshold, even with some nuclear electricity emissions.

        Morocco

        Ammonia, shipping, cracking, H2 use

        M

        M

        Morocco’s grid leads to high ammonia conversion emissions, but if renewable electricity was used instead, could comply.

        Morocco

        Ammonia, shipping, ammonia use

        M

        M

        Morocco’s grid leads to high ammonia conversion emissions, but if renewable electricity was used instead, could comply.

        Morocco

        Compression, shipping, H2 use

        L

        L

        Below the threshold, despite Moroccan grid input for compression.

        Morocco

        Compression, pipeline, H2 use

        L

        L

        Below the threshold, despite Moroccan grid input for compression.

        USA

        Ammonia, shipping, cracking, H2 use

        M

        M

        Using renewable electricity can enable compliance.

        USA

        Ammonia, shipping, ammonia use

        M

        L

        2030 just below threshold, but using renewable electricity throughout chain, rather than New Jersey’s high intensity grid, can enable compliance in 2023.

        Chile

        Ammonia, shipping, cracking, H2 use

        M

        M

        Using renewable electricity throughout chain can enable compliance.

        Chile

        Ammonia, shipping, ammonia use

        M

        L

        2030 just below threshold, but using renewable electricity throughout chain, rather than Chile’s high intensity grid, can enable compliance in 2023.

        Table 9: GHG intensity Compliance Scoring Matrix for Renewable Electricity Electrolysis Pathways

        Country

        Hydrogen Value Chain

        2023

        2030

        Reasoning

        Scotland (Scottish grid factor)

        Ammonia (Scottish grid factor), shipping, cracking, H2 end use

        H

        L

        Electricity grid decarbonisation enables this pathway to just fall below the threshold in 2030, but not in 2023.

        Scotland (Scottish grid factor)

        Ammonia (Scottish grid factor), shipping, ammonia end use

        H*

        L

        Electricity grid decarbonisation enables this pathway to just fall below the threshold in 2030, but not in 2023.

        Scotland (Scottish grid factor)

        (Scottish grid factor) compressed H2, shipping, H2 end use

        H*

        L

        Just above the threshold in 2023, but electricity grid decarbonisation enables this pathway to fall well below the threshold in 2030.

        Scotland (Scottish grid factor)

        (Scottish grid factor) compressed H2, pipeline, H2 end use

        L*

        L*

        Just below the threshold in 2023, and electricity grid decarbonisation enables this pathway to fall well below the threshold in 2030

        Scotland (GB grid factor)

        Ammonia (GB grid factor), shipping, cracking, H2 end use

        H

        H

        GB electricity grid ~3 times more GHG intensive than Scotland’s, leading to emissions well above the threshold, even with projected grid decarbonisation.

        Scotland (GB grid factor)

        Ammonia (GB grid factor), shipping, ammonia end use

        H*

        H

        GB grid ~3 times more GHG intensive than Scotland’s, leading to emissions well above the threshold, even with projected grid decarbonisation.

        Scotland (GB grid factor)

        (GB grid factor) compressed H2 shipping, H2 end use

        H*

        H

        GB electricity grid decarbonisation not quite enough to meet threshold by 2030.

        Scotland (GB grid factor)

        (GB grid factor) compressed H2 pipeline, H2 end use

        H*

        L

        GB electricity grid decarbonisation not quite enough to meet threshold by 2030.

        Norway

        Ammonia, shipping, cracking, H2 end use

        H

        L

        Decarbonisation of Norway and Netherlands electricity grids enables compliance in 2030.

        Norway

        Ammonia, shipping, ammonia end use

        L*

        L

        Below threshold, despite conversion emissions.

        Norway

        Compressed H2 shipping, H2 end use

        L*

        L

        Well below the threshold.

        Norway

        Compressed H2 pipeline, H2 end use

        L*

        L*

        Well below the threshold.

        France

        Ammonia, shipping, cracking, H2 end use

        H

        H

        France’s electricity grid decarbonisation is not enough to comply in 2030.

        France

        Ammonia, shipping, ammonia end use

        H*

        H

        France’s electricity grid decarbonisation is not enough to comply in 2030.

        France

        Compressed H2 shipping, H2 end use

        H*

        H

        France’s and Netherland’s electricity grid decarbonisation is not enough to comply.

        France

        Compressed H2 pipeline, H2 end use

        H*

        L*

        France’s electricity grid decarbonisation combined with low emissions from distribution allows compliance in 2030.

        Morocco

        Ammonia, shipping, cracking, H2 end use

        H

        H

        Morocco’s grid has a very high GHG intensity, significantly exceeding the threshold.

        Morocco

        Ammonia, shipping, ammonia end use

        H*

        H

        Morocco’s grid has a very high GHG intensity, significantly exceeding the threshold.

        Morocco

        Compressed H2 shipping, H2 end use

        H*

        H

        Morocco’s grid has a very high GHG intensity, significantly exceeding the threshold.

        Morocco

        Compressed H2 pipeline, H2 end use

        H*

        H*

        Morocco’s grid has a very high GHG intensity, significantly exceeding the threshold.

        USA

        Ammonia, shipping, cracking, H2 end use

        H

        H

        New Jersey’s grid has a high GHG intensity, significantly exceeding the threshold, even with expected decarbonisation by 2030.

        USA

        Ammonia, shipping, ammonia end use

        H*

        H

        New Jersey’s grid has a high GHG intensity, significantly exceeding the threshold, even with expected decarbonisation by 2030.

        Chile

        Ammonia, shipping, cracking, H2 end use

        H

        H

        Chile’s grid has a high GHG intensity, significantly exceeding the threshold, even with expected decarbonisation by 2030.

        Chile

        Ammonia, shipping, ammonia end use

        H*

        H

        Chile’s grid has a high GHG intensity, significantly exceeding the threshold, even with expected decarbonisation by 2030.

        Table 10: GHG intensity Compliance Scoring Matrix for Grid Electricity Electrolysis Pathways

        Country

        Hydrogen Value Chain

        2023

        2030

        Reasoning

        USA

        Ammonia, shipping, cracking, H2 end use

        H

        H

        Natural gas upstream emissions combined with N2O emissions, chain efficiency losses and the New Jersey electricity grid means emissions significantly above the threshold.

        USA

        Ammonia, shipping, ammonia end use

        H

        H

        Natural gas upstream emissions combined with N2O emissions, chain efficiency losses and the New Jersey electricity grid means emissions significantly above the threshold.

        UK

        Ammonia (GB grid factor), shipping, H2 end use

        H

        H

        Natural gas upstream emissions combined with N2O emissions, chain efficiency losses, and GB electricity grid means emissions significantly above the threshold.

        UK

        Ammonia (GB grid factor), shipping, Ammonia end use

        H

        H

        Natural gas upstream emissions combined with N2O emissions, chain efficiency losses, and GB electricity grid means emissions significantly above the threshold.

        UK

        Compression (GB grid factor), shipping, H2 end use

        M

        L

        Using renewable electricity for ATR+CCS hydrogen production and distribution could enable compliance in 2023. GB electricity grid and shipping decarbonisation could just lead to compliance in 2030 (but still sensitive to upstream natural gas emissions).

        UK

        Compression (GB grid factor), pipeline, H2 end use

        L

        L

        Low distribution emissions may just allow compliance in 2023 (but still sensitive to upstream natural gas emissions).

        Table 11: GHG Intensity Compliance Scoring Matrix for Natural Gas ATR+CCS Pathways

        Appendix H Methodology for calculating the cost of compliance

        For those pathways identified with an amber rating, ClimateXChange requested a methodology for calculating the costs (in £/kg) of meeting EU GHG intensity requirements if the GHG intensity of a delivered hydrogen pathway is too high but could be made compliant via implementing various GHG emission reduction measures.

        This methodology will allow ClimateXChange to combine energy and fuels unit cost data (for 2023 and 2030) from their previous report with the usage rates and relative GHG emission intensities from this project, to calculate the added costs of compliance, potentially as a weighted average cost across multiple mitigation options.

        Table 12 outlines the steps that can be taken to calculate the minimum cost of compliance for the “amber rating” hydrogen pathways. This approach relies on the user selecting mitigation measures that are independent of each other[9] and does not take into account any variation in cost within a mitigation measure, nor how these abatement costs compare to other options outside of the supply chain sensitivities explored (or other decarbonisation options for the end user outside of these hydrogen pathways).

        Step

        Methodology

        Example (purely illustrative)

        1

        Model the GHG intensity of the delivered hydrogen without any measures applied

        48.2 gCO2e/MJLHV hydrogen

        2

        Model the cost of the delivered hydrogen without any measures applied

        £19.2/kg ÷ 120 MJLHV/kg = £0.16/MJLHV hydrogen

        3

        Calculate the reduction in GHG intensity required to achieve the EU GHG emission threshold (step 1 – 28.2 gCO2e/MJLHV)

        48.2 – 28.2 = 20.0 gCO2e/MJLHV hydrogen abatement required

        4

        Identify an emission reduction measure

        Wind electricity replacing grid electricity across the whole pathway (at the same availability as grid)

        5

        Model the delivered hydrogen GHG intensity with the new measure applied

        15.2 gCO2e/MJLHV hydrogen

        6

        Calculate the maximum abatement potential of the new measure (step 1 – step 7)

        48.2 – 15.2 = 33.0 gCO2e/MJLHV hydrogen abated

        7

        Model the delivered hydrogen cost with the new measure applied

        £21.6/kg ÷ 120 MJLHV/kg = £0.18/MJLHV hydrogen

        8

        Calculate the added cost of the new measure (step 7 – step 2)

        0.18 – 0.16 = 0.02 £/MJLHV hydrogen

        9

        Calculate the abatement cost of the new measure, by dividing step 8 by step 6 then multiplying by 1,000,000

        (0.02 £/MJLHV hydrogen ÷ 33.0 gCO2e/MJLHV hydrogen) x 1,000,000 g/t = £606/tCO2e abated

        10

        Repeat steps 4 – 9 for each individual mitigation measure, and rank the mitigation measure abatement potentials by their abatement costs (step 9 results)

        Max 2.0 gCO2e/MJLHV hydrogen abated @£300/tCO2e for renewable shipping fuel replacing fossil marine diesel

        Max 33.0 gCO2e/MJLHV hydrogen abated @£606/tCO2e for renewable power replacing Scottish grid

        Max 12.0 gCO2e/MJLHV hydrogen abated @£700/tCO2e for (alternative) renewable heating replacing ammonia cracking self-heating

        11

        Repeat steps 4-10 as many times as there are measures, but instead of assessing measures individually, start with the lowest abatement cost measure, then cumulatively include each extra measure on top of the others (following the step 10 ranking), to output a new list of abatement potentials ranked by their new abatement costs. At the end of each new step 10, overwrite step 1 with the latest step 5 result, and overwrite step 2 with the latest step 7 result, before adding the next measure in step 4 again.

        2.0 gCO2e/MJLHV hydrogen abated @£300/tCO2e for renewable shipping fuel replacing fossil marine diesel

        33.0 gCO2e/MJLHV hydrogen abated @£606/tCO2e for renewable power replacing Scottish grid

        3.0 gCO2e/MJLHV hydrogen abated @£2,800/tCO2e for (alternative) renewable heating replacing ammonia cracking self-heating

        12

        Select enough measures in ranked order (cheapest first) from step 11 to achieve the step 3 requirement, noting that the whole abatement potential of each measure may not be needed

        2.0 gCO2e/MJLHV hydrogen abated @£300/tCO2e for renewable shipping fuel replacing fossil marine diesel

        18.0 gCO2e/MJLHV hydrogen abated @£606/tCO2e for renewable power replacing Scottish grid

        No (alternative) renewable heating needed

        13

        Calculate a weighted average of the selected step 12 abatements and abatement costs to calculate the overall minimum cost of compliance

        (2 x 300 + 18 x 606 + 0 x 2,800) / (2 + 18 + 0) = £575/tCO2e abated

        14

        Finally, convert step 13 into £/kg by dividing by 1,000,000 then multiplying by step 3 and multiplying by the LHV energy content of the delivered hydrogen

        (£575/tCO2e abated ÷ 1,000,000 g/t) x 20 gCO2e/MJLHV hydrogen x 120 MJLHV/kg = £1.38/kg extra required to comply with EU GHG threshold

        Table 12: Methodology for calculating the cost of compliance

        © The University of Edinburgh, 2024
        Prepared by ERM 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. The rationale for a voluntary standard is that it builds consumer trust and encourages participation through market-driven benefits like increased demand and price advantages, without imposing penalties. It supports self-regulation and is easier to implement internationally, avoiding the need for legislative enforcement. ↑



        2. Other standards that could incentivise the uptake of low-carbon hydrogen are also available in some regions (e.g. UK’s Renewable Transport Fuel Obligation, or California’s Low Carbon Fuel Standard). They have been excluded from this analysis because they are targeted at non-EU consumption, which is unlikely to affect hydrogen exports to the EU market. No further relevant standards were identified within those countries (Norway, Morocco, Chile) in scope of this study. ↑



        3. Upstream emission factor for nuclear fuel is taken from Table 3 from RED Delegated Act on GHG methodology for RCFs and RFNBOs (1.2 gCO2e/MJ LHV fuel) (European Commission, 2023). Nuclear power plant LHV efficiency of 33% then applied (JRC, 2020). ↑



        4. Feedstock emissions are only relevant to natural gas pathways and includes the upstream emissions for e.g. natural gas extraction, pre-processing and transport, including methane leakages. ↑



        5. The maximum theoretical efficiency that a heat engine may have operating between two given temperatures. It is used in the LHV energy allocation methodology when heat or steam is a co-product. ↑



        6. GOs is an assurance scheme to demonstrate to end-users that a product (e.g. hydrogen, electricity, biogas) are produced from renewable sources. In electricity, this can take the form of Renewable Electricity Certificates (RECs) or Power Purchasing Agreements (PPAs). More information on this in Appendix A. ↑



        7. The maximum credit value is $0.60/kg hydrogen. This amount is multiplied by 5 (i.e. maximum credit value of $3.0/kg hydrogen) if the production facility meets prevailing wage requirements and apprenticeship requirements defined under the IRA. ↑



        8. This is due to avoided methane emissions. ↑



        9. If any of the measures are not independent of each other (e.g. if one measure impacts the efficiency of the supply chain), these non-independent measures may change the maximum abatement potential of other measures, and the abatement costs of some measures may also be impacted by the costs and order/combinations of other measures applied (or not applied). This process to find a minimum compliance cost may be iterative and will rely on cost & GHG modelling of the whole supply chain exploring combinations of measures. ↑


        Work completed: December 2023

        DOI: http://dx.doi.org/10.7488/era/3666

        This research was carried out in 2022/23 and was based on the market conditions at that time. Policy related to and emphasis on electricity networks has changed significantly since this research was conducted and therefore not all aspects of the report reflect the current landscape.

        Executive summary

        Solar panels can help decarbonise Scotland’s energy supply and there are plans to reduce barriers to enable greater deployment in Scotland. The Scottish Government recently consulted on the potential for a solar ambition and a Solar Vision is in development.

        The solar industry has been calling for a 4-6 GW solar photovoltaic (PV) ambition by 2030, to put Scotland in line with the UK target of 70 GW by 2035. This can be broken down as 2.5 GW rooftop solar (1.5 GW domestic and 1 GW commercial), with the remaining capacity made up of large-scale grounded mounted solar.

        Our work investigates the benefits and impacts of deploying 2.5 GW of rooftop solar PV installation onto the electricity network in Scotland by 2030. The distribution network operators are forecasting lower levels of solar PV uptake in their future energy scenarios.

        We consider the benefits, high-level estimate of reinforcement investments needed to accommodate it and the potential impact on consumer bills. We also consider wider costs to the transmission network.

        Benefits and opportunities

        The rise of electricity generation connected to a distribution network, known as embedded generation, offers new opportunities to the distribution network for managing the future growth of demand. Potential network benefits include:

        • Reduction in electricity infrastructure investments due to generation meeting demand
        • Reduced line losses from transmitting electricity across the transmission network due to more demand being met by onsite generation.
        • Supporting demand in other areas by selling excess power

        Financial benefits for consumers adopting solar PV arise from lower electricity bills. Benefits could be increased if demand could be shifted to times of excess generation. Stakeholders from the distribution networks considered that increased solar PV deployment would provide greatest opportunities for commercial consumers whose peak demand during the day would be most likely to match peak solar generation.

        We also found that the co-location of commercial or domestic scale battery storage alongside solar PV would provide the greatest economic opportunities by extending the duration throughout the day when demand is met by on-site generation. This could also reduce network impacts by delaying the need for network upgrades.

        Impacts and costs

        We estimate that 27% (209) primary substations in Scotland might become overloaded with an increased deployment of rooftop solar. The impact is additional to that from other low-carbon technologies (e.g. wind, ground mounted solar, battery storage) as forecast by Distribution Network Operators. The majority (84%) of these substations are located in Scottish Power Energy Networks region, with 16% in Scottish & Southern Electricity Networks region.

        Our high-level estimates of total costs for all forecasted network interventions are:

        • Scottish Power Energy Networks (SPEN): £130 million worth of work to upgrade high-voltage substations and low-voltage networks and £120 million to upgrade transmission infrastructure.
        • Scottish & Southern Electricity Networks (SSEN): £20 million worth of work to upgrade high-voltage substations and low-voltage networks, and £30 million to upgrade transmission infrastructure.

        These are based on network reinforcement costs for a mix of areas representative of Scotland and key information on network location and capacity, and magnitude of solar PV in the area, with the results scaled up to represent all of Scotland. The cost of traditional network reinforcement involves replacing substations and overloaded equipment with that of a higher capacity rated equipment.

        The distribution costs will be paid by all consumers in Scotland through their energy bills. The estimated average annual increase in domestic consumer energy bills is £0.53 in the SSEN area and £1.81 in the SPEN area. The estimated average annual increase in non-domestic consumer energy bills is £7.17 in SSEN’s area and £24.46 in SPEN’s area.

        Alternative ways to release additional capacity from existing assets that could reduce costs include:

        • Flexibility services, which contracts consumers/aggregators to generate power or shift load at times of congestion to support constraint management.
        • Reconfiguring networks to release capacity from feeders that are close to operational limits.
        • Smart solutions and approaches to release capacity, for instance low-voltage monitoring for better informed design and operation, dynamic variable ratings to factor in seasonality and electronic control of power flows.

        These have the potential of decreasing or delaying the need for reinforcement but will not entirely negate this need.

        Overall, it is difficult to quantify whether the benefits outweigh the impacts on the grid and on consumer bills, but steps can be taken to reduce the potential impacts and enable greater benefits to be realised. Examples include investing in on-site battery storage and continued deployment of network flexibility and innovation solutions.

        Recommendations

        • Network interventions are triggered because Distribution Network Operators are required to use a conservative assumption that less generation will be consumed onsite with more exported to the network. This could be an area to explore.
        • Incentivising the requirement to have domestic and non-domestic battery storage in conjunction with solar PV to absorb any excess solar, thus preventing exports, may reduce the scale of network interventions needed. Battery storage can provide greater network flexibility by charging and discharging as required.
        • A co-ordinated approach is needed between key stakeholders including the Distribution Network Operators, transmission operators, local authorities and the solar industry to ensure that a significant increase in solar PV can be accommodated. Improved evidence of large quantities of solar being proposed is needed to allow the network operators to plan accordingly and justify their decisions to Ofgem.

         

        Glossary of terms

        AC

        Alternating current

        ANM

        Active network management

        BSPs

        Bulk supply points

        DC

        Direct current

        DFES

        Distribution future energy scenarios

        FIT

        Feed in Tariff

        DGCG

        The distributed generation connection guides

        DNOs

        Distribution network operators

        DUoS

        Distribution Use of System

        EHV

        Extra high voltage

        EREC

        Engineering recommendation

        EV

        Electric vehicle

        GSPs

        Grid supply points

        GW

        Giga watt

        GB

        Great Britain

        G98

        Distributed Generation Connection Guides: G98

        G99

        Distributed Generation Connection Guides: G99

        HV

        High voltage

        kW

        kilo Watt

        LCTs

        Low-carbon technologies

        LV

        Low voltage

        MW

        Mega watt

        Ofgem

        Office of Gas and Electricity Markets

        PS

        Primary substation

        PV

        Photovoltaic

        RIIO-ED2

        RIIO’ stands for ‘Revenue = Innovation + Incentives + Outputs’ and ‘ED’ stands for Electricity Distribution

        SEG

        Smart export guarantee

        SPEN

        Scottish Power Electricity Network

        SPT

        Scottish Power Transmission

        SS

        Secondary substation

        SSEN

        Scottish & Southern Electricity Networks

        SSET

        Scottish & Southern Electricity Transmission

        T&D

        Transmission and distribution

        TOs

        Transmission operators

        UoS

        Use of System

         

        Introduction

        Background

        Scotland has made significant progress in decarbonising its energy sector through the growth of renewable electricity generation technology. The Scottish Government has a statutory target legislated in the Climate Change (Scotland) Act 2019 to reach net zero emissions by 2045. This will require further decarbonisation across the entire energy sector in Scotland. The draft Energy Strategy and Just Transition Plan and the Climate Change Monitoring report set out targets for the transformation of Scotland’s energy sector from 2030 and beyond. There is an ambition to deliver at least 20 GW of additional low-cost renewable capacity by 2030, and for at least the equivalent of 50% of Scotland’s energy across heat, transport, and electricity demand to come from renewable sources.

        Over recent years, domestic, non-domestic and commercial buildings have been encouraged to become more energy efficient and reduce electricity consumption from the grid. As well as the use of energy efficiency measures, there has been an increase in the adoption of low carbon technologies (LCT), such as rooftop solar PV. Schemes such as Feed in Tariff (FIT) and Smart Export Guarantee (SEG) have further contributed to the rise in solar PV installations. The SEG scheme provides a payment to renewable energy generators for every kilowatt-hour (kWh) of energy that is exported to the grid via a p/kWh tariff agreement.

        The Scottish Government recently consulted on the potential for a solar ambition. The solar industry has been calling for a 4-6 GW solar photovoltaic (PV) ambition by 2030, which would align Scotland with the UK Governments target for solar [1]. This can be broken down into the following:

        • 1.5 GW domestic rooftop solar
        • 1 GW commercial rooftop solar
        • Remaining capacity made up of large-scale grounded mounted solar

        This level of solar ambition will require additional electricity network capacity, with cost implications in the form of necessary distribution and transmission network interventions. The distribution network costs will, in part, be passed onto electricity consumers across Scotland while transmission costs are levied on consumers at GB level. If distribution network intervention costs are higher in specific network regions, then consumers who sit in this region will pay more towards distribution costs through their energy bills than those in other network regions.

        Aims and approach

        This report focuses on 2.5 GW of rooftop solar PV installations, spread across domestic and non-domestic premises, and provides an assessment into the impacts on the electricity network and the resulting costs and benefits of greater solar PV deployment in Scotland.

        The level of investment needed to accommodate the additional solar installations and potential impact on consumers energy bills is estimated using credible assumptions but is not definitive. The assessment also considers wider costs to the transmission network. Our work was informed through desktop research, stakeholder engagement and analysis using data obtained from DNOs and reports in the public domain.

        Electricity network overview

        The electrical infrastructure in Scotland is made of two key parts: the transmission network and the distribution network. The transmission network includes the 400 kV, 275 kV and 132 kV network and operated by Transmission Owners (TOs), and the distribution network which includes lower voltage networks and is operated by the Distribution Network Operators (DNOs).

        The transmission and distribution networks in Scotland are operated by the following organisations (see Figure 1):

        • Scottish Power Energy Networks (SPEN), made up of 2 key parts:
          • Scottish Power (SP) Distribution are the DNO of the distribution network in Central & Southern Scotland
          • SP Transmission are the TO for Central & Southern Scotland
        • Scottish & Southern Electricity Networks (SSEN), made up of 2 key parts:
          • SSEN Distribution, who are the DNO for the North of Scotland
          • SSEN Transmission are the TO for the North of Scotland
        A map of scotland and scotland network Description automatically generated

        Figure 1 Electricity network operator map for Scotland

        At the distribution level, there are four types of electrical substations used to distribute electrical power from the transmission network to consumers:

        • Grid Supply Points (GSPs): Provide the connection between the transmission system and the distribution network. GSPs step the voltage down from the transmission network voltage of either 400 kV, 275 kV or 132 kV to the highest distribution network voltage known as the sub-transmission network or EHV network.
        • Bulk Supply Points (BSPs): Step the incoming 132 kV voltage down to 33 kV, which is then distributed to different primary substations in the region. Some very large industrial and commercial loads may be directly fed at this level.
        • Primary Substations: Take the incoming 33 kV feeder and steps the voltage down to 11 kV which directly supplies some larger commercial loads, as well as the secondary substations.
        • Secondary Substations: Take the incoming 11 kV feeder and steps the voltage down to Low Voltage (LV), which will typically supply residential areas.

        Solar PV connection types

        All solar PV installations (and other generation types) connecting to the distribution network must comply with the Distribution Code and either Engineering Recommendation (EREC) G98 or G99 as applicable [2] [3]. The Distributed Generation Connection Guides (DGCG) outline the steps to be carried out to obtain a connection agreement and gain approval to connect solar PV assets to the network [4].

        The DGCG considers both EREC G98 and EREC G99:

        • G98 for small-scale installations: This is applicable for small-scale installations with a total capacity of no more than 16 amps per phase connected at low voltage (230 V). This equates to a maximum peak power of 3.68 kW single phase or 11.04 kW three-phase. An example of a G98 application is domestic rooftop solar PV.
        • G99 for large-scale installations: This is applicable for installations with a total installed capacity greater than 16 amps per phase connected at either low voltage (Type A only) or high voltage levels. G99 includes four types:
          • Type A: From 0.8 MW to < 1 MW
          • Type B: From 1 MW to < 10 MW
          • Type C: From 10 MW to < 50 MW
          • Type D: greater than or equal to 50 MW

        Depending on available roof space, a commercial rooftop solar installation may fall into the G99 Type A category. Larger G99 types are likely to be ground-mounted.

         

        Project findings

        Potential opportunities for distribution networks from increased solar PV deployment

        Distribution network equipment has traditionally been sized to supply the peak load, which is the maximum demand that an area is expected to draw from the wider electricity network. This is to ensure that consumers do not pay for network infrastructure that is not used, known as stranded assets. The electrification of heat and transport through the introduction of heat pumps and electric vehicle charging points will add to the peak demand, potentially resulting in greater network constraints and triggering necessary interventions as a result. There are new ways to manage the impacts, including using the techniques described in Section 4.3.3. The rise of embedded connected generation will offer new opportunities to the distribution network when it comes to managing the future growth of demand.

        Benefits include the following:

        • Reduction in electricity infrastructure: Connecting distributed generation close to the point of use (e.g., rooftop solar PV behind the meter) could result in a reduced need for distribution infrastructure as the demand is being offset by generation. Increased distributed generation can reduce the average load on network assets and can defer the immediate need for asset replacement and when replacement is required. For example, charging of EVs could be timed to match the generation profile of the solar, reducing the need to supply power from elsewhere in the grid. However, the scale of 2.5 GW of additional solar will need to be investigated further to understand this opportunity in more detail.
        • Reduced line losses: Generation can supply loads within the distribution network, reducing the distance between where supply and demand are located, which reduces energy losses.
        • Supporting demand in other areas: Generators can sell excess power that cannot be consumed locally to the network to support other demand users. This can have the benefit of reducing network demand during periods of high demand, thus enabling more capacity to be made available for supporting more connections in wider network.

        Leveraging these benefits requires active support for flexibility technologies and accounting for these benefits in network design.

        Due to its inherent nature, solar PV generates in a finite window which is not generally at times of peak demand. This makes solar less directly beneficial than other renewable energy technologies that have some part of their energy generation window overlapping with the peak demand window. Engagement with DNO stakeholders resulted in the following conclusions on solar opportunities to the network:

        • A greater deployment of solar PV in the future will provide only small opportunities to reduce peak demand on the wider network. This is because solar generation is greatest in the summer on sunny days, and the demand peaks in the winter evenings when solar generation is usually at its lowest.
        • Domestic consumers who deploy rooftop solar PV are unlikely to present opportunities to the network as it is unlikely that generation will coincide with peak domestic demand.
        • There may be greater opportunities to the network from commercial consumers whose demand will peak during the day with a greater chance of matching the peak in solar PV generation. This would especially be the case for commercial buildings with flexible demand, or who provide EV charging points to their employees.

        However, it is the view of the stakeholders that co-locating domestic and commercial scale battery storage within the premise along with solar PV can provide greater economic opportunities. It will enable greater benefits to the distribution network to be realised as it will allow consumers to offset their peak demand and extend the duration during which electricity stored from solar PV can meet their own energy requirements [5]. This could provide a valuable flexibility service to the network and delay the need for expensive network upgrades, which can reduce network costs and consumers’ energy bills. Overall, battery storage should be encouraged alongside solar to enable greater opportunities for both the network and technology to be realised going forward.

        Potential benefits to consumers from increased solar PV deployment in Scotland

        Connecting solar consumers

        For an individual connecting solar consumer, the main benefits of installing solar PV include a reduction in electricity costs and direct access to zero carbon renewable electricity.

        The Carbon Trust publishes information online to advise businesses on the potential of renewable energy and to assess whether using renewable technologies is a viable option for a business [6]. According to the Carbon Trust, typical small-scale installations are around 15 to 25 square metres, with a 3 kW system comprising of around 15 panels taking up an area of 20 square meters and can generate roughly 2,500 kWh per annum [7]. Maintenance costs are low and estimated payback time varies significantly and will depend on the circumstances of each site. Some domestic installations report a payback period of just 4 years, reduced from previous years due to higher electricity prices in the UK [8].

        The potential benefit to individual connecting solar consumers will be on a case-by-case basis and depends on how much solar can be generated and the times of day the consumer is at home to maximise the benefits. For example, an average assumption for domestic solar panels is that 30% of generation is consumed at home and 70% is exported when the owners are out at work from 9-5pm [9]. If the consumer is at home during the day, then self-consumption will increase, while a commercial building is likely to use over 80% onsite. In summer, this offset might be significant, though this will be lower in winter when generation will be lower, and demand is often higher. Installing solar PV can bring financial incentives where a payment can be received from a supplier for a proportion of solar that is sold directly to the grid through securing Smart Export Guarantees [10].

        Stakeholders agreed that installing energy storage alongside solar PV can be used to extend the duration when power from solar can offset consumer demand, enabling further reduction in energy bills. Using energy storage can provide benefits by storing the excess solar energy that cannot be consumed at the time of generation, which reduces the level of exports onto the distribution network. This could help to reduce the need for network interventions if the design methods adopted by the DNOs allow for this.

        All consumers across Scotland

        The scale of solar PV installations in a 2.5 GW ambition will trigger network interventions because the DNOs are required to make conservative assumptions that less generation will be consumed onsite with more exported onto the network. This will have an impact on all consumers electricity bills in Scotland (not only those consumers with solar PV); however, consumers with solar installations will be less impacted compared to consumers without solar installations. Adopting flexibility measures such as domestic and commercial scale battery storage to absorb and reduce the excess solar generation exporting onto the grid will reduce network interventions, and thus reduce overall consumer costs. This should be encouraged alongside the installation of solar PV to maximise the potential of the technology and extend the duration at which demand can be met by on-site generation.

        Potential for distribution connected solar PV deployment in Scotland’s energy network

        DNO forecasts of rooftop solar PV connections

        The decarbonisation of a wide range of economic sectors, including the electrification of transport and heating, is expected to result in high adoption of low-carbon technologies (such as heat pumps and EV chargers) on the electricity distribution grid. As a result, greater network capacity will be required to facilitate supplying these additional loads, and the network load profiles will become less predictable. This could raise new operational and management challenges to the DNOs. In order to plan in advance of future network pinch points, the DNOs carry out studies to identify where network intervention is required between now and 2050 to enable informed investment priority decisions to be made.

        As part of their licence, DNOs are responsible for facilitating and creating the network infrastructure to meet electricity demand. To accomplish this, the DNOs forecast and understand consumers changing electricity needs under varying levels of consumer ambition, government policy support, economic growth, and technological development. The DNOs present these results in form of their DFES data, which provide a breakdown of different demand and generation technologies across each scenario up to 2050 and is updated every year after the DNOs have revised their modelling data. Both SP Distribution [11] and SSEN Distributions latest DFES data was assessed as part of this project. SSEN Distribution DFES results is not published in the public domain, this information was obtained directly.

        Using the latest DFES data on Scotland’s energy network, the Figure 2 shows both SP Distribution and SSEN Distributions forecasts of new small-scale solar installation until 2030 using 2020 as the baseline.

        Figure 2: Estimated new solar rooftop installations across Scotland in 2030 (2020 base year) Source: DFES forecasted generation capacity scenarios

        Figure 2 shows that projected small-scale solar PV uptake in 2030 is significantly less than the 2.5 GW number suggested by the solar industry. Even the scenario with the highest projected numbers (Leading the Way) forecasts only 13% (c.325 MW) of the 2.5 GW solar industry ambition. This indicates that the evidence collected by DNOs from stakeholder meetings with Local Authorities (LA) and generation developers is for a lower level of solar deployment.

        Accommodating a significant number of small-scale solar installations

        From our engagement with DNO stakeholders, we understand that individual small-scale (G98) applications are of less concern due to their small export capacity; however, a large cluster within a specific network area will pose greater network challenges. The impact will be location dependent as network topology and capacity will vary. In some cases, depending on the makeup of the LV feeder, the cross-sectional area of the cable, the number of consumers supplied on that feeder and the size of the houses, there may be no problems connecting a significant amount of PV in an area. However, in other cases, network reinforcement may be required with the addition of even a modest amount of PV generation.

        DNO stakeholders informed us that major network interventions needed to accommodate a significant amount of G98 applications are designed based on ‘worst case’ principles, where minimum consumer demand and maximum generation output are witnessed on the DNOs network. This approach has been used by DNOs over many years to establish if the network can still operate safely and reliably when there is an excess of generation exports due to low consumer site demand.

        Network impact assessments allow the DNO to understand the impacts as a result of accommodating more generation connections. Areas of investigation for the DNOs include:

        • Thermal overload
        • Voltage rises
        • Increased harmonic and fault level contributions

        If EREC standards of compliance are not meet through utilisation of the existing network, network interventions are required, and the scale of the work needed is proportional to the resulting network impact.

        Larger rooftop solar PV installations (G99 connections) require approval from the DNO before connection is granted. In contrast, G98 connections are ‘fit and inform’, where the connection can proceed without DNO approval. The connections are managed by the DNOs on a first come first serve basis by placing G99 applicants into a managed queue. A network impact assessment is carried out and any reinforcement costs incurred by the DNO are included in the final connection offer. The timescales for accommodating G99 solar PV connections (mainly commercial buildings) depends on the scale of the upgrades needed; however, DNOs are licenced by Ofgem and are obligated to make a final connection offer within the set timescales.

        Innovative methods of accommodating new connections

        Historically, the connection agreements for generators and load connected at low voltage allowed import or export of the full rated power with no restriction to time or duration. Connections and the network had to be reinforced to allow this. This would involve replacing cables, overhead wires, transformers, and switchgears. Broadly speaking, the more reinforcement works needed at high voltage levels results in greater the reinforcement costs.

        However, in recent years DNOs have introduced new methods that enable smarter use of the network equipment and reduce the amount of traditional reinforcement that is needed to accommodate the significant uptake of generation.

        The type of interventions used by DNOs include:

        • Network flexibility though flexible connection agreements: Flexible connection agreements allow the DNO to manage the load and generation connected to the network to some extent, providing a lever to alleviate overload on equipment or voltage issues. Examples include requiring the generation or load to operate differently if there is an outage of equipment on the network, at certain times during the year, or in response to signals from the DNO. This means that less reinforcement is needed to connect the new load or generation, potentially reducing the cost and time to connection. This does mean though that some developments would not be able to export power at certain times if they signed up to flexible connection agreement.
        • Network reconfiguration: This involves using remote controlled switches (mostly manual switching is done at LV level) to reconfigure the network and shift generation output from network equipment that is heavily loaded to another area of the network that is lightly loaded. This helps to release capacity on the network, reduce network constraints and avoid network upgrade investment.
        • Other innovative solutions: Both SP Distribution and SSEN Distribution are actively deploying new smart network management tools to manage the network more efficiently to allow a transition away from traditional ways of operating. For example, collection of network data to make more informed decisions on network operation or control systems to manage the network better during peak operation periods which will help reduce network constraints and maintain voltage tolerance limits.

        It is important to note that innovative solutions will not alleviate all traditional reinforcement requirements. If the options above fail to provide the necessary network capacity needed to accommodate more generation then infrastructure will need to be upgraded.

        Connecting a significant volume of rooftop solar generation

        A significant rise in solar PV connections could be accommodated in an efficient manner if the DNOs and policymakers work in collaboration to understand the policy signals, increase data transparency, understand the role different parties need to play and investment required to make this happen in a timely manner.

        In order to maintain a smooth transition to greater solar PV uptake, improved intelligence is needed, particularly at LA level, to understand where solar PV is likely to be located. More local information could provide more accurate data to update DNO modelling tools. This will give the DNOs a better picture of where networks will likely require intervention and inform their investment priority decisions ahead of time. This will also provide evidence to justify DNO decisions to Ofgem.

        DNOs have an obligation to provide an option to connect, but the timescales for making connections will vary depending on how much network intervention is needed. The cost of providing such interventions is, in part (depending on the particular situation) borne by the developer seeking the ability to export. The scale of investment needed in specific locations could affect connection timescales.

        Innovative approaches should continue to be used where possible to reduce the cost and time to connect. This will minimise the barriers to develop new renewable generation projects while maintaining a secure and reliable power supply. Innovative approaches are also a more efficient and cost-effective approach to asset management.

        Impacts of increased solar PV deployment on electricity networks

        Potential network challenges of increased rooftop PV

        The changing nature of the electricity distribution network as a result of dynamic power flows and increased unpredictability in load profile behaviour requires a transition away from traditional ways of operating. For example, electricity networks in Scotland are traditionally managed to meet the maximum demand throughout the day and year by sizing assets accordingly. However, the rise of generation at distribution level creates new challenges, such as demand reduction, increased thermal constraints, reverse power flows, greater voltage constraints, greater fault level contributions and harmonic contributions. These are detailed in Section 7.1.

        The impacts depend greatly on the size, design and local network condition of each individual connection. Additional PV generation would also be connected within the context of other LCTs such as heat pumps, batteries, electric vehicles, wind and larger solar generation. It is difficult to predict the specific challenges and impacts which will be experienced with accuracy.

        DNO stakeholders informed us that they are most concerned about voltage rises which must be maintained within the correct limits. This will be a big challenge in summer when there is excess generation flowing in the opposite direction onto the network, which increases network voltages. The exact scale is unknown and even a small deviation from voltage limits can damage network infrastructure and appliances because all electrical equipment is designed to handle voltages within specified tolerances.

        Estimated scale of network impact

        We conducted an analysis to determine how many primary substations are likely to require intervention in 2030 as a result of greater solar PV deployment in Scotland. The analysis used 1.5 GW domestic rooftop solar and 1 GW commercial rooftop solar by 2030, information provided by the DNOs and data from the DNOs DFES. The DFES provides generation forecasts up to 2050, including the distribution of that forecast across primary transformers. It was assumed that the additional solar generation was spread across the network in accordance with the forecasted distribution pattern. The uplifted generation forecast numbers for rooftop solar PV were then used to understand where substations were likely to be overloaded and may require interventions in 2030 by using the DNO headroom report on capacity availability [12] [13]. The methodology behind the analysis is discussed further in the Appendix Section 7.2.

        The projected percentage of primary substations that may require intervention in 2030 due to the 2.5 GW solar rooftop are shown in Table 1.

        Table 1: Primary substations that may require interventions by network area (Source: DFES data)

         

        Scottish Power Energy Networks

        Scottish & Southern Electricity Networks

        Total

        Number of substations that may require intervention in 2030 due to greater rooftop solar PV deployment

        176

        33

        209

        Total number of primary substations (down to 11 kV level)

        385

        384

        769

        % of primary substations that may require intervention

        46%

        9%

        27%

        We found that 46% of total primary substation equipment in SP Distribution and approximately 9% of total primary substation in SSEN Distribution could be overloaded as a result of increased solar PV generation. This represents 176 primaries out of 385 in SP Distribution’s area and 33 out of 384 in SSEN Distributions area. The analysis can be broken down further into low, medium and highly constrained sites:

        Table 2: Extent of site constraints for overloaded sites

        Lightly constrained

        (less than 10% overloaded)

        98% of sites

        Moderately constrained

        (10-20% overloaded)

        approximately 1% of sites

        Highly constrained

        (more than 20% overloaded)

        approximately 1% of sites

        The majority of these network interventions are projected to take place in SPENs distribution network area, which is likely to be linked to the fact that it is located in busier urban areas, whereas SSEN Distribution area is more rural.

        We carried out a high-level analysis to estimate the cost of interventions for upgrading distribution network infrastructure to accommodate the 2.5GW solar rooftop in 2030. The estimated cost of reinforcement provided by DNOs for selected study areas was scaled up to estimate the reinforcement cost for the entire network.

        The methodology used to estimate this cost is described in Section 7.3.

        Figure 3: Estimated cost of interventions in 2030 in both SPEN and SSENs distribution boundaries (£ millions)

        It can be seen that the cost of intervention is higher in the SP Distribution area (£134m compared to £17m in SSEN Distribution area). This can be attributed to a greater number of interventions being forecast as required in the SP Distribution area.

        Impacts on consumers’ bills and potential mitigations

        Rules for connection charges and Use of System charges

        The DNOs are licenced by the energy regulator, Ofgem, who sets rules regarding the amount of revenue DNOs can recover from consumers, this includes connection charges.

        Connection charges for rooftop solar covers the cost of replacing or upgrading equipment to facilitate new generation connections. The DNO determines the extent of network reinforcement required, and the subsequent cost, by studying the impact of the additional generation on the network.

        G98 connections, which are likely to include all domestic-scale and smaller commercial rooftops, do not incur connection charge. Larger generation installations under G99 may trigger an upfront connection charge depending on the capacity of the local network. Multiple generation installations in close proximity installed by the same party, for example a housing association fitting solar panels across many properties in one area, may also result in a connection charge.

        For all cases, additional costs not covered by the connection charge are recovered through Use of System (UoS) charges. UoS charges are charged to all consumers through their electricity bills. The DNOs are required to calculate these UoS charges annually utilising the Common Distribution Charging Methodology (CDCM) [14]. Each DNO is required to publish their statement of charges in advance of application [15]. These statements provide detail of how the charges are determined for demand or generation customers, and these are further split by domestic and non-domestic categories. The charging statements also contain worked examples of how any reinforcement costs are calculated.

        There are a number of steps used to calculate the Distribution Use of System (DUoS) charges which will be impacted by increased solar PV installation. For example, for each category of demand users the DNO estimates the following load characteristics:

        • A load factor, defined as the average load of a user group over the year, relative to the maximum load level of that user group; and
        • A coincidence factor, defined as the expectation value of the load of a user group at the time of system simultaneous maximum load, relative to the maximum load level of that user group.

        In determining the load characteristics of each category of demand user, the DNO will analyse meter and profiling data for the most recent 3 year period for use in the calculation of charges. Load factors and coincidence factors are calculated individually for each of the 3 years and a simple arithmetic average is then used in tariff setting. Large scale PV deployment would impact these calculations but without detailed data it is not possible to accurately determine what the resultant potential impact might be.

        The DNO determines a set of different distribution time bands, based on the underlying demand profiles and associated costs – these could be expected to change given large scale PV deployment in some areas. These time bands can only be revised annually on 1 April. It is likely that the large-scale rollout of solar PV for domestic customers will reduce their consumption during daylight hours (co-incident with system peak times) thus leading to a lower DUoS cost over those periods.

        The DNO also forecasts the volume chargeable to each tariff component under each tariff for the charging year, which are separately determined for the Domestic Aggregated and Non-Domestic Aggregated tariffs. These volumes would be impacted by PV deployment relating to the two different categories, thus impacting the relevant tariffs differently.

        The Significant Code review undertaken by Ofgem “Network Access and Forward-Looking Charges” [16] came into effect from 1 April 2023. This resulted in a reduction in the contribution to network reinforcement made by G99 connections. This improves the business model for many generators, who would otherwise have had to pay larger upfront costs. A summary of the previous and new rules for connection charging is provided below with some key terms.

        • Onsite works: This is works needed onsite to accommodate the installation and includes facilitating a connection to the distribution network.
        • Reinforcement works: This involves replacing equipment on the existing network to accommodate new connections. This usually involves replacing cables, transformers and switchgears etc.
        • Connecting solar consumers: This refers to domestic and commercial entities who have rooftop solar installations. A G98 installation is typically relevant to connecting consumers who are domestic, while G99 is more relevant to connecting consumers who are commercial entities.

        Table 3: The new Ofgem Significant Code Review rules for recovering network upgrade costs from generation connections that trigger the need for reinforcement (Source: Ofgem [16])

         

        Onsite works

        Reinforcement at connection voltage

        Reinforcement at one voltage level above the connection voltage

        G98 single installation

        Likely to include all domestic and smaller commercial properties

        Unlikely to be needed, as the property should already be connected to the grid

        Fully funded by the DNO via UoS charges

        Fully funded by the DNO via UoS charges

        Multiple G98 or G99 installations

        Connecting solar consumers pay 100%. Bigger installation would likely trigger the needed more bigger fuses onsite.

        Connecting solar consumers pay a proportion of the reinforcement costs (likely to be a small fee or nothing)

        Old arrangement

        Connecting solar consumer pays a proportion of the reinforcement costs

        New arrangement

        Fully funded by the DNO via UoS charges, up to a High Cost Cap

        Potential impact on consumer bills

        Large-scale solar PV adoption will impact the DUoS calculations for consumers. In order to assess the cost impact of the large scale roll out of rooftop solar on all consumer bills (not only consumers with solar installations) we assumed that all network interventions required to accommodate 2.5 GW of solar would be socialised. This is a simplified assumption that provides an estimate of the maximum impact UoS charges has as a result of the modelled interventions. A more accurate assessment would require more data regarding locations of commercial and domestic properties and the scale of solar to be adopted at the premises. This is because larger commercial buildings adopting solar PV will likely make a direct contribution to network intervention costs, thus reducing the UoS spread across all remaining consumers.

        According to Scottish Government energy data, non-domestic consumers account for 60% of Scotland’s total electricity consumption. As a result, non-domestic consumers will pay more towards DUoS directly due to their higher energy consumption [17]. We applied a non-domestic to domestic electricity consumption ratio of 60:40 in both DNO licence areas in Scotland. This allocated 60% of the intervention costs in each DNO area to non-domestic, with the remaining 40% of the costs going to domestic consumers.

        We then spread the costs using the ratio of number of non-domestic to domestic premises to obtain an indication of the increase in non-domestic and domestic energy bills which could be realised following large-scale solar deployment. SSEN provided this split, where out of total consumers in their licenced area that have electricity meters, 90% are non-domestic premises while 10% are domestic. The Department of Energy Security and Net Zero (DESNZ) has published information on GB electricity meters, and a similar ratio was observed [18]. SPEN did not provide the split in their region, so we have assumed the same ratio will apply.

        Table 4 shows the annual impact of socialising the reinforcement investment required at distribution level to accommodate 2.5 GW rooftop solar. Costs per consumer bill split between domestic and non-domestic consumers in Scotland irrespective if they have solar or not have been estimated. Section 7.4 explains the methodology used to calculate this estimate.

        Table 4: Annual impact of socialising the reinforcement cost at distribution level on consumers in Scotland (£/year/customer bill)

        DNO

        Estimated annual impact per domestic customer bill (£) for reinforcement costs in 2030

        Estimated annual impact per non-domestic customer bill (£) for reinforcement costs in 2030

        SSEN

        £0.53 per year for 45 years

        £7.17 per year for 45 years

        SPEN

        £1.81 per year for 45 years

        £24.46 per year for 45 years

        Non-domestic consumers will pay a bigger contribution towards reinforcements triggered by solar PV uptake due to their higher energy consumptions, while domestic consumers pay less towards DUoS. These costs are based on assumptions applied due to lack of available data during the research and should therefore be treated as indicators of what the additional costs over and above baseline energy bills could be but they are not definitive.

        The DNOs did not validate or confirm the methodology we used to derive these numbers. These provide a highest cost estimate due to the assumption that all Scottish consumers will pay 100% of reinforcement costs through their electricity bills. However, it is likely that some commercial solar connecting consumers will pay a proportion of the reinforcement costs they triggered upfront directly. This would reduce the impact on all consumer bills but is unlikely to have a large impact. It was not possible to separate the reinforcement cost triggered by commercial consumers due to data limitations.

        Potential impacts on the transmission network

        A proposed ambition 2.5 GW of small-scale rooftop solar PV by 2030 is likely to trigger the need for network reinforcement across the transmission network in Scotland and the rest of GB. The exact nature and scale of the upgrades required is difficult to predict as there is uncertainty as to where the clusters of solar will be located and the nature of impacts are locationally dependent. Different areas of the transmission network have varying levels of headroom and different amounts of generation could be accepted before voltage and fault levels are triggered.

        The nature of transmission network impacts and the intervention design works needed to accommodate future connections (including solar PV and other generation technologies) are determined from the Security and Quality of Supply Standard (SQSS) [19]. This sets the criteria for electricity transmission network planning.

        • Network Assessment Approach: The TOs take a deterministic snapshot methodology approach to reduce the risk of transmission assets being overloaded and generators being constrained on their respective networks. In this deterministic methodology, the TOs study the summer minimum demand against the maximum generation output on a given local area network for the assessment of any new generation connecting.
        • The results of network impact assessments: The TOs assess thermal, voltage and fault level constraints on the network and conclude if greater solar PV embedded in the distribution network could trigger non-compliance with grid code procedures if reverse power was realised.

        The timelines to resolve transmission constraint issues can be significant and are longer than the timescales needed for distribution upgrades.

        A high-level analysis was carried out to estimate the transmission network costs incurred by the TOs to upgrade the network. Figure 4 shows the estimated cost on the transmission network in Scotland is over £150 million with £122 million (81%) of this in the SPEN transmission network and £30 million (19%) in the SSEN transmission network.

        Section 7.3 explains the methodology used to estimate these costs in more detail. In brief, the estimated cost of reinforcement provided by TOs for our selected study areas was scaled up to estimate the reinforcement cost for the entire network. SPEN transmission reinforcement costs were estimated using cost of reinforcement shared by SSEN transmission for the study area.

        There will also be an incremental impact on the transmission network in England which will trigger additional transmission costs due to greater transmission capacity required to accommodate greater solar exports. These have not been considered in this study and the numbers provided below are for transmission assets that are located only in Scotland.

        Figure 4: Estimated cost of interventions in 2030 in both SP and SSENs transmission boundaries (£ millions)

        The investments made by the TO will be recovered through the price control mechanism with the cost being socialised across all GB energy consumers. Our estimated costs are provided to give insight into the scale of the challenge to reinforce the transmission network but are not definitive. Further, more detailed analysis would be required to reliably quantify the estimated costs associated with interventions in the transmission network.

        Conclusions

        We assessed the likely benefits and impacts of a proposed ambition for an additional 2.5 GW solar PV at distribution level in Scotland by 2030. In conclusion:

        • An additional 2.5 GW solar ambition would enable progress towards net zero targets. The Scottish Government has set a target to reach net zero carbon emission by 2045 and increased rooftop solar could contribute to the ambition to deliver at least 20 GW of additional low-cost renewable capacity by 2030.
        • Individual financial benefits are based on the reduction in electricity bills for consumers adopting solar PV. Benefits could be increased if demand could be shifted to times of excess generation.
        • Network benefits could be realised by pairing solar PV with battery storage as this will improve flexibility. Solar PV is an intermittent energy source and unlikely to reduce peak demand significantly.
        • DNOs would be obliged to make a firm or flexible connection offer to facilitate the extra solar PV in a cost-effective manner. Advance visibility of where large quantities or clusters of rooftop solar PV connections would be located would help DNOs understand the scale of intervention needed and in what timescale it can be delivered.
        • We estimate that 30% of primary transformers will require intervention to accommodate a 2.5 GW solar ambition. Most of these will be lightly constrained sites that are less than 10% overloaded. The impact is highly uncertain and depends on specific location of large quantities of solar PV and the status of the local electricity network.
        • The cost of this impact is uncertain; we estimate £150m in the distribution networks, and over £150m in transmission networks. These are based on highest-cost assumptions that traditional methods are used for capacity release eg that overloaded equipment is replaced with higher rated equipment.
        • The required intervention will be largely paid for by consumers. The network intervention costs associated with implementing the additional rooftop PV will be socialised to all consumers through electricity bills. A proportion of larger installations may be payable through connection charges by the connecting consumer.
        • The estimated average annual increase in energy bills for domestic consumers is £0.53 and £1.81 in SSEN and SPEN areas respectively. The average annual increase in non-domestic consumers energy bills is estimated at £7.17 in SSENs area and £24.46 in SPENs area. These are indicators based on assumptions but are not definitive, and the approach has not been validated or confirmed by the DNOs.
        • Adopting flexibility measures such as domestic and commercial scale battery storage will reduce the excess solar generation exporting onto the grid. This will reduce network interventions and thus reduce consumer costs. This should be encouraged alongside the installation of solar PV to maximise the potential of the technology and extend the duration at which demand can be met by on-site generation.
        • Network interventions are triggered in part because DNOs are required to use the conservative assumption that less generation will be consumed onsite with more exported onto the network.
        • Incentivising the requirement to have domestic and non-domestic battery storage in conjunction with solar PV to absorb any excess solar, thus preventing exports, may reduce the scale of network interventions needed. Battery storage can provide greater network flexibility by charging and discharging as required.
        • Network operators are developing innovative ways of managing networks which could reduce the costs. Solutions including flexibility, reconfiguring the network, improved network visibility and active network approaches are increasingly being used. These approaches could also speed up the time taken to offer new connections. While these approaches could decrease the need for reinforcement, they are unlikely to entirely mitigate the need to be consistent with relevant technical requirements.
        • A co-ordinated approach is needed between key stakeholders including the DNOs, TOs, LAs and the solar industry to ensure that a significant increase in solar PV can be accommodated. Improved evidence of large quantities of solar being proposed is needed to allow the DNOs to plan accordingly and justify their decisions to Ofgem.
        • Overall, it is difficult to quantity whether the benefits outweigh the impacts on the grid and on consumer bills, but steps can be taken to reduce the impact and enable greater benefits to be realised. Examples include investing in on-site battery storage and continued deployment of network flexibility and innovation solutions.

         

         

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        [15]

        Scottish and Southern Electricity Networks, “Scottish Hydro Electric Power Distribution charging statements,” [Online]. Available: https://www.ssen.co.uk/about-ssen/library/charging-statements-and-information/scottish-hydro-electric-power-distribution/.

        [16]

        Ofgem, “Access and Forward-Looking Charges Significant Code Review: Decision and Direction,” 3 May 2022. [Online]. Available: https://www.ofgem.gov.uk/publications/access-and-forward-looking-charges-significant-code-review-decision-and-direction.

        [17]

        Scottish Government, “Energy Statistics for Scotland – Q3 2022,” December 2022. [Online]. Available: https://www.gov.scot/publications/energy-statistics-for-scotland-q3-2022/pages/energy-consumption/#:~:text=This%20document%20is%20part%20of%20a%20collection&text=Consumption%20of%20electricity%20between%202021,with%20decreased%20in%20both%20sectors..

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        [19]

        National Grid ESO, “Security and Quality of Supply Standard (SQSS),” [Online]. Available: https://www.nationalgrideso.com/industry-information/codes/security-and-quality-supply-standard-sqss.

        [20]

        “Distribution Future Energy Scenarios 2022: Results and methodology report – North of Scotland licence area,” April 2023. [Online]. Available: https://www.ssen.co.uk/globalassets/about-us/dso/smart-and-local-benefits/ssen-dfes-2022-north-of-scotland-report.pdf.

        Appendices

        Network challenges

        Demand Reduction through the use of onsite generation will change the daily domestic and commercial load profiles and make them more unpredictable and more difficult to plan the network. Network operators strive to balance demand and generation in order to maintain grid stability and reliability. An increase in solar PV connections will lead to greater network challenges around grid stability. As distributed generation grows it will remove a significant portion of demand from the network during certain time periods, while higher up in the grid, greater numbers of renewable energy plants (offshore and onshore wind) will be connected leading to greater network imbalance. This will exacerbate the situation and pose additional challenges to grid operation. The National Grid may seek to reduce the imbalance by asking large-scale wind operators to reduce energy output or switch off which leads to constraint payments being made. The deployment of greater network demand through large-scale battery storage and hydrogen production is being actively encouraged to reduce the network imbalances.

        Examples of network challenges are as follows:

        Increased thermal constraints, where significant generated power is fed into the network, for example if there are clusters of PV generation in one area, and there is a mismatch between onsite solar generation and demand on a sunny day. This can overload equipment causing them to heat up beyond their rated temperatures, causing damage or aging. This will be common in summer where there is mismatch between solar generation and onsite demand.

        Reverse power flows, where power is fed into the network from generation resulting in power flowing in the opposite direction than designed. Some substations with new equipment will be able to handle greater reverse power flows, however, older equipment or that with a particular design may have less or no reverse power capability and may require maintenance or replacement.

        Greater voltage constraints, where voltage rises due to the reduction in load or the increase in generation across an area of network. All networks are designed to operate at voltages within acceptable tolerances and DNOs have a frequent task to maintain voltages within the correct limits. If voltages go outside their limits, this poses risk to asset health which could be damaged as a result. Greater solar connections runs the risk of exceeding voltage limits as laid out in the DNO licences. Voltage constraints are the biggest concern to the DNOs as they have the biggest impact.

        Greater fault level contributions, where the solar PV installations contribute towards greater network fault currents, which are triggered due to disturbances on the network. Faults on the network can cause inrushes of current which can damage critical infrastructure. The network and its protection equipment must be designed to accommodate the fault level for a short time in order to keep equipment and people safe. PV generation contributes to fault level (large inrush of current when there is a fault on the network), and so connection designs must accommodate it. If the fault level rating of equipment is exceeded the DNO will replace the assets. As a result, a significant cluster of generation will increase fault level contributions right up to transmission level.

        Harmonic contribution, where PV generation creates distortions in the Alternating Current (AC) signal resulting in a reduction in power quality being delivered to consumers and some consumer equipment might flicker or not operate properly. PV generation contributes to harmonic issues as a result of the inverter equipment, but this contribution is limited by regulation.

        Methodology for estimating proportion of interventions needed

        The DNOs forecast and understand consumers changing electricity needs under varying levels of consumer ambition, government policy support, economic growth, and technological development. The DNOs create forecasts for multiple scenarios through their DFES data (Leading the Way, Consumer Transformation, System Transformation, Steady Progression) [11] [20]. DFES data from both SPEN and SSEN using the Consumer Transformation Scenario was used in our analysis. This scenario assumes greater consumer engagement, which leads to greater deployment of low-carbon technologies, such as solar PV, to offset network demand. We consider that this assumption would be consistent with increased solar deployment.

        Primary substations which are likely to require intervention in 2030 were determined by spreading the 2.5 GW of solar PV across all primary substation assets in Scotland. We used the DNOs modelling assumptions to determine where they believe the high clusters of future solar installations will be located and spread the extra the 2.5 GW using the same pattern of distribution. The detailed approach is described below:

        1. We used DNOs DFES modelling tools to determine how much rooftop solar PV is estimated between now and 2030 across all primary substation assets. This was clear from SPEN modelling, but SSEN did not provide a degree of granularity and we estimated as the solar PV numbers.
        2. The DNOs own estimates of rooftop solar PV were removed from the analysis to leave an indication into forecast individual large-scale solar PV (ground-mounted). This was to avoid including the 2.5 GW over and above the DNOs rooftop solar PV forecast as this would duplicate the number of households that has solar PV.
          • We calculated the proportion of rooftop solar to total solar using DFES data. The DFES data only provided total rooftop solar numbers across each year rather than across each individual substation per year which reduces the level of granularity. However, the combined solar PV numbers (rooftop + ground mounted) was provided for each substation across every year. We expressed the total rooftop solar PV numbers to the combined solar PV numbers in 2030 as a percentage. This allowed us to estimate the proportion ratio of rooftop solar in 2030, which was then used to separate the rooftop component from the overall total solar PV numbers across all primary substation data. This provided an estimate of rooftop solar PV across each primary substation.
        3. 2.5 GW of solar capacity was then spread in a similar proportion to the original DNO forecast of rooftop solar across all primary substations to provide an uplifted forecast. For example, if the DNO was estimating that 2 MW of rooftop solar PV would be located in an area in Glasgow, we estimated that 15 MW would be realised in that area in 2030 using the following calculation:
          • Uplifted forecast = (2MW / total forecasted rooftop solar PV in 2030 from DNOs modelling tools) * 2.5GW
        4. The proportion of primary substations that will require interventions was estimated by subtracting the uplifted forecast from the DNOs published headroom report figures.

        Methodology for estimating cost of intervention

        We used four study areas in order to assess the cost of interventions needed. The study areas covered four categories:

        • Rural
        • Domestic properties in urban areas
        • Mixed domestic & commercial in urban areas
        • Commercial properties in urban areas

        A primary substation was selected for each study area that was close to being overloaded by using the DNOs published heat map data.

        Table 5 Study areas used to assess cost of intervention

         

        Rural

        Domestic properties in urban areas

        Mixed domestic & commercial in urban areas

        Commercial properties in urban areas

        DNO

        SSEN Distribution

        SP Distribution

        SP Distribution

        SP Distribution

        Location

        Aberdeenshire

        Larbert, Falkirk

        Livingston

        Edinburgh

        Primary Substation

        FYVIE

        LARBERT

        DEANS

        KINGS BUILDINGS

        Primary S/S generation capacity

        Red (heavily constrained)

        Amber (approaching operational limits)

        Amber (approaching operational limits)

        Amber (approaching operational limits)

        GSP

        KINTORE

        Bonnybridge

        DRUMCROSS

        KAIMES

        GSP generation capacity

        Red (heavily constrained)

        Red (heavily constrained)

        Red (heavily constrained)

        Red (heavily constrained)

        Headroom after adding in 2.5 GW target (MW)

        -2.95

        -4.74

        -1.51

        -3.50

        Uplifted forecast (MW)

        4.51

        5.47

        1.73

        4.03

        The study areas were submitted to both the DNOs and TOs to gain high level estimates of the type of interventions deployed and the cost of interventions.

        Due to time constraints, the DNOs and TOs could not commit to undertaking a detailed analysis, which involves undertaking detailed power flow analysis. The results provided are estimates of interventions from previous assessments carried out by the DNOs. The results of the DNOs and TOs analysis are detailed below.

        Table 6 Cost of interventions and assumptions provided by the DNOs for each study area

        Study area type

        DNO

        Cost of interventions

        Assumptions

        Rural

        SSEN Distribution

        £844k for replacing primary substation

        Replacing a 33/11 kV primary substation.

        The rules used to estimate costs in other parts of the network are for every £1 spent reinforcing the primary network, SSEN will spend:

        • £0.04 to upgrade 11 kV network
        • £0.11 to upgrade secondary substations
        • £0.11 to upgrade LV network

        Domestic Properties in Urban areas

        SP Distribution

        £0.5m – £1.25m

        This takes into account all reinforcement work from primary down to LV level.

        Mixed domestic & commercial properties in urban areas

        SP Distribution

        £0.1m – £0.25m

        This takes into account all reinforcement work from primary down to LV level.

        Commercial properties in urban areas

        SP Distribution

        £0.5m – £1.0m

        This takes into account all reinforcement work from primary down to LV level.

        The estimated cost of reinforcement provided by DNOs for the selected study areas was scaled up to estimate the reinforcement cost for the entire network. The headroom capacity numbers across all primary substations that may require intervention was used to scale up the costs.

        The results of the investigation with the TOs are provided in Table 7.

        Table 7 Cost of interventions and assumptions provided by TO for study area

        Study area type

        TO

        Cost of interventions

        Assumptions

        Rural

        SSEN Transmission

        £5 to £6 million
        • Connection Date: 2030+
        • Transmission Reinforcement Works: New Kintore 2 GSP required
        • Network Limitation: Thermal rating of grid transformers

        SPEN transmission reinforcement costs were estimated using the cost of reinforcement shared by SSEN transmission for the study area.

        Methodology for estimating the impact on consumer bills

        The steps below explain the methodology to estimate the impact of socialised costs on consumer bills split between domestic and non-domestic.

        1. Allocated 60% of the estimated interventions costs directly to non-domestic consumers with the remaining 40% going to domestic through the DUoS mechanism, which allocates socialised costs to the higher energy consumer. 60% of Scotland’s total electricity consumptions comes from non-domestic.
        2. Socialised costs were treated as standard network capex and so were added to the DNOs Regulatory Asset Base (RAB).
        3. The total socialised cost to be recovered through deprecation over a period of 45 years (assumption shared by SSEN DNO).
        4. The DNOs regulated rate of return was applied to the investment.
        5. SSENs split of non-domestic and domestic consumers in their licences area (90:10) was provided for the investigation. SPEN did not provide a similar split; however, it is assumed that the same ratio split applies.
        6. Using the total costs allocated to non-domestic and domestic based on their energy consumptions, and using the quantity of customers split between domestic and non-domestic, an annual impact per customer split between domestic and non-domestic could be obtained.

        The numbers are reflective of 2030 prices as this is when 2.5 GW could be realised. The year 2030 was used in isolation throughout this analysis rather than assessing the impact each year up to 2030 as we could not be sure how much solar would be added each year. It was therefore assumed that the grid would see 2.5GW in 2030.

        Stakeholder engagement findings

        This section presents areas of discussion in a series of stakeholder engagement meetings with DNOs and TOs. The meetings aimed to understand the following:

        • The potential for greater solar PV deployment in Scotland and how existing distribution and transmission networks will accommodate them in additional to other generation technologies
        • The impacts on the networks as a result of greater solar PV connections and the resulting interventions deployed by the network operators to manage the increase in connection requests
        • Establish the intervention assumptions and resulting cost to deploy these interventions when solar PV connections trigger the need when capacity headroom is no longer available
        • Explore the opportunities that solar PV can bring to future distribution network
        • Explore gathering data on the cost of interventions to support with the analysis

        SSEN Transmission

        A meeting was held between Ricardo and SSEN Transmission on 20 February 2023 to establish the implications on the North of Scotland transmission network because of greater solar PV connections and how this would be accommodated. A summary of the meeting with the questions relevant for the discussion are summarised below.

        Area of discussion: The process that transmission networks use to accommodate a significant increase in PV connections across Scotland’s energy network

        The meeting focused on the following topics:

        • SSEN TOs view of the 2.5 GW solar PV target by 2030.
        • How transmission network impacts are assessed, and the rules adopted for network reinforcement designs.
        • The ability of the transmission network to accommodate 100% reverse power flow and identify what needs to happen to accommodate this in the future.
        • Establish the impacts on the network from greater generation connections that are off most concern to the transmission network.
        • What type of interventions are being deployed to mitigate the impact on consumers.

         

        SSEN DNO

        Two meetings were held between Ricardo and SSEN Distribution on 24 January and 10 February 2023 to establish the implications on the North of Scotland distribution network because of greater solar PV connections and how this would be accommodated. A summary of the meeting with the questions relevant for the discussion are summarised below.

        Area of discussion: How will existing networks will accommodate a significant increase in solar PV connections across Scotland’s energy network?

        Areas explored:

        • How are G98 (‘fit and inform’) connections accommodated? How can this be done at a large-scale?
        • How are G99 (large-scale) connections accommodated, and how can they be accommodated at large-scale?
        • What is the timeframe for a G99 application to be granted approval by SSEN? How is this impacted by a large proportion of consumers requesting connections to the same part of the network?
        • What type of interventions are being considered? Any smart grid solutions?
        • Do you think it will be technically feasible to accommodate 2.5GW of additional small-scale rooftop solar across Scotland’s energy network by 2030?

        SPEN DNO

        A meeting was held between Ricardo and SPEN Distribution on 15 February 2023 to establish the implications on the Central and Southern distribution network in Scotland because of greater solar PV connections and how this would be accommodated.

        Area of discussion: How will existing networks accommodate a significant increase in solar PV installations between now and 2030?

        Areas explored:

        • How are G98 (‘fit and inform’) connections accommodated? How can this be done at a large-scale?
        • How are G99 (large-scale) connections accommodated, and how can they be accommodated at large-scale?
        • What is the timeframe for a G99 application to be granted approval by SPEN? How is this impacted by a large proportion of consumers requesting connections to the same part of the network?
        • What type of interventions are being considered? Any smart grid solutions?
        • Do you think it will be technically feasible to accommodate 2.5GW of additional small-scale rooftop solar across Scotland’s energy network by 2030?

        Solar Energy Scotland

        A meeting was held between Ricardo and Solar Energy Scotland (SES) on 28 July 2023 to discuss the solar industry view on the solar ambition, benefits of solar and areas of concern for how new connections are currently assessed by DNOs.

        © The University of Edinburgh, 2024
        Prepared by Ricardo Energy & Environment 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.

        Research completed: January 2024

        DOI: http://dx.doi.org/10.7488/era/4033

        Executive summary

        This study reviewed the use of fiscal levers to reduce greenhouse gas (GHG) emissions across the world. These levers include taxes, levies, duties or charges applied by governments on major sources of emissions.

        It focused mainly on direct carbon taxes which are applied to specific goods – typically fuels – based on the amount or intensity of greenhouse gases they produce. It also considered indirect taxes, which place a price on other forms of pollution, such as air or water, but often target GHGs as well. Grants and subsidies are not in scope.

        The study examined whether these levers have been effective in decreasing GHG emissions, the revenue that has been raised, and how governments have used that revenue. It looked at six international case studies in more detail. It also examined relevant fiscal levers currently applied in the UK and Scotland, and the possible implications for Scotland of adopting any new lever, based on the case studies. This study does not make policy recommendations, nor does it consider the costs and benefits if they were adopted.

        Findings

        The study focused mainly on the use of direct carbon taxes both nationally and sub-nationally (in specific regions or provinces within a country) around the world. Key findings are:

        • The use of carbon taxes is increasingly common. There are 37 direct carbon taxes in 27 jurisdictions globally, most of them in Europe. Several jurisdictions outside Europe have adopted taxes and more are considering them. About 6% of global GHG emissions are taxed by carbon taxes and this share has increased over the past 15 years. Sub-national carbon taxes have also been applied by Canada and Mexico.
        • Taxes differ in terms of GHG coverage and carbon price: We identified three broad categories:
        • ‘High ambition’ instruments with both a relatively high price and coverage of GHGs;
        • A mixed level of ambition, with either high prices and low coverage; or a high share but low prices;
        • Relatively low prices and coverage.
        • The balance of evidence suggests carbon taxes have reduced GHG emissions where adopted, but the data is limited, uncertain and rarely quantifies carbon leakage – when businesses transfer production to other countries with laxer emission constraints. Other regulatory measures are likely to be required alongside them to meet wider climate policy goals. There is limited detailed evidence on how affected businesses and households adjust behaviour in response to taxes.
        • Carbon taxes have generated government revenue; between several billion dollars in Sweden to tens of million in Iceland. The potential for revenue generation depends on the prevailing carbon price and coverage of the tax, as well as the size of the economy, its carbon intensity and energy mix. They have been relatively straightforward and inexpensive to administer for governments. Some direct carbon taxes have been used to raise revenues for specific purposes. These have typically been channelled towards green technology and specific rebates or tax cuts for affected groups, including low-income households.
        • Implementation has been politically challenging. Carbon taxes have been repealed in Australia, delayed in New Zealand and a planned acceleration of the carbon price was suspended in France. A legal challenge was brought in Mexico over whether the regional government had legal authority to implement a proposed tax.

        Current fiscal levers in the UK and Scotland

        Fiscal levers that target or address GHG emissions focus on energy and energy intensive industries, transportation and resource use. Examples include Fuel Duty, the Climate Change Levy, the Renewable Energy Obligation and the UK Emission Trading System, as well as Air Passenger Duty and vehicle excise duty. A devolved tax, the Air Departure Tax (Scotland) Act 2017, is being progressed, but needs to address the Highland and Islands exemption and safeguard connectivity. The Scottish Landfill Tax applies to waste disposed to landfill.

        The introduction of new national devolved taxes can only be delivered by agreement of the Scottish and UK Parliaments or through a change to the devolution settlement. Four of the six case studies have similarities to UK levies, which would need amending, but two would be entirely new. We consider how elements of the case studies could be applied in Scotland but make no recommendations on whether this would be advisable.

        Principles for implementation

        Any financial lever would be designed based on the six principles in Scotland’s Framework for Tax: proportionality, efficiency, certainty, convenience, engagement and effectiveness. As such, the precise design of any lever would need to be subject to careful consideration and clear communication in terms of its scope, phase-in, price (including future price escalation), sectors and activities on which it is levied and any relevant exemptions. Distributional effects would have to be carefully considered, including if and how revenue should be reallocated, to whom and under what conditions.

        Successful fiscal levers have been based on transparent design, regular monitoring and communication of revenues, costs and benefits, with rapid adjustments if unexpected adverse effects occur. They have formed part of wider fiscal reforms, with a clear strategic objective. Any potential options would be required to undergo extensive further consultation and robust impact assessment to fully understand the costs and benefits.

         

        Glossary

        1tCO2e

        One tonne CO2 equivalent. A metric that allows like for like comparison of carbon intensity

        Abatement technologies

        A technological mechanism or process that has the potential to reduce emissions or pollution

        Bonus Malus

        Latin for “good-bad”, used to describe an arrangement – or fiscal lever in this case – which alternatively rewards (bonus) and penalises (malus) specific purchasing behaviour.

        Carbon leakage

        A potential situation whereby carbon emissions were displaced, in whole or in part, from one jurisdiction to another, as a result of business production relocation in response to specific policies, for example.

        CBAM

        Carbon border adjustment mechanism. A fiscal lever which applies a carbo price to certain products imported into a jurisdiction

        CCC

        The Climate Change Committee. A statutory body established to advise the UK government and devolved administrations on emission targets, progress made in reducing GHG emissions and preparing for and adapting to the impacts of climate change.

        Counterfactual scenario

        Estimates or analysis of what would have occurred without the policy being adopted. It is used widely used in public policy analysis.

        Earmarking or hypothecation (of revenues)

        Commitments – whether set out in legislation, policy documents or via political statements – on specific uses of revenue from taxation (for example on tax rebates for low-income groups, of investment in green technologies)

        Ex-ante

        Translates from Latin as “before the event”. It refers to evidence based on prediction or forecast.

        Ex-post

        Translates from Latin as “after the fact”. It refers to evidence based on what actually occurred.

        ETS

        Emission trading scheme or emission trading system

        Fiscal levers

        An intervention or policy used by governments to affect financial revenue generated via taxes, duties, levies, charges (or fees). In this study the scope of the term excludes grants and subsidies.

        GHG

        Greenhouse gases, i.e., gases present in the earth’s atmosphere that trap heat. Examples include carbon dioxide (CO2), methane and industrial fluorinated gases hydro fluorocarbons (HFC, perfluorocarbons (PFC).

        IPCC

        Intergovernmental Panel on Climate Change. The United Nations expert body for assessing the science related to climate change.

        Negative externalities

        Where the social costs of a market transaction are greater than the private costs (for example air passengers may not pay the full costs of the damage from the carbon emission associated with their flight).

        Price elasticity of demand and supply

        An economic concept concerned with if, and to what extent, demand or supply of a good or service changes when its price does. It is calculated by observing changes in quantity of a good or service demanded (supplied), divided by the change in its price. Inelastic in this context means that demand (supply) does not change when prices do.

        Progressive and regressive taxation

        Terms which refer to the effects of specific taxes based on a person’s or a household’s income. Progressive refers to taxes which increase as a person’s income increases, for example income tax. Regressive taxes are applied uniformly, irrespective of income. The tax would then take a larger share of income from lower earners than from higher. For example, VAT is applied uniformly.

        Introduction

        Scotland has a legally binding target to reach “net zero” by 2045, as well as annual climate targets. “Net zero” means reducing carbon emissions to almost zero, with any remaining emissions absorbed by nature (such as via forests) or by technologies (such as carbon capture and storage). Rapid transformation across Scotland’s economy and society is required to meet this goal and the Climate Change Plan sets out a pathway and policies to deliver the targets. The Scottish Government has also committed to a just transition, which endeavours to make rapid decarbonisation beneficial and positive for society. There is currently a gap in our evidence base on the potential role for fiscal levers to deliver reductions in greenhouse gas emissions. For the purposes of this study, we define fiscal levers as taxes, levies, duties, or charges. The use of subsidies, grants and loans are not in scope of this work.

        We summarise the results of a targeted evidence review on the international use of fiscal levers seeking to reduce GHG emissions, which have either been considered or adopted by national or sub-national governments. We examine the evidence for how well certain fiscal levers have worked internationally, both in terms of reducing emissions of GHGs and in raising government revenue. We analyse six case studies in detail. After reviewing existing fiscal levers in Scotland, we also assess the potential implications for Scotland.

        This report should not be interpreted to mean the Scottish Government intends to adopt the examples analysed in this report, nor any fiscal lever. The purpose is to provide an evidence base for the Scottish Government in their consideration of policy action as part of a strategic approach to climate change mitigation.

        Overview of methodology

        We conducted a targeted literature review of the global use of fiscal levers currently in place – or being considered – that seek to reduce GHG emissions, either directly or indirectly. We then selected six case study examples that were judged to be relevant to Scotland for further exploration. We conducted semi-structured interviews with academics and technical specialists and with experts in the case study jurisdictions to obtain greater insights. We also conducted a high-level review of existing environmental fiscal levers in the UK (including energy, transport and pollution or resources taxes), focusing the analysis on those that deliver reductions in GHG emissions. This was to help understand whether the six case study examples could be implemented by the Scottish Government under current devolved competencies, or whether their adoption would require joint action with the UK Government. More detail on the methodology we used is in Appendix A.

        This approach has limitations. The project was undertaken over a short period, between July and October 2023. As such, the report presents selected results of a targeted search of a large secondary literature supplemented by the interviews referred to above, and it has not been possible to examine all issues in detail. No economic modelling has been undertaken on the potential scope or effects of the levers identified.

        The use of fiscal levers for GHG emission reductions

        Given the size of the literature and the complexity of the issues involved, we have simplified the review into a smaller number of lever typologies and identified lessons learned via successes and challenges encountered. The information in this chapter is drawn from secondary literature and a small number of targeted interviews with subject matter experts.

        We have defined fiscal levers as a tax, duty, levy or charge. Typically enacted by a national or sub-national government, they seek to induce changes in behaviour of companies and consumers via changes in the prices of goods and services. This is sometimes referred to as ‘carbon pricing’, which means levers which apply a price to GHG emissions with the intention of reducing them. Carbon pricing can provide an effective and cost-efficient approach to reducing GHG emissions in multiple economic sectors. They do so by incentivising changes in behaviour, via changes in prices, on both the supply side (i.e., amongst the suppliers of goods and services to invest in new abatement technologies or more efficient processes or products) as well as the demand side (i.e., among consumers in their purchasing choices). They also have the potential to raise government revenue.

        Economists often refer to GHGs (and other forms of pollution) as negative externalities. This is a type of market failure where the social costs (in this case the damages caused by climate change to current and future generations) are greater than the private costs from specific transactions (i.e., one only pays for the fuel, not the harm from emissions when filling a tank of petrol). A carbon price is a way of correcting the market failure by ensuring those wider costs are captured or ‘internalised’ in transactions (Coyle, 2020).

        The scope of this study does not extend to any assessment of the use of grants and subsidies, including so called “environmentally harmful subsidies” (World Bank, 2023a). These have been considered in Scotland in separate work (Blackburn, 2022).

        Typologies of fiscal levers

        We developed a list of typologies of fiscal levers to enable their effectiveness to be assessed. We have taken a simple approach to aid clarity, and therefore define five broad types of fiscal lever for this study. These are broadly in line with the categories used by the World Bank (2023b). The types of lever are:

        Direct taxation schemes

        These are taxes which provide a direct price signal and have the explicit aim to reduce GHG emissions, often referred to in the literature as ‘carbon taxes’. They are levied on emissions, for example £ per tonne of CO2 equivalent (tCO₂e), or on £ on emissions per litre of fuel. Costs incurred increase in direct proportion to emissions, but costs may be reduced or avoided by changes to production processes or purchasing decisions, where feasible. In practice all such direct taxes are applied only to certain sectors or economic activities, with various exemptions. Given that the focus of the work are levers to reduce GHG emissions, we have focused our research on direct taxes, where the link to GHG reduction is clearest.

        Indirect taxation schemes

        These are taxes which provide an indirect price signal and may have multiple aims, which include addressing GHGs as well as other forms of pollution, such as air or water pollution. The tax may be applied on a range of activities but are not directly proportionate to embodied GHGs.As such there is a much wider range of such taxes in operation.We summarise such schemes at a high-level.

        Carbon credit schemes

        These are systems where tradable carbon credits (again typically representing 1tCO2e) can be generated via voluntary emission reduction activities. Such activities are varied and can include emission avoidance as well as removal, for example tree planting, or carbon capture and storage activities. These credits can be sold (either by businesses achieving the credits or the organisation that administers the scheme). Demand for such credits (and hence value) are generated via the requirements of other carbon pricing or climate change mitigation policies. These are discussed further below, but our research indicates they offer limited potential for revenue raising by a host government, so are not prioritised in this study.

        Emission Trading Scheme (ETS)

        A Government places a limit on the mass of GHG emissions from the affected entity (usually businesses within a defined economic sector, or undertaking specific economic activities, e.g. agriculture, or aviation) defined in the legislation. Emissions units or allowances, typically representing one tonne of CO2 equivalent (1tCO2e), are typically auctioned to businesses. These can be traded to enable them to emit GHGs, within a given period. The price from the auction and/or a traded second market represents the price of carbon. There are two main types of ETS:

        • Cap and trade ETS: Governments set a cap on total GHG emissions from one or more economic sectors (or specific entities). They then sell allowances, typically in auctions, or distribute them for free (or a combination of both) up to the level of the cap. The cap (or the number of free allowances) may be progressively reduced. The European Union (EU) and UK ETSs are examples.
        • Rate based ETS: Here the total emissions are not fixed, but entities are allocated a performance benchmark (typically based on the emission intensity of their output). This then serves as a limit on net emissions. Emission allowances can be earned where entities’ emissions are lower than the benchmark and these can then be traded with those who exceed it. The China national ETS system is an example.

        The UK ETS replaced the UK’s participation in the EU ETS on 1 January 2021. The UK ETS applies in England, Scotland, Wales and Northern Ireland, whose governments comprise the UK ETS Authority. In Scotland, the Scottish Environment Protection Agency (SEPA) administer the scheme (UK Gov, 2023a). The UK ETS was originally based on the EU ETS but has since diverged in structure and operation. Given that Scotland currently has an ETS system, further research on such schemes have not been prioritised in the current research. However, in some jurisdictions, national governments have applied domestic ETS to additional sectors not covered by, for the example, the EU scheme. We refer to these as ‘national ETS’. These are included in the research as they could potentially be applied in Scotland.

        Carbon border adjustment mechanism (CBAM)

        These are policy mechanisms which impose a carbon price at the border on embodied emissions in specific goods imported from elsewhere. These seek to ensure a level playing field between the carbon price imposed via domestic legislation (such as via an ETS) and goods produced outside that jurisdiction as well as mitigate the risk of carbon leakage (i.e., displacement of carbon intensive activities outside of regulated jurisdiction) which may lead to a lower level of emission reduction overall.

        The EU CBAM entered a transitional phase in October 2023. This is aligned with the phase-out of the allocation of free allowances under the EU ETS. The first reporting period ends on the 31st January 2024 (European Commission, 2023).

        The UK Government is considering a range of further potential policy measures to mitigate the risk of carbon leakage in future. One such policy being considered is a UK CBAM. A consultation on these options was conducted jointly by HM Treasury and the Department of Energy Security and Net Zero between the 30th March and 22nd June 2023. The UK Government is currently considering these responses (UK Gov, 2023b). As such, this review does not focus on CBAM measures in other jurisdictions.

        Direct taxation schemes

        We used data from the World Bank carbon pricing dashboard (World Bank 2023c) to provide an overview of the characteristics of direct carbon pricing instruments as of March 2023. This dashboard identifies a total of 73 such instruments implemented in 39 national jurisdictions across the world. Together, these cover 11.6 gigatonnes CO2e (GtCO2e) of emissions (23% of global GHG emissions). Of these, 37 instruments are direct carbon tax instruments, the remainder are ETS instruments. These carbon taxes have been implemented in 27 national jurisdictions and they cover 2.7 GtCO2e about 5.6% of global GHG emissions. Several trends are evident from these data.

        The vast majority of direct carbon tax instruments in operation are in high-income countries, particularly Europe. In terms of timescales for adoption the earliest adopters of national carbon tax instruments in the 1990s are in Northern Europe (Finland, Sweden, Norway, Denmark) but also Poland. The 2000s saw modest further adoption, with only Estonia, Latvia, Switzerland, Ireland and Iceland adopting national carbon tax instruments by 2010. Thereafter, several further European and Non-European countries adopted instruments (the UK Carbon Price Support and carbon taxes in France, Portugal, Spain, Ukraine, Japan and Mexico). These were followed relatively quickly by carbon taxes in Argentina, Chile, Colombia, then Canada, Singapore and South Africa.

        In several jurisdictions, carbon taxes have been applied alongside national (or supranational) ETS instruments. These include several in EU Member States (including the UK at the time), as well as Mexico and Canada.

        There are only two jurisdictions where sub-national carbon taxes are in operation. There are a total of five in Canada: British Columbia (BC) which was the first subnational carbon tax anywhere in the world; Northwest Territories; Newfoundland and Labrador; New Brunswick and Prince Edward Island. Mexico has several such instruments, the Zacatecas carbon tax, and instruments in Queretaro and Yucatan, for example. In both cases, these are applied alongside a national carbon pricing mechanism; the Canadian federal fuel charge and the Mexican carbon tax, respectively. As would be the case in Scotland, they are also applied alongside an ETS instrument (the Canadian Federal Output based Pricing System (OBPS) and the Mexican pilot ETS, respectively.

        Recently, several further jurisdictions are considering instruments. These include the New Zealand agricultural carbon tax, and taxes in Indonesia and three African states: Botswana, Senegal and Morocco. Manitoba in Canada, Mexico (Jalisco), Catalonia and Hawaii are considering new subnational instruments.

        Figure 3.1 provides a visual overview of carbon taxes that are either implemented (in operation), scheduled for implementation (adopted in legislation with an official start date) or under consideration (the relevant government has announced its intention to work toward an initiative). Those that are implemented or scheduled are in blue; those under consideration – four subnational taxes and five national – are in yellow.

        Figure 3.1: Carbon tax instruments as of March 2023 (World Bank 2023c)

        Figure 8.1 (Appendix C) provides time series data on the share of global GHGs covered in the various carbon tax instruments between 1990 and 2023. This provides an indication of the overall significance of their use globally. Note, due to data limitations the share of emissions shown in the figure from 2015 onwards is based on 2015 global emissions data. Several trends are evident, based on these data:

        • As of March 2023, carbon tax instruments covered 5.4% of global GHG emissions. This was slightly down from a peak in 2019 of 5.7%. This is likely to reflect reductions in GHG emissions associated with mandatory lockdowns during the Covid-19 pandemic, alongside some emission reductions in at least some jurisdictions.
        • Increases in coverage are evident in the last 15 years, arising from the introduction of new instruments in 2011 (Ukraine), 2012 (Japan), 2014 (France and Mexico), and 2019 (South Africa).
        • Over the same period however, total global GHG emissions increased by around 50%, from about 31 million kilotonnes of CO₂e (ktCO₂e) in 1990 to over 46 million in 2020 (latest data). Whilst there are some uncertainties in the data, the overall rate of increase in global GHG does appear to have slowed after 2013 (World Bank 2023d).[1]

        In terms of overall ambition for the carbon tax instrument, Figure 8.2 (Appendix C) presents data from March 2023 which compares the carbon price (in US Dollars per tCO₂e) with the share of GHG emissions that are covered by the relevant tax. The figure also shows ETSs for comparison. These data highlight that existing instruments vary in both price and coverage. Overall, we can identify three broad groupings based on the overall level of ambition of existing instruments:

        • High ambition: those with relatively high carbon prices and relatively broad coverage as a proportion of total GHG emissions in that jurisdiction. The carbon taxes in Liechtenstein, Sweden, Switzerland, Norway and Finland are such examples.
        • Mixed ambition: this is a larger group with some trade-offs apparent between share or price. For example, Uruguay’s carbon tax, levied on gasoline, provides the highest carbon price but only covers a small share (less than 20% of relevant GHGs). Conversely, Singapore and Japan have wider coverage but a lower price. Others have middling coverage and price, for example France, Canada’s federal fuel charge, Iceland, Denmark and Portugal.
        • Low ambition: a smaller group with relatively low prices and coverage. For example, Poland, Estonia, Argentina, Chile and Colombia.

        Indirect taxation schemes

        The World Bank (2023) defines indirect carbon pricing as other policies which might change the price of products associated with GHG emissions, but they do so in ways not directly proportional to the emissions associated with those products. So these levers do not tax carbon or tax at a rate proportionate to carbon content. Rather, they tax carbon intensive activities or services (or focus on other forms of pollution, such as air pollution, which also has the benefit of producing GHG reductions alongside), hence indirectly create a carbon price signal and encouraging the reduction of GHG emissions. Indirect taxation schemes are therefore very broad. As such, the World Bank (2023c) note that indirect carbon pricing policies are far more common and wide-ranging than direct pricing. This diversity and the weaker causal link with reductions in GHG emissions present a challenge for assessing their effectiveness in this study. As a result, we have given them a lower priority than direct taxation schemes for the purposes of the evidence review.

        Examples of indirect taxes exist across many different sectors. They include landfill taxes, such as those in place in Bulgaria (EEA 2022a) and Austria (IEEP, 2016a) or ‘pay as you throw’, schemes for example in Lithuania (EEA 2022b). Pay as you throw schemes are designed to incentivise citizens to separate their waste at source and charge a fee for the collection of residual waste from households.

        France has a ‘General Tax on polluting activities’ which applies to companies which are engaged in the storage, thermal treatment or transfer of non-hazardous and hazardous waste (French Ministry of Finance 2023). Latvia employs a National Resources Tax (Latvian Ministry of Finance, 2020), which applies to the extraction of natural resources, environmental pollution, disposal and use of hazardous goods as well as the packaging used in business activities.

        In the field of air quality, levers include the Bonus Malus Scheme in France (see Section 8.9 for further detail), air pollution load charge in Hungary, which applies to emissions of nitrogen oxides, sulphur dioxides and non-toxic dust (IEEP 2016b) and a tax on emissions of SO2 and NO2 in Galicia, Spain (Xunta de Galacia, nd). Other levers include an incentive fee on volatile organic compounds as is in place in Switzerland, and a Pesticide Tax (Sweden and Denmark).

        Finland also employs a tax on peat use for energy. However, this represents a unique situation as peat is in fact subsidised in comparison to the tax rates of other fuels, and peat makes up a significant part of Finland’s energy mix.

        Carbon credit schemes

        We have used data from the World Bank carbon pricing dashboard (World Bank 2023c) to provide an overview of carbon credit schemes, their use, prominence in global trading, and role in international climate agreements.

        Carbon credits are units that represent emission reduction activities that include either avoiding the carbon being produced (e.g., capturing methane from landfills), or removing carbon from atmosphere (e.g., sequestering carbon through planting trees or directly capturing carbon from the air and storing it). One credit is typically equivalent to one metric tonne of a carbon dioxide equivalent (tCO₂e) reduced or removed.

        Carbon credit schemes create opportunities for investors and corporations to trade carbon credits. The carbon credit market has grown significantly since the concept was establish alongside the 1997 Kyoto Protocol. It experienced a further surge in interest following the Paris Agreement of 2015, more than doubling in size over five years (Dyck, 2022), though the sector grew less between 2021 and 2022, reflecting challenging economic conditions and criticism of the integrity of some schemes (World Bank 2023c). Carbon credits are supplied via regional, sub-national and national governments (such as the California Compliance Offset Program), at international scale through international treaties (such as the Kyoto Protocol and the Paris Agreement), and independently, via non-governmental entities (such as Gold Standard). The largest share of carbon credits is issued via independent non-governmental mechanisms, which had driven much of the overall growth seen between 2018 and 202.1 Figure 8.3 in Appendix C provides more detail.

        The biggest driver for demand on carbon credits is companies purchasing credits, usually from independent suppliers, to compensate for emissions-heavy activities, either voluntarily or in response to regulation. However, carbon credits can be controversial because it is not always clear that carbon has in fact been saved or stored, and there are concerns with the ways in which schemes are set up, managed and promoted. The carbon credit market is currently evolving to respond to these concerns (Donaho, 2023).

        Effectiveness of fiscal levers

        We interpret effectiveness as the extent to which the policy has achieved its desired objectives and reached the affected group(s) (Scot Gov, 2018), compared to the starting (or baseline) position (i.e. has the instrument led to decreases in GHG emissions in the sector or activities targeted). We have also considered the extent to which impacts can be attributed to the policy in question, compared to other factors. We focus on the available secondary evidence and on direct tax examples. We have sought evidence on policy objectives of interest to the Scottish Government; namely the extent to which the instruments have resulted in GHG emission reductions, preferably where these have been quantified and attributed to the tax, and the extent to which they have generated revenues for the host government. Where possible, we consider whether the policy has brought about behaviour change in response to the tax. We have also considered data on the revenues that the tax has created, as well as how that revenue has been used by the host government. Other unintended impacts are noted, where evidence allows.

        Before we consider data from specific instruments, a key broader conclusion is that several sources do not consider that existing carbon tax instruments are sufficient to address climate change goals. The Intergovernmental Panel on Climate Change (IPCC) estimated that to meet global GHG reduction requirements the average G20 economy needs to reduce its GHG emissions by over 10% every year (Green, 2021). The sources above suggests that the price and scope of existing instruments are not sufficient to deliver this kind of reduction.

        Evidence on effectiveness – GHG emissions and behaviour change

        In analysing the literature, we looked for secondary evidence on the overall effectiveness of different fiscal levers. Our assessment was limited by two key factors. First, it is not always possible to attribute GHG reductions to one policy instrument, compared to the various other factors influencing GHG emissions and all such estimates are subject to uncertainty. Possible other factors include rates of overall economic growth, growth within sectors, economic structure (i.e., size of emission intensive sectors and trends within these), imports and exports, as well as economic shocks such as recessions, the Covid-19 pandemic, and the Russian invasion of Ukraine. Similarly, there are several policies that may affect GHG emissions, so it can be difficult to ascribe GHG reduction to one climate-related policy over another. Second, there is a time lag between policy implementation and observed changes which, in this case, limits the available evidence.

        Overall, the balance of evidence suggests that the fiscal levers reviewed have reduced GHG emissions in the relevant jurisdictions, but the precise reduction is unclear. A 2021 review (Green, 2021) collated available quantitative ex post evidence on GHG emissions reductions attributed to either ETSs or carbon taxes.[2] Key findings are below (note further detail is provided in Table 8.1 in Appendix C, which contains discussion on the findings of several specific studies, including quantitative GHG emission reduction estimates).

        • Although carbon pricing has dominated many political discussions of climate change, only 37 studies assess the actual effects of the policy on emission reductions. Of these, the vast majority are focused on European examples. In turn, most of these examples focus on ETSs, rather than carbon taxes, per se. Similarly, there are few studies which compare either carbon taxes or ETSs to other climate change mitigation policies to establish the relative effectiveness and efficiency of policy measure or packages.
        • Most studies suggest that the aggregate reductions from carbon pricing (note this refers to both ETSs and carbon taxes) on emissions are generally limited. The overall reductions observed were on average up to 2% per year (again this refers to both ETSs and carbon taxes). However, there is considerable variation in the GHG reductions seen between sectors.
        • In general, the review concluded that the existing evidence suggested carbon taxes may have performed better than ETSs in producing emission reductions. Note this conclusion should be interpreted with caution; it may reflect the prevailing carbon price, rather than the mechanism itself and much of the evidence on emission reductions from ETSs discussed in the review focussed on the EU ETS. Some of the studies on which this conclusion is drawn are based on the pilot phase of the EU ETS, which involved free allocations to several sectors, a higher emissions cap and a relatively low carbon price. Future evidence should be monitored to examine whether that conclusion remains valid.
        • However, there is more evidence that other regulatory instruments beyond either ETSs or carbon pricing probably have a greater effect than either measure acting alone. A 2020 study concluded that “the real work of emission control is done through regulatory instruments” (Cullenward and Victor, cited in Green 2021). A 2018 review provides some evidence that nations which are part of the EU ETS and are without a carbon tax experienced emission reduction in those sectors not covered by the ETS at a slightly faster rate than those that applied a domestic carbon tax, alongside the EU ETS (Haites, 2018, cited in Green 2021). There are clearly several factors at play.
        • Experience to date indicates that in comparison with ETSs, establishing and administering carbon taxes in the host government are comparatively straightforward and inexpensive.

        We have identified limited evidence on the behavioural effects of the taxes. Two studies (Tvinnereim and Mehling 2018, Rosenbloom et al 2020, cited in Green, 2021) consider this. They conclude that there is little evidence that the taxes directly result in wider decarbonisation. The studies suggest a more common response is to mitigate the flow of emissions, via fuel switching or efficiency improvements, rather than more significant changes in manufacturing process or technologies. This may be a product of the nature of the instrument, the activities on which the taxes are targeted or current relatively low prices. It may also reflect a lack of coordination of wider climate mitigation policy, which as we have seen above, is likely to be necessary to sustain wider emission reductions.

        Evidence on effectiveness – Revenue generation and ‘hypothecation or earmarking’

        We reviewed evidence on both the revenue generated by carbon taxes as well as how these revenues have been used. The available data reflects different time periods and there are some methodological inconsistencies. Two overall conclusions are apparent. First, that carbon taxes have generated substantial income for the host government. Second, that a key characteristic of carbon taxes in operation to date is that a substantial proportion of that revenue is often allocated (or ‘earmarked’ or ‘hypothecated’) for specific purposes. Occasionally this hypothecation is explicit in the legislation, hence legally binding, while in other cases this allocation is via a political commitment, hence potentially subject to change with associated changes in Government.

        A 2016 review (Carl and Fedor, 2016) of 56 national or subnational instruments found revenues from carbon pricing (i.e., taxes and ETSs) amounted to $28.3 billion in 2013. Of this, well over $20 billion was raised from carbon taxes.[3] Of this only a small proportion of this revenue overall (about 15% was allocated to ‘green spending’. The review concluded that it was much more common for carbon tax revenues to be reallocated in the form of tax cuts and rebates and this accounted for about 44% of revenues at the time. About 28% were not allocated for a specific purpose, referred to as ‘unconstrained’. The same review indicates indirect taxes are often not reallocated for specific purposes (Carl and Fedor, 2016). Analysis of specific carbon tax instruments were also included, with results shown in Table 8.2 in Appendix C. These data indicate that taxes accounted for revenues between $30 million per year (Iceland) to $1 billion or more (Denmark, British Columbia and Norway). Sweden’s is by far the largest at $3.5 billion and it also has the largest per capita cost and share of GDP. These data indicate – at the time – that the most ambitious schemes constitute well under 1% of GDP. Further quantitative data is set out in Table 8.2 in Appendix C.

        More recent data show that by 2022 (World Bank 2023), revenues from carbon pricing had increased significantly to $95 billion, of which carbon taxes generated 31% (just under $30 billion).[4] Although revenues from carbon taxes had increased, this had been driven by rising revenues from ETSs. The overall tax revenue is not just a by-product of prices, but of the share of GHG emission covered, exemptions, the carbon intensity of sectors, and carbon leakage. For example, South Africa’s carbon tax covers nearly 10 times more emissions than Colombia’s and at a higher rate but was delivering a similar amount of revenues (World Bank 2023).

        For comparison, a more recent study based on 40 countries also examined the level and use of revenue (OECD, 2019). This source examines whether the revenue reallocations were legally binding (i.e., set out in the relevant legislative act) or based on a political commitment (i.e., via ministerial or policy statement). The review also provides further detail on precisely how the revenues have been used. These full data are produced in Table 8.3 in Appendix C.

        Again, the data show that a consistent feature of carbon taxes is the extent to which the revenues are used for specific purposes; around two thirds of total revenues have some form of hypothecation or constraint. They have been particularly directed toward reducing the taxation burden in other spheres, such as associated with employment or in provision of direct financial relief or subsidy to specific groups. Moreover, the review found that introduction of carbon taxes has frequently been part of broader tax reforms and that it has been more common for carbon tax revenue to be allocated based on political, rather than legal commitments. The authors indicate that the tax reform potential of carbon taxes (i.e., reducing the tax liabilities from labour and capital) may form part of the motivation for adoption, alongside the climate mitigation potential in at least some jurisdictions (OECD, (2019).

        Lessons learned

        We reviewed evidence on where carbon taxes have been effective, as well as where setbacks have occurred and why. We highlight data gaps and conclude with recommendations identified in the literature on how a hypothetical UK carbon tax might be applied.

        Are carbon taxes regressive?

        A small number of studies have explicitly reviewed the evidence on distributional effects from carbon taxes (i.e., to whom the costs are incurred, with a particular focus on different impacts based on income) and whether carbon pricing results in generally progressive or regressive effects. For example, Ohlendorf et al (2018) provide a meta-review, but the information identified has generally focussed on low and middle-income countries and shown different results. The review notes that literature reviews have shown mostly regressive impacts in developed countries, but that this is not necessarily the case in developing countries. More progressive outcomes were observed for reforms that remove fossil fuel subsidies as well as some transportation policy. Overall, the review is inconclusive and provides limited lessons for Scotland. The tax itself is likely to be regressive, where additional costs incurred via carbon taxes are passed through supply chains to end users or consumers. Without the revenue recycling/rebate measures described above this may disproportionately affect those on the lowest incomes (Ohlendorf et al 2018, LSE, 2019). The UK Government Net Zero Review examines household exposure to the costs associated with the net zero transition. The review concludes that forecasting household costs in detail is not possible, but costs may fall on households via a number of routes. These include via Government decisions on tax and expenditure, via businesses and reflected in prices, wages and consumer choices (HM Treasury, 2021).

        What has worked in the application of carbon taxes?

        Overall, we found several examples where carbon taxes have been applied, maintained, contributed to emission reduction and generated revenue for the host government, whilst maintaining popular support. However, in every case, the design of the tax has considered the unique context in each jurisdiction.

        A significant element of revenue recycling is a characteristic of most instruments adopted to date. An OECD review notes it has been possible, “in most circumstances”, to strike a balance between using the revenue in ways that are socially useful and that contribute to public support for carbon pricing. Such revenue recycling should not be seen as a panacea for public support, however. Introducing carbon pricing instruments generally is seen as more challenging when general public confidence in government is low (note this is not defined and is clearly relative). Such lack of confidence further limits the options for revenue use, by reducing the space for more significant tax reforms and increasing the political appeal for lump sum transfers of revenue (OECD, 2019).

        Others have seen the degree of hypothecation of revenues as a way of ensuring ‘lock in’ of the front-end prices and increasing the overall longevity and stability of the instrument. For instance, by ensuring the back-end uses of the proceeds are visible, it is harder to change prices or exempt certain sectors for reasons of political expediency (Carl and Fedor, 2016).

        A further balance must be struck between rigid hypothecation of the revenues, which may constrain flexibility, and the benefits of clearly communicating what revenues are being generated and how they are to be used. This communication is considered to be key for creating public support and any policy should be developed in conjunction with stakeholders and be subject to a detailed cost-benefit analysis (OECD, 2019).

        Sweden’s carbon tax, for example, may be seen as an exception to this. Some analysis suggests that it has been subject to so many changes that the ultimate effect of the carbon tax is not clearly distinct from effects of other measures e.g., value added tax, excise duties, etc. (Carl and Fedor, 2016). However, what is clear from the Swedish example is that the tax was part of a wider reform which itself had a clear objective (Section 8.6). This may explain at least some of the public support, even with a relatively high carbon price.

        The justification made at the time for the introduction of carbon taxes vary and are not confined to emission reduction objectives. For example, reducing taxation in other areas, such as on labour (British Columbia, Sweden) as well as using them for wider fiscal recovery after financial crisis (Ireland, Iceland). Other rationale includes the relative simplicity and stability relative to ETS instruments (Carl and Fedor, 2016).

        In the past, carbon taxes have provided a degree of price predictability and of revenue certainty for the host government. For instance, the British Columbia government has been able to predict revenues at least a year ahead within a 5% margin for error (Carl and Fedor, 2016). This would seem to be a feature of the design of the tax (i.e., the sectors at which it is targeted and the overall share of GHG affected).

        Gradual introduction of the tax was seen as a positive feature (for example British Columbia), avoiding a sudden increase in the cost base for affected sectors and mitigating unintended consequences. However, they are also seen as visible, tangible and “politically immediate” ways of demonstrating progress toward climate mitigation (Carl and Fedor, 2016, LSE, 2019).

        What lessons have been observed in the application of carbon taxes?

        It is equally important to draw lessons on where they have not worked or have encountered problems. Reflecting on implementation, we find that existing carbon taxes are generally not sufficient, either in price or scope, to meet existing climate policy goals.

        Carbon taxes have also been politically difficult to implement. They have proved controversial in many jurisdictions, including several with similarities to Scotland. Green (2021) suggests this opposition comes from two sources. The first source is the emitting industries themselves. Second, some evidence is presented by Green (2022) that the public tend to prefer other policies to carbon pricing. Use of dividends (i.e., rebates) may mitigate this risk, but only as part of a wider climate change mitigation package of policy.

        The review has identified several jurisdictions where significant setbacks have been observed. The clearest case is in Australia where an existing carbon tax policy was cancelled. The tax generated what were at the time the largest overall revenues and per capita costs in the world. This was despite having a carbon price ($30 per tonne as of 2016) which was comparable with other jurisdictions. The revenues were a product of the relative carbon intensity of the country’s – largely coal fired – energy generation infrastructure. Repealing the tax became a key element of the opposition party’s ultimately successful political campaign (Carl and Fedor, 2016).

        Mexico is the first Latin American country which has introduced sub-national carbon taxes. Durango is the most recent State to enact one, in January 2023 and others are considering implementing them. Baja California (a Mexican State) introduced a carbon tax as of 2022 as a part of broader fiscal reforms. The tax was levied on emissions from gasoline and diesels. A legal challenge was subsequently brought in Baja California, by the Mexican Federal Government and a group of regulated entities. This argued that under the Mexican Constitution, only the federal government could implement a tax on fuels. The Mexican Supreme Court ruled in favour of the Federal Government (World Bank 2023c).

        In France a planned acceleration of the carbon price increase was suspended in 2018. At that point the price was around $50 per tonne. This was in response to a public backlash on the perceived unfairness of the tax, which was introduced at the same time as broader reforms which were perceived as benefiting the wealthy (IMF, 2019). The wider backlash was epitomised by the ‘gilets jaunes’ or ‘yellow vests’ protests about fuel prices.

        There are other examples where the instruments have been adjusted, paused, amended or the price escalator has been delayed or otherwise changed. For example, British Columbia and particularly New Zealand, where a proposed ‘fart tax’ was cancelled and an agricultural tax has been delayed (see Section 3.7.4).

        A specific challenge is that the UK – and by implication, Scotland – has one of the most complex tax systems in the world. Some experts have consistently criticised a lack of an overall coherent tax strategy for the UK, particularly considering the implications of demographic changes for future taxation targeted at the economically active working age population (Johnson, 2023).

        What are the data gaps?

        Our review and the interviews have generated limited specific detail on impacts within affected sectors, as well as details on the behavioural response of those sectors. This reflects methodological challenges as well as time lags between policy action and observed effects. It has also identified limited quantitative information on carbon leakage. The emission reduction estimates are likely to be somewhat overstated, given that this has not been quantified.

        Recommendations for the UK in the literature

        A 2019 policy brief from the Grantham Institute reviewed the global evidence and provided a series of explicit recommendations for the UK if it were to implement a carbon tax (LSE, 2019). The recommendations were:

        • The tax rate should be high enough to be consistent with net zero policy objectives. This implied a starting rate somewhere around £40 per tonne (as of 2020) (note this also depends on the scope of the tax, which is not specified in detail in the paper, but would need to be applied “in most sectors”). It should complement and be carefully designed alongside other climate change mitigation policies.
        • Credibility requires clear rules, a design that is not susceptible to political pressure and visibility on how the trajectory of prices or scope may change over time (i.e., annually, based on factors like investment cycles or emission performance).
        • The price should start low and rise over time. This doesn’t only allow affected industries time to respond but allows evidence on effectiveness and any unintended effects to be observed in practice.
        • The use of the proceeds should be carefully and regularly explained alongside information on the economic, social and environmental costs and benefits (via a published, independent cost-benefit analysis, for example).

        Case studies

        To gain further depth on specific international examples of fiscal levers, we assessed six case studies in further detail. Their selection was based on six predetermined criteria (see Section 8.1.2 in Appendix A on the methodology for the overall study for more detail). An overview of the selected case studies, and the accompanying rationale for their selection against these criteria is in Table 3.1, below. Each criterion has been assigned a red [R], amber [A] or green [G] (RAG) rating. This is based on a judgement of the researchers on the overall similarities between the case study jurisdiction and the Scottish context. For comparison, the Scottish population was some 5.4 million (in 2022), whilst GDP per capita was $42,362 (in 2021).[5] Given Scotland’s devolved powers to create taxes with consent of UK Parliament, we include examples where instruments have been applied sub-nationally (for example Canada, Wallonia). There are cases which include rural and island communities or significant renewable energy generation potential (for example New Zealand). Scotland’s ambition is for Net Zero by 2045 and 75% reduction in emission by 2030, so we have selected jurisdictions with similarly ambitious targets (for example Sweden and Austria).

        We discuss key features and potential lessons for Scotland in Sections 3.7.1 to 3.7.4 below the table. Full details of the case studies are in Appendix D.

         

        British Columbia

        Sweden

        Austria

        New Zealand

        France

        Wallonia

        Overview of instrument

        Direct carbon tax, applied to fuels based on their CO2 content

        Direct carbon tax, applied to fuels based on a CO2 price per tonne

        National ETS scheme which augments the EU ETS and applies to sectors excluded from it

        Agricultural tax, applying a farm-level levy on GHG emissions

        Bonus Malus scheme with fees on purchase of new emission intensive vehicles and rebates for electric vehicles

        Indirect tax on environmental impacts from farming, focussed on water resources

        Population and GDP per capita

        5 million (2021) and $59,962 [G]

        10.5 million (2022) and $65,157 (2021) [A]

        9 million (2022) and $59,991 (2021) [A]

        5.1 million (2022) and $47,982 (2021) [G]

        68 million (2022) $55,064 (2022) [A]

        3.6 million (2022) and €31,568 (2021) [A]

        Administrative and legal arrangements/ competencies

        Sub-national tax, with separate federal tax system [G]

        National level tax, alongside EU ETS [A]

        National ETS designed around EU ETS [G]

        A proposed national-level tax [A]

        National level indirect tax [A]

        Indirect tax at sub-national level [G]

        Shared challenges

        Significant renewable energy use (largely hydropower), rural communities [G]

        Rapidly growing renewable energy potential, Rural and Island communities [G]

        Rapidly growing renewable energy potential, rural communities [A]

        Significant renewable energy potential, Peatland[G]

        Increasing renewable energy potential, rural communities [G]

        Increasing renewable energy use [G]

        Climate ambition

        Net Zero by 2050 [A]

        Net Zero by 2045 [G]

        Net Zero by 2040 [G]

        Net Zero by 2050 [A]

        Net Zero by 2050 [A]

        80-95% reduction in emissions by 2050 [A]

        Data and Evidence

        Good level of evidence [G]

        Good level of evidence [G]

        No ex-post evidence, but detail on design/expected impacts [G]

        Implementation lessons only [R]

        Good level of evidence [G]

        Good detail on lever design, limited evidence on effectiveness [A]

        Diversity of Approaches

        Sub-national direct carbon tax [G]

        Longstanding and highest priced direct carbon tax [G]

        National level ETS [G]

        Novel concept [G]

        Indirect tax, administered nationally [G]

        Indirect tax, administered at sub-nationally [G]

        Table 3.1: Overview of the case studies (RAG status indicating similarities with Scotland denoted by [R] red; [A] amber or [G] green)

        Impact on GHG emissions

        The available evidence linking each fiscal lever with GHG emission reduction varies significantly. The case studies include two direct taxes – both of which are applied to various fuels based on their CO2 content – in Sweden and British Columbia (BC), Canada. These levers have been in place for a relatively long period, so have generally good ex-post evidence available. Bernard and Kichian (2019) have calculated that the British Columbia carbon tax, once reaching the rate of $30/ton of CO2, achieved an estimated 1.13-million-ton reduction in CO2 emissions. This equates to an average annual reduction of 1.3% relative to British Columbia’s 2008 diesel emissions and 0.2% relative to all BC CO2 emissions in 2008. However, they do not think it is a viable strategy for achieving net zero goals in isolation. With regards to the Swedish carbon tax, a review of ex-post analyses of carbon taxes by Green (2021) reveals different results around Sweden’s emission reductions. For example, research by Andersson (2019) found an average emission reduction of 6.3% per year between 1990 and 2005, Fernando (2019) found an annual average reduction of 17.2% and research by Shmelev and Speck (2018) found no effect on emissions. A study conducted by Jonsson, Ydstedt, & Asen (2022) state that GHG emissions have declined by 27% between 1990 and 2018. This highlights various methodological differences in conducting these ex-post analyses, and the difficulty in establishing the baseline of what emissions reductions would have occurred even in the absence of the lever.

        The Austrian national ETS (nETS) – which extends the EU ETS, of which Austria is a part, to other sectors – is still in a phased implementation stage and will establish a set price which increases each year, reaching a market phase in 2026. Ex-ante modelling conducted by the Austrian government expects the scheme to reduce GHG emissions 800,000 tonnes by 2025. The proposed tax on agricultural emissions in New Zealand has not yet been finalised.

        The evidence suggests the French Bonus Malus scheme – which incentivises uptake of low emission vehicles with a combination of fees and rebates – has been effective in shifting vehicle sales toward more environmentally friendly vehicles. Even though progress has slowed in recent years, average emissions have reduced significantly from 149 gCO2/km in 2010 to 111 gCO2/km in 2017. The relationship between the agricultural tax in Wallonia – which is applied at a farm level on the effects on water resources from livestock and land cultivation – and GHG emissions is much less clear.

        Revenue generation and use

        Data availability on revenue generated by these schemes varies. In all cases, a key element has been that revenues are either directly recycled back to citizens or are offset in other parts of the budget. This has occurred via direct payments/rebates to households or implementing other tax cuts alongside the lever.

        The British Columbia carbon tax was designed to be revenue neutral and so was implemented alongside a wider scheme of tax cuts, and is now part of the Canadian Federal approach, which gives direct payments back to households. In 2019, SEK 22.2 billion was generated via the Swedish carbon tax, which is approximately 1% of Sweden’s total tax revenue. The carbon tax revenue goes into the overall government budget, and is not hypothecated, thus it is unclear where the revenue generated is distributed (Jonsson, Ydstedt, & Asen, 2022). The Austrian nETS was implemented as part of a wider policy package. Although revenue for the emissions allowances goes directly into the main budget and there is no hypothecation, ‘climate bonus’ payments are given directly back to households. Revenue in 2022 was approximately €800 million and the government have reallocated around €1 billion.

        Since 2014, the Bonus Malus scheme has generated surplus revenue for the French general budget. For 2018, the malus was set at a level that covered the costs of the bonus payments (EUR 261 million) and the additional bonus for scrapped vehicles (EUR 127 million). The agricultural tax in Wallonia generates an annual revenue of around €1.2 million, however, it is unclear how this is subsequently used.

        Behaviour change

        There is some evidence on how the case study examples influence behaviour change. The carbon tax in British Columbia has been shown to have had a role in decreasing consumer demand for fossil fuels and natural gas (Pretis, 2022). Additional studies from Xiang and Lawley (2018) and Antweiler and Gulati (2016) also draw correlations between the implementation of the tax and a decrease in fuel demand.

        The carbon tax in Sweden has shown to be effective in shifting market investment into low-carbon technology, specifically in renewable energy sources such as hydro and wind (Hildingsson and Knaggård, 2022). Levying the carbon tax at different rates on fuels has also resulted in behaviour changes in companies. Between 1993 and 1997, the higher tax rate on fuels used within domestic heating systems compared to fuels used within industry resulted in industries selling their by-products to domestic heating companies, while continuing to burn fossil fuels themselves (Johansson, 2000).

        One interviewee suggested that the Austrian nETS, whilst in its fixed price stage, is not expected to generate a strong enough price signal to result in a clear and significant change in behaviour. However, other parts of the policy package have been designed to specifically change behaviour (such as subsidies for changing heating systems in households). The Bonus Malus scheme has had a clear impact on shifting vehicle sales in France towards less CO2 intensive vehicles. However, the scheme may have a rebound effect, as the lower fuel expenditure for consumers due to more efficient vehicles may lead to an increase in vehicle use and thus in fuel consumed (and thus on emissions). There is no evidence regarding the behavioural effects of the agricultural tax in Wallonia.

        Unexpected challenges

        In British Columbia, the tax was initially designed without exemptions and applied universally. However, after competitiveness concerns were raised, the government introduced a one-time exemption worth $7.6 million in 2012, followed by an ongoing exemption in 2013 to greenhouse growers and an exemption for gasoline and diesel used in agriculture in 2014.

        When implementing their nETS, the Austrian government experienced challenges designing the scheme around the existing EU ETS. To ensure that emissions were not double counted, exemptions from the national ETS were given to installations already regulated under the EU ETS. This proved a challenging exercise for the Austrian government.

        Challenges have been observed for the proposed agricultural tax in New Zealand. Whilst these are political in nature, they have presented challenges for the implementing government. The original proposal for a split-gas, farm-level levy was revoked after a consultation highlighted public concerns about the impact on the cost and potential implications on availability of produce. A series of media outlets reported tensions between the agricultural sector in New Zealand and the government. Farmers expressed concerns regarding both the profitability and competitiveness of their business, with some expecting to have to reduce their herd size (Pannett, 2023). After revoking the original planned tax, the NZ government are now implementing mandatory monitoring and reporting of emissions from agriculture, to eventually transition into pricing of emissions.

        Overview of fiscal levers in the UK

        We investigated existing UK environmental fiscal levers, including taxes in the energy intensive industries, the power generation, transport, and pollution and resource sectors in Appendix B. We focused analysis on those that deliver reductions in GHG emissions. These include:

        • Fiscal levers specifically targeted to reduce GHG emissions.
        • Fiscal levers specifically targeted to address environmental impacts and affecting GHG emissions.

        These were classified using the typologies developed in Section 3.1. Fiscal levers that do not contribute to reducing GHG emissions have not been considered. A complete list of environmental taxes in the UK (at time of writing) is in Section 8.1.4.

        Existing fiscal levers which target or address GHG emissions focus on energy and energy intensive industries, transportation (road and air transport) and resource use. Examples include Fuel Duty, the Climate Change Levy (CCL), the Renewables Obligation (RO), the UK ETS, the UK Air Passenger Duty (APD), and the Vehicle Excise Duty (VED).

        Under the current devolution settlement, most tax powers remain reserved to the UK Government and Parliament. However, any existing national tax can potentially be devolved to the Scottish Parliament. New national taxes can be created through a mechanism allowing the UK Parliament, with the consent of the Scottish Parliament, to grant powers for new national devolved taxes to be created in Scotland (Scottish Parliament, 2021).

        Overview of fiscal levers in Scotland and implications of the case studies

        Devolution is the statutory delegation of powers from the central government of a sovereign state to govern at a subnational level. It is a form of administrative decentralisation. Devolved territories have the power to make legislation relevant to the area, thus granting them higher levels of autonomy. In the UK, devolution is the term used to describe the process of transferring power from the centre (Westminster) to the nations and regions of the United Kingdom (Torrance, 2022). Devolution provides Scotland, Wales and Northern Ireland with forms of self-government within the UK. In the case of Scotland, this includes the transfer of legislative powers to the Scottish Parliament and the granting of powers to the Scottish Government. While the UK Parliament still legislates for Scotland, it does not do so for devolved matters without the consent of the Scottish Parliament.

        The devolution process has led to calls for the Scottish Parliament to be given more responsibility over revenue raised and spent in Scotland. There are existing devolved environmental taxes under the Scottish Government’s remit that contribute to reducing GHG emissions. We have also considered implications of the case studies from a legal and regulatory perspective. No assessment is made of the potential costs and benefits of adoption nor of the practical challenges associated with them.

        Legal and regulatory fiscal system in Scotland

        The legislative framework for devolution to Scotland was originally set out in the Scotland Act 1998. The Scotland Act 1998 established the Scottish Parliament and set out the matters on which the Scottish Parliament cannot legislate and make laws, known as general and specific reservations. Everything not listed as a reserved matter is assumed to be devolved. Reserved taxation matters include VAT rates, Fuel Duty, and Corporation Tax. The Scottish Parliament currently has devolved responsibilities in relation to five taxes (Scottish Government (2021), as follows:

        • Scottish Income Tax, which is partially devolved. It is collected and administered by HMRC on behalf of the Scottish Government.
        • Land and Buildings Transaction Tax, a tax paid in relation to land and property transactions in Scotland, and Scottish Landfill Tax, a tax on the disposal of waste to landfill, are fully devolved national taxes and are managed and collected by Revenue Scotland.
        • The Scottish Parliament also has powers over local taxes for local expenditure. Currently, the two main local taxes are Council Tax and Non-Domestic Rates (also known as business rates), which are collected by local authorities. Note that a review of local taxes is not covered in this study.

        In addition, powers in relation to two further taxes have been devolved to the Scottish Parliament, but these have not yet been implemented and the relevant reserved taxes therefore continue to apply. These taxes are Air Departure Tax, a tax on all eligible passengers flying from Scottish airports, which will replace Air Passenger Duty when introduced, and a devolved tax on the commercial exploitation of crushed rock, gravel, or sand, which will replace the Aggregates Levy when introduced.

        The Scottish Parliament has the power to create new local taxes (i.e. local taxes to fund local authority expenditure). There is also a mechanism allowing the UK Parliament, with the consent of the Scottish Parliament, to devolve powers for new national devolved taxes to be created in Scotland. This is unlikely to be a swift process and would likely depend on the complexity of the new national tax and negotiation over devolution of the requisite powers.

        The UK Internal Market Act 2020 (IMA) seeks to prevent internal trade barriers among the four countries of the United Kingdom. Schedule 1, paragraph 11 of the IMA specifically exempts taxes (Legislation.gov.uk, 2020a). However, new regulatory acts considered to create additional administrative burdens which may affect intra UK trade may be challenged under the IMA.

        Devolved fiscal levers to deliver reductions in GHG emissions in Scotland

        The Commission on Scottish Devolution (also referred to as the Calman Commission), established in 2007, identified some taxes (including the Landfill Tax and the Air Passenger Duty) where devolved powers could be applied. Following this, the Scotland Act 2012 devolved powers for a Landfill Tax to the Scottish Parliament to cover landfills and transactions taking place in Scotland, which led to the Landfill Tax (Scotland) Act 2014. At the time of writing, this is the only fully devolved fiscal lever delivering reductions in GHG emissions that currently applies in Scotland.[6] Although the Scotland Act 2016 included the power to introduce a devolved tax on the carriage of passengers by air from airports in Scotland (i.e. to replace the present, UK-wide Air Passenger Duty). The Air Departure Tax (Scotland) Act 2017 was passed by the Scottish Parliament 2017, however the introduction of the tax has been deferred due to state aid (and now subsidy control) issues. The Scotland Act 2016 Act also made provisions for the creation of a devolved tax on extraction of aggregates, which is currently being legislated for in the Scottish Parliament, although this does not specifically look to reduce greenhouse gas emissions.

        Indirect Taxation Schemes

        The Scottish Landfill Tax (SLfT) replaced the UK Landfill Tax in Scotland from 1 April 2015 under the Landfill Tax (Scotland) Act 2012. The SLfT is part of Scotland’s Zero Waste Scheme and aims to encourage the prevention, reuse and recycling of waste in the country. It is administered by Revenue Scotland with support from the Scottish Environment Protection Agency (SEPA). SLfT is a tax on the disposal of waste to an authorised or non-authorised landfill in Scotland. The taxation of disposals to unauthorised sites (that is illegal dumping) is a key difference between SLfT and UK Landfill tax.

        The Scottish Government is responsible for setting the rates of the tax as part of the annual Scottish Budget and determining which waste is subject to it. The tax is paid on the disposal or unauthorised disposal of waste to landfill and is calculated based on the weight and type of the waste material. A standard rate of £102.10 per tonne is applied, while a lower rate of £3.25 per tonne is paid on less polluting (referred to as ‘inert’)[7] materials. Tax revenues have decreased from £149 million in 2015-2016 to £125 million in 2021-2022. The SLfT has been a major part of the success in driving change in Scotland’s waste performance (Revenue Scotland, 2021).

        Air Departure Tax (ADT). The Scotland Act 2016 included the power to introduce a devolved tax on the carriage of passengers by air from airports in Scotland. This allows Scotland to design a replacement for APD. The Air Departure Tax (Scotland) Act 2017 made provision for such a tax, which will be managed and collected by Revenue Scotland. However, the tax has not yet been introduced and UK APD continues to apply.

        The Scottish ADT will tax flights departing from an airport in Scotland (this includes airports in the Highlands and Islands regions). As with the UK APD, the amount of tax payable depends on the destination of the passenger and the characteristics of the aircraft (take-off weight,[8] flight distance seat pitch and seating capacity). Depending on the aircraft, the passenger will pay either the standard, premium or special rate.[9] Certain flights and passengers are exempt from ADT. Exemptions apply to flights operated under a public service obligation, which may include many flights to/from small islands, although the Air Departure Tax (Scotland) Act 2017 making provision for such a tax does not mention any exemptions for passengers on flights leaving from airports in the Scottish Highlands and Islands. There are also exemptions for emergency medical service flights, military, training or research flights. Passenger exemptions apply to persons that are working during the flight, such as flight crew, cabin attendants, persons undertaking repair, maintenance, safety or security work, persons not carried for reward, such as Civil Aviation Authority flight operations inspectors, or children under the age of 16 (FCC Aviation, 2023).

        ADT was originally expected to come into force on 1 April 2018. However, on April 2019 the Scottish Government deferred the introduction of ADT beyond April 2020 until issues have been resolved regarding the tax exemption for flights departing from airports in the Highlands and Islands regions. The devolution process is, thus, on hold. In the meantime, UK APD (and the rates and bands that currently exist) and the current Highlands and Islands exemption continues to apply.

        Implications of the case studies for Scotland

        We assessed whether the six case study examples (Section 3.7) could hypothetically be implemented by the Scottish Government under current devolved competencies. We also provide a high-level explanation of practical issues (e.g., target of the lever and groups affected). No assessment is made of the costs and benefits of adoption.

        Case study

        Description

        Exists in the UK?

        Exists in Scotland?

        Can be devolved to or created in Scotland?

        Direct Carbon Tax: British Columbia, Canada

        Tax applied to fuels based on their CO₂ content, covering all liquid transportation fuels such as gasoline and diesel, as well as natural gas or coal used to power electric plants.

        Yes. Similar to Climate Change Levy (CCL)

        No

        Yes. Hypothetically the CCL could be devolved to Scotland. A new Scottish CCL, with additions/adjustments to incorporate the carbon tax could then replace the UK CCL in Scotland. This would be subject to UK Parliament consent and Scottish Parliament agreement. A Scotland Act including the power to introduce a devolved CCL in Scotland and a new specific CCL (Scotland) Act applying the legislation to Scotland would be required.

        Direct Carbon Tax: Sweden

        Tax applied on fossil fuels used for motor fuels and heating purposes including gas oil, heavy fuel oil, coal, natural gas, petrol, gas oil, heavy fuel oil, coal and natural gas.

        Yes. Similar to Climate Change Levy

        No

        National ETS: Austria

        The national ETS was designed to complement and exist alongside the EU ETS. It covers CO₂ emissions from fossil fuels including transport fuels (petrol and diesel), fuel and heating oil, natural gas/liquified gas, coal and kerosene used in sectors which are not regulated under the EU ETS.

        Yes. Similar to UK ETS

        No

        Yes. A new Scottish ETS (with adjustments in scope to incorporate additional sectors, for example) could hypothetically replace the UK ETS in Scotland. This would be subject to UK Parliament, Welsh Parliament, Northern Ireland Assembly consent and Scottish Parliament agreement.

        A new specific ETS (Scotland) Act applying the legislation to Scotland would be required.

        Proposed tax on agricultural emissions: New Zealand

        A proposed farm-level levy that would require farms to calculate and pay for their emissions through a central calculator. It was set to use a split-gas approach by applying unique levy rates to short-and long-lived gases.

        No

        No

        Yes. Hypothetically a new national tax on agricultural emissions could be introduced in Scotland by the Scottish Government

        with the consent of the UK Government.

        A new specific Tax on Agricultural Emissions (Scotland) Act would be required.

        Tax on environmental impacts from farming: Wallonia, Belgium

        The tax is intended to address the environmental costs associated with the impact of agricultural activities on water resources, in particular livestock manure and the use of fertilisers and phytosanitary on crops.

        No

        No

        Bonus Malus Scheme: France

        This system combines fees and rebates for the purchase of new vehicles: vehicles purchased or leased whose emissions exceed certain limits pay a fee, while vehicles that do not exceed these limits are entitled to a bonus or rebate.

        Yes. Similar to Vehicle Excise Duty (VED)

        No

        Yes. Hypothetically, the VED could be devolved to Scotland; thus, a new Scottish VED (with adjustments as per the Bonus-Malus scheme) could replace the UK VED in Scotland. This would be subject to UK Parliament consent and Scotland Parliament agreement. A Scotland Act including the power to introduce a devolved VED in Scotland and a new specific VED (Scotland) Act applying the legislation to Scotland would be required.

        Table 5.1: Potential of case studies in Scotland

        While the balance of evidence suggests that similar taxes have reduced GHG emissions where they have been applied elsewhere, the net effect on GHG emissions in the host jurisdiction is uncertain. Challenges in implementation have also been observed and there is limited detailed evidence on behavioural effects. These issues will need to be further investigated before any such tax could be considered for Scotland. If the Scottish Government were to consider exploring any of the examples we have looked at, it would be necessary to undertake thorough policy scoping, analysis and consultation, in addition to the agreement of both the UK and Scottish Parliaments. The Scottish Government could also consider these points in the context of its wider discussions with the UK Government on the direction of climate and fiscal policies as part of a collaborative approach.

        Direct Carbon Tax

        The UK CCL (which is in practice similar to direct carbon taxes in place in several countries or regions, including Sweden and British Columbia) could be devolved to the Scottish Parliament through an agreement between the Scottish and UK governments and parliaments on the transfer of powers.

        A new Scottish carbon tax could then in theory replace the UK CCL in Scotland. This could be broadly similar to the UK CCL, although the Scottish Government could also make its own decisions on issues such as scope and rates to better align it with Scotland’s socioeconomic conditions and emissions reduction targets. Were the Scottish Government to consider such a measure, it would require significant exploration of options and detailed analysis to ensure it achieved these objectives, including consultation and engagement with stakeholders.

        Emissions Trading System

        The UK ETS is jointly operated by the Scottish Government, UK Government, Welsh Government and Northern Ireland Executive through the UK ETS Authority. It relies primarily on legislation that is devolved (the Climate Change Act), although parts of the ETS relating to auction processes are based on legislation that is more often considered reserved and, thus, relies on UK parliament.

        A new ‘Scotland ETS’ could hypothetically replace the UK ETS. This would require prior consent of the UK Parliament, Welsh Parliament, and Northern Ireland Assembly to have effect, as well as the agreement of the Scottish Parliament. The agreement of the Scottish Parliament could be sought through new specific legislation (either primary or secondary). Thus, an Act of the Scottish Parliament to make provision about the functioning of the ETS in Scotland would be required. This could in theory cover additional sectors not covered by the UK ETS, similar to the Austrian nETS operating alongside the EU ETS. However, any such proposal would require comprehensive policy scoping and consultation, in addition to the need for agreement from each legislative body, as detailed above.

        Bonus Malus Scheme for Vehicles

        The UK VED (similar to the bonus malus scheme explained in Appendix D) paid by businesses and households could in theory be devolved to the Scottish Parliament. Thus the new Scotland VED would replace the UK VED through an agreement between the Scottish and UK governments and parliaments on the transfer of powers.

        This could potentially allow for innovation, as differences are in principle permitted, as happened with landfill tax (the SLfT applies on the disposal of waste to both authorised and non-authorised landfills, whereas the UK landfill tax only applies to disposals to authorised sites). It could therefore be feasible to create bonuses to incentivise buyers to purchase low or zero emission vehicles (along the lines of the Bonus-Malus in France), which UK VED does not currently offer. However, this would require detailed policy scoping and consultation to ensure any potential measure operates fairly and effectively, as well as having the consent of both the UK and Scottish Parliaments.

        Tax on agricultural emissions

        Under Section 80B of the Scotland Act 1998 (as amended), a new tax on agricultural emissions similar to the tax on agricultural emissions proposed in New Zealand (for further details, see Appendix D) could in theory be created in Scotland as the UK Parliament can, with the consent of the Scottish Parliament, devolve powers for new national devolved taxes to be created in Scotland.

        This tax might operate by putting a price on agricultural GHG emissions, for example, and could include farmers and growers who operate on Scottish territory, depending on their GHG emissions. The lessons learned from the example in New Zealand clearly demonstrate that consideration of any such measures would require rigorous policy design, consultation and close collaboration with stakeholders in the sector. Whilst new taxes can be effective in changing behaviours and reducing GHG emissions, there is an important and challenging balance to strike between protecting jobs and the viability of industries such as agriculture whilst also meeting net zero targets.

        Conclusions

        Of the various policies to mitigate the effects of climate change, the use of fiscal levers (taxes, levies, duties or charges) to reduce GHG emissions has gained increased attention and wider adoption by policymakers around the world. Different types of fiscal levers include emission trading schemes; carbon credit schemes; carbon border adjustment mechanisms; and carbon taxes. We focused on direct carbon taxes. Subsidies, grants and loans by the UK or Scottish Governments were not in scope.

        International review of fiscal levers for GHG emissions

        Use of carbon taxes is increasingly common. 37 direct carbon taxes are in operation in 27 jurisdictions globally. The majority are applied in high-income countries, particularly Europe. Scandinavian countries were among the earliest adopters. Many of these taxes have been applied alongside an ETS. There has been less use outside Europe to date. However, several jurisdictions are currently considering them.

        Sub-national carbon taxes have been applied successfully: Of particular relevance to Scotland, two jurisdictions have applied carbon taxes sub-nationally: Canada, which has five, and Mexico, which currently has two with further instruments planned.

        Existing instruments differ in terms of GHG coverage and carbon price: about 6% of global GHG emissions are taxed by carbon taxes. This share has increased significantly over the past 15 years. Existing instruments differ in scope, price and coverage. For example, Sweden has a ‘high ambition’ instrument and was one of the earliest adopters with the highest carbon tax globally. Other instruments have a mixed level of ambition e.g. high prices and low share (Uruguay) or high share but low prices (Singapore). Relatively low prices and shares include some Eastern European and South American states.

        The balance of evidence suggests carbon taxes have reduced GHG emissions, with caveats. Despite the extensive literature on the merits of carbon taxation, actual data on their impact on GHG emissions is limited. Any assessment of impact is methodologically challenging, particularly in attributing GHG reductions to the specific tax. Effects of carbon leakage are rarely quantified, so estimates may overstate reductions in GHG emissions when taking a global view. Despite these challenges, the evidence indicates that carbon taxes have generally reduced GHG emissions in the relevant sector or jurisdiction. There is some limited evidence that carbon taxes perform better than ETSs in terms of GHG reduction, but both are likely to need additional regulatory measures to deliver the scale of decarbonisation necessary. The extent of reductions attributed to the taxes to date are not considered sufficient to meet broader climate goals.

        Evidence on behavioural effects within affected sectors is more limited. The available evidence indicates that fuel switching or efficiency improvements may be more common responses than significant changes to manufacturing processes or technologies. Analysis of the Swedish carbon tax suggests some decreased demand for petrol was offset by increases for diesel but it was considered to have supported a shift in investment toward low-carbon technologies. It is not clear if responses were a result of the design of the tax or a reflection of prevailing prices and/or coverage.

        Carbon taxes have generated government revenue but their magnitude depends on the design of the tax. The data contain some methodological and reporting inconsistencies, but 2013 information suggested revenues differed between some $3.5 billion (Sweden) and tens of million (Iceland). Data from 2019 show similar orders of magnitude, but the values for specific jurisdictions differ. The share of GDP represented by the taxes were all under 1% of national GDP at that time. By 2022 carbon tax revenues were upwards of $30 billion globally. Overall, revenues reflect the carbon price, as well as factors including the size of the economy, the coverage of the tax, exemptions, the carbon intensity of the jurisdiction and energy mix. The available evidence suggests that direct carbon taxes are relatively straightforward and inexpensive to administer for the host government.

        Direct carbon taxes have involved extensive allocations of revenues for specific purposes. Many of the instruments for which data are available contained extensive allocations, as a percentage of revenue. These were often legally binding or via political commitment. Specific allocations include for green spending and particularly on specific rebates or tax cuts to affected groups, including low-income households and some businesses. British Columbia’s carbon tax was designed to be revenue neutral. In Sweden and Iceland, revenues are unconstrained and used to finance general government expenditure.

        Implementation has been politically challenging. Australia is the only jurisdiction identified where an existing carbon tax was repealed. Repealing the tax became a central element of a successful opposition election campaign. Similarly, a planned acceleration of the carbon price was suspended in France as a result of widespread civil unrest, citing the perceived unfairness of the tax, having been introduced alongside tax cuts for the wealthy. A successful legal challenge was brought in Mexico over whether the regional government had legal authority to implement a subnational tax.

        Potential implications for Scotland

        Our high-level review of existing fiscal levers in the UK identified several existing taxes in the energy, transport and resource sectors which specifically target or address GHG emissions.

        The Scotland Act 2012 (Section 80B) provides the Scottish Parliament with the power to devolve any existing national tax of any description to Scotland and create new national taxes such as on activities currently not taxed under the UK tax code. Any changes to existing taxes or the introduction of new taxes will require the agreement of the Scottish Parliament and the prior consent of the UK Parliament to have effect. Several of the case studies contain elements that are in practice similar to existing UK levies, but which would need amending if they were to be considered for Scotland.

        Any new carbon tax could hypothetically be applied in Scotland, potentially as part of a devolved Scottish Climate Change levy. Similarly, a new ‘Scotland ETS’ could hypothetically replace the UK ETS, with adjustments in scope to incorporate additional sectors. This would require prior consent of the UK Parliament, Welsh Parliament and Northern Ireland Assembly, as well as the agreement of the Scottish Parliament. A devolved VED could theoretically replace the UK VED in Scotland. New national taxes could also be created in Scotland, requiring consent of both the UK and Scottish Parliaments. In each case, new Scottish legislation would be required.

        Principles for implementation

        This review has highlighted several fiscal levers used in other countries to reduce GHG emissions. Should any of these be explored further, Scotland’s Framework for Tax sets out the principles and strategic objectives that underpin the Scottish approach to taxation and any new measures (Scottish Government, 2021). These principles are:

        • Proportionality: Taxes should be levied in proportion to taxpayers’ ability to pay and a fair system should reflect relative income or wealth of the taxpayer.
        • Efficiency: Prospects for revenue should be balanced against the potential for unintended behavioural responses.
        • Certainty: So that businesses and individuals can plan and invest with confidence, taxpayers must know what is to be paid, by whom and when.
        • Convenience: Taxes should be collected in a way that maximises convenience for taxpayers. Policy should be simple, clear and straightforward and opportunities to streamline the tax system taken.
        • Engagement: To ensure accountability and maintain trust, governments should consult as widely as possible on tax design.
        • Effectiveness: Taxes should raise the expected revenues and achieve their intended aims. Opportunities for tax avoidance should be minimised.

        As such, the effectiveness of any fiscal lever depends on the precise design of the lever and should be subject to careful consideration and clear communication in terms of its scope, phase-in, price (including future price escalation), sectors and activities on which it is levied and any relevant exemptions. Distributional effects should be carefully considered, including if and how revenue should be reallocated, to whom and under what conditions. challenges in implementation have been observed. Successful fiscal lever examples have been based on transparent design, regular monitoring and communication of revenues, costs and benefits, with rapid adjustments if unexpected adverse effects occur. Successful examples have also formed part of wider fiscal reforms, with a clear strategic objective.

        Any potential instrument should be subject to detailed economic modelling, including testing different price rates and trajectories, an assessment of the risk of carbon leakage (with or without a UK CBAM), economic competitiveness and innovation effects, distributional effects (and potential mitigation via revenue reallocation), and any impacts on small and medium sizes businesses. This should be published in a robust Regulatory Impact Assessment to provide a comprehensive evaluation of any prospective measures, and ensure they adhere to the principles of the Framework for Tax while achieving GHG reductions through behavioural change.

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        Appendices

        Appendix A. Methodology

        This section provides a more detailed overview of the methodology we used.

        Literature review

        First, we conducted a targeted literature review on fiscal levers used to reduce greenhouse gas emissions. We focussed on academic and grey literature sources using agreed search terms. These were: ‘fiscal levers’, ‘tax’, ‘levy’, ‘duties’, ‘charges’, ‘carbon tax’, ‘environmental tax’ ‘carbon pricing’, ‘carbon credits’ ‘greenhouse gas emissions’, ‘Net Zero’, ‘climate change’, ‘fiscal measures’, ‘environmental behaviours’, ‘behaviour change’, ‘dis/incentive’, ‘rural” & “island’, ‘revenues’, and ‘devolved’. We used Boolean operators e.g., AND/OR etc to create relevant search strings from these key words and to refine the search results. We used additional terms including ‘effectiveness of’, ‘review of’, ‘evaluation of’, ‘impact assessment of’ and ‘meta-review of’ to identify additional evidence for specific schemes once they had been identified.

        We searched databases including PubMed, Web of Science All Databases and Scopus to identify relevant academic literature sources. We also looked for legislation as well as publications from national Governments, supranational organisations such as the European Commission or OECD as well as non-governmental organisations. The grey literature was identified via Google searches and searches of relevant government/organisation websites.

        As we identified sources, we screened them using executive summaries or abstracts to ascertain their relevance and quality. If we decided the source was relevant and of sufficient quality, we logged them in a data source register, which was a live Excel document (stored on the project SharePoint site) that was available to all team members. We recorded the source details (title, author, year, source) and information on the contents of the publication, such as the type(s) of lever it discusses, geographical scope, relevance for GHG emissions as well as an indication of the methodological rigour, accuracy and robustness of the source. This ensured that we clearly documented the evidence, and that we could share resources efficiently across the project team. As part of this exercise, 36 sources were logged, informing the beginning of the more in-depth research undertaken for each individual case study.

        As we logged the sources in the register, we undertook a secondary screening exercise of the lever examples – where specific examples were discussed – categorising them into an initial list of typologies. This also identified a ‘longlist’ of potential case studies of specific lever examples for more detailed analysis.

        Case study selection

        We shortlisted six case studies to be analysed in greater detail, from a long list of 12. The case study selection process was twofold. First, initial assessment during literature review stage of the project. While logging the data in the live excel sheet, we conducted a high-level assessment of the relevance of the identified fiscal levers to the Scottish context. Each case study was assigned a RAG rating based on an assessment against six criteria agreed with CxC and the Scottish Government. These criteria were:

        • Population, economic structure and GDP: Countries/regions that with comparable population, GDP/GDP per capita and economic structure (i.e., size of manufacturing sectors, predominance of service sectors) were prioritised. This may include certain EU Member States, for example.
        • Administrative and legal arrangements and competencies: Countries/regions with similar administrative arrangements (i.e., devolved competencies or instruments applied sub-nationally) were prioritised. Examples may include U.S. States, Australian territories or Belgian Regions.
        • Shared challenges: Countries/regions with similar characteristics to Scotland, such as extensive peatland, rural/island communities or extensive renewable energy resources may provide valuable insight. This may include Ireland, Canada, Estonia, Sweden, Finland and Germany, for example.
        • Climate ambition: Countries/regions with similar levels of ambition in terms of climate change mitigation should be prioritised. For example, those with net zero targets set out in national legislation.
        • Diversity of approaches: Different levers and typologies should be covered in the case studies to allow for a comprehensive analysis.
        • Data and evidence: Sufficient data and evidence on the lever and its effectiveness must be available to support case study analysis.

        We then used this RAG rating to select the most relevant case studies, which were presented to the project steering group for agreement. The project steering group selected the final six case studies for the project. These case studies are contained in Appendix C.

        Semi-structured interviews

        To supplement the literature review, we conducted 7 semi-structured interviews of c.45 minutes via MS teams. In two cases, the interviewees requested to respond in writing. Two rounds of interviews were conducted.

        We conducted the first round of interviews with experts who could offer an international perspective on the use of fiscal levers for greenhouse gas emission reductions. The purpose of these interviews was to gain expert input on the global picture, to ensure that sound case study options had been selected and to ensure that the project team was aware of all available evidence. We held interviews with Stefano Carattini, an academic specialising in carbon taxation worldwide, Ian Parry an expert from the IMF and Professor Lorraine Whitmarsh, an academic specialising in behavioural change in the face of environmental legislation and carbon taxation.

        The second round of interviews aimed to gain more targeted information about specific case studies in the relevant jurisdictions. We aimed to obtain evidence on the effectiveness of the fiscal levers and fill in any data gaps that had persisted after the literature review. These interviews included civil servants working on the policy in the relevant governments where these could be identified, as well as academics with the required expertise working in the relevant countries. We were able to arrange interviews with experts from four out of the six case studies analysed in this study. Experts in British Columbia, Austria, Wallonia and Sweden were consulted. Difficulties related to recent elections, and the early nature of the implementation of the tax in New Zealand meant that no civil servants were available to contribute to our study in this jurisdiction. In France, the expert we contacted rejected our interview request, based on the time which had elapsed since the individual was involved with that instrument. We were satisfied with the amount of information publicly available regarding the Bonus Malus scheme, however.

        We provided each interviewee with an interview guide in advance of the interview. The guide included a letter of introduction on the project and a short project briefing note, an interview consent form, detailing how the information would be used and stored (in accordance with GDPR). We requested that each interviewee signed and returned the form in advance of the interview. We recorded the interviews, subject to interviewee consent, and stored their data securely. The recordings were used to create meeting notes which were agreed by both the interviewee and the interviewer.

        Fiscal levers in the UK and Scotland

        We first identified existing environmental fiscal levers in the UK (including taxes in the energy, transport and pollution/resource sectors). The main source of information was the Office of National Statistics (ONS). The UK environmental taxes annual bulletin from the ONS shows the value and composition of UK environmental taxes, by type of tax and economic activity. These levers were:

        • Environmental taxes in the energy sector include the following: Tax on Hydrocarbon oil; Climate Change Levy; Fossil Fuel Levy; Gas Levy; Hydro-Benefit; Renewable Energy Obligations; Contracts for Difference;) UK Emissions Trading Scheme; Carbon Reduction Commitment
        • Environmental taxes in the transport sector include the following: Air Passenger Duty; Rail Franchise Premia; Vehicle Registration Tax; Northern Ireland Driver Vehicle Agency; Fuel Duty; Vehicle Excise Duty (VED) paid by businesses; VED paid by households; Boat Licenses; Air Travel Operators Tax; Dartford Toll
        • Pollution Resources taxes include the following: Landfill Tax; Fishing Licenses; Aggregates Levy; Plastic Packaging Tax.

        As the focus of our assignment is on fiscal levers to deliver reductions in GHG emissions, we focused our analysis on those that deliver reductions in GHG emissions. These include:

        1. Fiscal levers specifically targeted to address environmental impacts and affecting GHG emissions.
        2. Fiscal levers specifically targeted to reduce GHG emissions.

        The Rail Franchise Premia (premium paid by train companies to UK government to provide specified train services), the Boat Licenses (annual charge required by owners of boats who use or keep their boats on inland waterways in the UK), the Air Travel Operators Tax (an insurance scheme ran by the UK Civil Aviation Authority), the Dartford Toll (toll for motorists to use the Dartford Crossing), the Fishing Licenses (required to fish for certain species of fish in various locations across the UK), the Aggregates Levy (a tax on sand, gravel or rock that has been dug from the ground, dredged from the sea or imported into the UK), and the Plastic Packaging Tax (on finished plastic packaging components containing less than 30% recycled plastic) have not been considered in our analysis. These taxes do not contribute to reducing GHG emissions, either directly or indirectly. The Contracts for Difference and the Vehicle Registration Tax have not been considered either. The Contracts for Difference offers generators a contract with a known strike price for renewable electricity sold and, thus, it is considered a subsidy and not a tax. The Vehicle Registration Tax is a tax on vehicle registration in the UK.

        For taxes covered in our assessment (Tax on Hydrocarbon oil (Fuel Duty); Climate Change Levy[10]; Gas Levy; Hydro-Benefit; Renewable Energy Obligations; UK Emissions Trading Scheme[11]; Carbon Reduction Commitment; Air Passenger Duty; VED paid by businesses; VED paid by households and the Landfill Tax), we conducted a literature review of several academic and grey literature sources that reported information. This related to the following issues: objective of the tax, revenue generated, year of introduction, what is taxed and how tax is collected. This provided a good background overview.

        Within the UK, the devolution process has led to calls for the Scottish Parliament to be given more responsibility over revenue raised and spent in Scotland. Following the review of existing UK taxes, the next step has been to look at the environmental taxes under the Scottish Government’s remit that contribute to reducing GHG emissions.

        The devolution process was examined. This includes Section 80B of the Scotland Act 1998 (as amended), which devolves powers to add new national taxes in Scotland with the agreement of the Scottish Parliament. It also includes the Calman Commission, which supported the principle of devolution and identified some taxes (Stamp Duty Land Tax, Landfill Tax, the Aggregates Levy and Air Passenger Duty, and elements of Income Tax) where devolved powers could be applied. We reviewed the current legal framework and identified existing environmental fiscal levers in Scotland with an impact on GHG emissions where this devolution process has been applied. This only includes the Scottish Landfill Tax, which was devolved to the Scottish Parliament following the Scotland Act 2012 and replaced Landfill Tax on transactions taking place in Scotland. The Air Departure Tax (Scotland) has also been reviewed following the Scotland Act 2016. According to this Act, Air Passenger Duty is due to be fully devolved to Scotland and to be replaced by Air Departure Tax. However, this devolution process is currently on hold until a solution can be identified that protects Highland and Island connectivity and complies with UK subsidy controls.

        For the devolved taxes (this includes the Scottish Landfill Tax and the (Scottish) Air Departure Tax, even though the latter is still on hold) we conducted a literature review of academic and grey literature sources that reported information related to the following issues: objective of the tax, revenue generated, year of introduction, what is taxed and how tax is collected. A brief description of the levy/tax is presented, including, depending on the availability of official data, the rates applied, the taxable event, the taxable person and other additional considerations.

        Finally, we examined whether the six case study examples could be implemented by the Scottish Government under current devolved competencies, or whether their adoption would require joint action by the UK Government. This was carried out with reference to two key legislative acts. First, the Scotland Act 1998 that established the Scottish Parliament and gave it the power to legislate on certain matters, including certain elements of taxation. Second, Scotland Act 2012 (which amends the Scotland Act 1998) and gives the Scottish Parliament the power to (a) create new taxes in Scotland (such as on activities currently not taxed under the UK tax code) and (b) devolve any tax of any description with the prior consent of the UK Parliament (in addition to fully devolve the power to raise taxes on waste disposal to landfill).

        Appendix B. Fiscal levers to deliver reductions in GHG in the UK

        Direct taxation schemes

        Tax on Hydrocarbon oil (or Fuel Duty)

        Fuel Duty is charged on the purchase of petrol, diesel and a variety of other fuels. It is levied per unit of fuel purchased and is included in the price paid for petrol, diesel and other fuels used in vehicles or for heating. The rate depends on the type of fuel, as follows (Office for Budget Responsibility, 2023):

        • The headline rate on standard petrol, diesel, biodiesel and bioethanol is 52.95 pence per litre.
        • The rate on liquefied petroleum gas is 28.88 pence per kilogram.
        • The rate on natural gas used as fuel in vehicles is 22.57 pence per kilogram.
        • The rate on fuel oil burned in a furnace or used for heating is 9.78 pence per litre.

        In 2022, Fuel Duty revenue was £24.8 billion. It is the largest environmental tax, comprising 52.5% of environmental taxes and 70.2% of energy taxes in 2022 (Office for National Statistics 2023). Data for Scotland is not reported.

        Climate Change Levy (CCL)

        This levy was introduced by the UK Government in April 2001. It is an environmental tax charged on the energy used by businesses to encourage them to become more energy efficient, while helping to reduce their overall emissions. By 2022, the tax generated revenues of more than £2 billion in the UK (Office for National Statistics, 2023). Data for Scotland indicates that the share collected in Scotland was between 8 and 9% from 2001 to 2019. Revenues collected in Scotland reached £158 million in 2018-2019.

        Specifically, the tax applies to four groups of energy products: electricity; coal and lignite products; liquid petroleum (LPG); and natural gas when supplied by a gas utility. The CCL is paid via two rates: the main levy rate (for energy suppliers) and the carbon price support rate (for electricity producers). The CCL must be declared (via submission of a Climate Change Levy return to HMRC) and paid every three months, although small businesses can apply to make annual returns instead of quarterly returns.

        Main levy rate

        The main levy rate is applied to companies in the industrial, public services, commercial and agricultural sectors, and according to their consumption of electricity, gas and solid fuels (e.g., coal, coke, lignite or petroleum coke). Energy suppliers are responsible for charging the correct levy to their customers (SEFE Energy, 2023).

        The levy rate varies for each category of taxable commodity, according to energy content: kilowatt-hours (kWh) for gas and electricity; and kilograms for all other taxable commodities. The rates do not apply to domestic consumers and charities for non-business use. There are also reduced rates for energy consumers that hold a climate change agreement (United Nations, 2012). Climate change agreements (CCA) are voluntary agreements made between UK industry and the relevant Environment Agency to reduce energy use and CO₂ emissions. CCAs are available for a wide range of industry sectors from major energy-intensive processes such as chemicals and paper to supermarkets and agricultural businesses such as intensive pig and poultry farming.

        Carbon price support rate

        Carbon price support rates apply to owners of electricity generating stations and operators of combined heat and power stations. They become liable for the carbon price support rate when (a) gas passes through the meter at the registration station and or (b) LPG, coal and other solid fossil fuels are delivered through the entrance gate at the generation station. Electricity generators are responsible for measuring, declaring and paying the correct carbon price support rate.

        Renewable Energy Obligations

        The Renewables Obligations (RO) were introduced in April 2002 in Great Britain, and in 2005 in Northern Ireland, with the aim of increasing the use of renewable energy to help reduce GHG emissions. Revenue from the tax has increased since its introduction, reaching £6.6 billion in 2022 (Office for National Statistics, 2023). Disaggregated data for Scotland is not reported.

        This scheme requires electricity suppliers to generate a certain proportion of electricity from renewable sources. It imposes an annual obligation to present to the Office of Gas and Electricity Markets (OFGEM) a specified number of Renewables Obligation Certificates (ROCs) per megawatt hour (MWh) of electricity supplied to their customers during each obligation period. Suppliers can therefore comply with their obligation in two ways: buying and then redeeming ROCs or paying a buy-out price to OFGEM. The energy must be generated in the UK to qualify for ROCs and the eligible renewable sources include landfill gas, sewage gas, hydro (20MW or less), onshore wind, offshore wind, biomass (agricultural and forestry residues), energy crops, wave power and photovoltaics.

        The government sets the RO obligation each year based on predictions of the amount of electricity that will be generated in the UK and the number of ROCs that OFGEM will issue to eligible renewable generators. This obligation level is published at least six months before the start of each obligation period, which runs from April 1 through March 31 (Office of Gas and Electricity Markets, 2023).

        Carbon Reduction Commitment (CRC)

        The CRC was introduced in 2010 to improve energy efficiency and reduce carbon dioxide emissions in private and public sector organisations that are high energy users, although it was closed in 2019. In the years that the tax was in force, the revenue collected ranged from £0.2 billion to £0.7 billion (Office for National Statistics, 2023).

        Organisations that met the qualification criteria were required to participate and purchase allowances for every tonne of carbon emitted. For example, the scheme included supermarkets, water companies, banks, local authorities and all central government departments. Participating organisations were required to monitor their energy use and report annually on their energy supply. The Environment Agency’s reporting system then applied emission factors to calculate participants’ CO₂ emissions based on this information. Participants were then required to purchase and surrender allowances for their emissions (UK Government, 2023d).

        Emission trading schemes

        UK ETS

        The UK ETS was established on 1 January 2021. It replaced the EU ETS following the UK’s exit from the EU. The scheme revenue was £4.3 billion in 2022 (Office for National Statistics, 2023).

        The UK ETS covers energy-intensive industries, power generation and aviation. For aviation, the routes covered by this scheme include UK domestic flights, flights between UK and Gibraltar, flights between Great Britain and Switzerland, and flights departing the UK to European Economic Area states, conducted by all aircraft operators, regardless of nationality. For installations, the UK ETS applies to regulated activities that result in GHG emissions (except installations whose primary purpose is the incineration of hazardous or municipal waste). Activities in scope are listed in Schedule One (aviation) and Schedule Two (installations) of the in the Greenhouse Gas Emissions Trading Scheme Order 2020 (Legislation.gov.uk, 2020). The scope of the scheme is set to expand to include more high-emitting areas. It will be applicable to large maritime vessels of 5,000 gross tonnage and above from 2026. From 2028, it will also include waste incineration and energy generated from waste.

        Installations with combustion activity below 35MW rated thermal capacity (small emitters), installations with emissions of less than 2.500t CO₂e per year (ultra-small emitters) and operators that provide services to hospitals can opt out of the UK ETS. Instead of having to obtain allowances and thus having allowance surrender obligations, these installations will be subject to emissions targets. However, they will be required to monitor their emissions and notify the regulator if they exceed the threshold.

        Free allocation of allowances to eligible installation operators and aircraft operators is maintained to reduce the risk of carbon leakage for UK businesses (UK Government, 2023c). The maximum number of free allowances was set at around 58 million in 2021 (approximately 37% of the 2021 cap) and will decline by 1.6 million allowances per year (ICAP, 2022). Eligible installations must submit a verified Activity Level Report. If the data in the Activity Level Report shows an increase or decrease in activity of 15% or more from historical activity levels, their free allocation will be recalculated. Specific data for Scotland has not been reported.

        Free allocations will be made available for operators of eligible installations who applied for a free allocation of allowances for the 2021 to 2025 allocation period and for new entrants to the UK ETS. The free allocation will also apply to the allocation period 2026 to 2030, although free allocations are intended to reduce over time. From 2026, flight operators and aviation businesses will need to buy allowances for every tonne of carbon they emit.

        Indirect taxation schemes

        Air Passenger Duty (APD)

        UK APD is a tax levied on airlines based on the number of passengers carried when departing from a UK airport. It was introduced in 1994 to raise funds for the government and to regulate larger aircraft, but over the years it has become an important environmental tax. The amount of APD is based on the distance travelled and the class of service. There are four different pricing bands. Pricing as of April 2023[12] is:

        • For domestic flights (only within England, Scotland, Wales and Northern Ireland), the APD is £6.50 in economy, and £13 in a premium cabin.
        • For international flights of up to 2,000 miles (short haul), the APD is £13 in economy, and £26 in a premium cabin.
        • For international flights of 2,001 to 5,500 miles (long haul), the APD is £87 in economy, and £191 in a premium cabin.
        • For international flights of more than 5,500 miles (ultra long haul), the APD is £91 in economy, and £200 in a premium cabin.

        This tax does not apply to flights to the UK, as it is a departure tax only, nor to children under the age of 16 (OMAAT, 2023). Passengers carried on flights leaving from airports in the Scottish Highlands and Islands region are exempt, but passengers on flights from other areas of the UK to airports in Scotland are not. As with other environmental taxes, the government’s revenue from the APD has increased over time. Although it declined between 2020 and 2021 due to restrictions placed on air travel during the COVID-19 pandemic, it reached £2.9 billion in 2022 (Office for National Statistics, 2023). According to HM Revenue & Customs, UK APD collections from Scotland have been over 9% since 1999 and over 10% since 2018, amounting to over £380 million in 2022.

        Vehicle Excise Duty (VED)

        This is paid by businesses and households as a tax levied on vehicles using public roads in the UK. It is payable annually by owners of most types of vehicles, collected by the Driver and Vehicle Licensing Agency. The amount of VED depends on the year of registration of the vehicle: before or after 1 April 2017, or before 1 March 2001. Further changes will come into effect in April 2025, affecting new and existing electric vehicles.

        For cars registered before 1 March 2001 the excise duty is based on engine size. Vehicles with an engine size < 1549 cc pay £180 (single annual payment), while vehicles with an engine size > 1549 cc pay £295 (single annual payment). For vehicles registered between 1 March 2001 and 31 March 2017 a standard rate between £0 (up to 100 g/CO₂/km, which includes hybrid vehicles) and £630 (Over 255 g/CO₂/km) is charged based on theoretical CO₂ emission rates per kilometre. The standard rate is only paid in the year the vehicle is first registered.

        For vehicles registered from April 2017 onwards, VED are paid every year. First-year VED payments are based on theoretical CO₂ emission rates per kilometre and are in the range between £0 (up to 0 g/CO₂/km, which does not include hybrid vehicles) and £2000 (Over 255 g/CO₂/km). Drivers of Ultra Low Emission Vehicles (ULEVs) are particularly incentivised as they pay zero VED. Drivers of relatively fuel-efficient petrol or diesel cars (up to 10g/km CO₂) pay up to £10 for the year of initial registration (depending on the car’s official CO₂ emissions), while drivers of less fuel-efficient cars pay up to a maximum of £2,000. For the second year and beyond, most drivers pay a fixed flat rate of £140 regardless of their vehicle’s CO₂ emissions (except for zero-emission cars which pay zero). Apart from the payment period, the biggest changes from April 2017 are that hybrid vehicles are no longer rated at £0 and that cars with a retail price above £40,000 will pay a £310 supplement for years 2 to 6. The reformed VED system retains and strengthens the CO₂-based first year rates to incentivise uptake of the very cleanest cars whilst moving to a flat standard rate.

        Electric vehicles (EVs) are currently exempt and drivers of EVs pay no VED. However, from 2025 EVs first registered on or after 1 April 2017 will be liable to pay the lower rate in the first year and the standard rate from the second year of registration onwards. This also applies to zero emission vans and motorcycles (Office for Budget Responsibility, 2023).

        Landfill tax

        The landfill tax was introduced in the UK in October 1996 to encourage recycling and increase the use of reusable materials. Since its introduction, the amount of waste sent to landfill has fallen by 60%. The tax applies to all waste disposed at a licensed landfill site unless the waste is exempt. It is charged by weight and there are two charge rates: a lower rate for ‘inactive waste’, such as rocks or soil, currently £3.25 per tonne, and a standard rate for all other waste, currently £102.10 per tonne. Rates are updated by the UK Government annually and come into effect on 1 April each year.

        The landfill tax is paid by the operators or owners of landfill sites, who often pass on the costs to waste producers such as companies or local authority. Households are not required to pay landfill tax directly as local councils and authorities are responsible for the disposal of household waste. However, the cost may be further passed on to households that end up paying it indirectly via their council tax bill.

        In 2022, the UK government raised £0.8 billion from the landfill tax (Office for National Statistics, 2023). The revenue is used for a variety of purposes, including supporting environmental projects and programs (Business Waste, 2023). According to HM Revenue & Customs, Scotland’s share of the total collected by the UK Landfill Tax was 13% in 2014-2015 (the tax was devolved to Scotland in 2015), amounting to a collection of £0.15 billion.

        Appendix C. Supplementary data

        A graph with colorful bars Description automatically generated with medium confidence Figure 8.1: Share of GHG emissions covered, as of March 2023 (World Bank 2023c)

        A graph of a graph Description automatically generated with medium confidence
        Figure 8.2: Comparing coverage and prices (CTs and ETS instruments, 2023 (World Bank 2023c))

        A graph of blue and green bars Description automatically generated Figure 8.3: An overview of global carbon credit issuance (World Bank 2023c)

        Instrument

        Quantified GHG emission reductions

        Notes

        “Carbon taxes in European nations”

        Reduction in GHG emissions “by up to 6.5% over several years”.

        Evidence taken from a 2018 review, drawing on data up to the end of 2015 from 35 carbon taxes (cited in Green 2021). The instruments and period are not specified further.

        Carbon tax in British Columbia

        Reductions over 2008 – 2014 (with some variation in dates among studies) range between 5% and 15% below a counterfactual reference level, or around 2% per year. Note it is not clear in the source if this figure relates to total emissions in the jurisdiction or in affected sectors; it is assumed to be the latter.

        A 2015 study noted it reduced CO2 emissions from gasoline consumption by more than 2.4 million tonnes in the first four years of operation. And a 2020 study over the period 1990-2014 noted the tax had reduced transport sector emissions by 5%.

        Evidence based on a meta-review of various (number not given) of studies on the BC tax. Note this estimate does not include a quantitative estimate of carbon leakage associated with the tax to other jurisdictions. The net reduction is therefore highly likely to be less (cited in Green, 2021).

        UK carbon price support (UKCPS)

        A 2019 study concludes the UKCPS reduced emissions in the power sector between 41% and 49% over 4 years (2013–17). Another that it reduced emissions “overall” by 6.2% (2013-2016(2.1% per year)), based on a price of €18 per ton.

        All three studies are cited in Green, 2021. It is not always clear if these studies referred to reductions within the sectors affected by the instrument or overall aggregate reduction. Again, it is assumed to be the former. As above, the treatment of carbon leakage is not specified, hence the emission reduction estimates may be overstated.

        UK Climate Change Levy (CCL)

        A third study noted the CCL reduced emissions amongst power plants paying the full levy rate by “between 8.4% and 22.6% compared to plants paying the reduced rate”. The study refers to between 2000 and 2004.

        Sweden Carbon Tax

        Overall, the findings differ. A 2019 study estimated emission reductions of 6.3% in an average year, between 1990 and 2005. Other studies identify emission reductions only in certain sectors (district heating emissions, in a 1998 study and emissions from petrol in a 2018 study).

        The review notes “Nordic taxes tend to do better on emission reductions, although the wide variation in fundings make it hard to conclude this definitively”. The source is not clear on the precise period in question for each statistic, but the overall period assessed was 1960-2010. Other studies suggest the tax had “little or no effect on emissions”. This is an important finding, given the relatively high carbon price in Sweden as well as the length it has been in operation. Note: No estimates have been identified for Liechtenstein and Switzerland, the other jurisdictions with the highest carbon prices.

        Finland, Netherlands, Norway, Sweden.

        A 2011 study identified no effect on per capita growth rate of emissions between 1990 and 2008 in any jurisdiction, except Finland (which saw a reduction of 1.7%).

        The study applied a “difference in difference” analysis (a type of economic modelling approach). The time period this refers to is not clear.

        Sweden, Norway, Denmark, and Finland.

        A 2019 study identifies annual reductions in Sweden of 17.2% and 19.4% in Norway, but “no statistically significant effects in Denmark or Finland, over the period 1990-2004.

        Based on a synthetic control study (a statistical approach which compares effects based on case studies). Results considered “an outlier” in the Green 2021 review.

        Norway

        A 1997 study identifies a reduction of between 3% to 4% between 1991 and 1993 (1-1.3% per year).

        Based on a hypothetical counterfactual scenario.

        Denmark, Ireland, Finland, Sweden and Slovenia

        An increase in price of €1 per ton in CO2 tax results in an annual 11.58 kg per capita decrease in emissions.

        Based on panel data.

        France

        Carbon tax reduced emissions in manufacturing sectors by between 1% and 5% between 2014 and 2018.

        A 2019 study, using a counterfactual based on historical data.

        “Tipping points”

        A 2018 study, based on analysis between 1995 and 2013 suggests that CO2 taxes reduce emission if they surpass 2.2% of GDP.

        Based on economic modelling based on panel data.

        Germany, Denmark, Netherlands, UK, Slovenia, Finland and Sweden.

        Average reduction of 3.1% compared to a historical baseline (for 6 of the 7 countries).

        Based on historical data for the baseline and a counterfactual using country specific data. The “7th country” is not specified.

        Table 8.1: Quantitative impacts from selected instruments

        Instrument

        Annual revenue (million)

        Per capita revenue

        Share of GDP

        Earmarking/hypothecation

        Sweden carbon dioxide tax

        $3,680

        $381

        0.67%

        General funds (50%) and revenue recycling (50%)

        Norway carbon dioxide tax

        $1,580

        $307

        0.31%

        Green spending (30%); general funding (40%) revenue recycling (30%)

        British Columbia carbon tax shift

        $1,100

        $239

        0.49%

        Revenue recycling (102%)

        Denmark carbon tax act (2010)

        $1,000

        $177

        0.29%

        Green spending (8%); general funding (47%) revenue recycling (45%)

        Switzerland carbon dioxide levy

        $875

        $107

        0.13%

        Green spending (33%); revenue recycling (67%)

        Mexico special tax on production and services (2014)

        $870

        $7

        0.06%

        General funding (100%)

        Finland carbon dioxide tax

        $800

        $146

        0.29%

        General funding (50%); revenue recycling (50%)

        Ireland [1}

        $510

        $111

        0.03%

        Green spending (13%); general funds (88%)

        Japan tax for climate mitigation (2012)

        $490

        $4

        0.01%

        Green spending (100%)

        France [2]

        $452

        $7

        0.02%

        Green spending (100%)

        Iceland [3]

        $30

        $92

        0.22%

        General funds (100%)

        Table 8.2: Carbon tax revenue characteristics (based on 2013 data, unless specified) Carl and Fedor, 2016

        Notes:

        1. natural gas carbon tax, mineral oil tax and solid fuel carbon tax, data from 2012
        2. domestic consumption tax on energy products (carbon dioxide), data for 2014 and reflects a partial year
        3. Carbon tax on carbon of fossil fuel origin

        Instrument

        Annual revenue (EUR Million)

        Earmarking/

        hypothecation commitment

        Notes on revenue use

        Canada (Alberta and BC)

        1,520

        Legally binding

        Overall spending measures exceed revenues, via tax cuts, rebates and direct compensation. Revenues are distributed to households – targeted to low-income households – as well as business (including small businesses). Since 2018 a “clean growth incentive programme has been supported which focuses on research on fugitive emissions in the oil and gas sector and on slash burning.

        Chile

        233 (2018)

        None

        Unconstrained (used for general funds). Tax introduced in 2014 as part of a broader reform, to help fund educational reform policy.

        Denmark

        480

        Political commitment

        No data.

        Finland

        1,402

        All revenues distributed as tax cuts or rebates.

        France

        3,800

        79% legally binding, remainder unconstrained

        The legally hypothecated 79% is distributed via tax cuts and rebates. Up to 2016 this funded a tax credit for business. Since 2017 revenues are allocated to a dedicated “energy transition account” which compensates affected industries of a proportion of the costs associated with use of renewable energy sources.

        Iceland

        26

        None

        Revenues are unconstrained.

        Ireland

        434

        12% legally binding, reminder via political commitment

        The majority of revenues are distributed via tax cuts and rebates, including reductions in payroll taxes. A small proportion is allocated to energy efficiency measures, particularly household retrofits to help households at risk of fuel poverty and to provide support for rural public transport.

        Japan

        No data

        100% legally binding.

        Revenue data is not publicly available but used for energy efficiency and renewable energy support programmes.

        Norway

        1,246

        44% legally binding, reminder via political commitment

        Revenues are distributed via tax cuts and rebates. A proportion of the revenue flows to the Government Pension fund, the returns from which (expected to equate to the real rate of return (3%)) are then allocated to general government funds.

        Portugal

        134

        11% legally binding

        Reallocated to tax cuts and rebates particularly income tax reductions for households with larger families. A proportion of the revenue are allocated to green and environmental spending, including infrastructure for electric vehicles, public transport, conversation and climate change mitigation policy.

        Slovenia

        132

        All revenues are unconstrained

        From 2005 to 2008 some revenues were used to finance carbon reduction projects and environmental subsidies for industries.

        Sweden

        2,549

        Introduced in the early 1990s as part of a broader fiscal reform package. The revenues were used to finance labour tax reductions as well as fund Sweden’s 1996 application to the EU. Revenues from 2016 flow directly to central government budget.

        Switzerland

        985

        100% of revenues legally binding

        One third of revenues fund energy efficiency in buildings, including geothermal heating as well as a technology fund. The remainder fund social security contributions for businesses as well as subsidies on health care premiums.

        Table 8.3: Revenues and allocations, based on 2016 data (OECD 2019)

        Appendix D. Case studies

        For all case studies, RAG rating for similarities to Scotland denoted red [R], amber [A] and green [G].

        Case study 1

        Lever type: Direct Carbon TaxJurisdiction: British Columbia, Canada

        Context

        Population and GDP

        [G]

        Like Scotland, Canada is a high-income country, it comprises ten provinces and three territories. The British Columbia (BC) economy is similar in size to Scotland’s. For comparison, BC’s GDP was $265.8 billion (around £154 billion)[13] in 2020; Scotland’s was £148 billion. GDP per Capita in BC is $59,962 (Government of Canada, 2023a); in Scotland it was $42,632 in 2021 (Scottish Government, 2023a)[14] BC’s population is also comparable; BC’s population was 5 million in 2021 (Government of Canada, 2023b), compared to 5.4 million in Scotland in 2022 (Scottish Government, 2023c).

        Administrative and legal arrangement/ competencies

        [G]

        The carbon tax in BC was designed, applied, enforced, and administered at province level. This makes it of particular interest to Scotland, given devolution. Since its implementation however, it was frozen and then re-introduced when the Federal carbon tax was implemented at national scale by the Canadian Government. This tax is administered by the Canadian Ministry of Finance. The Ministry of Environment and Climate Change is responsible for the inventory and allocating funding.

        Shared challenges

        [A]

        Canada relies heavily on fossil fuel consumption for both domestic use and net exports of carbon-intensive manufactured goods and fossil fuels. It is also among some of the most intensive emitters of CO2 in the OECD, with per capita emissions for 2010 being recording at 15.5 tonnes per capita of CO₂. This compares to 9.6 tonnes per capita of CO₂ the OECD average and 7.6 tonnes per capita in the UK in the same year (OECD, 2023).[15] BC sources a very high proportion (93% of its electricity in 2008) from renewable energy, specifically hydropower (Harrison, 2013).

        Climate ambition

        [A]

        Canada is committed to achieving Net Zero by 2050. Scotland has committed to reducing emissions by 75% by 2030 and achieving Net Zero by 2045.

        Data and evidence

        [G]

        There is significant information available.

        Diversity of approaches

        [G]

        The approach taken in BC is a direct carbon tax that is administered at sub-national level. It is the only sub-national direct carbon tax selected as a case study.

        Lever design

        The BC Government introduced the first carbon tax in North America in 2008 (Pretis, 2022). It was introduced at a time when other North American governments were embracing cap and trade over taxation (Harrison, 2013). It is a direct carbon tax applied to fuels based on their CO₂ content, covering all liquid transportation fuels such as gasoline and diesel, as well as natural gas or coal used to power electric plants. The tax is applicable to 70-75% of the province’s GHG emissions, with the remainder of GHG emissions coming from non-combustion CO2 in industrial processes, methane emissions, from natural gas extraction and transmission, nitrous oxide emissions from agriculture and CO₂ emissions from forestry (Murray and Rivers, 2015, p.676). The rate of the tax at implementation was $10 CAD per tonne emitted. Initially, this was set to rise by $5 CAD per year until it reached $30 CAD per tonne in 2012. The tax increase was frozen however in 2012 by the British Columbia Government.

        In 2018, a change in government and the implementation of a federal carbon tax in Canada resulted in the BC carbon tax being unfrozen and the price increased. However, the legislation surrounding the tax was altered to no longer require revenue neutrality. We understand, following a stakeholder interview, that the British Columbian Government have mirrored the rates set by the federal government at national scale by following the federal government’s schedule for carbon tax increases[16].

        The British Columbian government initially committed to the tax being revenue neutral. It operated as a tax shift wherein carbon tax revenues were countered by cuts in other taxes (such as business taxes, personal income tax, low-income tax credits and direct grants to rural households) or direct transfers to households. Between the tax’s implementation in 2008 and 2015, the tax generated C$6.1 billion (Murray and Rivers, 2015). Since 2018, the revenue generated is now allocated centrally by the federal government. The revenues are then redistributed through dedicated tax rebates for low-income households or for public purposes, including climate action.[17] The administration of the tax is via the Ministry of Finance. The Ministry of Environment and Climate Change is responsible for the inventory and fund allocation.[18]

        When introduced, the tax did not include exemptions for particular sectors, it was applied universally. Concerns were raised, however, by greenhouse plant/vegetable growers (Seed your future, 2023)[19] regarding the competitiveness of their operations in comparison with California and Mexico. This led the Government in BC to introduce a one-time exemption (worth $7.6 million) from the Carbon tax in 2012, an ongoing 80% exemption from the carbon tax for greenhouse growers from 2013, and an exemption for gasoline and diesel used in agriculture from 2014.

        Lever effectiveness

        Public perception of the carbon tax in BC, almost 15 years on from its implementation, is seen as generally positive. The tax is considered a success in terms of its role in promoting behavioural change and decreasing consumer demand for fossil fuels and natural gas (Pretis, 2022). The Pretis paper outlines a series of studies, including Xiang and Lawley (2018) and Antweiler and Gulati (2016) that drew correlations between the implementation of the tax and a decrease in fuel demand. Furthermore, evidence shows that the tax has had a low per capita cost, aiding further public acceptance.

        Bernard and Kichian (2019) assess the extent to which the tax reduces British Columbia’s CO2 emissions. They state that once reaching the rate of $30/ton of CO2, it achieved an estimated 1.13-million-ton reduction in CO2 emissions, amounting to an average annual reduction of 1.3% relative to BC 2008 diesel emissions and to 0.2% relative to all BC CO2 emissions in 2008. Bernard and Kichian (2019) argue however, that whilst the tax can be considered politically successful, the reductions seen are not significant enough for it to be considered a viable strategy, in isolation, for the Canadian government to meet its carbon-related commitments.

        Pretis (2022) conducted a study on the effectiveness of the tax at reducing aggregate CO₂ emissions in order to determine economy-wide CO2 emission reductions. It was concluded that there is a lack of statistically significant proof of economy-wide effectiveness. The carbon tax was considered too low to result in rapid cross-sectoral changes. Pretis (2022) did outline that the tax has had significant impact on emissions from transport as BC relies heavily on individual motor vehicles due to the long driving distances and limited public transport. It also showed little impact on emissions from electricity production. This is explained by the high reliance on hydropower for electricity generation.

        The revenue-neutral commitment made by the government upon implementation of the carbon tax has been criticised by some analysts for not fully compensating low-income households for the additional burden due to higher energy prices (Beck et al., 2014). Beck et al. (2014) argues however, that criticisms such as that are unfounded, stating that the government have made every effort to ensure that the policy is equitable. It is important to note however, that this study was published before the revenue-neutrality element of the tax was changed, no later assessments of the equitability of the tax were found.

        Key lessons learned

        Pretis (2022) argues that the BC carbon tax is a good example for the introduction of carbon taxes in comparable jurisdictions. It confirms that carbon tax policies with high public support and acceptance are possible. It is also a positive example for how a carbon tax, with targeted sectoral exemptions, can reduce aggregate emissions. Pretis (2022) notes however, that the predominant role that hydropower plays in BC electricity generation potentially limits its applicability where reliance on fossil fuels is higher.

        Moreover, Harrison (2013) argued that the introduction of a carbon tax in BC resulted from a “perfect storm” of factors that enabled its implementation. These factors included the prominence of the hydropower, an increase in public concern for climate change, a government with the trust of the business community and a political leader (at province level) with the ability and determination to implement his ambitions. It is important to consider therefore, that whilst it worked in the context of BC, other nations considering the implementation of a carbon tax with a similar ethos, will still need a combination of factors related to political, economic and social context which ultimately determine its success.

        But several elements of the BC context are applicable to Scotland. First, there are lessons to be learnt from the progression of the tax, transitioning from sub-national instrument to later alignment with federal standards. It is an example of how sub-national taxation can be successful at reducing GHG emissions at sectoral level. It also shows that subnational carbon taxation can generate significant revenue for Governments to spend as they deem fit. As in Scotland there is high reliance on private vehicle use in BC, given low population density, extent of rural areas and low reliability of public transport connections in rural areas. Bernard and Kichian (2019) also noted that whilst the carbon tax in BC is generally publicly accepted, it has not been shown to have influenced significant reductions in overall emissions of CO2. They conclude therefore that it should not be considered a viable sole strategy for the Canadian government to meet its carbon-related commitments.

        Case study 2

        Lever type: Direct Carbon TaxJurisdiction: Sweden

        Context

        Population and GDP

        [A]

        Like Scotland, Sweden is a high-income country. Sweden has a larger economy and double the population. For example, GDP per Capita in Sweden was $65,157 in 2021 and in Scotland was $42,362 (Scottish Government, 2023a).[20] Sweden’s GDP was $683 billion in 2021 compared to Scotland’s £148 billion. Sweden has a population of 10.5 million (2022), approximately double that of Scotland (5.4 million in the same year (Scottish Government, 2023c)).

        Administrative and legal arrangement/ competencies

        [A]

        Sweden provides an example of a nationally administered carbon tax.

        The carbon tax is levied on transport fuels and is designed to work alongside Sweden’s energy tax and the EU ETS. Sweden’s energy tax is levied on diesel, coal, oil, and electricity used for heating purposes. This could give valuable lessons for Scotland in terms of designing a similar carbon tax to function alongside the UK ETS and the UK climate change levy.

        Shared challenges

        [G]

        Both Sweden and Scotland are increasing their renewable energy potential, in 2021 around 60% of Sweden’s energy production came from renewable sources compared to Scotland at around 57% (Swedish Institute, 2022) (BBC, 2021). In addition, both Sweden and Scotland have rural and rural-island communities which create a unique set of challenges and opportunities in delivering equitable national climate action.

        Climate ambition

        [G]

        Sweden is legally bound to achieving Net Zero by 2045. They are on track with this target and have managed to meet one of their renewable energy targets already. Scotland has similarly committed to achieving Net Zero by 2045 and reducing emissions by 75% by 2030.

        Data and evidence

        [G]

        There is significant information available for this case study as the carbon tax was implemented in the early 1990s, however there are contesting views on the effectiveness of the tax in reducing greenhouse gas.

        Diversity of approaches

        [G]

        This is an example of a direct carbon tax, administered at national level. The tax is one of the oldest and currently the highest priced carbon tax in the world.

        Lever Design

        Due to growing environmental concerns and building on Sweden’s history of levying taxes on energy products, the government introduced their first carbon tax in 1991 (Andersson, 2019). The carbon tax was levied on gas oil, heavy fuel oil, coal, natural gas, petrol, gas oil, heavy fuel oil, coal and natural gas (Johansson, 2000). To ensure Sweden’s existing energy tax – levied on diesel, coal, oil, and electricity for heating purposes – would work alongside the newly introduced carbon tax, fuels used for power generation were exempt from the carbon tax (Johansson, 2000). As such the fuels targeted by the carbon tax were mainly used within the transport sector, which in the early 1990s was Sweden’s largest emitting sector.

        In 1991, the carbon tax was introduced at a price of US$30 per tonne of CO₂ however tax rates were lowered by 50% for the agricultural and industrial sector to avoid carbon leakage and ensure international competitiveness. Furthermore, full exemptions were made for fuels used within electricity production as these were covered by Sweden’s energy tax (Jonsson, Ydstedt, & Asen, 2022). The Carbon tax introduction in 1991, was part of a wider tax reform by the Swedish Government, referred to as the “green tax switch”. Here, environmental taxes were increased while taxes such as marginal income tax, corporate tax and the capital income tax were lowered. The revenue generated by the carbon tax was 26 billion SEK in 2004 (Government Offices of Sweden, 2021).

        More recently, the carbon tax covers the direct (Scope 1) CO₂ emissions from all fossil fuels except peat, with 90% of the tax revenue coming from gasoline and motor diesel alone (Andersson, 2019) (World Bank, 2023b). As there are still numerous fuel exemptions from the tax, for example those used for commercial aviation and maritime, only around 40% of Sweden’s greenhouse gas emissions are covered by the tax. Some of the exempted industries are covered by the EU ETS (European Union Emission Trading Scheme) however levies within this scheme currently price carbon lower than the carbon tax (Jonsson, Ydstedt, & Asen, 2022). Note limited data was identified regarding the administration and enforcement of the tax.

        Lever effectiveness

        Public perception of the tax is generally positive, and Sweden is acknowledged as a pioneer in environmental governance at an at an international level (Hildingsson and Knaggård, 2022). The tax is considered to be a success as Sweden has been able to reduce its greenhouse gas emissions while maintaining a growing GDP (Government Offices of Sweden, 2021).

        Published research has attempted to quantify the effectiveness of the tax in reducing greenhouse gas emissions. Research by Sumner, Bird & Smith (2009) evaluates the carbon tax by comparing its implementation period to national greenhouse gas reduction trends. The results state that emissions were reduced by approximately 15% from 1990 to 1996, by 9% from 1990 to 2006 and decreased by 40% from the mid-1970s to 2008. There is some methodological disagreement on what reduction can be attributed to the carbon tax, in isolation. A review of ex-post analyses of carbon taxes by Green (2021) reveals contesting results around Sweden’s emission reductions. For example, research by Andersson (2019) found an average emission reduction of 6.3% per year between 1990 and 2005, Fernando (2019) found an annual average reduction of 17.2% and research by Shmelev and Speck (2018) found no effect on emissions. A study conducted by Jonsson, Ydstedt, & Asen (2022) state that GHG emissions have declined by 27% between 1990 and 2018.

        In terms of revenue generated by the tax, by 1994 the carbon tax generated 7 billion SEK. From 1994 revenue rapidly increased to 26 billion SEK in 2004 (Government Offices of Sweden, 2021). During this time the carbon tax rate increased from 23 EUR/tonne CO₂ to 84 EUR/tonne CO₂. Fluctuations in revenue generated by the tax have been caused by an increasing tax rate and decreasing tax base (greenhouse gas emissions overall are declining).

        From 2004, the revenue generated stabilised until 2010 and since then it has gradually declined over the last decade (Jonsson, Ydstedt, & Asen, 2022). In 2019, SEK 22.2 billion was generated which is approximately 1% of Sweden’s total tax revenue. The carbon tax revenue goes into the overall government budget, and is not hypothecated, thus it is unclear where revenue generated is distributed (Jonsson, Ydstedt, & Asen, 2022).

        The carbon tax has shown to be effective in shifting market investment into low-carbon technology, specifically in renewable energy sources such as hydro and wind (Hildingsson and Knaggård, 2022). In 2019, 59% of Sweden’s energy mix was generated by renewable energy sources (Hildingsson and Knaggård, 2022). Levying the carbon tax at different rates on fuels has also resulted in behaviour changes in companies. Between 1993 and 1997, the higher tax rate on fuels used within domestic heating systems compared to fuels used within industry resulted in industries selling their byproducts to domestic heating companies, while continuing to burn fossil fuels themselves (Johansson, 2000). Our understanding, following a stakeholder interview, is that the carbon tax increased the price of gasoline and diesel for consumers at the fuel pump and in response there was a substitution away from gasoline toward diesel. This interviewee referred to data showing road sector fuel consumption of gasoline decreasing while diesel consumption increased after the carbon tax was implemented.

        Key lessons learned

        Sweden’s experience with the world’s longest standing carbon tax makes it a valuable case study for Scotland. Sweden’s carbon tax is described as a ‘resilient success’ by the policy assessment called the “PPPE framework” (programmatic, process, political and endurance) and the tax has formed the backbone of environmental policy in Sweden to date (Hildingsson and Knaggård, 2022).

        The tax has been continuously redesigned over the past 30 years by the Swedish Government to reflect Sweden’s political, social, and economic situation. For example, the tax rate has incrementally increased over the last 30 years and the tax rate has been lowered by 50% on fossil fuels used by industry. These measures have ensured Sweden’s international competitiveness in energy exports have not been negatively impacted by the tax (Hildingsson and Knaggård, 2022).

        Sweden’s carbon tax was introduced at a time in which the country was undergoing a wider fiscal reform referred to as the ‘green tax shift’ where energy and CO2 taxes were introduced while labour taxes were reduced. Research by Shmelev and Speck (2018) suggests that in isolation the carbon tax would have been insufficient at reducing emissions and emission reductions were only achieved by a collective effort of the carbon tax, energy tax and investment into low carbon technology such as nuclear and hydro power. As evidence suggests, a carbon tax alone may not be effective enough in reducing Scotland’s emissions.

        Research by Carattini, Carvalho and Fankhauser (2018) reveals that the public’s support in increasing the Swedish carbon tax was strengthened by findings which demonstrated the effectiveness of the tax in reducing national emissions. Therefore, Scotland would need to consider the benefits of public awareness and information sources in incentivising support around any potential future carbon tax, should it be considered. Tax revenue recycling can be implemented to reduce potential distributional effects of carbon taxes. Thus, Scotland could explore revenue recycling options if it were to consider implementing a carbon tax to reduce any distributional effects such as income inequality.

        Case study 3

        Lever type: National ETS (nETS)Jurisdiction: Austria

        Context

        Population and GDP

        [A]

        Austria is a high-income country, however, there are differences in GDP. Austria’s was 537 billion USD in 2021, whereas Scotland was 181 billion in 2021). In per capita terms, this equates to $59,991 per capita for Austria in 2021 in comparison to Scotland’s $42,361 in the same year.[21].Austria also has almost double the population of Scotland – 9 million vs 5.4 million in 2022 (OECD, 2023a; OECD 2023b; Scottish Government, 2023a).

        Administrative and legal arrangement/ competencies

        [G]

        The Austrian nETS is administered at national level. However, it has been specifically designed to fit around and complement the EU ETS, a supranational cap and trade system. This could give valuable lessons for Scotland in terms of designing a similar scheme around the UK ETS.

        Shared challenges

        [A]

        Both Austria and Scotland are rapidly growing their renewable energy potential, although their situations are not necessarily comparable – Scotland had a target of 100% renewable electricity generation by 2020, however, the equivalent of 85% of gross energy consumption was from renewable sources in 2021. (Scottish Government, 2023b).

        Austria aims to reach 100% renewable electricity generation by 2030, and in 2021 Austria’s electricity mix was 71% renewable energy (Eurostat, 2023). Austria’s renewable energy is largely supplied by hydropower as a result of the many rivers and high rainfall, whereas Scotland’s is largely driven by onshore and offshore wind (Scottish Renewables, 2023). Austria has no island communities but does contain large rural population which could provide useful insights and comparators, in particular for the transport sector covered by the nETS.

        Climate ambition

        [G]

        The Austrian government has pledged to achieve Net Zero by 2040, however this has not been enshrined into national legislation and the IEA state that achieving this would require Austria to substantially enhance decarbonisation efforts across all energy sectors (IEA, 2023). Despite this, they have demonstrated climate ambition by implementing a novel fiscal lever to reduce GHG emissions in non-EU ETS sectors. Although Germany also has a nETS in place, neither have been in place long enough to generate significant evidence on effectiveness.

        Data and evidence

        [G]

        A lot of information is available on the lever design; however, the scheme is still in its initial implementation phase. An overall cap on emissions and trading of allowances, which will create a “market” price, will be initiated in 2026. Therefore, no ex-post evidence is available on effectiveness of the lever in practice as it has not yet reached the final stage of implementation.

        Diversity of approaches

        [G]

        This is the only national level ETS considered as a case study. Germany also operates a similar national level ETS but these are novel approaches.

        Lever design


        Austria launched its nETS as part of the Ecological Tax Reform Act on 1 October 2022 (Parliament Österreich, 2022). The reforms included many other pricing instruments, so was implemented as part of a wider policy package. The scheme was initially intended to be in place from 1 July 2022, but was postponed as part of an energy relief package intended to relieve cost of living pressures from increased energy prices resulting from the war in Ukraine.


        The nETS was designed to complement and exist alongside the EU ETS. It covers CO2 emissions from fossil fuels including transport fuels (petrol and diesel), fuel and heating oil, natural gas/liquified gas, coal and kerosene used in sectors which are not regulated under the EU ETS. The sectors in scope are small, non-EU ETS industry, transport, buildings, waste and agriculture. No data has been identified which set out the differences between the EU ETS and nETS in terms of GHG coverage. Designing the nETS to fit around the EU ETS, namely ensuring that EU ETS installations are not exposed to double counting, was one of the biggest challenges the Austrian government experienced when implementing this lever.[22]


        The ETS has a fixed price, which is designed to steadily increase from 2022-2025, before transitioning to a market price after that, which will operate as a standard cap and trade scheme. The scheme was designed to increase as a fixed price in this way to ensure there is security for market participants to plan ahead. The pricing scheme is as follows, for allowance which covers one tonne of CO₂e:



        • 2022 – 30 EUR

        • 2023 – 35 EUR

        • 2024 – 45 EUR

        • 2025 – 55 EUR


        For comparison, the price under the EU ETS in September 2023 was ~85 EUR per tonne. Therefore, the price under the nETS is much lower than under the EU ETS, however, at the end of the transitional phase it will be closer. However, by nature of the market phase it is uncertain what the price will be after the fixed allowance prices cease.


        Phased implementation


        In the early phase of the scheme (2022-2023), there is a fixed price and a simplified procedure for registration and reporting – registered entities (the company/person liable for paying the tax) are not required to conduct monitoring and reporting at this stage, and the National Emissions Trading Information System is being established. Emission allowances do not need to be formally purchased or surrenders, so the scheme is more like a tax, although companies are preparing for full implementation.


        In the transitional phase (2024-2025), allowances will start being issued and surrendered and obligatory monitoring and reporting will be phased in. This will include independent verification of emission allowances. In 2026, an overall cap on emissions will be in place and allowances will shift to a market price. The scheme will eventually align with the EU ETS 2, which from 2027 will eventually price emissions in the same sectors at European level.


        Compliance, MRV and Enforcement (ICAP, 2023)


        The Austrian Federal Ministry for Finance (BMF) and its excess duty administration is responsible for the implementation of the scheme in Austria, which has eased administration burdens for implementing the scheme due to similarities with existing excise duties, although the process of surrendering allowances is new and has been a learning process (other departments handle this for EU ETS).[23]


        The compliance period runs per calendar year, and registered entities must submit an emissions report at the end of June for the previous year’s emissions, and then have until the end of July in the following year to surrender allowances to cover the reported emissions. Emissions reporting must be independently verified and be based on a pre-approved monitoring plan. Exemptions are in place for installations subject to the EU ETS to avoid double burdens, negligible cases (emitting less than one tonne CO₂e) or exemptions under energy taxes.


        Entities must pay an increased certificate price (at two times the fixed emissions price) for each tonne of CO₂e for which no allowance has been surrendered. Once the market phase has been reached, entities must pay an increased certificate price of EUR 125 per tonne CO2e. Fines can be issued for other instances of non-compliance, apart from those exempted outlined above.


        The Austrian Federal Ministry for Finance (BMF) is the authority responsible for establishing the regulatory framework of the nETS, and the Office for National Emissions Allowance Trading at the Austria Customs Office is the implementing authority, responsible for receiving emissions reports.


        Revenue


        The nETS was implemented as part of a wider policy package. Although revenue for the emissions allowances goes directly into the main budget and there is no hypothecation, ‘climate bonus’ payments are given directly back to households. This is paid as a set price per person, which means that relatively poorer households (who typically live a less carbon intensive lifestyle, hence pay less of the costs) gain relatively more back than richer households. Currently, in the fixed price phase, more money is given back to households and companies in ‘climate bonus’ payments than is received by the Austrian government in revenue. Revenue in 2022 was approximately €800 million and the government have provided rebates of around €1 billion.[24]


        Lever effectiveness

        There are no ex-post studies or evaluations available as the lever has not yet reached its full implementation stage. Emissions data for 2022 (although implementation only started in October 2022) will be available in due course. However, 2022 was an unusual year as energy prices were very high, affecting behaviour. The CO2 price was still relatively low in 2022 – a carbon price of €30 leads to no more than €0.08 per litre of diesel or gasoline). Therefore, the Austrian government do not think that this will be representative of a typical year.

        Ex ante modelling studies conducted by the Austrian government showed that the scheme was expected to reduce CO2 emissions from the sectors affected of around 800,000 tonnes by 2025.[25] During the fixed price scheme the price signal is not expected to result in a clear and significant change in behaviour, however, other parts of the policy package are designed to specifically change behaviour (such as subsidies for changing heating systems in households).

        Key lessons learned

        The case of the nETS in Austria could yield important lessons for any potential similar system in Scotland. The Austrian scheme is specifically designed to be complementary to the existing EU ETS and covers emissions from non-EU ETS sectors. A similar scheme in Scotland could be designed to complement and exist alongside the UK ETS, which currently has the same coverage as the EU ETS. This would be crucial to ensure there is no double counting, and this was a key area highlighted by interviewees. The sectors covered by the Austrian nETS are small industry, transport, agriculture and buildings, which are not covered by the EU ETS.

        Many effects of the scheme are yet to be realised as the scheme is still under phased implementation. This phased implementation has been crucial to give businesses certainty about the future. However, from experience, the Austrian government suggest that a period of mandatory monitoring and reporting, without implementing a carbon charge, would be a useful place to start.[26]

        Case study 4

        Lever type: Proposed tax on agricultural emissionsJurisdiction: New Zealand

        Context

        Population and GDP

        [G]

        Like Scotland, New Zealand is a high-income country. New Zealand’s economy is larger than Scotland ($231.7 billion in 2020, compared to £148 billion and GDP per capita is slightly higher ($47,982 in NZ and $42,362 in Scotland in 2021 (Scottish Government, 2023a))[27]. New Zealand is of comparable size to Scotland in terms of population (NZ 5.1 million in 2022 (OECD, 2023b) compared to 5.4 million in Scotland (Scottish Government, 2023c)).

        Administrative and legal arrangement/ competencies

        [A]

        The proposed tax on agricultural emissions in New Zealand would apply at a national level.

        Shared challenges

        [G]

        The agricultural sector plays a key role in New Zealand’s economy, being a net exporter of farm commodities. In 2020, the crop and livestock exported was worth $25 billion (Ministry for Primary Industries, New Zealand Government, 2022). Similarly, approximately 80% of Scotland’s land mass is currently being under agricultural production (National Farmers Union Scotland, 2023). Like Scotland, New Zealand has a high potential for transitioning its energy sector towards renewable sources. This is due to the high potential of its wind, solar and hydro energy sectors (Anon, 2021).

        Climate ambition

        [A]

        New Zealand is committed to achieving Net Zero by 2050. Scotland has committed to more ambitious targets of achieving a 75% reduction in its CO₂ emissions by 2030 and Net Zero by 2045.

        Data and evidence

        [R]

        There is limited evidence available on the tax and its exact design is still uncertain as the original design was revoked and is yet to be applied. However, it is the first tax which explicitly focusses on agricultural emissions. Lessons may be learned in terms of design, political acceptance and implementation.

        Diversity of approaches

        [G]

        Despite the exact format of the tax remaining uncertain, it is a novel concept that could provide valuable insight for Scotland.

        Lever design

        A government announcement in December 2020 declared a climate emergency that “demands a sufficiently ambitious, urgent, and coordinated response across government to meet the scale and complexity of the challenge”. Following this, an emissions reduction plan for the Agricultural sector was announced in May 2022. The aim was to meet emissions reduction targets set in New Zealand’s Nationally Determined Contribution under the Paris Agreement, and the domestic emission reduction targets laid out in the Climate Change Response Act 2002 (CCRA). Targets were set at both national and at sectoral scale. Particular attention was paid to the agricultural sector given it accounts for half of New Zealand’s total greenhouse gas emissions (New Zealand Government, 2023).

        Almost 20 years ago, the New Zealand government announced a ‘fart tax’, which taxed GHG emissions deriving from livestock and agricultural sources. The announcement resulted in protest amongst the farming community. The Government then retracted the proposal, demonstrating the strong political influence the agricultural industry holds (Pannett, 2023). More recently, in 2022, the government founded a partnership with the Māori government and primary industry. The partnership was known as the He Waka Eke Noa – the Primary Sector Climate Action Partnership.

        It proposed a ‘farm-level levy’ that would require farms to calculate their emissions and pay for them. The emissions pricing was set to use a split-gas approach by applying unique levy rates to long-lived gases, i.e., carbon dioxide and nitrous oxide. Note this would be alongside an ETS also introduced in New Zealand. In response to the proposal for a farm-level levy, the Government launched a consultation to gain feedback from a series of stakeholders on options to price agricultural emissions (New Zealand Government, 2022b). The results of the consultation highlighted public concerns for the impact of the levy on the cost and availability of agricultural produce to consumers as farmers, growers and the wider agricultural sector adjust to internalising the new cost on emissions (Ministry for the Environment and Ministry for Primary Industries, 2022). A series of media outlets, including the Washington Post, have reported on tensions between the agricultural sector in New Zealand and the government. Farmers expressed concerns regarding both the profitability and competitiveness of their business, with some expecting to have to reduce their herd size (Pannett, 2023).

        The concerns of the agricultural sector have been attributed to the government altering their proposal. A new, temporarily less-stringent proposal was made that shifted the Government’s focus from farm-level taxation towards tightening monitoring and permitting requirements. Instead of outlining farm-level emission pricing, this shifted the focus – at least in the short term – toward a phased approach to mandatory monitoring and reporting requirements, to be implemented by 2025. The proposal delays the implementation of a farm-level levy therefore, until 2027. This new proposed legislation has been better received by the agricultural sector, although some have suggested the involvement of farming lobby groups in the development process (Corlett, 2022).

        The first stage of the revised proposal outlines a standardised approach to measuring and reporting of on-farm emissions which would eventually transition into the mandatory reporting of all farm-related emissions. The second area involved the recognition and reward of scientifically valid forms of on-farm sequestration (New Zealand Government, 2023). The policy would require that all producers in the agricultural sector collate emission reports by the end of 2022 and develop a farm plan to be implemented by 2025 (New Zealand Government, 2022a). These requirements seek to ensure farmers are aware of their own on-farm emissions and can provide the government with detail on their practices and technologies, providing it with further detail into how best to reduce emissions borne from agricultural sources and how emission levels vary between farms (New Zealand Government, 2023). It is proposed that the mandatory requirements for reporting and monitoring would apply to Inland Revenue registered farms.

        The proposal also outlines financial incentives for farmers to use technologies recommended by the Government that reduce sheep and cow burps. It also commits to reinvest the revenue generated from the tax into the sector (Craymer, 2022).

        Lever effectiveness

        The lever is yet to be implemented; therefore, assessments of effectiveness or behavioural impacts are not available. The tax is thought to offer potential to reduce New Zealand’s emissions due to the contribution of the agriculture sector to New Zealand’s total GHG emissions (Craymer, 2022). The agricultural sector accounts for nearly half of New Zealand’s total GHG emissions, the majority of which are emissions of methane. These emissions are not covered in New Zealand’s ETS (Craymer, 2022).

        Key lessons learned

        The New Zealand Government’s transition from a policy which placed direct pricing on emissions at farm-level towards one that implemented monitoring and reporting requirements demonstrates the importance of introducing change in a staggered, cooperative manner. Whilst the initial proposal from 2002 was widely contested, the involvement of farming groups in the development of the policy has enabled the Government to implement measures that are a step towards the pricing mechanism they have committed to in 2027 (Corlett, 2022).

        The New Zealand case has demonstrated the importance of stakeholder engagement in the successful implementation of contentious policies. One of our interviewees Professor Lorraine Whitmarsh who specialises in behavioural change and public policy acceptance, highlighted the importance of stakeholder engagement in policy development to gain public acceptance more generally. She noted the Scottish Government had made progress in implementing these methods in its policymaking process.

        Case study 5

        Lever type: Indirect tax (Bonus Malus scheme)

        Jurisdiction: France

        Context

        Population and GDP

        [A]

        France is a high-income country. According to WorId Bank estimates, it is the world’s seventh largest economy by nominal GDP. If this is calculated per inhabitant, France is 19th. GDP per capita was 55,064 US dollars in 2022,[28] higher than Scotland (42,362 US dollars in 2021 (Scottish Government, 2023a))[29]. The 2022 population of France was 68 million, based on OECD data. This is much larger than Scotland (5.4 million (Scottish Government, 2023c)).

        Administrative and legal arrangement/ competencies

        [A]

        The scheme is administered at national level.

        Shared challenges

        [G]

        To achieve its 2050 carbon neutrality objective, France has committed to reducing the use of fossil fuels in energy production (almost two-thirds of the French heating and cooling systems are powered by fossil fuels) while increasing the use of renewable energy. In addition to accelerated phase-out of coal, the government will ban the sale of petrol and diesel vehicles from 2040 onwards. French diesel taxes are also increasing to further incentivise diesel drivers to switch to petrol, hybrid, or electric cars (Monschauer et al. 2018). Note, a carbon tax is also in place in France (not the focus of the current case study). The country’s carbon tax is among the highest in the world and was scheduled to increase steeply in the coming years. It covers the transport, industry and buildings sectors.

        Climate ambition

        [A]

        In 2019, France passed the Law on Energy and Climate to introduce the objective of carbon neutrality by 2050 as part of its commitment to the 2015 Paris Agreement. The National Low-Carbon Strategy was updated in 2020 to reflect this objective.

        Data and evidence

        [G]

        A significant amount of information is available for the case study.

        Diversity of approaches

        [A]

        An “indirect” taxation instrument, administered at national level.

        Lever design

        The Bonus Malus system is one of the main instruments of climate policy in the French transport sector. It was introduced on January 1, 2008, by the Finance Law as amended for 2007 and Decree No. 2007-1873. This system combines fees and rebates for the purchase of new vehicles: vehicles purchased or leased whose emissions exceed certain limits pay a fee, whilst vehicles that do not exceed these limits are entitled to a bonus or rebate. Revenues from emission-intensive vehicle fees are used to finance these bonus payments for low-emission vehicles to incentivise car purchasing decisions. Since its inception in 2008, the French government has adjusted the system several times. Since 2017, only electric and hybrid vehicles have been eligible for bonuses.

        Since 2018, the fee must be paid for vehicles with CO₂ emissions equal to or greater than 120 g/km. For that threshold, the fee started at €50, but the fee function increases considerably (EUR 1,050 for 140 g/km and EUR 4050 for 160 g/km). For vehicles with CO₂ emissions equal to or above 185 g/km, car buyers must pay EUR 10,500. In parallel, vehicles specially equipped to run on E85 super ethanol can benefit from a 40% reduction in carbon dioxide emission levels if their CO₂ emissions are less than 250 g/km.

        In addition to the existing tax (’malus’), a ’super malus’ targeting luxury cars was introduced in January 2018. Car buyers must pay EUR 500 per “fiscal horsepower” for powerful vehicles with more than 35 fiscal horsepower and the tax is capped at EUR 8,000[30].

        On the ’bonus ’ side, since January 2018, the bonus of up to EUR 6,000 (27% of the acquisition cost) is only granted for electric vehicles emitting less than 20 gCO₂/km. Vehicles with emissions between 20 and 120 gCO₂/km are not affected by the Bonus Malus System, i.e. hybrid vehicles with emissions between 20 and 60 gCO₂/km are no longer eligible for a EUR 1,000 bonus payment. The bonus is granted directly to the buyer by means of an application form or is deducted from the price of the vehicle, when agreements are in place with dealers.

        At the same time, an additional bonus of EUR 1,000 (EUR 2,000 for non-taxable households) is granted when an old diesel or gasoline vehicle is scrapped and a used electric vehicle or a vehicle with a more efficient internal combustion engine is purchased (CEDEF, 2018). In the case of new electric and plug-in hybrid vehicles, the bonus is EUR 2,500. Two and three-wheeled vehicles, as well as electric quads, are eligible for a 20% or 27% subsidy of their acquisition cost (EUR 100 or EUR 900 maximum), depending on their power. In addition, non-taxable households can receive a subsidy of 20% of the cost when purchasing electrically assisted bicycles.

        Lever effectiveness

        In terms of GHG emissions effectiveness, the scheme has successfully contributed to reducing average passenger car emissions since its implementation. The scheme has been very effective in shifting vehicle sales towards more environmentally friendly vehicles, thereby removing old vehicles from French roads (according to plans, the scrappage bonus is likely to remove around 100,000 old vehicles) and lowering average emissions. Though progress has slowed in recent years, average emissions have reduced significantly from 149 gCO₂/km in 2010 to 111 gCO₂/km in 2017. The current European target for emissions levels of new cars sold is set at 95 gCO₂/km by 2024. For 2025 onwards, the EU feet-wide CO₂ emission targets are defined as a percentage reduction from a 2021 starting point.

         

        By promoting electric vehicles, the Bonus Malus scheme also contributes to improve local air quality in urban areas.

        Although it seems clear that the scheme has proven to be effective in reducing GHG emissions in France and local air conditions, the impact of this measure on GHG emissions is difficult to isolate. The scheme may have a rebound effect, as the lower fuel expenditure for consumers due to more efficient vehicles may lead to an increase in vehicle use and thus in petrol/diesel consumed (and thus on emissions).

        Based on projections of average annual vehicle kilometres and the number of new registrations, the French Ministry of Ecology estimates that measures to improve the performance of new passenger vehicles, including for example a CO₂ label for passenger cars, could lead to GHG emission savings of 5.4 million tonnes CO₂e (MtCO₂e) in 2020, 8.0 MtCO₂e in 2025 and 9.8 MtCO₂e in 2030. Compared to emissions from private cars, which in 2015 were around 66 MtCO₂e, the impact of the scheme could be substantial considering that the Bonus Malus system is likely to be the dominant driver of reductions. However, these figures also imply that additional measures would be necessary to significantly reduce emissions from the transport sector in the future.

        In terms of revenues generated, since 2014 the Bonus Malus scheme has generated surplus revenue for the French general budget. For 2018, the malus was set at a level that cover the costs of the bonus payments (EUR 261 million) and the additional bonus for scrapped vehicles (EUR 127 million).

        Note all data in this section taken from Monschauer, Y & Kotin-Förster, S 2018.

        Key lessons learned

        An important lesson was that incentives for new registrations were initially underestimated, leading to an overall increase in car sales and high costs for the bonuses paid at the beginning of the scheme. For example, during the first three years of implementation, the French state lost EUR 300 million (on average) per year because car manufacturers took advantage of the large steps between bonus payment categories in previous years. The instrument has been continuously adapted to meet efficiency and effectiveness criteria.

        It is also difficult to forecast the evolution of supply and demand. However, the establishment of a modelling function as a basis for malus rates has made it easier to predict the market reaction as a function of vehicle purchase cost elasticity. Consumers do not always understand how the system works and how it relates to air quality measures for passenger cars. Combining the Bonus Malus system with air quality criteria also remains a challenge, as the system is designed to be technologically neutral and it does not explicitly differentiate between petrol and diesel vehicles. Although diesel cars benefit slightly more from the system due to their lower average GHG emissions, they cause more particulate emissions than petrol cars. One success factor is the support of the French car industry, which has welcomed the bonus payments and acknowledges that they are financed by the malus charges.

        Case study 6

        Lever type: Indirect tax (Environmental impacts of farming)Jurisdiction: Wallonia, Belgium

        Context

        Population and GDP

        [A]

        Wallonia is a high-income region. According to the National Bank of Belgium, in 2021, the region’s GDP per capita was EUR 31,568, somewhat lower than Scotland (42,362 US dollars (Scottish Government, 2023a).[31]

        The 2022 population of Wallonia was 3.6 million, based on Iweps (Institute Walloon of L’évaluation, De La Prospective Et De La Statistique) data. This is slightly lower than in Scotland (5.4 million in 2022 (Scottish Government, 2023c)).

        Administrative and legal arrangement/ competencies

        [G]

        Administered at sub-national level

        Shared challenges

        [G]

        Wallonia is committed to transitioning towards a low carbon and environmentally friendly economy. It is also committed to increasing the use of renewable energy. For example, the region has decided to use Sustainable Capital Markets as a means of financing green projects and has created a Sustainability Bond Framework. One aim of the Bond is to help the region achieve its objectives in energy efficiency and low carbon buildings, sustainable mobility, resources/land use, and affordable housing.

        For the period 2019-2024, Wallonia has established an investment plan (in French PWI – Plan Wallon d’Investissement), which involves an investment budget of more than €5 billion to channel investments in social and environmental assets in several pillar sectors. The region has also established low emission zones to limit the most polluting vehicles and improve air quality. However, Wallonia must respond to several energy-related challenges, such as the planned closure of nuclear power plants and an ageing and energy inefficient residential building stock (Coppens et al., 2022). About 80% of Scotland`s total land area is under agricultural production, it is useful to focus a case study on this sector.

        Climate ambition

        [A]

        The Walloon Region has made an ambitious commitment to reduce its GHG emissions by up to 55% by 2030 and by 80% to 95% by 2050 (compared to 1990). Moreover, on 4 February 2021, Wallonia adopted its first strategy for the Circular Economy, which shows ambitions for 2025, such as: (i) 50% of relevant public procurement contracts will integrate circular economy principles or circular criteria; (ii) 75% of public information and communications technology (ICT) contracts will be circular and ethical; (iii) All public demolition/deconstruction contracts and subsidised contracts will include a materials inventory and selective deconstruction; and (iv) Reuse materials will be used in all public works contracts and progressively in works subsidised by the Walloon Region (European Commission, 2022).

        Data and evidence

        [R]

        There is limited data beyond the number of people affected and the annual revenue. However, there is detailed information on the coefficients applied by type of animal and crop.

        Diversity of approaches

        [G]

        Indirect tax, administered at sub-national level

        Lever design

        In Wallonia, agriculture represents about 40% of the total surface water abstractions. The main pressures on water resources are non-point source pollutions by nutrients and pesticides. Key pollutants from the agricultural sector are nutrients and pesticides as well as sediments from erosion.

        With the decrees of 12 December 2014 and 23 June 2016, the regional Parliament adopted measures aimed at financing water policy by optimising mechanisms for recovering the costs of services linked to water use, including costs for the environment and water resources, in application of Directive 2000/60/EC of the European Parliament and of the Council of 23 October 2000 establishing a framework for Community action in the field of water policy. Thus, the tax on environmental impacts from farming, in force since 2015, is intended to address the environmental costs associated with the impact of agricultural activities on water resources, in particular livestock manure and the use of fertilizers and phytosanitary on crops. In particular, the tax is based on the environmental charge, a tax base that considers not only the retained livestock, the “livestock” environmental charge, but also cultivation activities, the “land” environmental charge. Through the spreading of nitrogenous fertilisers and the use of plant protection products, these activities have a significant impact on water resources.

        The tax on environmental charges generated by farms in the Walloon Region is one of the key incentives in Wallonia’s environmental policy. The aim of the tax is to meet the requirements of the Water Framework Directive 2000/60 of 23 October 2000, the ultimate objective of which is to achieve good ecological and chemical status of all Community waters. As such, it is not directly related with GHG although it is useful as it encourages farmers to use water more efficiently.

         

        Principles: This system is based on the environmental load generated by the farm and it takes into account: (i) retained livestock or environmental loads generated by run-off from livestock manure storage infrastructures on the farm reaching groundwater or surface water, as well as pollution due to effluent storage infrastructures that do not allow storage for at least 6 months; and (ii) cultivation activities that generate, through the application of nitrogen fertilisers and the use of plant protection products, damage to aquatic resources.

        Farmers concerned: Farmers who meet at least one of the following three conditions are subject to the tax: (1) Keep live more than three head of livestock stock with an environmental load of more than three units (this unit is not defined in the literature identified, but is assumed to relate to/the same as head of cattle); (2) Have an area of crops, other than grassland, of at least half hectare; and (3) Hold an area of grassland of at least 30 hectares.

        Calculation of environmental load (taxation formula): N = 2 + N1 + N2 where N is the number of environmental load units, N1 is the “livestock” environmental charge. The load is determined by summing the products resulting from multiplying the number of animals in each category by its nitrogen coefficient (shown in the table below). This coefficient reflects the value of annual nitrogen production per type of animal.

        N2 is the “land” environmental load. The charge is determined by summing the products resulting from multiplying the areas under crops and grassland by the following coefficients:

        – 1) crop coefficient: 0.3

        – 2) organic farming coefficient: 0.15

        – 3) “Grassland” coefficient: 0.06

        – 4) “Organic grassland” coefficient: 0.03

        These coefficients reflect the average nitrogen residue in the soil, the average use of pesticides and the erosive potential of crops and meadows.

        The Government may assimilate certain agricultural practices that preserve the quality and condition of groundwater and surface water to organic crops within the meaning of the coefficients.

        N2 = area per category x coefficient for the corresponding category.

        Cattle

        Dairy cow

        0.5538

        Suckler cow

        0.4062

        Cull cow

        0.4062

        Other cattle over 2 years old

        0.4062

        Cattle less than 6 months old

        0.0615

        Heifer 6 to 12 months old

        0,1723

        Heifer 1 to 2 years old

        0.2954

        Bull from 6 to 12 months

        0.1538

        Bull from 1 to 2 years old

        0.2462

        Sheep and goats

        Sheep and goats under 1 year old

        0.0203

        Sheep and goats over 1 year old

        0.0406

        Equines

        Equine

        0.3446

        Pigs

        Sow

        0.0923

        Boar

        0.0923

        Fattening pigs and gilts

        0.0480

        Fattening pigs and gilts on biolitter

        0.0277

        Piglets (4 to 10 weeks old)

        0.0117

        Rabbits

        Mother rabbits

        0.0222

        Fattening rabbits

        0.0020

        Poultry

        Broilers (40 days)

        0.0017

        Laying or breeding hens (343 days)

        0.0037

        Pullets (127 days)

        0.0017

        Breeding cocks

        0.0026

        Ducks (75 days)

        0.0026

        Geese (150 days)

        0.0026

        Turkeys (85 days)

        0.0050

        Guinea fowl (79 days)

        0.0017

        Quails

        0.0002

        Ostriches and emus

        0.0185

        Tax exemptions or reductions: The tax includes two exemptions: (1) “Livestock” environmental charge (N1): is zero when the farm holds a certificate of compliance for livestock effluent storage facilities or when this certificate is in the process of being used; and (2) “Land” environmental charge (N2): the first thirty hectares of a farm are exempt from the tax. This exemption is calculated by multiplying the farm’s average “land” environmental load unit by 30. The average “land” environmental charge unit for the farm is obtained by dividing the “land” environmental charge (N2) by the total surface area of the farm.

        Applicable rate: The basic rate of the tax per environmental load unit linked to the farm is set at €10 from 1 January 2015. This basic rate will be indexed based on the consumer price index in force six weeks before the indexation date.

        Taxation data: The data integrated into SIGEC (detailed agricultural data filled by each farmer for the purpose of compliance with EU Common Agricultural Policy) as part of the Wallonia Agriculture Code are used to establish the tax on environmental charges.

        Source for information in this section: Portail de wallonne, 2023; Interview.

        Lever effectiveness

        The tax concerns some 13,500 taxpayers and generates annual revenue of around €1.2 million. The view from an interviewee indicates the tax may not be as effective as it could be, as the rate of taxation is low and the polluting nature of certain types of crops is not considered in the tax calculation formula. Only the state of cultivation or grassland and whether it is organic are currently considered in the formula for determining the amount of tax.

        Key lessons learned

        This instrument is simple to apply and generate revenues. It sends a signal to the market that an increasingly scarce resource such as water needs to be better managed, otherwise a tax will have to be paid. This tax is applied in what is a key sector for Scotland and covers a large part of its territory, so it could feasibly have a significant effect. Moreover, it could potentially be applied without major legal/administrative complications.

        © The University of Edinburgh, 2024
        Prepared by Logika Group and Metroeconomica 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. Official data indicate that between 2013 and 2020, the increase was less than 1%, but 2020 emissions were affected by the restrictions associated with the COVID-19 pandemic. A more accurate comparison of underlying trends may be between 2013 and 2018, where global GHG emission increased by just under 5%. ↑



        2. Note the evidence in this paper was drawn from peer reviewed academic research and grey literature published since 2000. The review focussed on emission reduction evidence, it did not consider the balance of costs and benefits, technological innovation or issues associated with equity, for example. It excluded national evaluation reports, reflecting the diversity in methodological approaches and a potential lack of independence in these sources. The latter critique is questionable, as third parties often conduct them. Our secondary review has also not identified such evaluations, which is an acknowledged limitation of the review. ↑



        3. Defined as levies applied downstream to the emission of carbon dioxide and other GHGs or upstream to the sale of carbon intensive fuels. ↑



        4. Note the two figures are not directly comparable, the 2016 review is based on a selection rather than an overall estimate of total revenues. Moreover, the two studies appear to use different definitions of “carbon taxes” and for example do not appear to treat e.g., fuel/excise taxes in the same way. ↑



        5. £30,793 in 2021, converted to US dollars for consistency in jurisdictions, using the average exchange rate for 2021 of 1.3757. Source: https://www.exchangerates.org.uk/GBP-USD-spot-exchange-rates-history-2021.html ↑



        6. i.e., it is managed, and revenues are collected by Revenue Scotland. In this context, partially devolved, is where instruments are managed and revenues collected by HMRC on behalf of the Scottish Government. ↑



        7. Defined by the European Environment Agency as wastes that do not undergo any significant physical, chemical, or biological transformations when deposited in a landfill. ↑



        8. The maximum mass at which the aircraft is certified for take-off due to structural or other limits ↑



        9. The special rate applies to business jets with a take-off distance weight (MTOW) of more than 20 tons and a maximum seating capacity of less than 19 passengers. The Scottish standard rate applies if the aircraft does not qualify for the special rate and the seat pitch does not exceed 1,016 meters. Otherwise, passengers will be charged the premium rate. ↑



        10. Prior to the introduction of the Climate Change Levy, a Fossil Fuel Levy introduced in 1990 existed. The tax was paid by suppliers of electricity from non-renewable energy sources and ended following the introduction of the Climate Change Levy. ↑



        11. The United Kingdom Emissions Trading Scheme replaced the European Union Emissions Trading Scheme in 2021 following the UK’s exit from the EU. ↑



        12. Up to 31 March 2023, there were 2 destination rate bands ↑



        13. Based on the 2020 annual average exchange rate of CAD 1.7202 to 1 GBP. https://www.exchangerates.org.uk/GBP-CAD-spot-exchange-rates-history-2020.html ↑



        14. £30,793 in 2021, converted to US dollars for consistency in jurisdictions, using the average exchange rate for 2021 of 1.3757. Source: https://www.exchangerates.org.uk/GBP-USD-spot-exchange-rates-history-2021.html ↑



        15. Air and climate – Air and GHG emissions – OECD Data ↑



        16. Information obtained during the case study expert interview phase of the stakeholder consultation ↑



        17. Information obtained during the case study expert interview phase of the stakeholder consultation ↑



        18. Information obtained during the case study expert interview phase of the stakeholder consultation ↑



        19. https://www.seedyourfuture.org/greenhousegrower#:~:text=A%20greenhouse%20grower%20specializes%20in%20growing%20plants%20in%20a%20greenhouse%20environment ↑



        20. £30,793 in 2021, converted to US dollars for consistency in jurisdictions, using the average exchange rate for 2021 of 1.3757. Source: https://www.exchangerates.org.uk/GBP-USD-spot-exchange-rates-history-2021.html ↑



        21. £30,793 in 2021, converted to US dollars for consistency in jurisdictions, using the average exchange rate for 2021 of 1.3757. Source: https://www.exchangerates.org.uk/GBP-USD-spot-exchange-rates-history-2021.html ↑



        22. Information obtained during the case study expert interview phase of the stakeholder consultation ↑



        23. Information obtained during the case study expert interview phase of the stakeholder consultation ↑



        24. Information obtained during the case study expert interview phase of the stakeholder consultation ↑



        25. Information obtained during the case study expert interview phase of the stakeholder consultation ↑



        26. Information obtained during the case study expert interview phase of the stakeholder consultation ↑



        27. £30,793 in 2021, converted to US dollars for consistency in jurisdictions, using the average exchange rate for 2021 of 1.3757. Source: https://www.exchangerates.org.uk/GBP-USD-spot-exchange-rates-history-2021.html ↑



        28. Provisional data ↑



        29. £30,793 in 2021, converted to US dollars for consistency in jurisdictions, using the average exchange rate for 2021 of 1.3757. Source: https://www.exchangerates.org.uk/GBP-USD-spot-exchange-rates-history-2021.html ↑



        30. Fiscal horsepower is a unit indicating the tax burden on a vehicle. In the past it was related to engine power, hence this measure is also referred to as “fiscal power”. In Spain, for example, it is usually obtained from the engine capacity. In France, the calculation is different: since July 1998 (Article 62 of Law n°98-546 of 2 July 1998), the fiscal power depends on the standardised CO₂ emission value in g/km and the maximum engine power in kW. ↑



        31. £30,793 in 2021, converted to US dollars for consistency in jurisdictions, using the average exchange rate for 2021 of 1.3757. Source: https://www.exchangerates.org.uk/GBP-USD-spot-exchange-rates-history-2021.html ↑


        Research completed March 2024

        DOI: http://dx.doi.org/10.7488/era/5316

        Executive summary

        Background

        The Scottish Government’s Climate Change Plan Update (CCPu) sets out an ambition for the agriculture sector to reduce emissions by 31% from 2019 levels by 2032, and a commitment to “work with the agriculture and science sectors regarding the feasibility and development of a SMART target for reducing Scotland’s emissions from nitrogen (N) fertiliser.”

        The agricultural sector is dependent on N inputs, both organic and inorganic. The inefficient use of these inputs creates N wastage, impacting air and water quality and the climate. The global nature of the issue provides an opportunity for Scottish agriculture to learn from other countries on how to improve Nitrogen Use Efficiency (NUE), i.e. taking action to reduce agricultural N losses while maintaining and supporting the sector in terms of income and yield.

        This report explores the potential for setting a NUE target for agriculture in Scotland. It examines N flows found in Scottish agriculture as shown in the Scottish Nitrogen Balance Sheet (SNBS), providing a clear analysis of the opportunities and barriers.

        Key findings

        Whilst there is theoretical potential for setting a NUE target for Scotland, there are practical obstacles that policy makers would need to overcome for the target to be implemented.

        This research argues sector specific NUE values are not currently feasible due to the calculation set-up in the SNBS and the assumption that production will remain stable, with only inputs decreasing.

        • We suggest that the SNBS calculations need refinement to attribute flows of N to the different measures and sectors. In the current version of the SNBS, the NUE calculations do not align directly with what happens in practice because there are overlaps and movements of N flows between the different agricultural sectors.
        • These are not easily viewed in isolation and not necessarily attributed to the correct sector. For example, mitigation measures around manure management will, in practice, be mainly implemented by the livestock sector but will, in the current calculations, be attributed to the arable sector because they are linked to reduced emissions from spreading of organic matter to soils.

        Opportunities

        • The SNBS would offer an effective data source for setting and monitoring progress towards a single nationwide NUE target that covers all sectors.
        • Many mitigation measures with known impacts on reducing N waste and improving N use are already in use in Scotland. Measures with the greatest potential improvement on NUE are
        • nitrification inhibitors
        • improving livestock nutrition, and
        • improving livestock health.
        • Note – that the improvement reflects implementing the relevant measure individually and does not consider any combination effects or interactions with other measures.
        • The lowering of N-related emissions through reaching a NUE target will positively contribute to other emission reduction targets and the potential for an increase in farm business profitability.

        Barriers

        • Since a sector specific NUE target is currently not feasible, the remaining option is a single nationwide target.
        • However, the arable, horticultural and livestock sectors would need to implement distinct mitigation measures, start from differing baselines, and will react inconsistently to implemented changes. This is partially due to the current limitations in the SNBS, but also due to the much lower baseline of current NUE values, setting a nationwide NUE target might cause the livestock sector to feel unfairly targeted.
        • Some mitigation measures require significant capital expenditure to implement.
        • The concept of NUE is complex and clear communication is required to ensure that targets and measures are clearly understandable and achievable to generate support from the farming sector.
        • We examined different scenarios to model a potential target. The table below shows an achievable target and one that is more ambitious. The 2045 (Ambitious) scenario is based on transformational change across the sector.
         

        Potentially achievable NUE estimates (%)

        2021 (Current)

        2030

        2040

        2045

        2045 (Ambitious)

        Whole agriculture

        27.2

        33.7

        35.7

        38.2

        40.9

        • No country currently uses a standalone NUE target. Several countries have set N-related targets, some of which include information on NUE. Notably, the Colombo Declaration represents the first time that governments are collaborating on a global N management target on N waste.

        Conclusions and recommendations

        While this research identified opportunities for setting a NUE target for Scottish agriculture, more work is needed to fully understand the following elements:

        • differential flows for each sector
        • make appropriate changes to the SNBS
        • ensure that the role of legumes in emissions reduction is fully integrated and
        • carefully plan communication to achieve support from the farming sector.

        A NUE target is not currently the most appropriate option for Scotland. This is partially due to the methodology in the current SNBS.

        Recommendations

        • Explore the potential for a more granular breakdown, and accurate representation of N flows in the SNBS. This may be difficult but would significantly help both monitoring and setting of a SMART NUE target.
        • Creating a NUE target requires considering several criteria including mitigation measures, current uptake, applicability, expected future uptake, timescales, and sector breakdown. It is important to understand that other agricultural practices may impact N flows, as will changes in the size of agricultural sectors, and achieving these targets in practice will require supporting instruments to encourage the uptake of these measures. This research recommends that:
        • N waste be considered as a target instead of a NUE target and that a SMART analysis is carried out to explore a N waste target further. Opportunities for setting a N waste reduction target include:
        • It is an easier concept to communicate to the farming community.
        • It values any N as a resource until it is lost as waste, creating options for greater collaboration between the arable, horticulture and livestock sectors. Any potential bias towards a sector will be avoided.
        • A N waste target would achieve reductions in national NUE thereby achieving the same objectives without the current issues around NUE targets.
        • Experience of the United Nations Environment Assembly and the Green Deal’s Farm to Fork targets has shown more potential in successfully reducing N pollution when focusing on reducing N waste over NUE targets as a policy option.
        • If a decision is made to set a NUE target, the underlying assumptions should first be updated based on latest available evidence, for example using the updated Up to date Farm Census data. would strengthen any underlying assumptions and may directly influence the potential for the mitigation measures, particularly relating to slurry and manure management.
        • The SNBS be improved by assigning distinct N flows to N waste and N re-use. A SMART target analysis for N waste will be beneficial to set a challenging and realistic target.

        Glossary / Abbreviations table

        Table 1: Glossary/ abbreviations table

        Term/acronym

        Definition

        CCPu

        Climate Change Plan Update

        CO2

        Carbon Dioxide

        EUNEP

        European Union Nitrogen Experts Panel

        GHG

        Greenhouse gas

        INMS

        International Nitrogen Management System

        kt N / yr

        kilo tonnes of nitrogen per year

        MtCO2e

        Million tonnes of carbon dioxide equivalent

        N

        Nitrogen

        N2

        Di-nitrogen

        NH3

        Ammonia

        NH4+

        Ammonium

        NO3–

        Nitrate

        N2O

        Nitrous Oxide

        NUE

        Nitrogen Use Efficiency

        NVZ

        Nitrate Vulnerable Zones

        PESTLE

        Political, Economic, Social, Technical, Legal, Environmental

        REA

        Rapid Evidence Assessment

        SNBS

        Scottish Nitrogen Balance Sheet

        SWOT

        Strengths, Weaknesses, Opportunities, Threats

        UNEP

        United Nations Environment Program

        Introduction

        Nitrogen and its relevance to agriculture

        Crops require nitrogen (N) to maximise growth. Most crops take up N from the soil in the form of nitrate (NO3-). NO3– in soils come from three major sources, the application of organic livestock manures, the application of inorganic N fertilisers and nitrogen fixing plants such as legumes. During harvest and through grazing, N is removed from the system. N can also be lost from soil through NO3– leaching and through emissions of ammonia (NH3) and nitrous oxide (N2O). The N cycle (Figure 1) shows how different forms of N flow through the agricultural system.

        Figure 1: The Nitrogen Cycle

        An excess of N can both directly and indirectly lead to soil, water and air quality deterioration which is detrimental to human and ecosystem health (e.g., affecting respiratory systems and reducing oxygen in water). According to the IPCC AR5 Synthesis Report, N2O has a global warming potential (GWP) 273 times that of carbon dioxide (CO2) over a 100-year timescale. In Scotland N2O is responsible for a quarter of the agriculture sector’s total GHG emissions.

        More detail can be found in Appendix A on the process of leaching, the effects of eutrophication and how N2O and NH3 are emitted from agricultural sources and in Appendix B on the chemical processes of N conversion.

        Nitrogen Use Efficiency

        Nitrogen use efficiency (NUE) describes the ratio between total N input (e.g., fertiliser) and total N output (e.g., harvested product) expressed as a percentage (%). Figure 2 presents a visual example of NUE.

        Figure 2. NUE diagram. Source: Udvardi et al., 2021

        NUE gives an indication of the efficiency of crop utilisation of N. Generally, the higher the percentage NUE the better as this means less loss of N to air and water and indicates the crop is efficient in the uptake of N. However, pushing the ratio too high (for example over 90% in a cereal crop) can indicate ‘soil nutrient mining’ leaving not enough available N to maintain healthy crop growth and soil ecosystems (Sanchez, 2002). When NUE is too low (less than 50% in cereal crops), a large amount of N is likely being lost to the water and air. An ideal NUE would therefore be between 50% and 90%. NUE efficiency is also greatly impacted by climatic conditions, with changes in microbial activity in drought and frozen soils, along with increased risk of denitrification or leaching when soils are waterlogged.

        NUE values are therefore both indicators of resource efficiency and markers for improvement. Key factors influencing NUE include crop type and rotation, soil pH and texture, climate, ammonia, leaching, biological utilisation of N and N management amongst others. As such, an absolute NUE reference value cannot be universally applied and will need to be understood and optimised for specific systems.

        Nitrogen and NUE targets in other countries

        Introduction

        A Rapid Evidence Assessment (REA) seeking evidence relating to the setting and use of nitrogen and NUE targets was undertaken and identified peer-reviewed academic literature as well as government policies and websites. The review also identified grey literature sources such as farming and industry press reports. This search included, but was not limited to, targets for NUE, N emissions and N fertiliser use. The methodology can be found in Appendix C. The review focussed on identifying:

        • Relevant scientific research on NUE target setting (4.2)
        • Countries with N-related target/s, including types, values and timeframes (4.3)
        • Relevance to Scottish agriculture, agricultural sectors and N flows (4.4).

        Research on NUE target setting

        This section includes information found through the REA on global NUE trends and relevant scientific research on the possibility of setting a NUE target including the necessary considerations (e.g., differences in farming sectors). 95 sources of literature were reviewed through the REA, 38 of which were from the UK, 32 from European countries and the remaining from other countries from around the world. Search strings used to gather this data can be found in Appendix C.

        The NUE trend in the UK shows an increase from 1961 to 2014 (Lassaletta, L et al., 2014) which is likely a response to both regulation and market forces (for example the Nitrates Directive and changes in farm incomes). A full list of country-specific changes (%) in NUE values from 1961 to 2014 can be found in Appendix D. Following on from these observations, the research discussed below highlights the requirements and considerations for setting a NUE target.

        Studies such as Quemada et al., 2020 collected farm-level data from 1240 farms across Europe and through statistical analysis, present NUE targets for different agricultural systems (e.g., 23% for a pig farm and 61% for an arable farm) which demonstrates the possibility of setting farm-level NUE targets. However, the study also highlights the importance of how differences in farming sectors will impact target setting.

        A study conducted by Antille et al., 2021 states that there is no universal method for the calculation and reporting of NUE across all agricultural sectors. Furthermore, research projects which provide recommendations for NUE targets also suggest that such targets could be dependent on the agricultural system and its management, as well taking the ‘4R nutrient stewardship’ approach (right fertilizer type, right amount, right placement and right time) (Waqas et al., 2023). These approaches are country and region specific, dependent on climate, farmer knowledge, technological advancement and availability.

        The EU Nitrogen Experts Panel (EUNEP) (initiated by an industry-based organisation ‘Fertilizers Europe’) recommends a maximum NUE of 90% (Duncombe, 2021), with an ‘ideal range’ of 50% to 90%. This range has been set to reflect that a NUE value below 50% is likely to result in N lost to the environment, while a value above 90% could result in soil N mining. Further detail is given in section 3.2. Whilst it is important to note that values will vary according to context (soil, climate, crop etc), the identification of this ‘ideal range’ by the EUNEP helps us to understand the opportunity and potential for setting a NUE target.

        The research has highlighted that whilst it is possible to set NUE targets, there are a number of variables which impact upon setting a NUE target. These variables include the differences in farming sectors, differences in farming management, a lack of universal calculation and reporting of NUE, country / region specificity and climate.

         

        N targets by country – types and policy context

        There are currently no standalone country level NUE targets. Several countries, however, have set N targets through various means, some of which include information or actions on NUE. The review of approaches and literature can be summarised as having three main reasons/drivers for introducing N targets, these are all focused on responding to environment and climate impacts of N emissions:

        • To lower GHG emissions
        • To improve water quality
        • To improve air quality

        The underlying impact of N-related targets all seek to reduce N waste[1], however, the two primary mechanisms differ in their points of measurement. Some targets are set to reduce N emissions whilst others are set to improved water or air quality. Table 2 gives an overview of existing initiatives across the world and their main N target with relation to agriculture. Many are relatively vague and reflect the difficulty in setting firm policy across regions or countries. No set value was found for the targets in table 2 that do not include a percentage or numeric change. These initiatives or legislation are described in further detail below.

        Table 2. Overview of existing initiatives on N targets.

        Initiatives and country

        N target

        Colombo Declaration 2019, United Nations Environment Programme

        Halve N waste by 2030

        Climate Change Response (Zero Carbon) Amendment Act 2019, New Zealand

        Reduce N2O emissions to net zero by 2050

        Nitrates Directive 1991, EU

        Reduce NO3 losses from agricultural sources

        National Emissions reduction Commitments Directive 2016, EU

        Reduce NH3 emissions from agriculture

        Farm to Fork Strategy 2020, EU

        Reduce nutrient losses by at least 50%

        Harmony rules, Denmark

        Limit N inputs to land from livestock manure

        Climate Action Plan 2021, Ireland

        Improve NUE

        Green transition of the agricultural sector 2021, Denmark

        Reduction of N emissions by 10,800 tonnes by 2027

        French Climate and Resilience Law 2021, France

        Reduction of N2O emissions by 15% of 2015 levels and NH3 emissions by 13% of 2005 levels by 2030

        National Emissions Ceilings Regulations 2018, UK

        Reduction commitments for NH3 of 16% by 2030 relative to 2005 levels

        Wales, UK

        Reduction of agricultural GHG emissions by 28% by 2030 compared to 1990

        International action

        The UN Environment Program (UNEP) previously considered ‘an aspirational goal for a 20% relative improvement in full-chain NUE by 2020’ (Sutton et al., 2014). However, Sutton et al., (2021) found that this could lead to an unfair distribution of effort whereby everyone had to increase their NUE by a relative amount. If this was the case a farm currently operating with high efficiency, e.g., 60% NUE, would have to increase by 12% to reach this 20% target. Whereas a farm operating with low efficiency e.g., 10% NUE, would have to increase by 2% to reach the same 20% target.

        To overcome this unfair distribution, a target to halve N waste was seen as a more equitable approach as less waste means less action is needed. For example, to reduce N waste by 50%, a farm with higher N waste e.g., 100t N/yr would have to reduce by 50 t N/yr and a farm with less N waste e.g., 10 t N/yr would have to reduce by 5t N/yr. Therefore, the largest effort needed is placed on farms with higher N waste (low NUE) as opposed to farms already operating with high efficiency (high NUE).

        Alongside the support from the UNEP and the technical support of the International Nitrogen Management System (INMS), the Colombo Declaration represents the first-time that governments are collaborating on an ambitious, quantitative, and global N management target by seeking to cut N waste by 50% across the world.

        Outside Europe

        New Zealand’s Climate Change Response (Zero Carbon) Amendment Act 2019 includes a target to reduce N2O emissions to net zero by 2050. Canada (which has set a target to reduce fertiliser emissions by 30% by 2030) applies a region-specific approach due to the vast expanse of the country having variable meteorological conditions.

        The European Union

        The Nitrates Directive (1991) aims to protect water quality across Europe by preventing nitrate losses from agricultural sources through the promotion of good farming practices and includes limitations on N application from manures. Nitrate Vulnerable Zones (NVZs) are areas where the water bodies, such as lakes or rivers, are considered ‘at risk’ because there they have more than 50 mg/l of NO3– or are eutrophic. Farmers in these areas must comply with rules set out in the Member States’s action programmes to reduce the risk and the Managing Authorities need to report on NO3– concentrations in ground and surface waters. The Directive does not focus on N emissions other than NO3–. While the Nitrates Directive has driven a reduction in nutrient application over the last 30 years, targets have failed to improve NUE in many areas with reported high levels of N surplus (N remaining beyond plant and soil requirements) found in the Netherlands, Belgium, north-west Germany, Luxembourg and Brittany in France.

        The National Emissions reduction Commitment (NEC) Directive (2016) is the current primary European regulation requiring actions to improve air quality and sets targets for reduction in the emissions of key air pollutants. This is important in an agricultural context due to the inclusion of setting reduction targets for NH3. Target reductions are specific to each Member State and vary significantly with the target NH3 reduction for 2030 ranging from 1% for Estonia and 32% for Hungary.

        The European Green Deal (2019) is the EU’s holistic plan to achieve net zero GHG emissions across the EU, while improving biodiversity and human health. The Farm to Fork strategy (2020) includes targets to reduce the use of N fertilisers and losses of N to the environment to support improvements in air and water quality and to reduce emissions of GHGs. The strategy sets a target to reduce nutrient losses by at least 50%, while ensuring that there is no deterioration in soil fertility. The European Commission expect this to reduce the use of fertilisers by at least 20% by 2030.

        Considering the European wide scope of the directives and strategies to reduce N pollution, our study findings were surprising in that examples of nationwide NUE targets are limited. Whilst no country has a standalone NUE target, some countries such as Ireland and Denmark have incorporated NUE as an ‘action’ as part of a programme or another target (e.g., GHG target).

        The Danish example relates to the historic, 1980 ‘Good Agricultural Practice Program’ where increasing NUE was part of a suite of actions to reduce N use. This program was unsuccessful in limiting emission effects and as such ‘harmony rules’ were introduced, which, along with other measures, increased the Danish national NUE to an average of 40%. The Danish harmony rules prescribe the minimum area that a livestock farm must have for spreading livestock manure from their livestock production, thus limiting N inputs to land from livestock manure (Sommer and Knudsen., 2021).

        Ireland’s Climate Action Plan 2021 put forward a suite of actions to deliver their GHG target that includes N. Action 359 details the implementation of ‘a suite of measures to improve NUE’. Teagasc, who is leading this action, sees that there is room for improvement across Irish dairy farms with an industry target of 35% NUE “set for farmers to achieve in the coming years” – an improvement of 10% from the current NUE of 25%.

        Also in 2021, Denmark introduced the ‘Green transition of Danish agriculture’ which has set an agricultural target to reduce GHG emissions by 55-60% by 2030, including a reduction of N emissions by 10,800 tonnes by 2027. The specific impacts on the aquatic environment are further covered through their Action Plan on the Aquatic Environment III which has targets to reduce N leaching.

        France, through the French Climate and Resilience Law 2021, have set targets for reduction of N2O emissions by 15% of 2015 levels and NH3 emissions by 13% of 2005 levels by 2030 (Hawley., 2022). This law includes measures to reduce the use of mineral N fertilisers.

        The United Kingdom

        In the UK, there are N relevant targets at both UK-wide and devolved levels. Nitrate vulnerable zones (NVZ), designated as part of the Nitrates Directive (1991), aim to reduce nitrate water pollution by encouraging good farming practice. Areas where the concentration of nitrate in water exceed 50 mg/l in ground and/or surface waters have been designated as NVZs. There are at least 70 NVZs in England and Wales, covering 55% of agricultural land in England and 2.3% of Wales. Five areas of Scotland (Lower Nithsdale, Lothian and Borders, Strathmore and Fife (including Finavon), Moray, Aberdeenshire / Banff and Buchan, and Stranraer Lowlands) have been designated as NVZs.

        The National Emissions Ceilings Regulations (NECR) (2018) commits the UK to reduce NH3 of 8% by 2020 and 16% by 2030, both relative to 2005 levels. The 2020 target was not met, but there has been a 12% reduction since 2005[2]. The NECR also contains reduction targets for nitrogen oxides (NOx), of 55% by 2020 (which was met) and 73% by 2030 but agriculture is a less important source.

        Wales have set a target of reducing its total agriculture specific GHG emissions by 28% by 2030 compared to 1990. There are currently no UK-wide agriculture specific GHG emissions reduction targets, however, there is a UK-wide target of net zero by 2050, and agriculture will play an important role in achieving this target. For example, Defra has implemented new regulations on the use of urea fertilisers from 2023, which means that only urease-inhibitor treated or protected urea fertilisers may be used throughout the year, while untreated/unprotected urea fertilisers may only to be used from 15th January to 31st March each year. This regulation is expected to deliver an 11kt reduction in ammonia emissions by 2024/2025.

        Why set a NUE target in Scotland?

        It is important to consider the size and balance of the different Scottish agricultural sectors to understand the NUE potential of each sector. This section provides detail on the different forms of N found in Scottish agriculture, their impact on flows of N and how they can be targeted to improve NUE. A list of mitigation measures to improve NUE can be found in Appendix E and the impacts of these measures on NUE in Scotland are discussed in section 6.2.

        The most recent Scottish GHG Statistics (2021) states that 2MtCO2e of N2O was emitted from the agricultural sector, which is a quarter of Scotland’s agriculture sector’s total GHG emissions and 2/3rds of total N2O emissions. N2O is emitted from soils after the application of N-fertilisers and manures (Brown, 2021). In addition, 90% of Scotland’s total NH3 emissions are attributed to the agricultural sector. Tackling the emissions of these pollutants will directly contribute to the following Scottish Government policies and ambitions:

        Understanding N flows in Scotland

        In recognition of the potential for reducing N to reduce total GHG emissions, the Climate Change (Emissions Reduction Targets) (Scotland) Act 2019 set requirements for Scottish Ministers to create a Scottish Nitrogen Balance Sheet (SNBS) from 2022 (Figure 3). The N flows in the SNBS combine data across all sectors of the economy and environment forming an evidence base to support the optimal use of N across all economic sectors to achieve optimal economic and environmental outcomes. While the SNBS was published in 2022, the data within it relates to 2019. Scotland is currently the only country to have planned to regularly update a cross-economy and cross-environment N balance sheet.

        Figure 3. Scottish Nitrogen Balance Sheet (baseline data (mainly 2019)). Source: 3. Results from the initial version of the Scottish Nitrogen Balance Sheet – Establishing a Scottish Nitrogen Balance Sheet – gov.scot (www.gov.scot)

        The annual SNBS report to the Scottish Parliament presents an assessment of:

        • progress towards implementing proposals and policies relevant to improving NUE in Scotland,
        • any future opportunities for improving NUE in Scotland, and
        • how NUE is expected to contribute to the achievement of future emissions reduction targets (as per section 98 of the Climate Change (Emissions Reduction Targets) (Scotland) Act 2019)

        In 2022, the SNBS report published NUE values for agriculture as a whole sector (27%) with more granular figures of 65% for crop production NUE and 10% for livestock feed conversion. This valuable baseline shows NUE’s potential for improvement which can reduce emissions from all forms of N to support improvements in air and water quality with positive implications to both human (Pozzer et al., 2017) and biodiversity health (Houlton et al., 2019). While the SNBS is a valuable baseline for improving N management it is important to note the specificities of its set-up particularly on how different quantities of N are attributed to different sectors and how this relates to what happens in practice (more detail on this can be found in Section 6.5).

        Research has found that the global arable NUE is 35%. When we do not consider all the variables which impact NUE and NUE target setting, as discussed in sections 3.2 and 4.2, the Scottish arable NUE of 65% appears to compare well to international data, however, some EU countries have arable NUEs of up to 77%, showing there may be room for improvement. The 2022 SNBS report states total N losses from agriculture to the environment amount to 30.2 kt N/yr as air pollutants (NH3, nitrogen dioxide (NO2) and N2O) and 104 kt N/yr from runoff and leaching from agricultural soils.

        Targeting different forms of N

        Figure 4 Scottish agricultural sectors (Scottish Agricultural Census June 2021)

        The different N inputs and outputs of Scottish agriculture are described below (also see Figure 3). Most of Scotland’s 5.64 million ha of agricultural area is best suited to livestock farming with a significant proportion occupied by cattle and sheep in Less Favoured Areas (LFAs) (55% or 3,159,137 ha) followed by crops and grass (1,885,701 ha), shown in Figure 4. Non-LFA cattle and sheep (107,712 ha) and specialist dairy (106,935 ha) are large sources of N in manure. More intensive sectors such as pigs and poultry do not have a direct correlation between NUE and land area, however they are significant sources of manures and contribute to N inputs. These areas are used to track N flows from the SNBS against sectors of particular potential in section 4.4.2. Note that forestry and aquaculture are out of scope of this project but will have impacts on Scottish N flows.

        NUE varies between different Scottish farm types as the biological utilisation of N influences the potential NUE. The SNBS shows that livestock farms currently have a lower NUE (10%) than arable farms (65%). This is partly due to the relative inefficiency in the conversion of ingested N in feed converting to stable N within livestock products (milk and meat).

        N Inputs

        Fertiliser as the N input

        The SNBS details that one of the largest flows of N in Scotland (143.8 kt N/y) is the use of inorganic fertiliser on arable crops and grass, with 62.1kt of this inorganic N applied to crops per year and 81.7kt going to grass [4]. The British Survey of Fertiliser practice states that in 2022, 63 kg N/ha were applied on average to all crops and grass in Scotland.

        There is little information on N use in Scottish horticulture and permanent crops. Nonetheless, N fertiliser recommendations for vegetables, minority arable crops, bulbs, soft fruit and rhubarb crops exist. The high value of many of these crops and the technological advances taking place in this sector facilitate a higher degree of precision in management (e.g., GPS use for N application, leaf N monitoring, fertiliser application within irrigation water etc), which allows a better understanding of N flows in these systems. Targeted N applications could lead to reductions in inputs and waste thereby improving overall NUE for these crops. However, to date there are no recommended NUE levels for these specialist crops, thus more research is needed to understand the impact of reduced N applications on crop health and yield.

        The evidence relating to the N requirements for the majority of crop and grass areas in Scotland is well described within the technical notes, and recommendations for NUE targets could build upon the evidence supporting these recommendations. Like specialist crops, improvements in fertiliser practices and technology can support improvements in N applications which will help matching of N inputs to crop requirements with greater precision and thus improves NUE.

        Livestock Feed intake as the N input

        The optimum levels for dietary crude protein are often exceeded to ensure that N intake does not limit either growth or welfare. This excess of N supply in the diet results in surplus N being excreted through manure and urine leading to N losses. Cattle cannot efficiently convert dietary N (efficiency ranging between 22-33%) and therefore, on average, 75% of consumed N is wasted, mainly through excretion. Matching N supply in feed with livestock requirements is part of ‘precision livestock feeding’ which can increase farm profitability, reduce emission intensity of methane (Rooke et al., 2016) and reduce N intake and excretion. Reductions to NH3 and N2O emissions from livestock sources due to precision feeding vary widely. However, studies have found that a reduction in crude protein of 2% leads to a 24% reduction in NH3 emissions in broilers, and a 1% crude protein reduction in pig feed results in a 10% reduction in NH3 emissions (Santonja, 2017).

        The SNBS found one of the largest N flows is N excreted by livestock (142.9 kt N/y). The control of N levels added to soil from livestock directly impacts the input part of the livestock NUE calculation. A NUE target aimed at the livestock sector may be most impactful as it currently has the lowest NUE (10%) whilst also covering the largest amount of agricultural land (combined total of 3.3 million ha) meaning even a small, targeted improvement in NUE for livestock could have a significant impact on the overall N budget.

        N Outputs

        Ammonia as the output

        NH3 from agricultural sources produces particulate matter which can impact human health, causing diseases such as cardiovascular and respiratory disease. In addition, NH3 emissions can result in the long-range transport of N compounds and this N deposition can cause acidification and eutrophication. Scottish agriculture accounts for 90% of total NH3 emissions, which have decreased by 12% over the last 30 years. NH3 is tied specifically to the (housed) livestock sector, with most emissions (35% of NH3 emissions) coming from cattle manure management. Livestock housing and storage of manure is responsible for 10.5kt N/y in the form of NH3 emissions, therefore improvements targeted at this sector would directly improve NUE. Examples of mitigation measures which can be introduced to lower the NH3 emissions in this sector are detailed in Table 3 under section 6.2.1 and include slurry store covers and slurry acidification.

        Use of urea based inorganic fertilisers can lead to significant losses of NH3. High temperatures and winds at the time of fertiliser application or very dry conditions can lead to high levels of NH3 volatilisation (the conversion of NH4+ to NH3 gas) with a significant proportion of the N being lost and unavailable to the plants. A useful mitigation measure is the use of urease inhibitors with urea fertilisers to reduce these emissions.

        Nitrate leaching as the output

        Excessive leaching of N from agricultural activity can lead to water pollution and eutrophication which can then result in the loss of aquatic biodiversity and GHG emissions. The SNBS shows N run-off and leaching from crops and arable land as 45.5 kt N/yr and from grass as 58.5 kt N/yr. This N is lost as NO3–, which is readily mobile in soil water or runoff. Any N that is lost from the soil is no longer available to plants thereby lowering the potential NUE and increasing agricultural pollution.

        According to Adaptation Scotland, Scotland is predicted to experience an increase in rainfall, with intense, heavy rainfall events increasing in both winter and summer. This has the potential to increase N leaching as soil moisture controls both crop N uptake and N leaching (McKay Fletcher et al., 2022). In addition, Scotland’s topography affects the rate of run-off as steep slopes promote surface run-off. When considering Scotland’s topography and the predicted change in rainfall, the potential for leaching will increase and continue to negatively affect water quality. Those areas currently most at risk are classified as NVZs.

        Nitrous oxide emissions as the output

        N2O is a GHG that accumulates in the atmosphere and directly contributes to climate change. The SNBS shows 5.9kt N2O per year is emitted from the agriculture sector. This includes 0.9kt from livestock (including manure management), 3.8kt from soil management (including mineral fertiliser use), and 1.2kt of indirect emissions (from N deposition and NO3– leaching). N2O is produced in the process of denitrification, where denitrifying bacteria under conditions where oxygen is limited (for example waterlogged soils) use the NO3– available in soil. By using the NO3–in soil, these bacteria reduce the NO3– available by plants potentially negatively impacting yield. In conditions where NO3– is available in excess denitrification can reduce NO3– losses through leaching. However, since N2O is produced in the process, negative impacts on climate are the result. Total elimination of N2O emissions from agriculture is not possible; however, some mitigation is possible through improvements in soil conditions and avoidance of N fertiliser application under wet conditions (Munch and Velthof, 2007).

        Crop and livestock outputs

        Crop and livestock products are the useful outputs of N from agriculture. In Scotland these account for 54.5kt N per year. This value includes livestock products, including meat, milk, eggs, and wool, and harvested crops used for food for human consumption (but excludes crops for animal feed or fodder). Useful crop outputs also include seed, feed and straw, but these are retained in the agricultural system and so are not final outputs.

        Cereals, explicitly for alcohol production, accounts for the largest useful output flow in Scotland at 20.5kt N, followed by livestock products at 19.6kt N and crop product for human consumption at 12.2kt N (all values per year).

        Optimising the quantity of N recovered in these outputs i.e. the N is taken up by the plant or animal and used to increase growth, relative to the quantity of inputs (feed and fertiliser) is key to reducing N waste and improving NUE. Managing the quantity of N application to meet crop and livestock requirements alongside the soil conditions will improve the overall NUE.

        Viability of a SMART Target for NUE in Scotland

        This section looks at the viability of setting a NUE target for Scotland and provides a summary of the risks and benefits of setting a Specific, Measurable, Achievable, Relevant, and Time-Bound (SMART) NUE target in Scotland and presents how a range of influences can support or hinder the achievement of a NUE target. Information on N targets in other countries was considered and analysed for their applicability to Scotland. Since no other country has a standalone NUE target, we had to rely on information on other N targets for our analysis and transfer these finding to a NUE target for Scotland. The methodology can be found in Appendix F.

        Analysis Tools

        SWOT analysis

        Strengths, weaknesses, opportunities, and threats (SWOT) of setting N-related targets were analysed based on the information gathered on N targets in other countries. We also included analysis of GHG and climate related targets where relevant to increase the body of information. This information was then used to assess applicability of setting a NUE target for Scottish agriculture with the limitation that the analysis was based on N, GHG and climate related, rather than NUE specific targets. The SWOT analysis shows a range of influences which can support or hinder the achievement of a NUE target. The full SWOT analysis can be found in Appendix F.

        PESTLE analysis

        Setting NUE and other N targets are subject to a range of enablers and barriers. Therefore, a political, economic, social, technical, legal, and environmental (PESTLE) analysis was undertaken to assess the feasibility of setting a NUE target for Scottish agriculture, again, with the limitation that the analysis was based on N, GHG and climate related rather than NUE specific targets. The PESTLE assessment took place following the SWOT analysis to ensure the findings from the SWOT were assessed and, if relevant, included into the PESTLE categories. The full PESTLE analysis can be found in Appendix F.

        Discussion

        Supporting a SMART NUE target

        The SNBS is reviewed and updated annually and provides a source of data for measuring and monitoring the changes in NUE and thus the progression of a NUE target. In addition, all mitigation measures identified in section 6.2 and analysed for their effect on Scottish agriculture NUE are captured by the SNBS. The use of the SNBS enables a measurable target. This was identified as a strength and technical enabler in the analysis of setting a NUE target.

        Another strength and technical enabler identified through the analysis includes the mitigation measures required to achieve a NUE target. N-related mitigation measures are well understood, and many are relatively low cost and already practiced in Scottish agriculture (e.g., use of catch and cover crops) which makes reduction in N losses achievable. Furthermore, measures continue to be developed through additional research e.g. in Canada to understand the emission reduction potential, costs and benefits of different measures at farm level.

        Section 6.4 recommends years 2030, 2040 and 2045 as deadlines which would ensure a NUE target is time-bound. These years align with other emission targets set in Scottish Government which may affect agriculture and therefore complement a new, potential NUE target. Including three timed steps into a binding target would also help measure the progression of the NUE target whilst also encouraging the delivery of high reductions.

        A NUE target would be relevant in meeting statutory emission reduction targets. Introducing a NUE target would lower N-related emissions and would therefore contribute to other emissions reduction targets, for example the CCPu which aims to reduce agricultural GHG emissions by 31% from 2019 levels by 2032. Similarly, a NUE target would be relevant to several other environmental issues as the implementation and success of a NUE target would have multiple benefits for example, improvements to water quality, air quality (Sutton et al., 2014), human health and biodiversity (Houlton et al., 2019).

        The SWOT and PESTLE analysis identified influences needed to support a specific and achievable NUE target by detailing opportunities which could assist with the implementation of such a target. Regulatory instruments include BAT/mitigation measures and fertiliser use limits, economic instruments include taxes and subsidies, and communicative instruments include extension services and awareness (Oenema et al., 2011).

        Other positive influences include an increase in farm profitability following the implementation of mitigation measures such as precision livestock feeding and matching N supply to demand) which was found as a strength and economic enabler through the analysis. Moreover, through the introduction of a NUE target, there would be an opportunity to involve advisors and consultants which may also lead to the implementation of better advice and practice regarding N use in Scottish agriculture.

        Hindering a SMART NUE target

        All analysis was based on N targets rather than NUE targets due to the lack of any NUE specific targets in other countries. Therefore, clear evidence on NUE targets is lacking and the analysis of a NUE target for Scotland is based on assumptions through transferring information from N-related targets to NUE.

        To achieve any potential NUE targets a range of new techniques, technologies and systems would be required. These are referred to as mitigation measures. There is already a good body of evidence and supporting examples of the implementation of mitigations. These have been identified as a strength and enabler as some examples such as variable rate N application (precision farming) can save farmers money on inputs by only purchasing and applying N as needed. Others, however, require significant capital expenditure with upfront investment of time and money required to implement some of the mitigation measures (for example, low emission slurry application equipment). This has also been identified as a weakness and economic barrier which may be experienced by Scottish farmers. This could directly impact upon the achievability of a NUE target. Similarly, several barriers to uptake of mitigation measures were identified as a threat through the SWOT analysis. Barriers include lack of awareness and knowledge of why and how to improve N use, and farmer’s personal beliefs, both of which may lead to Scottish farm managers finding it difficult to quantify the benefits to their business and understand the relevance of a NUE target. These barriers would generally hinder the achievability of a NUE target.

        In trying to make a NUE target relevant in terms of meeting statutory emission reduction targets, there is a risk when reducing N-related emissions, through mitigation measures, that pollution-swapping takes place. An example of this is the decrease in NH3 emissions and an increase in N2O emissions (due to nitrification/denitrification processes) when using slurry injection (a type of low emission slurry application) compared to surface application. Pollution-swapping as an unintended consequence of some mitigation measures was identified as a threat and environmental barrier in introducing a NUE target.

        Farmers’ perception of a national NUE target for Scotland may limit target achievability. Scottish farmers may not understand how their practices impact NUE and how introducing on-farm mitigation measures may impact on a general NUE target for Scottish agriculture. For example, questions may arise on how many and at what frequency the relevant mitigation measures need to be introduced by each farmer to achieve this overarching target. To overcome this, some farmers may respond more positively to several more specific targets, for example a reduction of fertiliser input (by a certain amount and by a certain date). Alternatively, ensuring a NUE target is accompanied with very specific and relevant action points on how this NUE target would be achieved so that farmers have a clear understanding on what is expected of them and their farming system to contribute to a national NUE target.

        The time taken to create and process the appropriate legislation for a NUE target can be uncertain and longwinded. This process has the potential to directly impact the time-bound element of a SMART NUE target.

        In the Netherlands, an ambitious target led to civil unrest where more than 10,000 Dutch farmers have been protesting following government plans to reduce N emissions. Similarly, when targets or limits are seen to be a barrier to economic performance, implementation of new regulation can become challenging, as is seen in the case of revising the approach towards Nutrient Neutrality in England. The use of a SMART target is therefore critical to avoid the implementation of a policy which is neither appropriate nor achievable.

        In the main, these examples relate to current exceedances of regulations under the Habitats or Nitrates directives, follow a long period of previous actions and constraints on the farming sector and relate to farming systems which are very different to those present within Scotland. In addition, these regulations are not focused on NUE but rather on the achievement of environmental targets and so do not consider the productive potential of the sector. Notwithstanding these differences, these risks do indicate the importance of well formulated targets, based on sound scientific understanding and with a clear plan for consultation and implementation on their achievement and delivery.

        The political and legal barriers identified include the potential for pushback on mitigation measures which are seen to reduce productive output and a concern that Scottish farmers may not comply with regulatory requirements. This could directly impact upon the achievability of a NUE target.

        Development of a NUE target for Scotland

        Assessment using the Scottish Nitrogen Balance Sheet

        The SNBS has been used as a baseline to assess how practices that influence N pools or flows may impact the agricultural NUE value. This dataset contains values for key sectors, pools (stores of N within parts of the N cycle e.g. in manure, in soils or in livestock/crops), and flows of N (movement of N into different pools as the N form changes or is taken up by plant or animals). These flows include inputs to the system (e.g. fertilisers, animal feed), useful outputs (e.g. meat, cereals), and waste (e.g. NO3– leaching, NH3 emissions). Each of these flows have a value in kt N/yr assigned. The NUE is improved by either increasing the output flow values or reducing input and waste flow values. This can be modelled by estimating the impact of a mitigation measure (e.g. improved nutrient planning or reduced protein livestock feed) and applying these values to the relevant N flow in the SNBS (for improved nutrient planning this would be reduced inputs of fertiliser and reduced N emissions to atmosphere). This produces estimates for N flows that can then be summarised in NUE calculations as currently setup in the SNBS, resulting in estimates of improved NUE values (see Appendix E for a detailed methodology and all assumptions).

        Mitigation measures

        The effect of mitigation measures on Scottish agriculture’s NUE

        This section presents and discusses the effects of 18 different mitigation measures on the current NUE of Scottish agriculture.

        The table below presents modelled estimates for the NUE of Scottish agriculture, by individual measure and at each future projected target year. The values reflect implementing the relevant measure individually and compared to the current whole-agriculture NUE of 27.2% (i.e. preventing soil compaction may improve total NUE by 0.1% by 2030). The results show the impact for the relevant measure in isolation and do not reflect any combination effects for interactions with other measures. Further detail on the assumptions and methodology can be found in Appendix E. The 2030, 2040 and 2045 scenarios are based on minimal change, continuing recent trends of recent changes in uptake, but including greater increases where there is precedent to, e.g. low emissions spreading techniques all increasing to 95% by 2030 as this will be required under the New General Binding Rules on Silage and Slurry. However, the 2045 Ambitious scenario is based on a transformational change across the sector where there is greater effort to improve NUE to meet a legally binding target. Therefore, the improved NUE in the 2045 and 2045 (Ambitious) scenarios may be viewed as the range where a target may be set, where the lower bound of the range (2045 scenario) is more achievable, while the higher bound (2045 (Ambitious) scenario) would require more effort across stakeholders to be achieved but is a better value.

        Table 3 List of mitigation measures and their effect on Scottish agriculture NUE (%) compared to the current whole agriculture NUE of 27.2%. The two 2045 scenarios can be viewed as an ideal range for NUE; where the lower bound (2045 scenario) reflects changes to agriculture planned to come in (current and upcoming legislation, expert judgement on technological developments etc.); while the upper bound (2045 ambitious scenario) reflects the possibility for a greater push from industry and government to improve NUE (financial incentives, increased awareness of N management, etc.).

        Measure

        2030

        2040

        2045

        2045 (Ambitious)

        Avoid excess N

        31.23% (-3.02%)

        31.90% (-3.48%)

        31.90% (-3.48%)

        33/41% (-5.59%)

        VRNT

        27.66% (-0.43%)

        27.96% (-0.72%)

        28.41% (-1.16%)

        30.40% (-3.02%)

        Urease Inhibitors

        27.57% (-0.35%)

        28.08% (-0.86%)

        28.35% (-1.12%)

        28.70% (-1.47%)

        Improving nutrition

        27.26% (-0.03%)

        27.30% (-0.07%)

        28.27% (-1.04%)

        28.26% (-1.03%)

        Novel crops

        27.44% (-0.22%)

        27.52% (-0.29%)

        27.77% (-0.55%)

        27.81% (-0.58%)

        Low emission spreading

        27.62% (-0.39%)

        27.62% (-0.39%)

        27.62% (-0.39%)

        27.62% (-0.39%)

        Rapid incorporation

        27.26% (-0.09%)

        27.31% (-0.09%)

        27.34% (-0.11%)

        27.47% (-0.24%)

        Low emission housing

        27.24% (-0.02%)

        27.27% (-0.04%)

        27.28% (-0.06%)

        27.43% (-0.20%)

        Improving livestock health

        27.64% (-0.42%)

        28.02% (-0.80%)

        27.32% (-0.09%)

        27.43% (-0.20%)

        Slurry cover

        27.25% (-0.02%)

        27.28% (-0.05%)

        27.03% (-0.07%)

        27.33% (-0.10%)

        Optimal soil pH

        27.25% (-0.02%)

        27.29% (-0.06%)

        27.30% (-0.07%)

        27.30% (-0.07%)

        Nitrification inhibitor

        27.23% (-0.01%)

        27.24% (-0.02%)

        27.25% (-0.02%)

        27.25% (-0.03%)

        Improving GI + genomic tools

        27.23% (0.00%)

        27.23% (-0.01%)

        27.23% (-0.01%)

        27.25% (-0.03%)

        Slurry acidification

        27.23% (0.00%)

        27.24% (-0.01%)

        27.24% (-0.01%)

        27.25% (-0.02%)

        Preventing soil compaction

        27.23% (-0.01%)

        27.24% (-0.01%)

        27.24% (-0.02%)

        27.24% (-0.02%)

        Use of catch and cover crops

        27.27% (-0.05%)

        27.34% (-0.11%)

        27.37% (-0.15%)

        27.38% (-0.18%)

        Legume-grass mixtures

        –

        –

        –

        –

        Grain legumes in crop rotations

        –

        –

        –

        –

        There are potential interactions/overlaps between several of these measures. Where this occurs, measures cannot be applied on the same unit (area of land/head of livestock) at the same time as they are mutually exclusive. We have avoided double counting these effects by resolving the total maximum applicability across overlapping measures i.e. the combination of measures cannot exceed the total land available to apply the measure to.

        The key outcomes are:

        • The measures with the greatest potential improvement on NUE are nitrification inhibitors, improving livestock nutrition, and improving livestock health.
        • Nitrification inhibitors are more effective at improving NUE than urease inhibitors as they can be applied to a greater proportion of fertiliser products used in Scotland (both NO3– and urea-based products, while urease inhibitor can only be applied to urea-based products).
        • Improving livestock nutrition will improve NUE by reducing the overall quantity of N being fed to livestock while maintaining liveweight yield.

        Measures that are based on the use of legume crops were not included in the modelling of the new NUE values, as the reduced requirement for inorganic fertiliser input will be offset by increased biological fixation of N from the atmosphere. Both flows are included in the N input values when calculating NUE in the SNBS. Therefore, the total N inputs levels will stay constant, as will the outputs, and so there is no impact on NUE. However, there are benefits of legume crops beyond an improvement to NUE, which should be considered, namely the effects of reduced requirement for inorganic fertiliser inputs (lower GHG emissions), improved soil health and soil function, and reduced costs. This is likely to be economically beneficial to the farmer, as soil health benefits the local ecosystem and improves resilience, reduced fertiliser use avoids emissions from manufacture and transportation of inorganic fertiliser; all of which are benefits from moving to a circular economy.

        Potential N savings through implementation

        The table below summarises the potential savings of N inputs of mineral fertiliser in both absolute values in kt N yr-1, and relative to the quantity in the current SNBS as a %. The values presented here include fertiliser use savings due to legume-based measures (legume-grass mixtures, and legumes in crop rotations). The effect of these measures is not included in calculations of NUE due to the assumption that the saved fertiliser N application will be replaced by increased N deposition from the atmosphere.

        Table 4 Absolute values of N inputs of mineral fertiliser saved in kt N per year and as % of the quantity in the current SNBS when all modelled measures are included. The two 2045 scenarios can be viewed as an ideal range for NUE; where the lower bound (2045 scenario) reflects changes to agriculture planned to come in (current and upcoming legislation, expert judgement on technological developments etc.); while the upper bound (2045 ambitious scenario) reflects the possibility for a greater push from industry and government to improve NUE (financial incentives, increased awareness of N management, etc.).

        Year

        2021 (kt N yr-1)

        Savings (kt N yr-1)

        Savings (%)

        Savings (kt CO2e yr-1)

        2030

        143.78

        36.36

        25.29

        160.09

        2040

        143.78

        44.16

        32.12

        213.41

        2045

        143.78

        53.14

        37.96

        248.56

        2045 (Ambitious)

        143.78

        78.22

        -54.40

        361.15

        Recommended criteria for target(s) setting for Scotland

        When modelling the NUE improvements and the establishment of potential targets, the key criteria for consideration are listed below.

        Mitigation measures

        The measures/farming practices that have been included for modelling are the result of literature searches and expert judgement. Measures that impact N flows in agricultural systems, and the relevant data, were extracted from literature. These were then reviewed to ensure applicability to Scotland, and any other measures that were identified by experts as being important were also researched.

        Current uptake

        The current uptake provides a basis from which to estimate what future uptake may be possible and the likely rate of additional implementation. It also supports the calculation of a baseline or counterfactual against which change can be measured. These values come from the same sources which have provided the NUE impact values (see Appendix E for detail on current uptake for each measure).

        Applicability

        The applicability values refer to the portion of a SNBS N flow that a measure’s impact value can apply to. Expected future uptake

        The expected future uptake values are estimates based on expert judgment and consultation within the project team. The values for each measure can be found in Appendix E and are additional to the current uptake levels. These values increase over time to reflect increasing commitment to NUE improvements. The two 2045 scenarios can be viewed as an ideal range for NUE; where the lower bound (2045 scenario) reflects changes to agriculture planned to come in (current and upcoming legislation, expert judgement on technological developments etc.); while the upper bound (2045 ambitious scenario) reflects the possibility for a greater push from industry and government to improve NUE (financial incentives, increased awareness of N management, etc.). The expected future uptake ranges from 1% to 100% depending on the measure and scenario. For example, soil compaction was only expected to increase by 2% even in the 2045 (Ambitious) scenario as it was assumed that where soil compaction is occurring most farmers will already be taking steps to improve it. While low emission spreading techniques increased to 95% by 2030 to reflect the New General Binding Rules on Silage and Slurry. A full example is provided in Appendix G.

        Timescales

        We modelled potential NUE targets for Scottish agriculture for 2030, 2040, and 2045. These were chosen to align with Scotland’s Climate Change Act 2019 with a target date of 2045 for reaching net zero GHG emissions.

        One NUE target for Scottish agriculture or per sector?

        Currently, the arable sector is more N efficient than the livestock sector (65% and 10% respectively). This difference is due to inherent qualities of livestock systems with animals unable to process N as protein as efficiently as plants uptake N. The current NUE should, however, be seen as a baseline, and the scale of improvements from this should be the focus rather than an absolute target applicable to all sectors and systems. The majority of measures included in the modelling of NUE improvements target the soil N pools (arable and grass land), therefore separate targets for each sector are advisable.

        Analysis of recommendations

        The table below presents the estimated NUE values in 2030, 2040, and 2045 based on increased uptake of on-farm measures. As well as an additional value for the year 2045 where increased ambition has been included in the projected uptake values.

        Table 5. Potentially achievable NUE estimates in 2030, 2040 and 2054 based on increased uptake of on-farm measures. The two 2045 scenarios can be viewed as an ideal range for NUE; where the lower bound (2045 scenario) reflects changes to agriculture planned to come in (current and upcoming legislation, expert judgement on technological developments etc.); while the upper bound (2045 ambitious scenario) reflects the possibility for a greater push from industry and government to improve NUE (financial incentives, increased awareness of N management, etc.).

         

        Potentially achievable NUE estimates (%)

        2021 (Current)

        2030

        2040

        2045

        2045 (Ambitious)

        Whole agriculture

        27.2

        33.7

        35.7

        38.2

        40.9

        The NUE values that are modelled in this study are based on the selected measures, and the achievement of these NUE targets rely on their implementation. Other agricultural practices may impact N flows, as will changes in the size of agricultural sectors.

        Similarly, the NUE values that have been calculated are based on the levels of implementation that have been included in the modelling. Achieving these targets in practice will require supporting instruments to encourage the uptake of these measures. As stated in Section 6.2.1, the NUE values in the above table for 2030 and 2040 reflect assumptions on uptake based on minimal change and not a transformational change to the sector (such as the setting of a target). Therefore, these values should not be viewed as potential targets for these years, but as indicators of the feasibility of improvements to NUE in Scottish agriculture.

        Sector specific NUE values are not currently feasible due to the calculation set-up in the current SNBS (which flows are considered as inputs/outputs for arable and livestock), and the assumption made in the modelling that production will not increase and only inputs will decrease. This set-up leads to results that make it seem that the arable sector is mining N, which is not the case. Improvements to the set-up of calculations to overcome this barrier are outlined in Section 6.5 below.

        Guidance for future implementation

        In the current version of the SNBS, the NUE calculations do not align directly with what happens in practice in the different agricultural sectors because there are overlaps and movements of N flows between the different agricultural sectors that are not easily viewed in isolation. For example, in practice, improvements to NUE due to implementation of manure management measures will largely be implemented by the livestock sector. However, given the current set-up of the calculations in the SNBS, N flows related to manure management may not be attributed to the livestock sector NUE values as they will reduce emissions from spreading of organic matter to soils, which would be reported in the arable sector calculation. This would make it more difficult to use the SNBS to set and measure sectoral targets. Therefore, accurately monitoring the changes in NUE and attributing these changes to the correct sector would be important if considering sectoral targets. Accurately representing N flows in the SNBS to the relevant sector may be difficult, due to, for example, data availability, different ways data is collected across mitigation measures and sectors and difficulties in correctly separating overlaps and movements of N flows between the different agricultural sectors, however, could significantly help the feasibility of achieving and monitoring NUE targets.

        When reflecting the potential impacts of mitigation measures on the values in the SNBS, certain hurdles resulting from the disaggregation of flows make it more difficult and possibly less accurate. More details of these hurdles, and how they were overcome, can be found in Appendix E, but a key example here is the use of slurry acidification on livestock slurry. In the SNBS there is one flow of N from manure management to atmosphere which includes all manure storage types and all livestock types. However, the implementation potential and mitigation impact potential will vary between storage and livestock types. This required an assumption to be made on the breakdown of this manure management N flow so that the appropriate uptake levels and impact values can be applied to the correct portion of the total N value (in this instance the Scottish Agricultural Census was used). This can be considered a sound approach to reflect the mitigation measures in the current SNBS, however going forward, to improve the ease and accuracy with which targets can be projected and improvements can be measured, a more granular breakdown on the N flows in the agricultural sector in the SNBS are required.

        Conclusions

        A NUE target for Scotland

        The rationale behind setting a NUE target for Scotland is to reduce the impacts of N wastages to the environment to lower GHG emissions and improve water and air quality. NUE values can be used as indicators for N resource use efficiency and as markers for improvement. Scotland is in the unique position to use and regularly update a cross-economy and cross-environment N Balance Sheet (SNBS). The SNBS provides a valuable baseline in the current performance of Scottish agriculture and provides a tool to tackle all forms of N pollution.

        However, setting a NUE target is not without challenges and nowhere in the world has yet set a NUE target. NUE values are impacted by various factors (soil type, climate, crop type, livestock type, etc). Whilst research shows that the ideal range for NUE is between 50-90%, it is crucial to understand the different forms of N inputs and outputs and to allocate these correctly to the different farming sectors.

        As no other country has yet set a standalone NUE target, we had to solely rely on other N-related targets for our evidence base. Our analysis of the viability of setting a NUE target for Scotland is therefore based on assumptions through transferring information from N-related targets to NUE.

        The SWOT and PESTLE analysis carried out in this study highlighted several factors which can influence the success of a SMART NUE target for Scottish agriculture. Importantly, the use of the SNBS would make the target measurable and the fact that many N-related mitigation measures are well understood and already practiced in Scottish agriculture would make the target achievable. However, some mitigation measures require significant capital expenditure, such as slurry management equipment, or increased ongoing investment, such as nitrification inhibitors, or a change in focus, such as better-balanced protein in livestock feed. These changes would need support from the farming sector. Using NVZ regulations as an example, a small study conducted in 2016 (Macgregor and Warren 2016) showed that some farmers regarded the NVZ regulations as “burdensome and costly”. To avoid similar responses to setting NUE targets, farmers would need to be able to quantify the benefits to their business and understand the relevance of a NUE target for climate and the environment. It is therefore important to accompany NUE targets with specific actions points expected by farming businesses. Providing funding to farmers to help implement mitigation measures and share knowledge on the impact to their businesses, the climate, water quality, air quality and biodiversity is likely to aid faster and easier uptake of these measures.

        Looking at initiatives worldwide, we know that N use can be targeted in many different forms (fertiliser use, livestock diet, reduction of N waste, reduction of emission of air pollutants, etc.) and alongside the proven mitigation measures discussed above, it is clear that improvements to NUE are achievable.

        Modelling NUE improvements using the SNBS

        In this study, the SNBS has been used to model NUE improvements by estimating the impact of a mitigation measure and applying these values to the relevant N flow in the SNBS. It is important to note that these results show the impact for the relevant measure in isolation so do not reflect any combination effects for interactions with other measures. In the arable sector, the mitigation measures with the greatest potential to improve NUE are the use of variable rate N application (precision farming) and the use of nitrification inhibitors potentially increasing NUE to 28.8% and 29.7%, respectively, by 2045. In the livestock sector, improving nutrition and improving livestock health (NUE of 31.7% and 29.4% respectively by 2045) have the greatest potential. Overall, the modelling suggests that total NUE of Scottish agriculture could be increased to 38.2-40.9% by 2045, depending on the level of implementation of mitigation measures.

        Sector specific NUE values are not presently feasible due to the calculation set-up in the SNBS and the assumptions that production will remain stable, with only inputs decreasing. In the current version of the SNBS, the NUE calculations do not align directly with what happens in practice in the different agricultural sectors because there are overlaps and movements of N flows between the different agricultural sectors that are not easily viewed in isolation and not necessarily attributed to the correct sector. For example, mitigation measures around manure management will, in practice, be mainly implemented by the livestock sector but will, in the current calculations, be attributed to the arable sector because they are linked to reduced emissions from spreading of organic matter to soils.

        The feasibility of a NUE target for Scotland

        This research indicates that a NUE target for Scotland is not currently feasible. We see potential for such a target in the future but recommend to first consider several points for improvement.

        • The SNBS. Improvements to the calculations and attributions of flows of N to the different measures and sectors are required. The modelling for this report depends on assumptions and figures from another CXC report (Eory, et al., 2023). We recommend updating this data with real on farm data to better inform assumptions that follow from it.
        • The sectors. Currently, the arable sector is more N efficient than the livestock sector (65% and 10% respectively). Sector specific targets would be helpful due to differences in current NUE, N inputs and N wastages but this is presently not possible due to the current limitations in the SNBS.
        • The mitigation measures. More data on the impacts of mitigation measures under Scottish conditions would increase the accuracy of modelling achievable aims. Since NUE values are both indicators of resource efficiency and markers for improvement, it is possible to focus on mitigation measures with the most potential to improve NUE values.
        • Farmers. It is highly important to ensure that targets and measures are clearly understandable and achievable for farmers to create support from the farming sector.

        A potential target figure?

        If a NUE target was set, this could be in line with the modelled potential NUE estimates of 38.2-40.9% by 2045, depending on mitigation measure implementation. To achieve greater improvement, a combined push from industry and government (financial incentives, increased awareness of N management, etc.) is required. This additional push is reflected in our ‘Ambitious scenario’.

        However, based on our research findings, the barriers identified to implementing an achievable and successful NUE target and the need for farmer and industry support to achieve changes in practices and expectations, we conclude that focusing on reducing N waste is likely to have more success than NUE targets as a policy option. Experience from the United Nations Environment Assembly’s discussions on N and the Green Deal’s Farm to Fork targets, has shown more success in including the reduction of N pollution in policy when focusing on N waste over NUE targets. NUE can instead be used as a technical tool to mark improvements, with the SNBS key to setting a baseline and providing a visualisation of the combined impacts of implemented mitigations measures over time. We therefore recommend setting a target for N waste.

        An alternative – a N waste target?

        Opportunities for setting a N waste reduction target include:

        • It is an easier concept to communicate to the farming community and other N producing sectors.
        • It gives the opportunity to value any N as a resource until it is lost as waste, creating options for greater collaboration between the arable, horticulture and livestock sectors. Any potential bias towards a sector will be avoided.
        • Each individual farmer and land manager would be encouraged to reduce N waste for the economic and environmentally beneficial outcomes. The positive messages around a N waste target would be likely to create support from the farming sector.
        • Achievements towards an N waste target would achieve reductions in national NUE thereby achieving the same objectives without the current issues around NUE targets.

        Following the Colombo Declaration of 50% reduction of N waste and the Green Deal target of reducing nutrient waste by 2030, a reduction of 50% of N waste in Scottish agriculture would align with other examples. However, we recommend further research to determine a realistic N waste target for Scotland.

        Research gaps for setting a N waste target

        In the SNBS, N flows would need to be properly assigned to N waste and N re-use. Legumes would need to be included in the SNBS because N waste is likely to be lower than N input. A SMART target analysis for N waste would be beneficial to set a challenging and realistic target. It would be helpful to closer investigate the relationship between N waste and NUE targets if a NUE target is the long-term aim.

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        Appendix / Appendices

        Appendix A: Nitrogen and its relevance to agriculture

        Leaching and the effects on eutrophication

        Leaching is the loss of N (as nitrate) as water drains through the soil moving nitrate away from the root zone. Both organic forms of N (such as slurry and manures) and inorganic fertilisers are liable to leaching. When nitrate is leached from soils, it can enter watercourses contributing to environmental problems such as eutrophication. Eutrophication is an accumulation of nutrients in watercourses causing excessive plant and algal growth resulting in reduced water quality and impacts upon fish, invertebrates and plant diversity. The extent of leaching is determined by factors such as soil type, crop cover, land management methods, geological characteristics and meteorological conditions prior to, during and following the application of the nutrients.

        How NH3 is emitted from agricultural sources

        Loss of ammonia which is a significant air pollutant impacting upon both human health and biodiversity (respiratory harms and nutrient enrichment of sensitive habitats) is common from agricultural systems. Ammonia is lost through volatilisation of ammonium (NH4+).

        How N2O is emitted from agricultural sources

        Nitrous oxide is emitted in the process of denitrification, a bacterial process in waterlogged soils that converts nitrate to nitrous oxide and N2 (for more explanation regarding the chemical processes involved please see Annex F). N2O is a potent greenhouse gas and forms a significant contribution to agriculture’s impact on climate warming.

        Appendix B: Chemical processes of Nitrogen

        Appendix C: Rapid evidence assessment methodology

        The Rapid Evidence Assessment (REA) methodology used for this project aligns with NERC methodology and comprised of the following steps.

        • Define the search strategy protocol, identify key search words or terms, define inclusion/exclusion criteria. A list of key words, terms and search strings were created and reviewed by the project steering group to direct the REA review to the most relevant sources.
        • Searching for evidence and recording findings. Literature was searched using Google Scholar, utilising our accounts with Science Direct and Research Gate to access restricted PDF’s where required. When searching through Government websites (to find policy initiatives and associated targets), the search engine Google was used. Searches were divided into academic literature and government websites (including farming press and industry). A unique search reference was assigned for each individual search, and the date, search string used, total number of results found, and the total number of relevant papers found were recorded. Examples of search strings include:
        • “Nitrogen” “target” “Europe”
        • NH3 target agriculture
        • Nitrate leaching target
        • Emission reduction target Denmark

        All results were recorded in an excel spreadsheet with information extracted on the following:

        • Country
        • Target
        • Target timeframe
        • Benefits and risks/challenges of proposed target
        • Mitigation measures (introduced, planned and proposed/suggested)

        A RAG (red, amber, green) rating was also assigned for each source, based on the following criteria:

        Description

        Rating

        Quality

        Peer reviewed journal, sound data sources and methodology

        Green

        Government funded research reports, sound data sources and methodology

        Green

        International Nitrogen Management System (INMS)

        Green

        Research funded by NGOs (e.g. AHDB), sound data sources and methodology

        Amber

        Work is unreliable because of unreliable data sources, or limited sources, or because the method is not robust

        Red

        Information from websites, blogs etc., of unknown quality

        Red

        Relevance

        Timeframe: within last 10 years

        Green

        Timeframe: within last 20 years

        Amber

        Timeframe: older than 20 years

        Red

        • Screening. Sources of evidence were then screened initially by title and then accepted papers were screened again using the summary or abstract. Literature was screened for information on the following inclusion criteria:
        • Nitrogen target (including but not limited to target for NUE or nitrogen emissions, or nitrogen fertiliser use, or nitrogen deposition)
        • Benefits and risks of introducing a target
        • Mitigation methods that improve NUE, or decrease nitrogen inputs
        • Extract and appraise the evidence. The screening provided an organised list of papers which enabled evidence to be extracted directly from the literature into the report. Literature extracted also guided the internal workshop and supported information included in the SWOT and PESTLE tables.

        How was the evidence found used. Evidence gathered from the REA was used to identify the different types of N targets used in other countries and provided a discussion following examples of the relevance of these targets to Scottish agriculture (section 4). The evidence was also used to identify the benefits and risks of setting a NUE target for Scotland and assisted the SWOT and PESTLE analysis (section 5) and to inform criteria and underpin recommendations for setting an appropriate target/s for Scotland.

        Appendix D: Country-specific changes (%) in NUE values from 1961 to 2014

        Table 6: Country-specific changes (%) in NUE values from 1961 to 2014 (Our World in Data)

        Country or region

        Year

        Relative change (%)

        1961 (%)

        2014 (%)

        Denmark

        39.68

        74.29

        87

        Finland

        34.51

        57.08

        65

        France

        37.89

        73.87

        95

        Germany

        37.71

        62.62

        97

        Greece

        65.22

        50.25

        11

        Hungary

        45.26

        92.95

        105

        Iceland

        0.38

        0.21

        43

        India

        43.73

        34.34

        21

        Indonesia

        48.2

        80.38

        67

        Ireland

        77.02

        86.9

        13

        Italy

        47.85

        52.64

        10

        Japan

        37.36

        27.87

        25

        Latvia

        58.75

        61.41

        5

        Luxembourg

        49.71

        18.29

        63

        Malaysia

        42.81

        262.09

        512

        Mexico

        75.78

        45.74

        40

        Netherlands

        18.15

        37.1

        104

        New Zealand

        10.26

        5.23

        49

        North Korea

        49.68

        41.85

        16

        Norway

        20.08

        20.35

        1

        Poland

        48.16

        45.27

        6

        Portugal

        33.39

        19.2

        42

        Romania

        40.8

        107.17

        163

        Russia

        64.37

        125.2

        95

        Sweden

        43.15

        53.01

        23

        Switzerland

        50.53

        36.66

        27

        UK

        28.36

        66.69

        135

        USA

        71.9

        71.61

        0

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        © Published by Institution, 202X 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.

         

        Appendix E: Analysis & recommendation development Methodology

        • Data collection

        Relevant measures were collated from results of the REA. The impact factors for these measures on N flows was extracted into an excel file.

        • Data extraction

        All relevant data points were extracted from the papers into an Excel spreadsheet manually.

        • Data appraisal

        A RAG rating was applied to all data sources based on the quality of the data (including publishing date, assumptions made, applicability etc.). Where data was considered to be very poor quality, alternative sources to fill or improve this data point were sourced.

        • Mapping

        Relevant mitigation measures were mapped on to the SNBS according to what nitrogen flows they impacted. This allowed for accurate modelling of the change in nitrogen flow, and subsequently nitrogen use efficiency, if the measures are implemented at the estimated uptake rates in the given years.

        • Calculations

        Once the impact values had been mapped on to relevant N flows, they were evaluated to ensure that the theory behind these values relate and can therefore be applied to the values in the SNBS. This involved ensuring that each measure had a relative impact value as percentage, and that the baseline is applicable to that in the SNBS.

        Applicability: the portion of the relevant flow in the SNBS that the measure/impact value applies to e.g. emissions from livestock are grouped in one flow in the SNBS, and so a measure/impact value relevant to only dairy animals can only be applied to a portion of the N flow value. There were several sources used to determine this granularity of application. For livestock sectors the Scottish agricultural census data was used. The total livestock number in heads was divided by the total number of livestock from all sectors and reported as a percentage. Fertiliser use was determined from data within the Agricultural SMT produced by ADAS.

        Some measures that include N fixation may not improve NUE but will reduce mineral N inputs.

        Current uptake: An estimation of the portion of the relevant N flow that is subject to the impact of the measures. This is subtracted from the overall applicability as the impact is already considered in the current NUE values. In this way double counting of impacts is avoided.

        Maximum future impact: Calculated as applicability minus current uptake, multiplied by the impact value. This calculates the impact the measure may have if implemented on all remaining applicable units. The value is then multiplied by the projected future uptake value in each of the time points to produce an estimate for the impact that could be expected.

        • Quality Assessment

        All data inputs, calculations, and outputs of this task were reviewed internally by the sector experts to ensure robustness and validity. Where possible the results were also compared to peer reviewed literature to ensure that they were consistent with the current scientific understanding.

        • Assumptions around SNBS

        There is no flow that relates to N from soil into grass, so impacts on this could not be quantified in the SNBS.

        Crop residue N is recycled within the system. Therefore, this flow is not considered in the NUE calculations in the SNBS, and so any impacts to crop residue N due to implementation of measures will not be reflected in an improvement to NUE. To compensate for this, improvements to crop residue N was modelled as a reduction in N inputs from fertilisers.

        There is around 30kt N unaccounted for through livestock flows. This is perhaps accounted for in what is considered in the report as ‘stocks’ – i.e. an amount of N in living livestock at any one time.

        Appendix F: Description of measures and assumptions

        In the following tables, where the source is given as “other CXC paper” this is referring to the paper Eory, V., et al. (2023) and “MACC Update” refers to the paper Eory V., et al. (2015).

        • Preventing soil compaction

        Approximately 20% of arable land in Scotland is susceptible to soil compaction and is therefore eligible to have compaction prevention applied. This measure is expected to increase yields and crop residue N, and so is assumed to reduce mineral N requirements.

        Paper

        CXC

        CXC

        CXC

        CXC

        CXC

        CXC

        Sector

        Arable

        Grassland

        Arable

        Grassland

        Arable

        Grassland

        N Effect

        Crop Residue N

        Crop Residue N

        Yield

        Yield

        N2O Emission Factor

        N2O Emission Factor

        Value

        2%

        1%

        2%

        1%

        -6%

        -6%

        Applicability

        20.00%

        20.00%

        20.00%

        20.00%

        20.00%

        20.00%

        Current Uptake

        0%

        0%

        0%

        0%

        0%

        0%

        Maximum Future Impact

        2.00%

        1.00%

        2.00%

        1.00%

        -6.00%

        -6.00%

        Uptake 2030

        1%

        1%

        1%

        1%

        1%

        1%

        Uptake 2040

        2%

        2%

        2%

        2%

        2%

        2%

        uptake 2045

        2%

        2%

        2%

        2%

        2%

        2%

        2030

        -0.01%

        -0.01%

        -0.01%

        -0.01%

        -0.04%

        -0.04%

        2040

        -0.03%

        -0.02%

        -0.03%

        -0.02%

        -0.10%

        -0.10%

        2045

        -0.04%

        -0.02%

        -0.04%

        -0.02%

        -0.13%

        -0.13%

        • Optimal soil pH

        This measure involves applying lime to soils to ensure that soil pH is in the optimal range for N availability. This means that when applying N fertilisers there will be less excess N as it will be more bioavailable and taken up by crops. This has been found to increase crop residue N and yield, both by 6%, while reducing the emission of N2O by 3%, in arable and grassland. It has previously been assumed that approximately 9% of arable land and 22% grassland are applicable to have pH optimised.

        Paper

        CXC

        CXC

        CXC

        CXC

        CXC

        CXC

        Sector

        Arable

        Grassland

        Arable

        Grassland

        Arable

        Grassland

        Nitrogen Effect

        Crop Residue N

        Crop Residue N

        Yield

        Yield

        N2O Emission Factor

        N2O Emission Factor

        Value

        6%

        6%

        6%

        6%

        -3%

        -3%

        Applicability

        9.00%

        22.00%

        9.00%

        22.00%

        9.00%

        22.00%

        Current Uptake

        0%

        0%

        0%

        0%

        0%

        0%

        Maximum Impact in Future

        -0.56%

        -1.37%

        0.56%

        1.37%

        -0.27%

        -0.66%

        2030

        -0.17%

        -0.41%

        0.17%

        0.41%

        -0.08%

        -0.20%

        2040

        -0.22%

        -0.55%

        0.22%

        0.55%

        -0.11%

        -0.26%

        2045

        -0.42%

        -1.03%

        0.42%

        1.03%

        -0.20%

        -0.50%

        Uptake 2030

        30%

        30%

        30%

        30%

        30%

        30%

        Uptake 2040

        40%

        40%

        40%

        40%

        40%

        40%

        uptake 2045

        75%

        75%

        75%

        75%

        75%

        75%

        • Use of catch/cover crops

        Catch/cover crops are non-productive plants cultivated between catch crops with the effect of taking up excess N that was left in soil, having not been taken up by the preceding cash crop. This reduces the amount of N (in the form of NO3– ) that is lost in leaching by 45%. The applicability of this measure to crops has previously been set to 34%.

        Paper

        MACC Update

        Sector

        		 

        Nitrogen Effect

        Frac_Leach

        Value

        -45%

        Applicability

        34.00%

        Current Uptake

        30.00%

        Maximum Future Impact

        -10.71%

        2030

        -0.75%

        2040

        -1.82%

        2045

        -2.36%

        Uptake 2030

        7%

        Uptake 2040

        17%

        uptake 2045

        22%

        • Variable rate nitrogen application

        Variable rate nitrogen application (VRNT) is where a digital map or real-time sensors supports a decision tool that calculates the N needs of the plants, transfers the information to a controller, which adjusts the spreading rate (Barnes et al. 2017). This measure is applicable to all land that receives fertiliser. 2-22% of farms use precision farming technologies and 16% used variable rate application, though only 11% use yield mapping (25% cereal farms, 18% other crop farms, 5% pig/poultry and dairy farms, 2% grazing livestock farms, 11% mixed farms). This measure can increase yield, reduce fertiliser use rates, and increase crop residue N. As with all measures yield is kept constant with current levels, and crop residue N is considered through a decrease in N fertilisation. Therefore, this measure is modelled as a decrease to N inputs through three mechanisms.

        Paper

        CXC

        CXC

        CXC

        CXC

        CXC

        CXC

        Sector

        Crop

        Grassland

        Crop

        Grassland

        Crop

        Grassland

        Nitrogen Effect

        N fertilisation rate

        N fertilisation rate

        Crop yield

        Crop yield

        Crop residue N

        Crop residue N

        Value

        -5%

        -5%

        -3%

        -3%

        -3%

        -3%

        Applicability

        100.00%

        100.00%

        100.00%

        100.00%

        100.00%

        100.00%

        Current Uptake

        21.50%

        2.00%

        21.50%

        2.00%

        21.50%

        2.00%

        Maximum Impact in Future

        -3.93%

        -4.90%

        -2.36%

        -2.94%

        -2.36%

        -2.94%

        2030

        -0.27%

        -0.34%

        -0.16%

        -0.21%

        -0.16%

        -0.21%

        2040

        -0.67%

        -0.83%

        -0.40%

        -0.50%

        -0.40%

        -0.50%

        2045

        -0.86%

        -1.08%

        -0.52%

        -0.65%

        -0.52%

        -0.65%

        Uptake 2030

        7%

        7%

        7%

        7%

        7%

        7%

        Uptake 2040

        17%

        17%

        17%

        17%

        17%

        17%

        uptake 2045

        22%

        22%

        22%

        22%

        22%

        22%

        • Urease Inhibitors

        Urease inhibitors slow down the hydrolysis of urea to ammonia when urea-based fertilisers are applied to soils, reducing ammonia emissions and increasing the N available to plants.

        Paper

        CXC

        CXC

        CXC

        Sector

        Crop

        Crop

        Crop

        Nitrogen Effect

        N2O Emission Factor

        N leaching

        N fertilisation rate

        Value

        -27%

        -13%

        -17%

        Applicability

        8.40%

        8.40%

        8.40%

        Current Uptake

        0.00%

        0.00%

        0.00%

        Maximum Impact in Future

        -2.27%

        -1.10%

        -1.41%

        2030

        -0.56%

        -0.27%

        -0.35%

        2040

        -1.35%

        -0.65%

        -0.84%

        2045

        -1.75%

        -0.85%

        -1.09%

        Uptake 2030

        25%

        25%

        25%

        Uptake 2040

        60%

        60%

        60%

        uptake 2045

        77%

        77%

        77%

        • Nitrification Inhibitor

        Paper

        CXC

        CXC

        Sector

        Crop

        Crop

        Nitrogen Effect

        N2O Emission Factor

        N2O Emission Factor

        Value

        -60%

        -30%

        Applicability

        7.50%

        36.50%

        Current Uptake

        0.00%

        0.00%

        Maximum Impact in Future

        -4.50%

        -10.95%

        2030

        -0.53%

        -1.28%

        2040

        -1.27%

        -3.10%

        2045

        -1.65%

        -4.02%

        Uptake 2030

        12%

        12%

        Uptake 2040

        28%

        28%

        uptake 2045

        37%

        37%

        • Improved Nutrition

        Improving the nutrition of livestock can involve matching N in feed to the needs of the animal, improving the availability of N in the feed to animal, improving the digestibility of the feed so that more N is utilised by the animal and converted to liveweight. This can reduce N inputs and/or reduce N losses while keeping useful N outputs constant, and so increases NUE. From previous modelling of this measure in Scotland it was found that the N content of feed could be reduced by 2% in beef, poultry, and dairy, while excreted N could be reduced by 5% in pigs and 2% in sheep. The applicability of this measure for each livestock type is based on the proportion of total livestock units of each livestock type based off the Scottish Agricultural Census. The current uptake is based off data from previous reports modelling this measure in Scotland.

        Paper

        CXC

        MACC (2020)

        MACC (2020)

        MACC (2020)

        CXC

        Sector

        Beef

        Pigs

        Poultry

        Dairy

        Sheep

        Nitrogen Effect

        Feed

        N Excreted

        Feed

        Feed

        N excreted

        Value

        2%

        5%

        2%

        2%

        -2%

        Applicability

        42.46%

        11.50%

        10.35%

        10.84%

        23.03%

        Current Uptake

        20.00%

        80.00%

        80.00%

        80.00%

        20.00%

        Maximum Impact in Future

        0.68%

        0.12%

        0.04%

        0.04%

        -0.37%

        2030

        0.08%

        0.01%

        0.00%

        0.01%

        -0.04%

        2040

        0.19%

        0.03%

        0.01%

        0.01%

        -0.10%

        2045

        0.25%

        0.04%

        0.02%

        0.02%

        -0.14%

        Uptake 2030

        12%

        12%

        12%

        12%

        12%

        Uptake 2040

        28%

        28%

        28%

        28%

        28%

        uptake 2045

        37%

        37%

        37%

        37%

        37%

        • Improved health

        This measure includes eliminating issues including worms, liver fluke, and lameness, increasing the productivity/efficiency of the animals. While in theory 100% of the herd could have improved health (the stance taken in CXC A scenario), an 80% applicability value was chosen, following the assumption in CXC marginal abatement. This will produce a slightly more conservative estimate of the impact on NUE, to allow for not all diseases/health issues that contribute to lower productivity being treatable/eradicated, and a portion of the herd that may already be achieving higher health. Previous studies focusing on improving livestock health to mitigate nutrient loss, greenhouse gas loss etc. focused on the mechanism of increased productivity. Therefore, as we are keeping yields constant in this model the increased productivity is factored in as a reduction in feed inputs. 

        Paper

        CXC

        CXC

        CXC

        Sector

        Dairy

        Beef

        Sheep

        Nitrogen Effect

        Milk Yield

        Liveweight

        Liveweight

        Value

        6%

        6%

        10%

        Applicability

        41.63%

        24.05%

        8.21%

        Current Uptake

        0.00%

        0.00%

        0.00%

        Maximum Future Impact

        2.66%

        1.53%

        0.86%

        2030

        0.80%

        0.46%

        0.26%

        2040

        1.50%

        0.87%

        0.49%

        2045

        1.95%

        1.13%

        0.63%

        Uptake 2030

        30%

        30%

        30%

        Uptake 2040

        57%

        57%

        57%

        uptake 2045

        73%

        73%

        73%

        • Livestock Genetics

        Livestock genetics techniques can be used with various goals including increasing productivity, climate resilience, or reducing emissions. For improving NUE of livestock systems the key goal is increasing efficiency i.e. increasing the utilisation of N and yield of livestock products, compared to the feed N intake levels. The uptake of using better genetic material is only around 20-25% in the dairy herd, and still lower in the beef herd (Defra 2018). The outcomes of this measure will depend on the breeding tools used and the breeding goal chosen. Three more specific measures have been gathered from the literature, and their potential impact on NUE has been modelled. These are:

        • Increased uptake of the current approach in the dairy herd,
        • Using the current breeding goals but enhancing the selection process by using genomic tools, in dairy and beef,
        • New breeding goals to include lower GHG emissions, using genomic tools.

        In 2018 usage of improved genetic material was reported as 20-25% in the dairy herd, and less in the beef herd. However, several previous projects modelling similar measures set the current uptake at 0% of both dairy and beef herds.

        Paper

        CXC

        CXC

        CXC

        Sector

        Dairy

        Dairy

        Beef

        Nitrogen Effect

        Milk yield

        Milk protein

        Liveweight

        Value

        1%

        1%

        0%

        Applicability

        10.84%

        10.84%

        42.46%

        Current Uptake

        60.00%

        60.00%

        25.00%

        Maximum Future Impact

        0.04%

        0.04%

        0.08%

        Uptake 2030

        15%

        15%

        5%

        Uptake 2040

        25%

        25%

        10%

        uptake 2045

        35%

        35%

        20%

        2030

        0.00%

        0.00%

        0.00%

        2040

        0.00%

        0.00%

        0.00%

        2045

        -0.01%

        -0.01%

        -0.03%

        • Slurry acidification

        Livestock excreta is susceptible to N volatilization, leading to losses to the atmosphere using storage, and leaching during spreading. Acidification of slurry can immobilize the N and reduce these losses. The impact of acidification is largely measured and reported in reductions to emissions, however, as the emissions values are not considered in the NUE calculations this has to be transformed to an impact on inputs. Higher N in slurry will increase yields/maintain yields with lower inputs. Therefore, in this model we include the impact of slurry acidification as a reduced input of N to land receiving fertiliser.

        Paper

        CXC

        CXC

        CXC

        MACC Update

        MACC Update

        MACC Update

        Sector

        Dairy

        Beef

        Pigs

        Dairy

        Beef

        Pigs

        Nitrogen Effect

        NH3 Volatilisation

        NH3 Volatilisation

        NH3 Volatilisation

        N2O Emission

        N2O Emission

        N2O Emission

        Value

        -75%

        -75%

        -75%

        -23%

        -23%

        -23%

        Applicability

        2.28%

        0.85%

        2.19%

        2.28%

        0.85%

        2.19%

        Current Uptake

        0.00%

        0.00%

        0.00%

        		   

        Maximum Future Impact

        -1.71%

        -0.64%

        -1.64%

        -0.52%

        -0.20%

        -0.50%

        Uptake 2030

        7%

        7%

        7%

        7%

        7%

        7%

        Uptake 2040

        17%

        17%

        17%

        17%

        17%

        17%

        uptake 2045

        22%

        22%

        22%

        22%

        22%

        22%

        2030

        -0.12%

        -0.04%

        -0.11%

        -0.04%

        -0.01%

        -0.04%

        2040

        -0.29%

        -0.11%

        -0.28%

        -0.09%

        -0.03%

        -0.09%

        2045

        -0.38%

        -0.14%

        -0.36%

        -0.12%

        -0.04%

        -0.11%

        • Slurry store cover

        Based on an impermeable slurry cover. Impact and uptake values taken from previous CXC paper. The flow in the SNBS does not distinguish between NH3 emissions from housing and spreading and N2O emissions from animal husbandry in general. The portion of each of these gaseous emissions was then extrapolated from the SMT. An impermeable cover is applicable to 100% of slurry tanks and lagoons as there is no available uptake data.

        Paper

        CXC

        CXC

        CXC

        CXC

        CXC

        CXC

        Sector

        Dairy

        Dairy

        Beef

        Beef

        Pigs

        Pigs

        Nitrogen Effect

        NH3 Volatilisation

        N2O Emission

        NH3 Volatilisation

        N2O Emission

        NH3 Volatilisation

        N2O Emission

        Value

        -80%

        -100%

        -80%

        -100%

        -80%

        -100%

        Applicability

        6.25%

        2.71%

        0.85%

        0.85%

        4.26%

        4.26%

        Current Uptake

        0.00%

        0.00%

        0.00%

        0.00%

        24.00%

        24.00%

        Maximum Future Impact

        -5.00%

        -2.71%

        -0.68%

        -0.85%

        -2.59%

        -3.23%

        Uptake 2030

        18%

        18%

        18%

        18%

        18%

        18%

        Uptake 2040

        43%

        43%

        43%

        43%

        43%

        43%

        uptake 2045

        55%

        55%

        55%

        55%

        55%

        55%

        2030

        -0.88%

        -0.47%

        -0.12%

        -0.15%

        -0.45%

        -0.57%

        2040

        -2.13%

        -1.15%

        -0.29%

        -0.36%

        -1.10%

        -1.37%

        2045

        -2.75%

        -1.49%

        -0.37%

        -0.47%

        -1.42%

        -1.78%

         

        • Low Emission Housing

        Acid air scrubbers can remove nitrogen from air, reducing NH3 emissions, which can then be applied to soils as N fertiliser, and essentially recovering more N in useful outputs by reducing waste N in emissions. Approximately 90% of recovered N can be reinput into the soil. The removal efficiency depends on the specific machinery used and approximately 90% can be expected for acid air scrubbers.

        Paper

        Comparing environmental impact of air scrubbers for ammonia abatement at pig houses: A life cycle assessment (sciencedirectassets.com)

        Comparing environmental impact of air scrubbers for ammonia abatement at pig houses: A life cycle assessment (sciencedirectassets.com)

        Sector

        Pigs

        Poultry

        Nitrogen Effect

        Recovering emissions

        Recovering emissions

        Value

        -81%

        -81%

        Applicability

        12%

        10%

        Current Uptake

        		  

        Maximum Impact in Future

        -9.32%

        -8.38%

        Uptake 2030

        7%

        7%

        Uptake 2040

        17%

        17%

        uptake 2045

        22%

        22%

        2030

        -0.65%

        -0.59%

        2040

        -1.58%

        -1.42%

        2045

        -2.05%

        -1.84%

        • Novel Crops

        Novel crops (crops with improved NUE) is designed to reflect the impact of growing new cultivars of crops that can maintain (or improve yields) with a lower requirement for N inputs as fertiliser. Previous

        Paper

        MACC Update

        Sector

        Arable

        Nitrogen Effect

        N fertilisation rate

        Value

        -9%

        Applicability

        70.00%

        Current Uptake

        0.00%

        Maximum Impact in Future

        -6.30%

        2030

        -13.23%

        2040

        -2.52%

        2045

        -4.73%

        Uptake 2030

        30%

        Uptake 2040

        40%

        uptake 2045

        75%

        • Rapid Incorporation

        Paper

        SMT

        Sector

        		 

        Nitrogen Effect

        NH3 Volatilisation

        Value

        -41%

        Applicability

        100%

        Current Uptake

        26%

        Maximum Impact in Future

        -30.34%

        Uptake 2030

        12%

        Uptake 2040

        28%

        uptake 2045

        37%

        2030

        -9.10%

        2040

        -8.60%

        2045

        -11.12%

        • General Assumptions:
        • Take the total inputs and subtract the total loss to atmosphere as NH3 and loss to run off and leaching
        • Maybe assume that N2 and NOx stay constant, NH3 and N2O, estimate the losses and subtract from inputs
        • Ignore crop residue N, check how this impacts flow
        • Increased N fixation will lead to reduced mineral fertiliser inputs, balance out
        • Reduced losses (N2O, NH3, leaching) will reduce inputs in equal amounts (may need to apply a percentage to this, as farmers may only reduce inputs by 80%, may have to look into the literature)
        • Maintain yield (useful outputs), and so any change to output will be modelled as a change to inputs. This is based on the principle that there will be economic drivers at play that will mean on a Scotland wide scale production levels will be maintained, and so if there is a yield increase/decrease on one farm this will be balanced out by the converse on a different farm. Any yield increase/decrease will be felt as the converse in inputs – feed, fertiliser etc. will be reduced in line with the estimated increase of milk, liveweight, crop, etc.
        • All legume measures will not impact NUE as any saving in N fertilisation will be balanced by increased biological fixation.
        • Assumed that legumes are included once in every five years. Therefore, a fertiliser saving is felt in two of every five years and so impacts 40% of the mineral fertiliser input to crops flow (one year (20%) will be saved from the legume cycle, and one year (20%) from the subsequent crop year due to residual soil N).
        • Within the SNBS, nitrogen flows to or from livestock pools were given as a single value for all livestock, rather than by type. However, the measures relating to livestock were species-specific (e.g. slurry acidification in dairy slurry and pig slurry). To compensate for this the number of heads of each livestock type (from the Scottish agricultural census) was converted to livestock units, and then the proportion of total livestock amount of each type was calculated and applied to the relevant measures.
        • A single flow value is provided in the SNBS for all mineral fertiliser to crops and all mineral fertilisers to grass, however several of the measures only impact a certain type of fertiliser or may have a different impact depending on the type of fertiliser.

        Appendix G: SWOT and PESTLE Analysis

        The risks and benefits to Scotland from determining a NUE target were determined through giving consideration to numerous avenues of information and data. Evidence gathered following the completion of Task 1 (evidence review) focusing upon risks and benefits of setting NUE targets in other countries were collated and analysed. This was followed by an internal workshop, led by key experts within the agricultural field, to determine the applicability of the information to Scotland, during which time additional risks and benefits were identified. Following the internal Workshop, a more detailed study of the aspirations and trends in agricultural practices set by the Scottish Government was undertaken. The SWOT (strengths, weaknesses, opportunities, threats) and PESTLE (political, economic, sociological, technological, legal and environmental) tables were populated to better understand the complexities of the information gathered by Ricardo, with the analysis tools providing a summary of the risks and benefits of setting a NUE target in Scotland and demonstrating how a range of influences can support or hinder the achievement of a NUE target. The points presented in both the SWOT and PESTLE analysis have varying degrees of severity therefore a judgment on overall supporting and hindering influences cannot be made on the number of points alone.

        SWOT

        Strengths, weaknesses, opportunities, and threats (SWOT) of setting N-related targets were analysed based on the information gathered on N targets in other countries. We also included analysis of GHG and climate related targets where relevant to increase the body of information. This information was then used to assess applicability of setting a NUE target for Scottish agriculture with the limitation that the analysis was based on N, GHG and climate related rather than NUE specific targets. The SWOT analysis shows a range of influences which can support or hinder the achievement of a NUE target.

         

        Strengths of a NUE target

        Weaknesses of a NUE target

        Internal
        • Raises awareness of the contribution of N use to GHG emissions
        • Mid-point assessments allow long-term benefits of N deposition reduction to be communicated on political timescales
        • Regulation has a strong impact on land-management decisions
        • Targets are meaningful reference values which convey a desired outcome
        • Various treaties and regulations have put limits or targets on N use; information is available in terms of reducing N pollution (e.g., NVZ)
        • Technologies and measures that can support the success of a NUE target already exist and continue to be developed
        • Data on attainable NUE exists in literature
        • Supports fertiliser efficiency, reducing imported input demand
        • Many mitigation measures are relatively low cost and accessible
        • NUE can be estimated at different spatial and temporal scales
        • Improvements in NUE are achievable
        • A voluntary approach may attract more farmer involvement
        • Can support a NUE indicator for the food system including food waste, transport, exports etc , supporting wider national policies
        • Support farm profitability by reducing spend on inputs
        • Work is ongoing to increase the data availability for GHG mitigation potential, and the economic costs and benefits of mitigation measures
        • Some government funding is needed, for example, to help cover large upfront investments for some measures e.g. low emission spreading machinery
        • Enforcing measures requires political will that may be in tension with the current rhetoric around food security.
        • Some mitigation measures may need to be repeated or changed frequently which requires monitoring (e.g. nitrification inhibitors need to be used annually)
        • There is no single universally applicable path for increasing NUE which can reduce action due to confusion on what to do
        • To set a target, accurate current uptake levels for relevant measures need to be known (high current uptakes limit the potential for further improvements to NUE), which is not currently the case. Some measures may already be in widespread use, which limits the potential for additional reductions.
        • A target with a voluntary approach may limit success and require ‘buy-in’ from farmers
        • Biogeochemical hysteresis effects are not yet well understood quantitatively (Being able to quantify the indirect effects of introducing new mitigation measures (e.g., change of N management) on the wider ecosystem (e.g., N cycle) are not well understood).
        • Predicting future uptake levels for mitigation measures is difficult
        • Improving NUE reduces emissions of N, but does not eliminate them, so there is target limitation
        • Some measures that are good for N use (e.g., legume crops) may not be reflected in the SNBS
        • A clear, nationwide strategy to support farmers in implementing measures on a broad scale to improve NUE on farm is currently lacking
         

        O Opportunities presented by having a NUE target

        Threats presented by having a NUE target

        External
        • The SNBS will allow annual monitoring
        • To date, progress has been small in reducing nutrient pollution and N emissions from agricultural sources, improvements in NUE offer opportunities to significantly reduce N emissions without significantly disproportionate costs to the agricultural sector
        • Drive better practices on farm
        • Binding targets can deliver high reductions in N losses and encourage farmers beyond mitigation and into prevention
        • Supports effective and efficient policy
        • Proposing multiple mitigation measures suited to different farming types can increase uptake
        • Learn from other policy initiatives e.g. The Colombo Declaration
        • Further promote the development of technologies and measures that support better N use
        • Farm support programs for purchase/modernisation of agricultural equipment
        • Farmers can use N modelling tools to assess the effectiveness of different mitigation measures
        • Build upon the sector’s work to increase adoption of region and farm-specific measures
        • Training can be far-reaching and can be combined with incentives and verification at all stages
        • Private markets could pay farmers to adopt practices that produce ecosystem services
        • Knock on benefits of better NUE include
        • Reduction of other pollutants e.g., GHGs, NH3
        • Improvement of water quality
        • Improvements to air quality
        • Improvements to human health
        • Biodiversity benefits
        • Saves farmers’ money
        • Binding N targets have led to civil unrest in other countries so potentially, government enforcement of a target (i.e. introducing a tax) may cause civil unrest
        • A voluntary approach with further reductions in limits may result in less buy-in from farmers
        • ‘Overly’ ambitious targets may drive farmers out of business with community implications
        • Unintended consequences e.g., pollution swapping
        • Even if measures are as successful as anticipated and are fully adopted, the cumulative reduction may be less than the estimated potential
        • Setting an unambitious/low target could be seen as a “parody which pushes responsibility onto other sectors”
        • ‘Quick-win’ results may hinder future development
        • Implementation of mitigation measures may need monitoring and enforcement
        • Biogeochemical hysteresis effects
        • Mitigation measures may interfere with other regulations e.g., land-use regulation
        • Challenging to change animal production technology, change agrotechnics and progress technological and digital transformation to support the success of a NUE target

        Threats to achieving a NUE target

        • Climate change affects the sources and sinks of N
        • Legislative delays
        • Incorrect implementation of measures

        PESTLE

        Setting NUE and other N targets are subject to a range of enablers and barriers. Therefore, a political, economic, social, technical, legal, and environmental (PESTLE) analysis was undertaken to assess the feasibility of setting a NUE target for Scottish agriculture, again, with the limitation that the analysis was based on N, GHG and climate related rather than NUE specific targets. The PESTLE assessment took place following the SWOT analysis to ensure the findings from the SWOT were assessed and, if relevant, included into the PESTLE categories.

         

        Enablers

        Barriers

        Political
        • Socioeconomic, cultural and health considerations can be used to inform policies. In the context of N this includes impacts on air and water pollution, climate, farmer incomes and biodiversity.
        • The introduction of government policy incentivises uptake of mitigation measures by providing focus and direction
        • NUE increase is complimentary with other economic, environmental, health and climate policy objectives
        • Regulatory instruments (pollution standards and ceilings/fertiliser use limits/ BAT)
        • Negative experiences in other countries who are dealing with a similar challenge (E.g., farmer protests following the Dutch government proposals to tackle N emissions)
        • Lack of clarity on synergies with other policies
        • Pushback on measures seen to reduce productive output in terms of food production

        Economic
        • Optimal use of fertiliser saving farmer’s money
        • Capital grants or support schemes can help shoulder on-farm costs and encourage uptake of the more expensive mitigation measures (e.g. specialised spreading equipment)
        • Mitigation measures are expected to span a wide range of activities and may result in net benefits to farmers (e.g., improvement in farm profitability)
        • Many mitigation measures are low cost and available to farmers
        • Policy levers available to encourage optimal use of fertiliser
        • Lack of incentives
        • Mitigation measures are expected to span a wide range of activities and may result in net costs to farmers
        • Upfront investments required to implement some new technologies and strategies to reduce emissions
        • Recurring costs of mitigation measures

        Social
        • Health benefits e.g., controlling N pollution will lower nitrate concentrations in drinking water
        • Public drive and increasing interest in climate, health and environment can influence policy (increasing interest from public)
        • Increase in value of farm produce
        • Current lower levels of fertiliser use (due to high prices) can complement a NUE target and contribute to an ambitious target
        • Communicative instruments (extension services/ education, awareness and persuasion/ co-operative approaches)
        • A target with a non-mandatory approach will require buy-in from farmers
        • Potential impact on output if N is changed without proper strategies in place e.g. removing all fertiliser use (reduced yields/switching effect due to challenges of continuing to produce products profitably)
        • Perception of potential for decreased yield/ production security

        Technical
        • Technology and measures exist to improve NUE, and solutions continue to be developed through research
        • The SNBS annually monitors and measures Scottish agriculture’s NUE
        • Training and advice to farmers, feed companies and other support services would support NUE increases
        • Many farmers are not aware of why and how to improve N use
        • Monitoring and measuring NUE target success at sub-sector level (i.e. for different farming systems) is not currently possible at a central level

        Legal
        • Legislation to support a NUE target exists e.g., Cleaner Air for Scotland Strategy Plan 2021, Scotland’s Agricultural Reform Route Map
        • The objectives of existing legislation would be supported (air and water quality, farmer incomes, biodiversity and human health)
        • Farmers may not comply with regulatory requirements
        • A NUE target must fit in with other environmental legislation (e.g., integrate with The N directive, National Emissions Ceiling Directive, Drinking Water Directive etc.)
        • N limiting targets (N budgets) may lead to legal challenges
        • Time taken to create and process legislation for a N target can be longwinded and uncertain

        Environmental
        • Measures related to N mitigation can also mitigate other pollutants
        • A NUE target may have other indirect positive benefits to the environment e.g., improvements to air and water quality
        • Unintended consequences of mitigation measures, e.g. decreased productivity of agriculture, displacing some production and impacts to another place
        • Pollution swapping (e.g. decreased NH3 emission leading to more retained N in soil with increased N2O emission)

        Appendix H: Worked example

        To aid in understanding the approach taken to calculate the impact of each measure on the NUE worked example, for slurry acidification has been presented below.

        Slurry acidification can reduce the NH3 volatilisation at the storage stage by 75% for dairy, beef and pigs. It will also reduce N2O at the spreading stage by 23%. This measure cannot be applied on all managed livestock manure, and can be applied only where slurry is stored in tanks. Approximately, 41%, 4%, and 38% of dairy, beef, and pig excreta is on a slurry system, respectively, and approximately 50% is in slurry tanks rather than lagoons, for each livestock type. Therefore, this measure can be applied to approximately, 21%, 2%, and 19% of all dairy, beef, and pig excreta.

        The relevant flows with the SNBS for these two impact values are N2O emissions from animal husbandry (including manure management), with a value of 0.92 kt N yr-1, and NH3 from housing and storage of manure, with a value of 10.5 kt N yr-1.

        These flow values represent the absolute quantity of N transferring from the excreta pool to the atmosphere, for all livestock and storage types. Of total livestock units in Scotland, approximately 42% are beef, 11% are dairy, and 12% are pigs.

        The uptake levels of this measure in 2030 is estimated to be 7%.

        The current uptake is assumed to 0%.

        The applicability of this measure on dairy is:

        Portion of livestock that are dairy animals * portion of dairy excreta suitable for acidification

        0.11 * 0.21

        = 0.0228

        Therefore, the impact of slurry acidification on the dairy sector is:

        Applicability * (1-Current Uptake) * Impact Value * 2030 Uptake

        0.0228 * (1-0.00) * -0.75 * 0.07

        = -0.12%

        Apply this to the absolute value for dairy from the SNBS:

        10.5 * 0.0012

        = 0.0126 kt N yr-1

        This calculation is carried out for all three livestock types, and for the N2O value. The total N saved is 0.03 kt N yr-1, which is subtracted from the quantity of mineral fertiliser applied to soils:

        143.78 – 0.03

        = 143.74 kt N yr-1

        The NUE is recalculated taking into account the new mineral fertiliser quantity:

        (Inputs / Outputs) * 100

        (200.08 / 54.48) * 100

        = 27.23%

        © The University of Edinburgh, 2024
        Prepared by Ricardo PLC 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.

        ClimateXChange

        Edinburgh Climate Change Institute

        High School Yards

        Edinburgh EH1 1LZ

        +44 (0) 131 651 4783

        info@climatexchange.org.uk

        www.climatexchange.org.uk


        1. N waste is reactive nitrogen (Nr) that is not used in the nitrogen cycle. Higher N waste reduces NUE. ↑



        2. The 2021 total is an adjusted total to consider compliance, meaning the contribution of emissions from non-manure digestate spreading is removed ↑



        3. A NVZ designation limits the total amount of N (from livestock manure) that can be applied to agricultural land in that area. Scottish NVZ designation is reviewed every four years and nitrate concentrations in surface and ground water are measured by The Scottish Environment Protection Agency (SEPA). ↑



        4. N fertilisers are used most commonly in the forms of ammonium nitrate and to a lesser extent urea both as a solid prill (pellet) which is spread using a broadcast spreader. ↑


        Research completed October 2023

        DOI: http://dx.doi.org/10.7488/era/5005

        Executive summary

        Introduction

        Land use transformation (and related reductions in greenhouse gas emissions) will be necessary to achieve Scotland’s ambitions to reach net zero emissions by 2045 as well as biodiversity and climate change targets. A variety of support systems for land use transformation, such as financial support and advice, are already in place. This study aims to understand how and why land managers engage, or not, with these support systems. This helps inform how policy could be best deployed to accelerate the process of change.

        Influences on land manager decision making

        We found substantial evidence for land manager behaviour and decision making that influences engagement with support systems. Their decisions are determined by a range of interacting internal and external factors, primarily related to financial, practical and cultural influences, which can be enabling or restricting, such as:

        • personal values and knowledge
        • perceived loss of control
        • social norms/pressures
        • trust in sources of information and advice e.g. land agents
        • administrative burdens/transaction costs
        • financial incentives
        • awareness and understanding
        • clarity of the benefits of change.

        Restrictive barriers are compounded by context specific factors that vary across individual businesses, such as tenure, business scale and biophysical constraints.

        Findings

        Overall, the public sector grant-giving support network is logical to use. Most schemes are accessed through the Rural Payments and Inspections Division (RPID) portal. Other schemes are straightforward with regard to procedures. The RPID portal only requires one set of login credentials to access a wide range of support systems. Support systems under this umbrella are easy to access and do not require additional login credentials.

        The administrative burden associated with applying to schemes, i.e. form filling, is a barrier to engagement. Procedural support (i.e. form filling by an adviser) is widely available from both public and private advisory sources but requires additional resource to procure. This is distinct from practical support, such as site-specific implementation advice, which was frequently mentioned by stakeholders as key to facilitating the uptake of environmental management practices and yet less readily available.

        Land managers often decide whether to engage with support and advice based on confidence in its source. For example, farmers are more likely to trust advisers or organisations that have a background in practical farming over those from a consulting or academic background.

        Land managers in Scotland primarily access public funding support. Some access private finance to supplement their income or achieve specific goals. Those accessing private finance generally do it to avoid the conditionality of public funding support and retain operational control over the management of their land. Combining Agri-Environment Schemes and e.g. the Peatland Code is perceived as overly cumbersome, with interactions between schemes, different application dates and the need to demonstrate additionality proving complex.

        The breadth of support sources is confusing for some land managers. Better alignment, or at least signposting between sources, would be helpful. Ideally this needs to be via people as well as (rather than just) an online portal. This will enable land managers to choose the correct support more readily, according to their own circumstances.

        Applicants would prefer administrative simplicity and greater flexibility. Therefore, efforts to streamline application and monitoring processes, reduce information burdens, widen application windows and vary contract lengths, are justifiable.

        Administrative touch points and contractual constraints are only one influence on land manager behaviour. Improved accessibility and flexibility will not, by themselves, increase overall engagement with land use change. Other measures will also be needed such as attractive payment rates, sufficient technical advice and training, and management flexibility. Further research from workshops with potential support recipients, ideally out of peak summer work season, would help understand how future engagement can be maximised.

        Abbreviations table

        AECS

        Agri-Environment Climate Scheme

        ARE

        Agriculture and Rural Economy Directorate

        BPS

        Basic Payment Scheme

        ENFOR

        Environment and Forestry Directorate

        FAS

        Farm Advisory Service

        FGS

        Forestry Grant Scheme

        JHI

        The James Hutton Institute

        MLDT

        Modern Limited Duration Tenancy

        NFUS

        National Farmers’ Union Scotland

        NGO

        Non-Governmental Organisation

        LDT

        Limited Duration Tenancy

        LFA

        Less Favourable Area

        LFASS

        Less Favourable Area Support Scheme

        PCC

        Peatland Carbon Code

        QMS

        Quality Meat Scotland

        RPID

        Rural Payments and Inspections Division

        RSABI

        Rural Payments and Services

        RSPB

        Royal Society for the Protection of Birds

        WT

        Woodland Trust

        SAF

        Single Application Form

        SAOS

        Scottish Agricultural Organisation Society

        SCF

        Scottish Crofting Federation

        SEPA

        Scottish Environment Protection Agency

        SLE

        Scottish Land and Estates

        SLDT

        Short Limited Duration Tenancy

        SOPA

        Scottish Organic Producers’ Association

        SRUC

        Scotland’s Rural and Agricultural College

        SUSSS

        Scottish Upland Sheep Support Scheme

        SSBSS

        Scottish Suckler Beef Support Scheme

        STFA

        Scottish Tennant Farmers’ Association

        WCC

        Woodland Carbon Code

        Introduction

        Rural land use in Scotland directly supports the national economy, rural communities, and local businesses. Sustainable land use holds a key role delivering Scotland’s biodiversity goals and response to climate change. Agriculture is the second largest source of greenhouse gas emissions in Scotland, behind the transport sector, with emissions largely coming from livestock and soils.[1] In order to achieve biodiversity recovery and climate mitigation and adaptation, agricultural transformation is required to reduce emissions, and capture carbon in vegetation and soils. A continued, long-term expansion and integration of regenerative agriculture, afforestation and peatland restoration will be necessary and is currently underway as part of the plan to achieve Scotland’s net zero targets.

        This research was undertaken to gain a better understanding of the key influences that have a bearing on land manager decision making, including their motivations, what they want to achieve for their operation and their appetite for change.

        The aims of the project were to map current support services across different land use sectors to inform our understanding of a land manager’s ability to make decisions and access funding and advice for different land uses. One of the key influences on land manager decision making is their awareness and engagement with support systems. “Support systems”, for the purpose of this report, refers to all sources of support that a land manager in Scotland could access to aid their management of their operation. This includes the following sources:

        • Public funding support (e.g. Agri-Environment Climate Scheme (AECS))
        • Private funding support (e.g. Woodland Carbon Code (WCC))
        • Procedural and practical support from advisors, both public and private (e.g. Farm Advisory Service (FAS))
        • Informal networks (Family, friends, and peers)

        We looked at availability and links between existing and relevant land use information systems, support services, and current incentives for land use transformation which are directly related to achieving Net Zero and/or nature restoration.

        Through stakeholder interviews and other evidence, we established where, when and how different rural land managers interact with the systems and services; we then collated the evidence for issues and barriers to access them. The results are presented using SWOT and PESTLES analysis, conclusions, and visualisations.

        When we defined “land manager” we focussed our research on managers of agricultural land, including moorland, peatland and forestry, whether that be farmers, crofters, large estates or organisations such as NGOs.

        Understanding land manager behaviour in relation to their awareness of, and drivers of actions that support (or not) environmental outcomes is complex. Decisions and outcomes in this area are a result of multiple interactions between agronomic, cultural, social and psychological factors, all of which sit within the national, regional and specific site context (Mills et al, 2016). Therefore, understanding land manager engagement with current support systems will prove equally complex.

        To further our understanding, we carried out an evidence review of the literature. This informed the design of typical land manger archetypes to facilitate the analysis of how specific sectors in Scotland are engaging and accessing support systems. Please see Table 6 in Appendix B for the longlist of archetypes. The long list was used to gather further data, through stakeholder interviews, from both support providers and receivers, across the spectrum of land manager sectors in Scotland. Twenty-five stakeholder interviews were conducted, with participants ranging from support recipients such as crofters and farmers, to support providers and academics. Views from the agriculture, forestry and peatland sectors were captured. Attitudes relating to land managers’ ability and willingness to engage with support systems as well as what determines the level of engagement with these systems were explored. This included the types of support available, their pros and cons, as well as whether they were felt to be accessible, credible and available.

        Reflecting its relative prominence within public expenditure and land-based businesses in rural areas, agriculture dominates much of published literature on land-use support. This evidence was supplemented by feedback from stakeholder interviewees, including individuals representing other sectors. The final step was to map the experience of six chosen, prioritised, archetypes in more detail. These are presented in section 6.2.

        Full details of our methodology can be found in Appendix A-D.

        This study included:

        • Carrying out a rapid literature review. (methodology in Appendix D)
        • Identifying and mapping the most prominent existing and relevant land use information systems, support services and the current incentives for land use transformation directly related to achieving Net Zero and/or nature restoration. (Appendix A)
        • Developing typologies for land managers who might engage with these systems. (Appendix B)
        • Agreeing a discussion guide (see Appendix C) for semi-structured interviews.
        • Identifying a list of target candidate interviewees who were chosen to represent recipients of support, providers of information and advice, and academic experts. (Appendix C)
        • Analysis of where, when, and how land managers interact with the systems and services.
        • Presentation of evidence for issues and barriers to access these systems and services from the stakeholder interviews.

        Introduction to land manager decision making

        The literature is consistent in reporting that land manager decision making, regarding the use and management of their land, and therefore support system engagement, is influenced by both internal and external factors which combine to create individual circumstances. (Buamgart-Getz et al. 2012; Mills et al. 2016; Barnes et al. 2021; Conti et al. 2021; Thompson et al. 2021a).

        These factors affect a land manager’s willingness and ability to adopt environmental management practices. The importance of this is underlined by the fact that climate is the most important element of agricultural productivity in many instances (Scottish Government, 2012). Therefore, once bio-physical conditions (an external factor in itself) have determined what management measures are suitable for a land manager, the wider range of internal/external factors will influence engagement with specific support systems offering funding, information, advice, and training. Table 1 below displays the different internal and external factors that influence land manager decision making, as identified by Thompson et al. (2021a).

        Table 1 – Internal and external factors influencing land manager decision making – (adapted from Thompson et al. (2021a)).

         

        Factor

        Description

        Internal

        Risk perception

        Extent to which a land manager is open to changing practices.

        Values

        Extent to which a land manager has a positive view of environmental measures.

        Knowledge

        Extent to which a land manager understands how to implement environmental measures and how these compare to other potential land uses such as recreation, housing, renewables etc.

        Socio demographic, age and location

        Specific land manager characteristics, including sociodemographic background, education, age and location.

        External

        Funding, cost and policy indicators

        Access to funding (e.g. subsidies, private investment), cost of changing practices and perception/stability of the policy environment.

        Land characteristics

        Key characteristics, such as farm size, tenure, type (arable, mixed, dairy etc.), biophysical condition, whether there is currently active land management.

        Support system accessibility

        Complexity and accessibility of support systems, i.e. how complicated support systems are perceived.

        Knowledge availability, sharing, and awareness

        Land manager knowledge of alternative practices and preference of farmer on method of engaging with wider network and support systems (verbal, formal etc.)

        Cultural

        Networks and connectivity, social norms (what is perceived to be right and wrong) and influence of peer group.

        The way these factors affect and interplay with land manager willingness – and their ability to adopt environmental practices – are shown in Figure 1 (after Mills et al. (2016)). For example, a land manager with limited resources, reliant on informal networks of support, with a strong anti-change personal attitude is unlikely to engage with environmental practices and support systems. Another land manager with higher access to finance, human and social capital, more formalised support networks and a positive outlook on environmental practices would be more likely to engage.

        Figure 1 – Factors influencing land manager engagement, willingness and ability to adopt (from Mills et al. 2016).

        These examples are clearly extreme ends of the spectrum. Landowners will all have a unique set of factors that influence their decision making when it comes to adopting environmental practices and engaging with specific support systems. It is for this reason that understanding and predicting land manager environmental behaviour and engagement with support systems is complex.

        It is important to note that most of the literature on the subject of land manager engagement/motivations with support systems focuses on farmers. For example, (Sutherland et al. 2011) who state “research into actor influences on land use change (attitudes, motivations and objectives held by individuals and groups) has traditionally focused on single sectors, particularly farming. Neither is the range of landholding entities addressed, as emphasis is typically on private owners.”

        Some studies (Ambrose-Oji, 2019; Tyllianakis et al. 2023) have explored wider land manager engagement with support systems in detail, however the focus in the academic literature remains centred on farmers. The reasons behind this focus are not currently clear, but it may be due to the large engagement of the agricultural industry with support systems, particularly financial support.

        We have attempted to fill this gap in the literature through targeted stakeholder interviews with individuals representing land managers outside, as well as within, the agricultural industry.

        Our evidence review has suggested that engagement with current support systems is primarily influenced by certain personal values and knowledge, perceived loss of control, excessive administrative burdens/transaction costs, a lack of credible financial incentives, a lack of awareness, understanding and clarity of the benefits of certain support schemes and social norms/pressures. These barriers are then further compounded by context specific factors that vary across individual businesses, such as tenure, business scale and biophysical constraints.

        Land manager engagement with support systems is discussed in more detail in Section 6

        Review of support systems

        The next stage of this study attempted to identify the current land use support systems that land managers are engaging with in Scotland. This allowed us to map current support services across sectors in Scotland. Once we established the variety of support systems, we could begin to understand how land managers are interacting and engaging with these systems, whilst identifying key barriers and opportunities that could be used to inform future policy support.

        We achieved this by firstly identifying a range of typical land manager archetypes in Scotland, followed by a review of all visible support systems identified through academic and grey literature review.

        More detail on the types of support available is given in Appendix A Support in terms of funding is available from Government and the Private sector. Advice and information can be sought from direct Government sources plus third-party sources funded by Government (e.g. the Farm Advisory Service) but also independent third-party provision. Third sector, charities and Non-Governmental Organisations also provide landowners with advice and funding to undertake measures that align with their objectives.

        Initial land use support system mapping

        The infographic on the following page (Figure 2) displays a high-level mapping overview of the current land use support systems in Scotland and the extent to which land managers are engaging with each. Most land managers engage with government agency support and funding, with agricultural land managers doing this to a greater extent. This is mostly limited to schemes such as BPS and LFASS as these offer large rewards for less administrative actions compared to other schemes, such as AECS. Other land managers are more likely to be engaging with corporate buyers and private sector sources of support, such as emerging natural capital opportunities.

        Figure 2 demonstrates clearly that the land manager support network in Scotland is a complex entity, with different land managers drawing from a wide range of support sources. Whilst it has not been possible to quantify the exact support flows between support providers and support receivers, we have provided an indication of the overall network and flow of support in Scottish Agriculture, helping us map current land manager engagement with support systems.

        A diagram of support in scotland Description automatically generated

        Figure 2 – Land use support system providers in Scotland. Source: Adapted from Sutherland et al. (2023)

        Stakeholder views on engagement with support systems

        It was recognised from the outset that the results of the evidence review must be calibrated against the lived experience of key stakeholders. We were able to conduct 25 interviews, and had scheduled to supplement this with additional workshops, but it proved very difficult to gain substantive input from planned workshops due to the timing overlap with the peak summer workload alongside harvesting.

        We have captured the results of the stakeholder feedback below. This should be read alongside the review of the literature which is presented in section 7. Whilst there are significant similarities between the evidence from the literature review and stakeholder perceptions from the interviews, we recognise that this evidence would be usefully supplemented by a more in-depth form of action research with a wider stakeholder group, in particular potential support recipients, which would help to deliver more substantive results.

        Factors influencing land managers’ decisions.

        Stakeholder interviewees identified many factors influencing the ability and willingness of land managers to change management practices and/or land use patterns. Although varying in terms of emphasis and specific examples offered, there was a high degree of agreement across stakeholders (and consistency with the literature) regarding the main categories of (interacting) influences, which can be summarized as follows:

        Confidence and understanding

        Land management involves a range of tasks requiring both practical skills (e.g. handling livestock and machinery) but also organizational (e.g. resource allocation) and strategic (e.g. business planning). Changing land management practices and/or land use patterns requires expanding this skill set. However, not all land managers currently have the necessary skills, leading to many having a low understanding of how to change and low confidence in abilities to change successfully. Conflicting messages about the definitions, relative merits and compatibility of different practices (e.g. afforestation, regenerative agriculture) cause significant confusion, reinforcing an underlying wariness of changing unnecessarily.

        Indeed, stakeholders were concerned that basic awareness amongst many land managers of requirements for change under both future agricultural policy, but also private supply-chain pressures, is still very low. Clearer and more consistent messaging from government and industry leaders would help, particularly if it was accompanied by more detail on practical support measures, including funding levels, the provision of information, advice and training, and any implications for future eligibility for land-related tax breaks and other public funding sources.

        Resource constraints

        Although any given parcel of land can be used for a variety of purposes, its underlying natural capital and biophysical characteristics (e.g. climate, topography, soils) exert a significant influence over its inherent suitability for different uses. Consequently, land managers do not all face the same land use possibilities to deliver particular ecosystem services. The Less Favoured Area (LFA) designation recognizes this in agricultural production terms but variation in suitability to deliver other ecosystem services is also recognized through various environmental designations (and indeed spatial targeting of agri-environment measures).

        Farm type provides a convenient, albeit crude, indicator of likely flexibility in agricultural land use, with many hill and upland livestock farms being particularly constrained. The JHI Agricultural Land Capability Map (and equally the forestry suitability map) offers a more refined indication, but greater use of maps to categorise potential to deliver wider, environmental services would be helpful. For example, High Nature Value (HNV) farming.

        Beyond biophysical constraints, farm businesses are also constrained by the availability and quality of other resources – in particular, working capital, equipment and labour. Stakeholders stressed that many farm businesses operate on very slim margins and are risk averse, limiting the scope for experimentation and investment in new management practices or forms of land use. Financial support can help to overcome this, as can support scheme contracts’ length and flexibility. However, labour scarcity and the relentless nature of farming often leave little spare time to devote to engaging with the process of change.

        Geographical remoteness and/or poor communications connectivity can add further challenges. So can small scale – smaller businesses with fewer resources (especially labour) typically lack both the economies of scale and flexibility available to larger businesses to accommodate/experiment with change. This limits their ability to be creative and do something different. Some larger businesses have recruited in-house expertise and/or they directly commission academic and other consultants, particularly in relation to emerging nature-based solutions and rewilding exercises.

        Transaction costs

        The transaction costs of seeking information, advice, training, and external funding to implement change can be significant. To make it easy for all applicants, sources of information, advice, training and funding should be easy to locate. Administrative processes for applications, monitoring and reporting should be simple and accessible, including in their choice of language and terminology.

        Stakeholders acknowledged that accountability for public expenditure necessarily requires a degree of bureaucratic oversight. However, they expressed concern that the complexity of some funding schemes[2] was a deterrent to some applicants, including those with little spare time and/or an unfamiliarity with administrative processes. This phenomenon was described as ‘form anxiety’. The difficulties of coordinating across multiple sources of information, advice and training were recognized, and it was suggested that clearer signposting and the use of one-stop-shops would be welcome.

        Smaller businesses lacking the staff and/or finance to hire specialist advisors may be particularly affected by transaction costs, facing a proportionately greater burden than larger businesses. For example, there is often a fixed cost element to application processes regardless of the level of funding sought and having to seek information directly rather than being able to delegate to staff can have a high opportunity cost.

        Tenure

        Farm tenure exerts a direct influence over land managers’ ability to undertake change, particularly between different land uses. Specifically, whilst owner-occupiers have the freedom to choose how they manage their land, tenants are constrained by the terms of their lease. The degree of restriction varies across different types (e.g. length) of tenancy, with crofting tenure adding some further complexities, particularly in relation to common grazing.

        In most cases, agricultural tenancies restrict the range of land use activities permitted. For example, afforestation and non-agricultural enterprises are typically precluded from leases by default (although may be agreed via negotiation). Moreover, non-agriculturally productive parcels of land (e.g. pre-existing woodland, riparian habitats) are often excluded from the area covered by a lease. Consequently, the ability of many tenants to implement and benefit from land use change is currently constrained.

        However, some stakeholders believed that the issues around tenure constraints had become better understood in recent years and were hopeful that the forthcoming Agriculture Bill would address many of them.

        Motivations and norms

        Beyond the practical constraints suggested above that influence a land manager’s ability to change, willingness to change is also affected by various factors. In particular, by an individual land manager’s attitude towards and motivation for land management and by cultural norms held by family, friends and peer groups.

        Land managers need to perceive how change fits with business viability and continuity. Some land managers (e.g. rewilding estates, NGOs) may be motivated to undertake change primarily by seeking environmental improvements. Others may be more motivated by the traditional farming values centred around food production, and they be more fundamentally opposed to activities perceived as incompatible with growing or rearing consumable produce. The latter is particularly relevant to debates around afforestation and (to a lesser extent) peatland restoration.

        Many land managers are starting from a mainstream farming perspective, although not all are; other groups are perhaps more open to change such as community groups, foresters and horticultural producers. Stakeholders suggested that variation in willingness to change was likely to be significant across the full population of land managers and would complicate any targeting of encouragement to change.

        Stakeholders also noted that willingness to change could ultimately be influenced by financial pressures, whether via public finding or market signals, but that sustainable change would require cultural shifts – winning hearts and minds. This implies a need for clear industry leadership backed-up by the provision of information, advice and training plus (probably) encouragement for generational renewal. Negative perceptions of bureaucracy and of support payments simply flowing to advisers (a ‘consultants charter’) are widespread.

        Types and sources of support

        Stakeholders identified different types of support for land managers, distinguishing funding from other forms of support.[3]

        Funding

        Funding was further divided into public and private, although the emphasis was very much upon public funding. Public funding for land management is dominated by agricultural support, notably decoupled area payments plus limited voluntary coupled support. Significant funding is also available for forestry and peatland restoration, plus wider agri-environmental schemes, innovation funds and various capital grant schemes. Public funding is also available to land-based businesses from other sources, such as the Enterprise Networks (see Table 2 for listing).

        Stakeholders regarded public funding as essential to achieving management and land use change; in particular to offer financial incentives (or at least reduce disincentives) to make change worthwhile and to encourage any necessary capital investments. However, it was noted that inflation continues to erode the real terms value of public funding, decreasing the leverage that it has over management decisions.

        Private funding for changing land management is also available. For example, there are high-profile cases of new and large landowners essentially self-funding and/or harnessing emerging environmental funding mechanisms. The latter include the Woodland Carbon Code and the Peatland Code.

        However, the accessibility of such mechanisms to all land managers (e.g. tenants, common grazing, smaller holdings, community owners) is imperfect. Moreover, considerable uncertainty exists over the future value of carbon credits, and the possibility of claims over them by downstream supply-chain partners. Consequently, notwithstanding Scottish Government aspirations to increase private funding, stakeholders expressed some scepticism about the potential of private funding to replace public funding.

        Non-funding support

        Stakeholders also sub-divided non-funding support, into procedural support to help land managers navigate bureaucratic processes (e.g. advice on how to complete application forms, enrol in training programmes) and support to help with actual activities on-the-ground (e.g. training in new management practices). Both were regarded as necessary, but the degree of procedural support required relates back to concerns about transaction costs.

        Procedural support tends to either take the form of information and general advice provided by the source of any funding, or the form of professional assistance to comply with application and reporting processes. For example, public funding is accompanied by online (and sometimes print) public guidance material plus online, phone and (sometimes) face-to-face advice on (e.g.) eligibility criteria, payment rates and evidence requirements. Private sources (e.g. land agents, consultants) often mirror this, but also offer further hands-on assistance to gather necessary data and complete paperwork plus more bespoke advice for individual land managers.

        Practical support is similarly available in different forms from a variety of sources. Indeed, stakeholders emphasized the huge variety of forms and sources (see Table 2 for listing). For example, information is available via print and social media from public (e.g. Scottish Government, NatureScot, SEPA, Universities), private (e.g., levy bodies, consultants, input suppliers) and third-sector (e.g. NGOs) providers and advice can be offered one-to-one or one-to-many[4] either online or face-to-face. Moreover, face-to-face may involve a simple meeting or a site visit or demonstration. Vocational training (e.g. via Lantra or colleges) tends to involve face-to-face events, but online training can suit some strategic and planning type skills development. Stakeholders suggested that the breadth of support sources was confusing for some land managers and better alignment or at least signposting between sources would be helpful, although signposting ideally needs to be via people as well as (rather than just) an online portal, for land managers to define the correct source of support for their own individual circumstances.

        Importantly, stakeholders also stressed the role of informal sources of information and advice. For example, family and friends plus unrelated business professionals (e.g. accountants, vets). Peer group networks (local but also international) of like-minded people can also be important – indeed some stakeholders identified these as particularly relevant for emerging practices such regenerative agriculture and agro-forestry which some stakeholders regarded as not well-served by more formal support mechanisms. Peer networking can be encouraged through trained facilitators and funding.

        Availability, accessibility and relevance

        Uptake of information, advice and training requires land managers to trust the source and to see the relevance of what is being offered. This poses a demand-side challenge in persuading land managers of the need for change and relates back to points made above regarding the need for clear, consistent messaging from government and industry leaders to set the tone – particularly in relation to strategic business skills and new technical skills.

        However, it also poses supply-side challenges in terms of the availability and accessibility of information, advice and training. Government only has leverage of this through either direct provision itself, or funding of third parties to provide support. Stakeholders noted that availability was already patchy geographically and in terms of specialist topics. Moreover, they were not confident that public funding levels would be sufficient to cover all future requirements – implying a need to prioritise particular topics or groups of land managers, and/or to rely more upon online and one-to-many methods (despite experiential, hands-on learning being viewed as more effective).

        Citing diminishing returns and the 80/20 rule[5], some questioned the merits of trying to accommodate all ‘hard to reach’ groups (e.g. smaller producers, new entrants, women, the very young, those with poor mental health). However, the Women in Agriculture initiative was cited as a good example of targeting.

        Furthermore, even if future funding was sufficient, stakeholders were not confident that sufficient appropriate advisors would be available in the short-term. Trust depends on perceived credibility and, rightly or wrongly, in many cases this requires advisors to have agricultural backgrounds – yet the types of management and land use changes required extend beyond agriculture. This implies a need to upskill existing advisors but also to recruit advisors from different backgrounds – either to work in teams or (hopefully) to be accepted as credible by land managers.

        Stakeholders offered a variety of solutions to this problem, including allowing the Farm Advisory Service (FAS) to evolve in terms of its modes of operation and topic overage but also to sub-contract other independent and/or specialist advisers (including existing land managers) as appropriate. Deployment of RPID staff to offer advice as well as conducting inspections was also suggested, reminiscent of previous policy eras and also, to some extent, emulating more recent practice in forestry and catchment management.

        The use of facilitators rather than advisors was supported by some stakeholders, reflecting (possibly) easier recruitment (technical expertise is less essential than people skills) and perceived advantages of facilitated experiential learning rather than expert instruction.

        It was also suggested that advisors should be included more formally in policy design and monitoring processes since they are well placed to offer insights into how ideas will be received and implemented on-the-ground. It was noted that total formal advisory capacity includes those working for input (e.g. seed, feed, fertiliser) suppliers as well as those aligned with FAS or working independently.[6]

        Table 2 – Cited examples of support

        Category

        Funding (for investment, working capital and income support)

        Info/advice/training (via print & social media, online, telephone, face-to-face, demonstrations, one-to-one, one-to-many etc).

        Private, independent

        Loans.

        Equity partners. Crowdfunding.

        Impact bonds.

        Carbon markets.

        SAC Consulting, ADAS, Land Agents.

        Forest Carbon. Scottish Agronomy.

        Smaller independent consultancies (e.g., 5 AGM, ScotFWAG).

        Vets. Accountants. Contractors.

        Ringlink Scotland.

        Private, tied

        Input suppliers and marts (credit lines).

        Downstream buyers (credit lines, grants).

        Feed/Fertiliser/Seed/Machinery suppliers.

        Banks.

        Downstream supply-chain.

        Public, national

        Ag and forestry support/grants.

        Research grants.

        Peatland Action grants.

        Scottish Government. SEPA.

        Forestry & Land Scotland. FAS. Scottish Land Fund.

        Public, local

        		 

        RPID Area Offices; RLUPs; National Parks.

        Research body

        Grants.

        SRUC, JHI, Mordun, Universities

        EPI-Agri

        NGO

        Woodland Trust grants.

        RSPB, Wildlife Trusts, Soil Association.

        Lantra.

        Land manager organization, formal

        		 

        QMS. AHDB. SAOS. Confor. RICS.

        STFA. NFUS. SLE. SCF. NBA. NSA. DMG.

        Monitor Farms.

        Land manager organization, informal

        		 

        Peer-to-peer.

        Innovative Farmers. Pasture for Life. Nature Friendly Farming Network.

        Neighbours/personal network

        Business partners.

        Neighbours. Business partners.

        Family

        Friends and family.

        Non-farming income.

        Inter-generational.

        Generic business support

        Loans.

        Enterprise Networks, Business Gateway. Local Authorities. Banks

        Land manager experiences of support systems

        As part of this research project, we attempted to identify and map all existing and relevant land use information systems, support services and the current incentives for land use transformation directly related to achieving Net Zero and/or nature restoration. An outline of all the support schemes identified can be found in Appendix A. We then collected additional information on a sub-set of current support systems administered by the Scottish Government, to explore specific touch points for land managers. To frame this exercise, we firstly mapped the main agencies within the Scottish government that are responsible for the relevant land manager support systems (Figure 3).

        Figure 3 underlines that multiple agencies are responsible for providing and administrating support to land managers in Scotland. This has the effect of increasing administrative burdens for land managers if systems across agencies are not in sync in terms of data collection and system operation.

        Figure 3 – Agencies responsible for land manager support in Scottish Government

        Insights from the literature

        We can gain significant insight from published grey literature about where, when, and how land managers interact with support systems and services. There are three highly relevant published pieces of work. The first is the RPID customer satisfaction survey (RPID, 2021), where RPID customers gave their views on the application process and how it could be improved. 2147 customers filled in this survey, providing a robust sample size to gather insights from. The second piece of work is the NatureScot Research Report 1254 (NatureScot, 2021), where biodiversity outcomes were evaluated. This included a quick survey of applicants’ views on the application process. The third piece of work is ‘Doing Better Initiative to Reduce Red Tape for Farmers & Rural Land Managers’ (SRUC, 2014) where regulations (or their implementation) that impinge on business decisions were identified and solutions were put forward to address these.

        Administrative burdens

        The general literature review (reported in Section 7) and Stakeholder views (reported in Section 5) revealed that the administrative burden and ‘form anxiety’ associated with support schemes can significantly affect land manager engagement with support systems.

        We can relate this to the RPID survey responses, in particular the question ‘Applications made to other schemes in the last twelve months’. Interestingly, 77% of RPID customers stated that they did not make another application to another non-SAF (Outside BPS, LFASS, AECS, FGS) scheme in the last 12 months.

        Groups who had not made another scheme application are compared below:

        • More owners (80%) than tenants (74%) and business partners (70%);
        • More other businesses (84%) and farms (79%) than crofts (73%);
        • More older (84%) than younger (66%) customers; and
        • More customers that completed their SAF with support (81%) than those that completed it on their own (74%).

        This would suggest that for the majority of RPID customers, the main support systems they are engaging with fall within the bracket of the SAF administrative process. It appears that many land managers are only engaging with SAF and not applying for schemes outwith this (e.g. AECS, Peatland Action etc.). Although it is difficult to draw conclusions from this question alone, the supporting evidence from this report would suggest that the administrative burdens are a considerable factor in preventing land managers from engaging with other support systems outside their SAF application.

        For instance, the RPID survey found that a substantial number of RPID customers felt that application processes were too complicated, or the application forms were too long or complicated. When asked what customers’ main reasons for dissatisfaction with information from RPID, the main two reasons given were:

        • The application process is too complicated (53%)
        • Application forms are too long/complicated (52%)

        Furthermore, in the 2013 RPID customer satisfaction survey, the most common reason for dissatisfaction with information from RPID was ‘not enough information being available’ (29%). This suggests that the administrative burden involved with applying for rural funding schemes has become a more significant influence on farmer decisions in the period between 2013-2021.

        The challenges of administrative burdens are further reinforced when customers were asked about the ‘aspects of RPID’s performance customers would like to see improved’ where the most popular answer was ‘application forms are easy to complete’ (42%). One respondent was quoted:

        “Website and all forms etc. need to be rewritten and simplified. They need to be clear and concise and user friendly. Use words not acronyms. Use far fewer words.”

        We find further evidence to support this in SRUC (2014) where a list of recommendations is provided to the Scottish Government on how to reduce red tape burdens placed on farmers and land managers. Recommendation 5 states that an IT system should be developed that reduces the form filling burden for farmers and land managers – reducing administration costs. This recommendation also suggests that a full review of data requests from farmers and land managers is undertaken to ensure that duplication is minimised.

        Despite this point being raised in 2014, the findings from the RPID survey suggest that from 2013 to 2021 administrative burdens on land managers applying for government support schemes have increased.

        Support required to access funding

        There is also substantial evidence that suggests that many land managers in Scotland require support to submit applications to financial support systems. Evidence for this is provided by the RPID survey, where the following three points were cited as the reasons why customers needed some support with their Single Application Form submission:

        • Personal (e.g., first time completing form, learning disability) – 43%
        • Mistakes (e.g., want to avoid mistakes) – 41%
        • Forms (e.g., difficulty accessing forms, take too long to complete) – 34%

        This would suggest that many land managers find the current administrative processes involved with submitting applications to support systems a significant barrier to engagement and require support to ensure that they can access these. The response to this question suggests that the current complexity is leading landowners to obtain procedural support to complete their applications.

        Of those that are using procedural support to complete applications, SRUC agents are the most common support agents being used (48% of cases). Interestingly, other business (not farmers) used commercial agents to support applications 51% of the time.

        Land manager support system mapping

        This section presents three infographics (drawn from RPID survey data and our findings from the previous sections of this study) representing the typical land manager pathways to access agricultural support systems in Scotland. Each infographic is broken down into four main sections (from left to right). The first section, motivations, highlights the broad overarching motivations that a land manager is looking to achieve within their business objectives. This includes motivations such as ‘business support’ and ‘woodland establishment’. The following section highlights the agency touchpoints that a land manager will engage with if they decide to follow one or multiple of the previous motivations. This includes both the agency (such as RPID) and the specific scheme that relates to that motivation (such as the Forestry Grant Scheme for Woodland establishment). The third section shows the administrative actions that are associated with engaging with each different support scheme, including information such as what IT system is used (e.g. RPID portal) and if support is generally needed by a third party. The final section details what kind of login credentials are needed for each administrative action and if these are shared or unique for each scheme.

        Figure 4 represents all the pathways open to land managers, providing an overview of the support system landscape. Figure 5 highlights the pathways that a typical farming land manager could take. Figure 6 highlights the pathway that a non-farming land manager, such as an estate, could take. The following sub-sections draw out some of the key findings and help understand where, when and how land managers interact with support systems and services.

        Figure 4 – land manager support system map

        This figure presents an overview of all the motivations, touchpoints and administrative actions that a land manager could undertake if they were to take certain pathways. Key points from this infographic include:

        • It appears that land managers only need to have one login credential to access all support services via RPID (Rural Payments and Inspections Division) in Scotland. This is the RPID portal login, where land managers can access the SAF, AECS application, SSBSS & SUSSS form and FGS application. For those schemes not under the umbrella of the RPID portal (Peatland Action), online submissions are required that do not require login credentials (FAS applications still require RPID Business Reference Number however). This would suggest that login credentials do not pose a significant barrier to land manager engagement with support systems.
        • Regarding touch points, RPID is the agency that land managers are most likely to be engaging with for funding. This is because the most popular support schemes (BPS, LFASS, AECS etc.) are administrated through this agency. Other support schemes that are not administrated by RPID, such as the Forestry Grant Scheme, are still accessed through the RPID portal. FAS and Peatland Action support schemes are accessed outwith the RPID portal, but require relatively simple administrative inputs to complete.
        • Overall, the RPID public sector support system network is administratively logical from a high-level perspective. The majority of schemes are accessed through the RPID portal, and those that are not are procedurally straightforward in terms of required steps. However, the level of detailed information needed by certain schemes makes accessing a wide range of these extremely challenging for some land managers in Scotland (recalling from section 5 that land managers differ widely with respect to skills and confidence to tackle administrative processes and implement management changes). For example, AECS applications are considered very complex due to the level of information that needs to be provided along with the lengthy application form/process. Furthermore, Forestry Grant Scheme applications require a level of detail that is beyond most typical land managers’ (farmers etc.) knowledge, leading to a reliance on external specialists to complete applications.
        • On the whole, this would suggest that the complexities in land manager support systems, including the level of detail needed for specific applications are reducing engagement with systems that could encourage improved environmental management practices. This does not take into account private schemes, such as the Woodland Carbon Code, which would only add to this complexity.
        • All other things being equal, administrative simplicity is preferable to complexity and (for applicants) greater flexibility is preferred. Hence efforts to, for example, streamline application and monitoring processes, reduce information burdens, widen application windows and vary contract lengths, are justifiable. However, accountability for public expenditure requires a degree of bureaucracy to ensure that funds are disbursed and used as intended, and simplicity and flexibility for applicants may impose additional complexity for administrators. Consequently, there are trade-offs, and the scope for improvements in process design alone will typically be limited.
        • This implies that other steps need to be taken to improve accessibility, including the provision of additional procedural information and advice – which necessarily incurs additional public administrative costs, raising familiar questions regarding the appropriate degree of such assistance and whether it should be universal or targeted at specific groups.
        • Moreover, administrative touch-points and contractual constraints are only one influence on land manager behaviour, implying that improved accessibility and flexibility will not by itself increase overall engagement with land use change. Other measures will also be needed. For example, attractive payment rates, sufficient technical advice and training, and support for capital investments.

        Figure 5 – farmer decision pathway map

        This figure presents an indicative pathway through the support systems that would be taken by a land manager (farmer) who does not have any specific environmental goals (woodland establishment, peatland restoration) but would like to improve the efficiency of their operation and reduce their overall impact on the environment. It is important to stress that this pathway is indicative, and it is not intended to represent all farmers in all locations. In reality, as explained in the literature review in section 7 later, all land managers will have a unique set of motivations, barriers and opportunities regarding land management practices that will affect their engagement with support systems. The findings from this infographic are summarised below:

        • The majority of farming land managers will be engaging with support systems that are accessed through the SAF process (BPS etc.) as these are familiar and provide a high level of financial support for a relatively small administrative and practical input.
        • Land managers of this type could also be engaging with AECS. This provides the land manager with an opportunity to improve the economic performance of their operations, whilst also benefitting the environment. Land managers will often choose options that require the smallest practical/administrative inputs compared to financial returns. Many land managers will require support from a third party to complete their AECS application due to the complexity of information required.
        • Many land managers of this type will rely on FAS and other agents, along with informal networks, to provide procedural support to their applications to support systems. This is because farming land managers are often time-poor due to their focus on practical activities on farm, relying on others to assist with the administrative processes of applying to support schemes.

        Figure 6 – Non-farmer decision pathway map

        This figure presents an indicative pathway through the support systems that would be taken by a land manager (non-farming) who is looking to diversify the use of their land, improving economic and environmental performance simultaneously. Again, it is important to stress that this pathway is indicative, and it is not intended to represent all non-farming land managers in all locations. In reality, as explained in the literature review, all land managers will have a unique set of motivations, barriers and opportunities regarding land management practices that will affect their engagement with support systems. The findings from this infographic are presented below:

        • Non-farming land managers are much more likely to engage with a wider range of support systems outwith those administered by RPID. This may be due to a mixture of different beliefs, fewer/different constraints on time and resources and more desire to diversify income streams to ensure financial resilience.
        • These land managers still often rely on external specialists to assist with certain elements of the application process, such as external forestry consults when applying for the Forest Grant Scheme.

        Figure 4. Land manager support system map

        Figure 5 – farmer decision pathway map (N.B. this is indicative and not intended to represent all farmers in all locations.)

        Figure 6 – Non-farmer decision pathway map (N.B. this is indicative and not intended to represent all non-farming land managers in all locations.

        Land manager attitudes – a review of the literature

        Factors affecting engagement with support schemes

        The literature review highlighted that internal factors such as attitudes, beliefs and personal values can have a significant impact on engagement with support systems.

        Values and knowledge

        It was recognised as far back as the 1970’s (Gasson 1973) that farmers do not always make financially rational decisions and that a range of social and intrinsic factors may also be prioritised; risk perception, values and knowledge are particularly influential in business decision making.

        Land managers, in particular farmers, generally have a strong sense of self and are often influenced by their intrinsic values. This theme can be explored when looking at land manager attitudes towards planting trees on their land. Historic literature suggests that land managers have a resistance to creating woodland and forests, due to traditional values surrounding the belief that measurable productivity and growth are their traditional core purpose. Burton et al. (2008) explores the importance of the ‘good farmer’ identity, where social status and personal validation is derived by the evidence of delivering a skilled role on landscapes, i.e. livestock farming. Burton (2004) concludes that planting woodland and forest (afforestation), as well as engagement with other non-farming activities, represents both a loss in productive output and a symbolic loss of the opportunity to demonstrate farming skill and knowledge.

        Farmers often resist afforestation on this basis, with agriculture and forestry historically being viewed as competitors for land rather than complementary land management practices that could be adopted as a sustainable approach to single proprietary unit diversification (Nicholls, 1969; Hopkins et al. 2017). Therefore, as many farmers perceive themselves to be farmers only, they are unwilling to change their practices due to inherent values that are tied to their current activity. This trend is likely to be seen across most landowners, not just restricted to afforestation, who will possess their own objectives, values and knowledge. For example, Moxey et al. (2021) note that the willingness to participate in peatland restoration schemes is highly variable, and that cultural ties shape attitudes towards restoration activities.

        On the other hand, some land managers have intrinsic values that prioritise attempting to balance the need for a productive enterprise and protecting/enhancing the environment. Mills et al., (2017) found that it was common to hear that farmers were attempting to find a balance between production and environmental management, which were not always seen as conflicting needs.

        This is reflected by the well documented finding that farmers (and land managers as a whole) are often willing to adopt environmental measures if they are perceived to increase the efficiency of on farm activities and therefore prove cost effective (Feliciano et al. 2014). For example, Farsted et al. (2022) noted that climate mitigation measures are mainly perceived as, treated as, and appreciated for offering farm-beneficial functions other than climate change mitigation by Norwegian farmers. This is also reflected in the Farm Practices Survey (2022) where 44% of farmers thought that reducing emissions would improve farm profitability and that the main motivation for farmers to take action to reduce GHGs on farm was that it was considered good business practice (84%).

        Unsurprisingly, those land managers that are personally concerned/motivated to address climate change are more likely to be undertaking environmental management measures on their land. Those who are less engaged are likewise less likely to be undertaking environmental management practices.

        Ease of transition, control and risk perception

        An important aspect of land manager engagement with support systems is the perceived degree of control afforded by the available schemes and the ease of operational transition.

        Academic literature in this area has focused on exploring the barriers that prevent uptake of Agri-Environment Schemes (AES), specifically focusing on schemes that restrict land manager’s ability to control and own the final product that is being delivered. For example, Lampkin et al. (2021) suggest that a top-down prescriptive approach of some AESs has failed to engage farmers in a way that would give them ownership of the delivery of environmental goods. This view is supported by Daxini et al. (2019) who found that the intention to follow a Nutrient Management Plan is primarily driven by perceived behavioural control.

        Thompson et al. (2021) further suggest that farmers are more likely to participate in AESs if they retain some control over implementation, which requires flexible terms and regular monitoring. Therefore, it appears an important element of how land managers engage with current support systems involves analysing the degree to which each support system will affect operational control.

        Another key internal factor that will influence land manager engagement with support systems is risk perception. Multiple sources suggest that the clarity and certainty of the final objective of any support scheme is important to its uptake and success. Analysis from the James Hutton Institute (Rajagopalan and Kuhfuss, 2017) suggested that the uptake of the Agri-Environment Climate Scheme (AECS) was restricted by the lack of flexibility in options, along with the uncertainty on the environmental outcome due to the influence of external factors outside of the land managers’ control (climate, pests etc.)

        Kuhfuss et al. (2018) also suggest the success of AES may vary depending on the clarity of the objectives and perceived challenges in achieving them. For example, afforestation is a relatively easy concept to understand and is generally low risk, however peatland restoration is much more difficult conceptually and is seen as a higher risk option. Indeed, peatland restoration may seem to be of high risk because UK peatlands are at the southern limit in the northern hemisphere and therefore at risk due to anticipated climatic changes.

        The tolerance of land manager to the inherent risks that are involved with engaging with support schemes that require alterations in management practices is an important factor in determining uptake.

        Socio-demographic, age and education

        The traditional view within the literature is that older land managers are less willing to change land management practices and that younger and more educated farmers are more willing to adopt new practices and engage with environmental support schemes. Sutherland et al. 2016; Mills et al. 2016; Brown, 2019)

        This is often supported by evidence that younger people have a higher degree of environmental concern, risk tolerance and openness to new practices (Dessart et al. 2019). Therefore, younger land managers may be more able to engage with support systems and understand the requirements and trade-offs involved. Benni et al. (2022) reported that the age and education of farmers was not found to affect time requirements to fill in administrative burdens. This suggests that the transaction costs associated with support systems does not interplay with age and education levels of applicants.

        When analysing the factors behind farmers’ adoption of ecological practices, Thompson et al. (2023) found that socio-economic factors were insignificant more often than they were significant. Despite these findings, Tyllianakis and Martin-Ortega (2021) argue that the evidence base suggests that wealthier land managers stand to gain more than less wealthy land managers in enrolling in AESs. The impact of socio-economic and demographic factors on land manager engagement is therefore likely to vary considerably across different sectors and organisational structures.

        Engagement and trust of official advice vs. informal networks

        Due to the rise of information available (mainly through the expansion of digital services), answers can be found to many real-world and agricultural issues and questions online. Rust et al. (2021) suggest that farmers have previously often relied on in-person advice from traditional ‘experts’, such as agricultural advisors, to inform farm management practices. Sutherland et al. (2013) stress the importance of the perceived credibility of sources of advice. This view is supported by Daxini et al. (2019) who found that trust in technical sources of information (e.g. advisor and discussion group) is found to be a more influential determinant of farmers’ attitude, subjective norm and perceived behavioural control than trust in social information sources (e.g. family and the media).

        Nonetheless, Birner et al. (2006) and Sutherland et al. (2022, 2023) highlight the breadth of sources of information, advice and training utilised by land managers, encompassing family and friends, peer groups, accountants, vets, input suppliers, private consultants, NGOs and public sector bodies, accessed in different modes including via print and social media, online, one-to-one meetings, group meetings and events/demonstrations.

        This is discussed further by Rust et al. (2021), who suggest that farmers are now changing their information sources due to the rise of online sources of knowledge and advice, foregoing traditional ‘expert’ advice in preference for peer-generated information. They found that farmers regularly use online sources to access soil information and often changed practices based on information from social media. Results from their survey suggested that farmers placed more trust in other farmers and peer networks rather than traditional ‘experts’, particularly those from academic and government institutions, who they believed were not empathetic with the farmers’ needs.

        This could be further compounded by many farmers deciding not to engage with advisory services at all. Dunne et al. (2019) found that almost one-third of farmers in Ireland were not using extension services and a further third had contracts with private sector and public sector advisors.

        Research from the James Hutton Institute (Hopkins et al. 2020) also found that new entrants to farming are less likely to engage with subsidies and support systems than existing farmers in the sector. In particular, new entrants did not think that the ‘official’ Farm Advisory Service (FAS) and the Scottish Government were helpful when starting their enterprise. This finding is mirrored by Labarthe et al. (2022), who suggest that new entrants to agriculture are often disconnected from knowledge structures, as they often operate businesses that are not typically addressed by advisory services. Other ‘hard to reach’ or less engaged groups can include women farmers and those suffering from poor mental health (Hurley et al. 2022).

        Understanding how land managers engage with knowledge networks and their trust of these networks is an important factor in determining their experience of support systems. By improving farmers’ awareness, it is expected that changes in behaviour would be reflected in the adoption of improved management practices. However, Okumah et al. (2021) argue that the limited research in this area so far has shown that the link between awareness and adoption exists. This link is indirect and is mediated and moderated by other factors. Nevertheless, on balance, it seems that hypothetically, with all factors being equal, more awareness is better than less awareness.

        Summary

        The willingness of land managers to engage with forms of support for changing management practices and land use patterns is influenced by a number of internal factors. These include the compatibility of change with land managers’ self-identify of what it means to be a land manager, particularly a farmer – something that is ingrained and often inter-generational, making it difficult to alter in the short-term. Similarly, inflexible management prescriptions are at odds with cherished decision-making autonomy and change can be perceived as incurring higher than acceptable levels of risk, although attitudes can be softened if prescriptions align with personal or business objectives.

        Weak confidence and understanding regarding the purpose and practicalities of change reinforce business-as-usual, with a lack of trust in the credibility and relevance of available sources of information, advice and training further constraining engagement. Such internal factors vary across individual land managers, but there is some evidence that greater openness to change may be associated with (younger) age and (greater) education but also that some groups, including women, new entrants with no prior experience and people suffering from poor mental health, may be further disconnected from support systems.

        External factors influencing land manager engagement with support schemes

        Alongside the internal factors identified above, there are significant external factors that influence land manager behaviours, including the physical, environmental, business structure, financial, knowledge availability, social norms and time factors on land management.

        Funding, costs and policy indicators

        As with any business operation, the need to generate revenue to ensure the survival of the business is a high priority for any land manager. The majority of land managers, especially tenants, seek to make a profit from their land. Therefore, financial considerations are paramount to the landowners’ decision-making process, underlining the importance of support schemes and their potential to influence change.

        Previous research has indicated that given the unpredictability of agricultural and land-based activities, only when economic conditions were stable could land managers focus on other activities – including environmental considerations (Scottish Government, 2012). Measures that do not guarantee financial benefits – e.g., that may have a negative impact on production or come at a cost to the farmer – are unlikely to be adopted in the absence of other tangible benefits.

        In the latest Farm Practices Survey (2022), 32% of farmers who were already taking actions to reduce GHG emissions stated that environmental measures were too expensive to implement. This may explain why Ruto and Garrod (2009) found payment rates to be a key driver and Pineiro et al. (2021) conclude that interventions that lead to short term financial benefits have higher adoption rates than those that concentrate on delivering ecological service provision. This view is supported by Mills et al. (2016) who state that current financial incentives and regulatory approaches have had a degree of success in encouraging environmental practices, but these are ultimately transient drivers that have not led to long-term sustainability.

        Within this, policy uncertainty may further hinder the uptake of environmental land management practices. Kuhfuss et al. (2018) describe these uncertainties as:

        • differences in sources in funding (public vs private)
        • eligibility rules
        • financial uncertainty of prices in the carbon markets and
        • potential emerging markets that may provide better results.

        This is further compounded by whether a payment by results or an activity model is used. Moxey at al. (2021) reinforce this point by suggesting that peatland restoration work is hindered by the perceived ineligibility for agricultural support payments, tax breaks and concerns over future support arrangement and carbon market fluctuations.

        Bio-physical constraints, tenure and structure

        Environmental constraints often limit which environmental measures can be implemented on a spatial scale. Location, climate and environmental quality are key determinants of which support schemes are viable for a land manager’s piece of land as they affect what is implementable practically in local conditions in relation to opportunities. An example of this is the large amount of peatland and moorland that provides potential for peat bog restoration management practices: in these locations woodland planting should be discouraged (Lampkin et al. 2021). Paulus et al. (2022) provide further evidence to support this point by suggesting that environmental management practices are more likely to be implemented on sites with unfavourable agricultural conditions.

        Two more important factors are the size of the enterprise and the tenure of the land. Regarding tenure, a meta-analysis of 46 studies (Baumgart-Getz et al. 2012) looking at the adoption of best-management practices found secure tenure to be a positive indicator of adoption, and the findings are likely to apply to climate friendly measures as well. This suggests that land managers who either own their land or are on secure tenancies with a good relationship with their landlord are more likely to adopt environmental measures due to the long-term security that their tenure status affords them.

        Multiple sources within the literature also suggest that larger enterprises may be more willing and able to engage with support systems, particularly those with environmental outcomes (Mills et al. 2013; Paulus et al. 2022). Smaller enterprises are likely to have fewer opportunities to take elements out of production and fewer resources to apply without impacting their net income.

        Ease of access to support

        A key determinant of engagement with support systems is the perceived and actual accessibility of these schemes.

        If a scheme is considered to be straightforward and easy to apply for, there is likely to be high engagement. The opposite is true of a scheme that is considered complex and time consuming. For example, for land managers the administrative load (transaction costs) and time commitment is often the determining factor on whether to participate or not. A common criticism of AESs is that they often carry high transaction costs, especially in comparison to more traditional support schemes (Kuhfuss et al. 2018).

        Lampkin et al. (2021) suggest that schemes have become increasingly complex, partially in response to regulatory, audit and compliance issues. The administrative burden can also vary across enterprise type, with Benni et al. (2022) finding that dairy producers face substantially higher transaction costs than arable producers. Furthermore, once schemes are in place, the ongoing maintenance requirement for many AES (reporting etc.) can prove a further barrier to uptake (MacKay & Prager, 2021).

        The Peatland Code can be used to understand some of the accessibility issues found in the Scottish agricultural sector. Moxey et al. (2021) suggest that the administrative burden associated with applying for joint funding via AESs and via the Peatland Code is perceived as overly complex, with interactions between them further increasing this. The study notes that the issue of interacting schemes occurs when having to demonstrate additionality, aligning funding cycles between different sources and coordinating across multiple land managers and investors.

        Novo et al. (2021) also found that challenges in understanding the application process and funding mechanism were a barrier mentioned by interviewees in their study regarding the peatland carbon code.

        Therefore, the perceived and actual transaction costs associated with support systems are a barrier to uptake. When looking to address this, Westway et al. (2023) caution that simplicity is important to encourage uptake, however oversimplification of schemes can lead to unintended consequences and needs to be balanced against public accountability for expenditure.

        Knowledge availability, sharing and awareness

        Engagement with support schemes and uptake of specific on farm measures is frequently linked with the knowledge and understanding of the individual land manager (Toma et al. 2018).

        A lack of knowledge and understanding has been frequently cited as a key barrier to new management practices. This is further enhanced when new technological and informational processes are needed for alternative practices and if the costs/benefits are not clear or easy to judge. This finding is supported by results from the Farm Practitioner Survey (2022), where the most reported reason for not taking action was being unsure on what to do due to too many conflicting views (44%). These informational barriers are important as 30% responded that a lack of information was another key reason for not taking action.

        This sentiment is echoed by two specific examples in Scotland. Firstly, Moxey et al. (2021) found that the awareness of the need for and benefits of peatland restoration is generally not well known amongst land managers, along with the voluntary market of the Peatland Code. Secondly, Lozada & Karley (2022) suggest that more evidence and greater awareness are needed amongst land managers about the financial and social outcomes of agroecological practices to facilitate uptake.

        There is also evidence that land managers have a difference in ability to adopt new practices due to a variance in resources. Larger scale land management operations may have more resources and the ability to bring in consultants and agents for any new opportunities and land management practices. This is in comparison to smaller scale land managers who may not be able to approach new opportunities in the same manner due to (e.g.) a lack of time and cash plus higher overhead and transaction costs and less scope to cope with risk.

        As an example, it has been suggested that small scale agroecological farmers might disproportionately suffer from a lack of access to incentives, despite delivering to environmental policy targets, or see incentive schemes as contrary to their farming ethos (Lozada & Karley 2022). This involves access to specialist advisors, where more profitable enterprises will be able to access specific advice on a more frequent basis compared to less profitable enterprises.

        Social norms

        As seen in section 4.2 above, farmers do not always make rational economic decisions and are influenced by societal goals and norms (Mills et al. 2017), the influence of a land manager’s peer group is likely to determine the extent to which they engage with specific support systems and management practices. This is observed in multiple studies (Kuhfuss et al. 2016: Cullen et al. 2020; Cusworth, 2020) where peer behaviour has been deemed to influence land manager uptake of environmental practices to a varying degree through framing of what it means to be a ‘good farmer’.

        Howley et al. (2021) suggest that social norms can be harnessed to encourage pro-environmental behaviours in land managers. The researchers found that providing farmers with an opportunity to demonstrate their “green credentials” to their peer group can encourage conservation practices.

        Summary

        The ability of land managers to engage with changing management practices and land use patterns is influenced by a number of external factors. At a practical level, biophysical characteristics, and the area of land available will determine the suitability of alternative practices and land uses, but also the scope for experimentation and risk management. Equally, tenancy restrictions may impose legal constraints on freedom to change.

        As businesses, the financial consequences of making changes matters. Funding needs to cover actual cash costs but also opportunity costs (time, income forgone) and transaction costs. The latter arise from application and reporting processes, both for funding and/or non-funding support, and can be disproportionately burdensome for smaller land managers. Separately, access to support can vary in terms of eligibility but also the availability of information, advice and training. Importantly, internal factors such as social norms and peer group pressure strongly influence land managers’ self-identity. This affects their perception of whether different management practices and land use patterns are compatible with their own values.

        Discussion guide

        The findings from the literature review suggested that we should focus on three main themes when we were drilling into the details with key stakeholders:

        • identify the main determinants of ability and willingness to change land use and land management practices, to give us a clearer understanding of the key factors that influence land manager decision making, including their motivations, what they want to achieve for their business or organisation, and their appetite to change.
        • focus on the existing support systems that land managers are engaging with and their experiences of doing so. This allowed us to identify and map all existing and relevant land use information systems, support services and the current incentives for land use transformation directly related to achieving Net Zero and/or nature restoration and understand some of the key barriers/opportunities regarding land manager engagement with these systems.
        • explore how land managers are accessing these support systems, which allowed us to explore where, when and how the land managers interact with the systems and services.

        The interview methodology and more detail on the interview questions can be found in Appendix C, and the findings are summarised above in section 5.

        SWOT & PESTLE analysis

        This section provides the details of a SWOT and PESTLE analysis on the current land manager support systems in Scotland and were informed by the literature review and stakeholder engagement exercises.

        8.1 SWOT analysis

        Strengths

        Weaknesses

        • There are a wide range of funding and support schemes, giving land managers choice of which how to engage.
        • Some land manager types are self-sufficient and do not rely on public support systems to achieve their desired goals and outputs, for example large scale rewilding estates.
        • NGO’s and other charitable organisations generally have a more formalised internal system that gives them the capacity to take advantage of support systems and absorb the transaction costs associated with these.
        • Some sources of private funding are already well established and are being accessed by some Scottish land managers, such as the Woodland Carbon Code.
        • The majority of current support schemes are administrated through RPID. This means that land managers only need one set of login credentials to access the administrative processes of all support systems.
        • Many land managers in Scotland lack the technical understanding and/or risk appetite to change management practices without extensive support or tangible demonstrations.
        • Lack of clarity from government and industry leaders regarding priorities and trade-offs creates uncertainties and inhibits change.
        • Many land managers remain uncertain of where to find information, advice and training, but also lack trust in the credibility and relevance of some sources.
        • Most agricultural land managers are used to taking basic payment scheme payments and what is expected in return for this is perceived to be quite minimal from land managers perspectives. Therefore, increasing or changing support thresholds/minimum criteria is likely to encounter resistance.
        • Many support systems, in particular AECS, are considered overly complex by land managers who find them difficult to understand and apply for. This leads to resentment over the administrative burden involved in applying and maintaining AECS agreements.
        • Land managers perceive support rules to be overly restrictive, impacting their ability to have control over outcomes on their farm.
        • Lack of adequately trained advisory agents to provide support to land managers as they look to engage and undertake new environmental land management practices.
        • Many land managers in Scotland are constrained by bio-physical attributes which limit the management measures and activity type that they can undertake on their land.
        • Due to small operating margins along with limited access to skilled labour, machinery and specialist advice – many land managers are risk adverse. They are therefore less likely to engage with support systems that do not adequately cover risks.
        • Many land managers have in built attitudes towards certain land management practices and are therefore unlikely to engage with any support system that challenges their pre-defined beliefs and attitudes. This is particularly evident with forestry, with many farmers viewing tree planting on agricultural land in a negative light.
        • Many land managers will choose to engage with the financial support system that maximises profit for the least amount of input.
        • There has been an increase in the perception that support service application processes are too long/complicated amongst land managers, potentially affecting engagement with support schemes.
        • Land managers often rely on assistance, whether this be public/private/network to fill in support system application forms.

        Opportunities
        • Threats
        • Land managers engage with support systems and new management practices when in-person evidence and demonstration of the success of these systems/practices is available.
        • Larger holdings and particular industries (dairy, arable) are more willing to undertake environmental management practice changes and engage with new support systems that facilitate this.
        • Emerging natural capital markets.
        • Increasing the number of skilled advisors and/or facilitators could increase the uptake of environmental management practices and engagement with support schemes.
        • Land managers generally consider GHG mitigations measures to increase farm profitability. This would suggest that many land managers would engage with support systems that improve the GHG performance of their operations.
        • Simplifying or condensing application processes could increase the level of engagement with any upcoming support systems.
        • Land managers are using a wider range of new information sources, such as social media and other digital sources, to access informational support. Harnessing these digital communication methods could allow support to be accessed by a large range of land managers in Scotland using a one-to-many approach.
        • This research has indicated that land managers generally trust others that are in the profession (i.e. other land managers) over formalised advisors. Harnessing this trust and providing more peer-to-peer resource in Scottish agriculture is a potential opportunity to increase impactful support provision.
        • “Hard to reach” groups may not be reachable through support systems. Attempting to do so could cause resourcing issues that could lessen the impact of targeted support and funding.
        • Land managers are severely time restricted and do not have enough time to understand all the latest practices and standards that are expected of them.
        • Smaller holdings may be unable to keep up with increased ‘transaction costs’ if new support schemes are implemented that require an increased administrative burden.
        • Many land managers in Scotland rely on support systems to keep their enterprises profitable. Any changes to how these support systems are accessed could therefore prove unpopular.
        • Climate change is likely to change the environment in which land managers are operating in, meaning that future land use opportunities could be constrained by future climatic conditions.
        • Poor responsibility around emerging natural capital markets.

        8.2 PESTLE analysis

        Political
        • Continuing uncertainty and impact of Brexit on agricultural markets, including loss of tariff free export market, loss of labour pool and changes to CAP and subsidy schemes.
        • Uncertainty surrounding the funding scheme that will replace CAP and other EU aligned systems in Scotland.
        • Increased political discussions about the validity of taking agricultural land out of productivity for other environmental goals.
        • Political instability has the potential to change input market prices (such as the spike in fertiliser prices due to the war in Ukraine).
        • New Scottish Agriculture and Rural Communities Bill has been published, in addition to forthcoming Land Reform and Natural Environment bills which will bring in new legislation that land managers will need to comply with.
        • Policial commitments to a Just Transition.

        Economic
        • Cost-price squeeze on farm-gate margins due to supply-chain pressures make many agricultural land managers heavily dependent on public funding.
        • Uncertainty over future budgetary flexibility to maintain support funding for land-based businesses.
        • Loss of income and uncertainty post-CAP until new funding systems are in place and understood by land managers.
        • Emerging private finance (e.g. woodland carbon code) offers potential new income streams, but it is unregulated and subject to considerable uncertainty.
        • Price volatility linked to political and geopolitical circumstances.

        Social
        • Many ingrained beliefs towards land management processes are generational, and it may take a generational refresh for certain attitudes to become redundant.
        • There is uncertainty of transition if older land managers are less likely to engage with support systems than younger land managers.
        • There is an indication that land managers with a higher degree of education and those with higher environmental understanding are more likely to engage with support systems – particularly those with environmental outcomes.
        • There is a risk that ‘hard to reach’ groups, who are often already marginalised, will not benefit from future support systems, meaning they are less likely to engage with new management practices.
        • Land managers with learning difficulties, i.e. dyslexia, will have trouble engaging with more administrative requirements and burdens of future support systems if the requirements are too complex.
        • There is an increasing reliance on social media and other digital platforms to share knowledge and access informational support.
        • There is an increasing social awareness/view that taking productive agricultural land out of productivity to pursue an environmental goal could impact food security in the UK.

        Technological
        • Potential for new technological solutions, such as autonomous and alternatively fuelled machinery and methane inhibitors, to lower the carbon emissions resulting from land manager activities in Scotland.
        • The adoption of new lower carbon technology in Scottish Agriculture is likely to require significant financial investment.
        • AI and other technological developments have the potential to reduce the administrative burden on land managers in Scotland if harnessed effectively.
        • Improving internet connectivity in remote areas may increase land manager access to support systems.
        • Simplifying administrative systems online could facilitate land manager access to support systems.

        Legal
        • There is a complex regulatory framework surrounding rural land use in Scotland.
        • Land tenure arrangements, notably crofting tenure and farm tenancies, constrain access to both public and private environmental funding sources.
        • Upcoming Agriculture Bill will introduce new legislative changes.

        Environmental
        • Twin biodiversity and climate emergencies, as expressed in policy objectives and targets, imply significant and rapid change for Scottish rural land management.
        • Climate change itself will affect land management, requiring adaptation to wildfire, drought and pest/disease risks plus general growing conditions.

        Conclusions

        Our research has reinforced existing findings in the literature surrounding land manager behaviour and decision making. Reflecting its relative prominence within public expenditure and land-based businesses in rural areas, agriculture dominates much of published literature on land use support and this was supplemented by stakeholder interviews, including with individuals representing other sectors.

        The key message is that land manager engagement with support systems is determined by a range of interacting internal and external factors. These relate to financial, practical and cultural influences on both willingness and ability to engage. This is supported by the following conclusions:

        • The administrative systems associated with land use support in Scotland are perceived as logical from a high-level perspective. Most interactions with the system are through the RPID portal, which only requires one set of login credentials to access a wide range of support systems. Those support systems not under this umbrella are easy to access.
        • However, the administrative burden associated with applying to these schemes, i.e. form filling, is the main barrier to engagement. Some land managers have more resources available to absorb this administrative burden, such as large estates, investment owners and rewilding estates. If several schemes are appropriate this burden will increase.
        • Procedural support (i.e. form filling by an advisor on behalf of a land manager) is widely available from both public (FAS, SAC) and private advisory sources. However, this is distinct from practical support, such as site-specific implementation advice, which was frequently mentioned by stakeholders as key to facilitating the uptake of environmental management practices, and yet less readily available, and can depend on location.
        • We found that land managers often decide whether to engage with support and advice based on the credence of its source. For example, farmers are more likely to trust advisers/organisations that have a background in practical farming over those from a consulting/academic background.
        • Another key determinant of engagement with support systems was the level of control associated with outcomes/management practices. Stakeholders mentioned that the perceived prescriptive nature of AECS and forestry related grants would prevent land managers from choosing to access these support services.
        • Land managers in Scotland primarily access public funding support, with some accessing private finance to supplement their income or achieve specific goals. For those accessing private finance, this is generally done to avoid the conditionality of public funding support and retain operational control over the management of their land.
        • A lack of knowledge and understanding has been frequently cited as a key barrier to new management practices. This is further enhanced when new technological and informational processes are needed for alternative practices and if the costs/benefits are not clear or easy to judge.

        Going forwards, administrative simplicity is preferable to complexity and (for applicants) greater flexibility is preferred. Therefore, efforts to streamline application and monitoring processes, reduce information burdens, widen application windows and vary contract lengths, are justifiable. However, accountability for public expenditure requires a degree of bureaucracy to ensure that funds are disbursed and used as intended, and simplicity and flexibility for applicants may impose additional complexity for administrators. Consequently, there are trade-offs, and the scope for improvements in process design alone will typically be limited.

        As our literature findings highlight, administrative touch points and contractual constraints are only one influence on land manager behaviour. This implies that improved accessibility and flexibility will not by itself increase overall engagement with land use change. Other measures will also be needed such as attractive payment rates, sufficient technical advice, training and management flexibility.

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        Appendices

        Appendix A – Support system overview

        As part of the desk-based research element of this report, we attempted to discover as many of the existing official support systems available to land managers in Scotland as possible. This included visiting Scottish Government resources, such as the Rural Payments and Services website[7], along with an internet trawl through other resources – such as NatureScot’s summary of the Agri-Environment and Climate Scheme[8]. We used this information to compile Table 5 below, giving a summary of all the available sources of support and an indication, where possible, of how land managers are engaging with this support system.

        To help understand how land managers are engaging with support systems, we identified and defined the key support system providers. These are outlined below:

        Government – publicly funded support systems. These can come in the form of general funding support schemes (such as BPS) or more targeted schemes with environmental objectives (AECS). Government funding also underpins other forms of support, such as the Farm Advisory Service. Generic, rather than agricultural-specific business funding is also available from local and central government, but is generally regarded as less relevant to land managers.

        Private sector – Land managers routinely access private sector funding in the form of overdrafts and loans offered by banks, plus calling upon personal networks (friends and family). Other sources of short-term credit include auction markets and input suppliers. More novel funding sources such as crowdfunding and impact bonds have emerged in recent years, as have voluntary carbon markets e.g. the Woodland Carbon Code and the Peatland Code.

        Knowledge networks and advisory services – Land managers draw on a range of informational support when making decisions. This includes direct government sources plus third-party sources funded by government (e.g. the Farm Advisory Service) but also independent third-party provision. The latter includes advisory services tied to input suppliers as well as independent consultants but also, importantly, less formal reliance upon friends and family plus peer-to-peer networks.

        Third sector, charities and NGOS – Certain groups with defined goals, such as nature protection and restoration, also provide landowners with advice and funding to undertake measures that align with their objectives. These groups are often landowners themselves.

        Table 5: Support scheme overview

        Scheme

        Primary[9] Type of support

        Description

        Project providers

        Support providers

        Land manager experience of support system

        Decoupled area payments: Basic Payment Scheme/Greening/LFASS (also National Reserve)

        Financial

        The Basic Payment Scheme (BPS) acts as a safety net for farmers and crofters by supplementing their main business income. Greening is a top-up to the BPS. The National Reserve helps new and young farmers who do not automatically qualify for BPS entitlements. LFASS (Less Favoured Area Support Scheme) is a separate decoupled area payment, but covers most farm businesses, particularly beef and sheep farms. Payment rates per ha vary according to geography.

        Croft, Grazing, Mixed farm, Arable, Dairy, Pig & Poultry, Soft fruit, Estate (multi), Community ownership

        Government agencies

        Many land managers, particularly farmers, rely on basic annual payments to ensure profitability in their enterprises. For example, even with support payments, only 60% of dairy farms were profitable in 2018.[10] Those in the crofting and grazing industry have relied on support on the basis of what businesses ‘have’ or ‘had’ rather than what they ‘do’.[11] LFASS calculation methods have resulted in many businesses with historically managed higher livestock numbers getting overcompensated whilst other units that have since grown are not receiving full support payment levels to reflect their higher production and activity levels.

        Voluntary Coupled Support (VCS): Suckler Beef Support Scheme (SBSF)/Scottish Upland Sheep Support Scheme (SUSSS)

        Financial

        The SBSF and SUSSS are supplementary payments per selected animal, available to suckler beef and sheep farms in selected areas.

        Suckler beef and sheep farms

        Government agencies

        An attempt to target support payments at particularly vulnerable types of farming receiving low decoupled support.

        Woodland Carbon Code

        Financial

        The Woodland Carbon Code (WCC) is the UK’s voluntary carbon standard for woodland creation projects. It provides reassurance about the carbon savings that woodland projects may realistically achieve.

        Estate (multi)

        Estate (sporting)

        Estate (conservation)

        Charity organisation

        Estate (investment)

        Commercial forestry

        Community ownership

        Corporate buyers

        Government agencies

        Preliminary results of the analysis of Project Design Documents suggest that carbon is only one consideration amongst other factors. This is demonstrated by differences in planting and management decisions, which affect the type and uses of the woodland created. This is corroborated by interviews with developers and landowners, who expressed a wide range of interests and intentions behind woodland creation.[12]

        Peatland Carbon Code

        Financial

        The Peatland Code is a voluntary certification standard for UK peatland projects wishing to market the climate benefits of restoration. It provides assurances to carbon market buyers that the projects they are investing in are credible and deliverable.

        Estate (multi)

        Estate (sporting)

        Estate (conservation)

        Charity organisation

        Estate (investment)

        Commercial forestry

        Community ownership

        Corporate buyers

        Government agencies

        The Peatland Code itself is largely unknown amongst land managers and restoration practitioners. As a comparator, awareness of the Woodland Carbon Code is notably greater, as is its uptake.

        Peatland Action

        Financial

        The main source of public funding for peatland restoration, covering a proportion of upfront capital.

        Estate (multi)

        Estate (sporting)

        Estate (conservation)

        Charity organisation

        Estate (investment)

        Commercial forestry

        Community ownership

        Government agencies

        Proactive raising of awareness by NatureScot and iterative changes to payment rates and terms and conditions have achieved relatively high uptake rates, but the pace needs to quicken further if ambitious restoration targets are to be met.

        Agri-Environment Climate Scheme

        Financial

        The Agri-Environment Climate Scheme (AECS) promotes land management practices which protect and enhance Scotland’s natural heritage, improve water quality, manage flood risk and mitigate and adapt to climate change. About £30-40 million is awarded annually to land managers.

        All

        Government agencies

        Over 3,200 farmers, crofters and land managers have AECS contracts out of the regular 18,000 CAP claimants.

        The AECS covers 1,16 million hectares of agricultural land under management contracts representing about 20% of agricultural land.

        Comments on the application process include:

        “Guidance is awful even for someone who has much experience in this area such as an agent/manager like myself. It is difficult to find all the information on the internet and too bureaucratic. Guidance can change. Before, there was a booklet to guide you through everything, but now it is on the internet and can change with little knowledge of changes that may have happened to various measures/payments etc.”

        “It’s a 5-year scheme so there can be problems when planning, as it is difficult to change options and areas during the scheme, which is sometimes important in arable rotations to get the best from the land”.

        “Not difficult for an adviser, but it would be a lot of problems for a farmer, on his own, to do”

        Forestry Grant Scheme

        Financial

        The Forestry Grant Scheme supports 1) the creation of new woodland and 2) the sustainable management of existing woodlands. There are eight categories under which support can be applied for; agroforestry, woodland creation, forest infrastructure, woodland improvement grant, sustainable management of forests, tree health, harvesting and processing and forestry co-operation.

        Estate (multi)

        Estate (sporting)

        Estate (conservation)

        Charity organisation

        Estate (investment)

        Commercial forestry

        Community ownership

        All farming archetypes

        Government agencies

        Some farmers are put off engaging with this support system due to inherent views that planting trees is not what a typical ‘good farmer’ would do – representing a lack of skill that may reduce their standing amongst peers.

        Some farmer archetypes also do not engage with this support system as it is outwith the administrative system that they normally engage with.

        The MacKinnon Report[13] attempted to identify the key administrative barriers in current support schemes and propose solutions to remove some of the burden on scheme applicants. This may have led to a streamlined application process to this support scheme.

        Sustainable Agriculture Capital Grant Scheme

        Financial

        The Sustainable Agriculture Capital Grant Scheme (SACGS) provides support to businesses so that they can invest in equipment to reduce harmful ammonia emissions and reduce adverse impacts on water quality resulting from the storage and spreading of livestock slurry and digestate.

        Grazing

        Mixed farm

        Dairy

        Pig & Poultry

        Arable

        Estate (multi)

        Government agencies

        There is little evidence on how land managers are engaging with this support system.

        Scottish Land Fund

        Financial

        The Scottish Land Fund is a programme which supports community organisations across Scotland to own land, buildings, and other assets.

        Public

        Community ownership

        Charity

        Government agencies

        A recent evaluation report of the Scottish Land Fund[14] found that 92% of applicants rated the overall process involved in the fund as either good or very good. The report concluded that the “fund is highly valued and seen as a vital tool for community groups who wish to

        transform land and buildings in their local areas.” On this evidence, it would appear that land managers are positively engaging with this support system.

        Preparing for Sustainable Farming

        Knowledge

        This scheme helps farmers and crofters to further their understanding of how farming and food production can be even more economically and environmentally sustainable. Scottish farmers can claim funding for carbon audits, soil sampling and analysis and animal health and welfare interventions.

        Croft, Grazing, Mixed farm, Arable, Dairy, Pig & Poultry, Soft fruit, Estate (multi),

        Government agencies

        There is little evidence on how land managers are engaging with this support system.

        Knowledge Transfer and Innovation Fund

        Knowledge

        The scheme has two aims: 1) to promote skills development and knowledge transfer in the primary agricultural sector and 2) deliver innovation on-the-ground improvements in agricultural competitiveness, resource efficiency, environmental performance and sustainability.

        Croft, Grazing, Mixed farm, Arable, Dairy, Pig & Poultry, Soft fruit, Estate (multi)

        Government agencies

        The Farm Advisory Service[15] have published multiple reports summarising the activities undertaken as part of the Knowledge Transfer and Innovation Fund. For example, the project ‘Agroforestry in Action’ highlighted that their agroforestry advice videos have had over 8,000 views at the time of writing in 2021.

        Nature Restoration Fund

        Financial

        The Nature Restoration Fund (NRF) is a competitive fund launched in July 2021, which specifically encourages applicants with projects that restore wildlife and habitats on land and sea and address the twin crises of biodiversity loss and climate change.

        Estate (multi)

        Estate (sporting)

        Estate (conservation)

        Charity organisation

        Estate (investment)

        Community ownership

        Government agencies

        We found little evidence on how land managers are engaging with this support system other than a published list of successful projects.

        The Water Environment Fund

        Financial

        The Water Environment Fund is targeted on projects which will derive the greatest benefit to Scotland’s rivers and neighbouring communities.

        All

        Government agencies

        We found little evidence on how land managers are engaging with this support system.

        Advisory Services (FAS)

        Knowledge

        The Farm Advisory Service (FAS) offers a range of advisory services to Scottish farmers, such as livestock and soil management, water management, specialist advice and integrated land management plans (ILMPs). FAS is part of the Scottish Rural Development Programme (SRDP) which is funded by the Scottish Government, providing information and resources aimed at increasing the profitability and sustainability of farms and crofts.

        Croft, Grazing, Mixed farm, Arable, Dairy, Pig & Poultry, Soft fruit, Estate (multi)

        Government agencies

        A recent evaluation of the FAS service concluded that “Overall, there is clear evidence that the FAS One to Many service has delivered a wide-ranging programme which, insofar as we have data, appears to be well-regarded by those who use it.” Highlighted points include those below:

        Delivering over 800 events over a range of geographical locations, with consistently high feedback. As many as 15,656 people attended these events between 2016/17 and 2019/20.

        Provision of a small farm and crofter subscription service, providing subsidised advice to 2, 188 crofters and 287 small farms in 2019/20.

        Providing technical information, including a Farm Management Handbook. Between January 2020 and August 2020, 108,674 technical documents were downloaded.

        It would therefore appear that land managers, in particular farmers, in Scotland are engaging heavily with this support service.

        Farmer Clusters

        Knowledge

        Farmer Clusters are groups of farmers and land managers that come together under the guidance of a ‘facilitator’ or advisor to work cohesively in their locality. The approaches can differ, with sources of funding varying across Britain. Currently, only two Farm Clusters are registered in Scotland.

        Croft, Grazing, Mixed farm, Arable, Dairy, Pig & Poultry, Soft fruit, Estate (multi),

        Charity

        We found little evidence on how land managers are engaging with this support system.

        Monitor farms/forests

        Knowledge

        Monitor farms are managed by Quality Meat Scotland and AHDB Cereals and Oilseeds as a form of demonstration farm for new practices and innovative technologies. Improving carbon performance is one of the key themes of this.

        Croft, Grazing, Mixed farm, Arable, Dairy, Pig & Poultry, Soft fruit, Estate (multi),

        Government agencies

        A previous report from 2014 highlighted that monitor farms have been successful in practical and effective knowledge exchange and delivered a positive impact on farm practices and performance. More recent evaluation of engagement with this support system is not available.

        Carbon positive

        Knowledge

        Managed by SAOS as a platform for collating farm data on natural capital and carbon footprints

        Croft, Grazing, Mixed farm, Arable, Dairy, Pig & Poultry, Soft fruit, Estate (multi),

        Private sector

        We found little evidence on how land managers are engaging with this support system.

        Croft Woodlands and Crofting MOREwoods

        Knowledge

        The Woodland Trust’s “Croft Woodlands” advisory team offers crofters, smallholders and common grazing committees free advice on tree planting as well as training, educational resources, assistance with grant applications and funding for tree planting.

        Croft, Grazing, Mixed farm, Estate (multi),

        Private sector

        Charity

        Government agencies

        From 2015 to 2020, this support scheme supported the planting of over a million trees in the Crofting Counties and helped bring over 1000ha of woodland into sustainable management.

        The Facility for Investment ready Nature in Scotland

        Finance

        Through the Facility for Investment Ready Nature in Scotland (FIRNS), grants of up to £240,000 will be offered to organisations and partnerships to help develop a viable business case and financial model, to attract investment in projects that can restore and improve the natural environment.

        All

        Government Agencies

        We found little evidence on how land managers are engaging with this support system.

        Facility for Investment Ready Nature Scotland Grant Scheme

        Finance

        The FIRNS is a joint initiative between NatureScot, the Esmée Fairbairn Foundation and the National Lottery Heritage Fund Supporting the development of environmental projects in Scotland that:

        -align with the Scottish Government’s Interim Principles for Responsible Investment in Natural Capital

        -aim to value and monetise ecosystem services derived from the restoration of natural capital assets, in a model that will attract and repay investment or support an investment model that can be scaled up and duplicated elsewhere.

        Charity organisation

        Community organisation

        Local Government

        Government Agencies

        Seven projects have been selected to be funded by FIRNS.

        Private agricultural consultancies

        Knowledge

        Private consultancies offer a range of management and consultancy services to rural land managers, providing support and guidance. This usually focuses on commercial development of the business and can include advice on estate management, planning, building consultancy, renewables and tax and funding advice.

        Estate (multi)

        Estate (sporting)

        Estate (investment)

        Commercial forestry

        Community ownership

        All farming archetypes

        Private sector

        We found that all archetypes are engaging with private agricultural consultancies to some extent. Some are using these services to offer procedural support, such as help completing application forms etc. whereas others are using more specialised services, e.g. forestry.

        Appendix B – Archetype methodology

        Archetype identification

        The first priority was to define a baseline list of Scottish land manager archetypes[16] in discussion with the project steering group.

        Archetypes are a useful tool when trying to simplify the heterogeneity of land managers in Scotland and provide context to the following sections of analysis. The simplified archetypes were then used to underpin the mapping elements of this study. Firstly, archetypes were used to provide a high-level overview of how different land managers are engaging with support systems in Scotland. Secondly, the archetypes were used to identify potential climate change mitigation project providers in Table 6 below. Thirdly, archetypes were discussed with participants at the stakeholder workshop to explore the extent to which each archetype is interacting with support systems in the manner to which is expected based on stakeholder interviews and our literature review.

        The following archetypes have been informed by Mills et al. (2017) (see Figure 1) where three main factors are defined that influence a land manager’s willingness and ability to undertake environmental management.

        These are listed below:

        • Willingness to adopt – willingness of land managers to undertake environmental land management practices and the intrinsic factors (e.g., motivations, beliefs, social norms) affecting land managers environmental behaviours.
        • Farmer Engagement – where land managers enter into dialogue, discussion and collective problem framing with those who hold environmental knowledge and expertise.
        • Ability to adopt – farm characteristics (e.g., tenancy, scale, skills and capital constraints), that influence land manager’s decision making in relation to environmental management and their ability to adopt new practices.

        Mills et al. (2017) found that land managers tend to exhibit different sub-optimal positions within this conceptual framework. These positions are found below:

        • Willing and engaged only – willingness to undertake environmental management activities on their land, but this has not translated into behaviour because the manager does not have the ability to do so.
        • Able and engaged only – undertaking environmental management and has engaged with advice, but lacks sustained motivation to maximise environmental benefits.
        • Willing and able only – actively undertaking environmental management, but has not engaged with any advice which means that land is not delivering its full environmental potential.
        • Disengaged – not engaged with any environmental management, either because they were not willing, they do not have capacity, or they dislike outside interference or are concerned with loss of control or management flexibility.

        Some characteristics are more readily observable than others. For example, farm type, size and tenure status are recorded routinely, levels of financial, human and social capital or personal attitudes less so. Nevertheless, it is possible to construct example archetypes that can be used to explore how different configurations may affect land use decisions.[17] The Table on the following page is an attempt to illustrate a broad range of potential land manager archetypes in Scotland. This has been arranged primarily based on activity, as this is the most observable difference between land manager types. We have provided a hypothesis of the likely size, tenure and engagement along with a brief description of key characteristics and indication of location. Words in bold indicate that this characteristic applies to the archetype.

        In further developing these archetypes, we hypothesized additional influences on ability and willingness to change land management/use:

        • Tenure restrictions (particularly short-term leases and crofting tenure, notably common grazing) constrain automatic freedom to change (and reap rewards);
        • Small scale incurs proportionally higher transaction (e.g., application) costs, although transaction costs also deter larger land managers. Small scale also constrains availability of labour/capital/land to make changes.
        • Availability of advisers (particularly for non-traditional topics) perceived as credible and relevant is limited, especially/ in remoter areas.
        • General lack of policy certainty also deters change.
        • Biophysical conditions constrain land use options.
        • Financial circumstances constrain ability to change – but also affect relative importance (leverage) of public funds e.g., market revenues and/or non-land income may matter more, making some land managers less responsive to policy (i.e., opportunity cost vary) even if public funding is generous.
        • All of the previous influences are mediated through cultural identities, social norms and personal motivations – willingness to change will vary within any given category of activity, size, tenure, region, biophysical circumstances and financial circumstances.

        Archetype table

        Table 6 – Archetypes

        Activity

        Size

        Tenure

        Description

        Region

        Priority*

        Crofting

        Small

        Medium

        Large

        Crofting Tenant

        Crofting Owner

        Traditional small-scale sheep and suckler cow producers in highlands and islands LFA area with a small area of arable crops grown for livestock feed on the croft with the livestock grazing on the common grazing (which is shared with multiple crofters in the township). There are around 20,000 crofts in Scotland.

        Highlands & Islands

        North East

        South East

        South West

        All

        YES

        Grazing (mixed beef and sheep)

        Small

        Medium

        Large

        Tenant (LDT/SLDT/MLDT)

        Tenant (grazing)

        Tenant (secure)

        Owner

        Single or multiple farms managed solely for beef and sheep purposes. Typically, they possess the lowest earnings of any farm types which may limit ability to adopt environmental measures.

        Highlands & Islands

        North East

        South East

        South West

        All

        		 

        Mixed Farm

        Small

        Medium

        Large

        Tenant (LDT/SLDT/MLDT)

        Tenant (grazing)

        Tenant (secure)

        Owner

        Single or multiple farms managed (either all owned or mixture between tenanted and seasonal lets) across Scotland, enterprises vary, from specialist pig, dairy, arable, beef and sheep units to soft fruit and veg growing. Can vary in size/output/profitability.

        Highlands & Islands

        North East

        South East

        South West

        All

        YES

        Arable

        Small

        Medium

        Large

        Tenant (LDT/SLDT/MLDT)

        Tenant (grazing)

        Tenant (secure)

        Owner

        Single or multiple farms managed solely for arable purposes. Concentrated in the South East/North East and generally make lower profits than other activities such as specialist horticulture and dairy. Around 10% of Scotland’s total agricultural area in 2019 was arable land.

        Highlands & Islands

        North East

        South East

        South West

        All

        		 

        Dairy

        Small

        Medium

        Large

        Tenant (LDT/SLDT/MLDT)

        Tenant (grazing)

        Tenant (secure)

        Owner

        Single or multiple farms managed solely for dairy purposes. Generally the most profitable type of enterprise in Scotland which may increase their ability to adopt environmental practices. Often possess a large environmental impact. In 2021 dairy cows numbered 174,200 in Scotland.

        Highlands & Islands

        North East

        South East

        South West

        All

        YES

        Intensive pig & poultry

        Small

        Medium

        Large

        Tenant (LDT/SLDT/MLDT)

        Tenant (grazing)

        Tenant (secure)

        Owner

        Single or multiple farms managed solely for pig & poultry purposes. As of 2020 there were 14.4 million poultry and 337 thousand pigs.

        Highlands & Islands

        North East

        South East

        South West

        All

        		 

        Soft fruit

        Small

        Medium

        Large

        Tenant (LDT/SLDT/MLDT)

        Tenant (grazing)

        Tenant (secure)

        Owner

        Single or multiple farms managed solely for soft fruit purposes. In 2020 the estimated total area of soft fruit was 2,200 hectares.

        Highlands & Islands

        North East

        South East

        South West

        All

        		 

        Estate (Multi farm/croft)

        Small

        Medium

        Large

        Tenant (LDT/SLDT/MLDT)

        Tenant (grazing)

        Tenant (secure)

        Owner

        Similar to a farm owner, may employ a factor or a land agent to have day to day responsibility for the land management interests and overseeing the entire estate incl. tenants, will likely have other land based income such as renewables, forestry, holiday/residential lets, sporting etc.

        Highlands & Islands

        North East

        South East

        South West

        All

        		 

        Estate (Sporting)

        Small

        Medium

        Large

        Tenant (LDT/SLDT/MLDT)

        Tenant (grazing)

        Tenant (secure)

        Owner

        Estate that is managed solely for sporting purposes. Willingness to adopt is constrained by the desire to keep sporting estate, e.g. deer and grouse, in its current state. However, environmental management is often a priority for these land managers.

        Highlands & Islands

        North East

        South East

        South West

        All

        YES

        Estate (Conservation)

        Small

        Medium

        Large

        Tenant (LDT/SLDT/MLDT)

        Tenant (grazing)

        Tenant (secure)

        Owner

        Purchased for environmental ethical reasons, usually removed from agricultural production and returned to nature through rewilding (tree planting, peatland restoration). Pro-environmental goals of land management increase willingness to adopt however unlikely to engage with wider advice.

        Highlands & Islands

        North East

        South East

        South West

        All

        		 

        Charity organisation

        Small

        Medium

        Large

        Tenant (LDT/SLDT/MLDT)

        Tenant (grazing)

        Tenant (secure)

        Owner

        Purchased and managed for environmental reasons, may carryout limited agricultural activity using livestock to graze habitats. Main activity is nature restoration/conservation. Reliance on charitable funding could constrain the ability to adopt.

        Highlands & Islands

        North East

        South East

        South West

        All

        YES

        Public ownership

        Small

        Medium

        Large

        Tenant (LDT/SLDT/MLDT)

        Tenant (grazing)

        Tenant (secure)

        Owner

        Land owned and managed by public bodies (including Local Authorities). Examples of this could be the MoD, who own 64,900 hectares in Scotland. Normally managed with a primary function in mind, such as training zones.

        Highlands & Islands

        North East

        South East

        South West

        All

        		 

        Estate (Investment)

        Small

        Medium

        Large

        Tenant (LDT/SLDT/MLDT)

        Tenant (grazing)

        Tenant (secure)

        Owner

        Land managed with investment priorities, either through natural capital (carbon offsetting) or commercial production of timber. Often used to offset internal carbon emissions of large corporations (such as Aviva) and therefore disengaged with wider support systems.

        Highlands & Islands

        North East

        South East

        South West

        All

        YES

        *Priority – this column indicates that this archetype was identified as a priority for this research project by the steering group.

        Appendix C – Interview methodology

        Interview methodology for land use support

        A Discussion Guide (see below) for semi-structured interviews was developed and a list of target candidate interviewees was also drawn-up and agreed. Candidate interviewees were chosen to represent recipients of support, providers of information and advice, and academic experts.

        Semi-structured interviews were arranged in advance by email and conducted mostly by video conferencing with some conducted by mobile phone. Interviews lasted 25 to 85 minutes and occurred between 17th June and 3rd August 2023. Overall, 25 interviews were conducted with 28 interviewees (plus one by email only). The list of interviewees is shown in the table below.

        Written notes were taken during interviews, and subsequently converted into reflective summaries immediately afterwards to capture key insights. The use of formal thematic coding and software analysis was not deployed and, to protect commercial confidentialities, no quotes have been attributed to individual interviewees.

        Table 7 – Interviewee’s organisation

        Interviewee’s organisation

        Principally representing

        Confor

        Support recipients

        Scottish Tenant Farmers Association

        Support recipients

        Community Land Scotland

        Support recipients

        NFUS

        Support recipients

        Rewilding Scotland (email only)

        Support recipients

        SCF

        Support recipients

        Milk Suppliers Association

        Support recipients

        Institute of Auctioneers & Appraisers in Scotland

        Support recipients

        Scottish Land and Estates

        Support recipients

        Pasture for Life

        Support recipients

        RSPB Scotland

        Support provider

        Lantra

        Support provider

        Scottish Agricultural Organisation Society

        Support provider

        South of Scotland Enterprise

        Support provider

        Independent Forestry Consultant

        Support provider

        Forest Carbon

        Support provider

        Peatland Code

        Support provider

        SAC Consulting

        Support provider

        ScotFWAG

        Support provider

        Soil Association

        Support provider

        Agricultural Industries Confederation

        Support provider

        Future Ark and FLS non-exec Director

        Support provider

        University of Leeds

        Academic expert

        University of Gloucestershire

        Academic expert

        University of Aberdeen

        Academic expert

        Royal Agricultural University

        Academic expert

        James Hutton Institute

        Academic expert

        As with all efforts to canvass opinion from industry stakeholders, the approach taken was limited by the resources and time available to conduct interviews – further interviews might have produced additional insights. Moreover, it is possible that the profile of interviewees or selective answering of questions by them could bias reported findings. However, there was a high degree of consistency across interviews (and with the literature) in terms of the issues identified, implying that participation was in good faith.

        Discussion guide

        • What factors influence land managers’ ability to adopt new management practices and/or land uses?
        • What factors influence land managers’ willingness to adopt new management practices and/or land uses?
        • What types of support are required? What determines engagement with them?
        • What sources of support are available? Any pros and cons for different sources?
        • What mode of (non-funding) support are available? Any pros and cons for different modes?
        • What affects the availability, accessibility and credibility of (non-funding) support?

        Appendix D – Literature review methodology

        We undertook a focused literature review to identify existing policy and research relating to existing support systems in the agricultural industry in Scotland. In order to conduct a robust, rapid evidence review, key search terms were agreed with the steering group. Search terms were applied to both academic search functions and generic search providers. This ensured a wide range of academic and grey literature was captured. Search terms can be found below in Table 8.

        Table 8 – Search terms

        Theme 

        Search term 

        Support systems  

        Land manager; support systems, access to funding, grants, loans, barriers to funding, barriers to finance, incentives (Scotland, UK) 

        Low-carbon farming; support systems, access to funding, grants, loans, barriers to funding, barriers to finance, incentives (Scotland, UK) 

        Financing land support measures (Scotland, UK) 

        Land use change support systems (Scotland, UK)  

        Green finance and agriculture (Scotland, UK) 

        Private finance and agriculture (Scotland, UK) 

        Government support of; rural economy, rural environmental objectives, agricultural environmental objectives (Scotland, UK) 

        Additional terms for specific support systems: Forestry grant scheme, woodland grants, woodland carbon code, peatland code, conservation funding, peatland advisory services, Peatland Action, Nature restoration fund  (Scotland, UK) 

        Land manager decision making and motivations  

        Path dependence in Scottish Agriculture.  

        Land manager; decision making, motivations, motivations in seeking change, land use change, access to knowledge, access to skills, knowledge sharing, advice, training, information gathering, barriers to change, sunk costs and stranded assets (Scotland, UK) 

        Agricultural; decision making, motivations, motivations in seeking change, land use change, access to knowledge, access to skills, knowledge sharing, advice, training, information gathering, barriers to change, sunk costs and stranded assets. (Scotland, UK) 

        Land manager; diversification activities. (Scotland, UK) 

        Agricultural; diversification activities. (Scotland, UK)  

        Land manager; experience of support systems, engagement with support systems, experience of funding, experience with subsidies, experience of applications, experience with support systems. (Scotland, UK)  

        Agricultural; experience of support systems, engagement with support systems, experience of funding, experience with subsidies, experience of applications, experience with support systems. (Scotland, UK)  

        Key  

        Words in bold are the truncated search term, with the phrases following added onto the stem to broaden the use of the stem word.  Where (Scotland, UK) is indicated, these terms will be added to the end of each search term in that group. 

        © The University of Edinburgh, 2024
        Prepared by LUC 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. Scottish Greenhouse Gas Statistics 2021. Accessed 15/02/2024 ↑



        2. The level of detail offered by stakeholders regarding specific public funding schemes varied, but most suggested that agri-environmental type schemes were more complex to enrol in. ↑



        3. Although in practice there may be some overlap since funding may be made available to facilitate interaction with other forms of support. For example, grants to attend training sessions. ↑



        4. i.e. one advisor to one land manager or one advisor to many land managers ↑



        5. The Pareto principle (also known as the 80/20 rule) states that roughly 80% of outcomes come from 20% of input effort. ↑



        6. For example, the AIC estimates that its members deploy c.125 staff in Scotland under Feed Adviser Register (FAR) system, which compares with c.140 FBBASS accredited advisers. ↑



        7. https://www.ruralpayments.org/ ↑



        8. https://www.nature.scot/doc/scotlands-agri-environment-and-climate-scheme-summary ↑



        9. Financial support is normally accompanied by at least the provision of information but sometimes also more interactive advice. ↑



        10. https://www.webarchive.org.uk/wayback/archive/20220804182342/https://www.gov.scot/publications/dairy-sector-climate-change-group-report-2/documents/ ↑



        11. https://www.gov.scot/binaries/content/documents/govscot/publications/independent-report/2021/06/blueprint-sustainable-integrated-farming-crofting-activity-hills-uplands-scotland/documents/hill-upland-crofting-group/hill-upland-crofting-group/govscot%3Adocument/hill-upland-crofting-group.pdf ↑



        12. https://www.hutton.ac.uk/sites/default/files/files/WCC%20Poster%20Website.pdf ↑



        13. https://www.gov.scot/binaries/content/documents/govscot/publications/corporate-report/2016/12/mackinnon-report/documents/analysis-current-arrangements-consideration-approval-forestry-planting-proposals-pdf/analysis-current-arrangements-consideration-approval-forestry-planting-proposals-pdf/govscot%3Adocument/Analysis%2Bof%2Bcurrent%2Barrangements%2Bfor%2Bthe%2Bconsideration%2Band%2Bapproval%2Bof%2Bforestry%2Bplanting%2Bproposals.pdf ↑



        14. https://www.gov.scot/binaries/content/documents/govscot/publications/research-and-analysis/2021/03/scottish-land-fund-evaluation/documents/scottish-land-fund-evaluation/scottish-land-fund-evaluation/govscot%3Adocument/scottish-land-fund-evaluation.pdf ↑



        15. https://www.fas.scot/publication-type/ktif-reports/ ↑



        16. a very typical example of a certain person or thing. ↑



        17. e.g.: Mustin, K., Newey, S. and Slee, B., 2017. Towards the construction of a typology of management models of shooting opportunities in Scotland. Scottish Geographical Journal, 133(3-4), pp.214-232.; Sutherland, L-A., Barlagne, C. and Barnes, A.P. 2019 Beyond ‘hobby farming’: towards a typology of non-commercial farming; Barnes, AP; Thompson, B; Toma, L. 2022 Finding the ecological farmer: a farmer typology to understand ecological practices within Europe. ↑


        Completed in September 2024

        DOI: http://dx.doi.org/10.7488/era/5006

        Executive summary

        Purpose

        Collaborative landscape management is the enhancement of ecosystems via combined efforts of multiple farmers and land managers across a landscape. It has potential to help meet Scottish Government targets associated with addressing biodiversity loss and climate change.

        This research, commissioned by Scottish Government, investigated a variety of models and experiences of collaboration to explore how support for collaborative landscape management in Scotland could be provided. This can help inform how such support may be incorporated in the Agricultural Reform Programme and other relevant policy areas.

        Key findings

        Overall, stakeholders were keen to see that we build on what exists already, rather than reinventing the wheel.

        Relevant examples of collaboration in Scotland:

        The English farmer cluster model is also considered successful in bringing farmers together and initiating and planning for collaborative activities. This is beginning to be replicated in Scotland, for instance in Strathmore, Moray, Lunan Burn and West Loch Ness, mainly supported by the Game and Wildlife Conservation Trust.

        International examples:

        Success factors, required support and opportunities

        Informed by the main success factors in these examples, as well as their own knowledge and experience, stakeholders identified the following support needs:

        • Facilitation to bring groups together and enable planning, preparation for and implementation of collaborative landscape management approaches. This includes long-term funding and training for facilitators. This could be provided through a mechanism akin to the Countryside Stewardship Facilitation Fund delivered in England by DEFRA, or expanding the Farm Advisory Service.
        • Long-term funding dedicated to incentivising and supporting implementation of collaborative activities. This could include investing in existing collaborative structures, such as farmer clusters, Regional Land Use Partnerships, Landscape Enterprise Networks and Deer Management Groups. Greater accessibility and flexibility of funding are needed to encourage engagement in collaborative landscape management.
        • Encouraging private sector investment to incentivise engagement in collaborative landscape management and enable greater flexibility for context-specific, bespoke projects. This could be encouraged by increasing the scale of FIRNS and completing development of NatureScot’s Landscape Scale Natural Capital Tool. The Scottish Government could also actively broker direct connections between farmers and private-sector organisations.
        • Training, conferences and knowledge sharing to foster a culture of collaboration.
        • Monitoring, evaluation and communication about the benefits of collaborative landscape management approaches. For example, through building on data such as NatureScot’s Ecological Surveys and Natural Capital Tool, as well as community science approaches.
        • Coordinated support for collaboration, both across government policies and between government and other stakeholders. Collaboration may be incentivised by increasing support points in the Agri-Environment Climate Scheme and Nature Restoration Fund.

        Gaps and opportunities for future research and innovation

        We have found tensions between stakeholders’ preferences for greater incentives and the importance of regulation, as well as between simplicity and flexibility of support mechanisms. Private sector involvement may incentivise flexible collaboration. However, approaches that ensure private-sector-led nature restoration initiatives remain responsible and accountable, whilst making favourable returns on investment, need to be explored.

         

        Glossary / Abbreviations table

        Collaborative landscape management

        Enhancement of ecosystems via the combined efforts of multiple farmers and land managers across a landscape (Westerink et al., 2017).

        AECS

        Agri-environment climate scheme

        Biodiversity

        The variability among living organisms from all sources including terrestrial, marine and other aquatic ecosystems and the ecological complexes of which they are a part (Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services).

        CSFF

        Countryside Stewardship Facilitation Fund

        DMGs

        Deer Management Groups

        ECAF

        Environmental Cooperation Action Fund

        Facilitation

        Activities provided by an individual or organisation to run meetings, foster relationships, discussions, planning and learning. May also include coordination of administrative tasks for groups of collaborators (Leach and Sabatier, 2003).

        FAS

        Farm Advisory Service

        FIRNS

        Facility for Investment Ready Nature in Scotland

        GWCT

        Game and Wildlife Conservation Trust

        LENS

        Landscape Enterprise Networks

        LEAF

        Linking Environment and Farming

        Natural capital

        Defined by NatureScot as: A term for the habitats and ecosystems that provide social, environmental and economic benefits to humans.

        NGOs

        Non-governmental organisations

        NRF

        Nature Restoration Fund

        RLUPs

        Regional Land Use Partnerships

        RSPB

        Royal Society for the Protection of Birds

        SAOS

        Scottish Agricultural Organisation Society

        SAC

        The Scottish Agriculture Consultants

        Acknowledgements

        The authors would like to thank all the stakeholders who participated in this study, Antonia Boyce for review and project management support, and Alhassan Ibrahim for review.

        Introduction

        Context

        It is widely acknowledged that transformative change is needed to address biodiversity loss and climate change at pace and at scale. The Scottish Government has therefore set ambitious targets to meet ‘Net Zero’ by 2045 and proposed nature restoration targets for the same period, for inclusion in a Natural Environment Bill. Meeting these targets will require collaboration across the boundaries of individual farms and land holdings, to match land management to the scale of habitats, catchments, and landscapes.

        Defining collaborative landscape management

        Various definitions of collaborative landscape management exist. For the purpose of this report, we use the definition: enhancement of ecosystems via the combined efforts of multiple farmers and land managers across a landscape (Westerink et al., 2017). Academic literature indicates such approaches can enable positive outcomes for nature and climate change (Kuhfuss et al., 2019), increasing information flows and learning (Prager and Creaney, 2017), as well as reducing the likelihood of conflicting or duplicate efforts by neighbours (Westerink et al., 2017). In so doing, they may offer better value for public money.

        However, it cannot be assumed that farmers and land managers are able and willing to collaborate across a landscape. Collaboration requires time and effort. Support mechanisms such as agri-environment schemes have historically been directed at the level of individual farms, rather than at the landscape scale. Scottish Government are therefore keen to understand more about how to create a supportive policy environment for collaborative land management practices.

        Existing research on collaboration between farmers indicates that it often depends on long-term relationships and knowledge-sharing, supported by facilitators (Kuhfuss et al., 2019). Where farmer groups already exist, their facilitators are known to be a key influence on farmers’ learning (Prager and Creaney, 2017). The importance of facilitators is also true for other types of landscape-scale collaborations (Waylen et al., 2023). This is especially relevant as other types of landscape-scale partnerships also exist in Scotland, such as Rural Land Use Partnerships (RLUPs), Deer Management Groups (DMGs), and voluntary catchment management partnerships. Ongoing research on collaborative management interventions (JHI-D4-1[1]), in the Scottish Government’s Strategic Research Programme also emphasises the importance of peer-to-peer learning and building on social capital.

        There are therefore a variety of models and experiences of collaboration, from which lessons may be drawn. To enable collaborative landscape management for conservation and climate change outcomes, it is therefore important to identify what existing networks and institutions can be built on and how. This will help to establish what approach(es) for supporting collaborative landscape management will be most worthwhile, and feasible, to include in the future agricultural support framework and other policy developments. To assist in understanding how collaborative landscape management can best be supported, the Scottish Government commissioned this CXC study, in which we built on key concepts and insights from the academic literature and explored this issue with key expert stakeholders in Scotland.

        Aim

        This study engaged with agricultural and conservation stakeholders (including farmers, land managers, conservationists, and academic experts), in Scotland. We explored their expert opinions regarding how collaborative landscape management can be supported to deliver positive outcomes for climate and nature in Scotland. Specifically, we addressed the following research questions:

        1. What examples of effective support for collaborative landscape scale activities may be identified and what lessons may be learned from them?
        2. What should support measures look like, to enable farmers and land-managers to engage in collaborative landscape management? What are their relative advantages and disadvantages? How might they enrich and elaborate on existing approaches?
        3. What are the barriers and opportunities for uptake of collaborative landscape management?
        4. What benefits can collaborative approaches achieve, and how may they be monitored and evaluated?

        The research involved stakeholder engagement through an online survey and in-person workshop, both conducted in June 2024. The methodology is explained in Appendix A.

        Stakeholders’ experiences of collaborative landscape management

        Stakeholders were keen to emphasise the importance of building on what exists already, rather than ‘reinventing the wheel’. This section therefore identifies existing examples of collaborative landscape management and draws lessons from them in terms of what is working well and what is challenging.

        Examples of success

        Stakeholders identified a range of examples of collaborative landscape approaches that they perceived as successful, within Scotland, across the UK, and internationally. Existing examples in Scotland included the following:

        • The Facility for Investment Ready Nature in Scotland (FIRNS), delivered by NatureScot in collaboration with the Scottish Government. FIRNS is currently supporting 29 projects to improve their readiness to attract private sector investment. FIRNS is also stimulating flows of information and relationship-building via its ‘Community of Practice’ forum.
        • The Deer Management Groups are helping to pool information about landscape-scale biodiversity and are encouraging collaboration by bringing people together to work on a common issue (deer management). Groups are entirely different in composition but all work at landscape scale. Initially, this was primarily to manage a single resource (deer), but over the last ten years there has been a shift towards landscape planning in the public interest, including peatland restoration, woodlands and communities. These collaborative mechanisms have been well established but are currently facing a lack of funding for continuation of this work.
        • The Tweed Forum are carrying out a great amount of work around river management through building trust among different stakeholders, to engage them in landscape-scale nature restoration. They have successfully improved water quality at the catchment scale, via a collaborative approach.
        • The Working for Waders initiative in Strathspey is an example of an environmental NGO funded landscape scale project. It involves a range of different stakeholders, including farmers and the Royal Society for the Protection of Birds (RSPB), to protect and restore habitat for waders in Scotland.
        • The ‘Findhorn Watershed Initiative’ have achieved success in winning Just Transition funding to support building partnerships among different stakeholders for collaborative landscape management approaches. This funding allows for not just the restoration work but also building social capital and socio-economic aspects.
        • The Dee Invasive Non-Native Species Project (DINNs) has a lot of farmers working collaboratively and has good examples of large-scale projects that have achieved funding with relative ease. They were described as ‘doing what they say on the tin’ within their work, one example being bringing people together to collaborate on the removal of Himalayan Balsam (an invasive plant species) in their landscape.
        • The Cairngorms Nature Index (CNI), built on an example from The Norwegian Institute for Nature Research (NINA), collects data around health of habitats, species and ecosystems and attempts to put it into a standardised format that people can draw on. This has potential to inform clusters in the areas, however this link is not currently there.

        The main example from England, which stakeholders spoke highly of, was farmer clusters:

        A wide range of international examples of collaborative landscape management were cited. The full list is included in Appendix B. Some key examples included:

        • Landscape Enterprise Networks are helping to build networks of farmers and land managers in multiple countries.
        • The FASB initiative in Brazil is supporting local-level nature restoration initiatives by creating collaborative working groups, facilitating peer-to-peer learning, and supporting existing local-level initiatives.
        • The Cevennes National Park in France is achieving strong engagement from landowners, by working hand-in-hand with them.
        • The EU Interreg Partridge project was considered successful in ensuring consistency for managing species across landscapes.
        • The Netherlands is generally considered to have a strong culture of collaboration among farmers. Indeed, collaboration is compulsory for some types of agricultural support.

        What is working well?

        We draw the following lessons from the above examples of success, regarding what is working well in supporting collaborative landscape management.

        Facilitation

        The examples of success emphasise the importance of providing a forum for groups of farmers, land managers and other stakeholders to come together in the first place, share ideas, plan and build trusting relationships. One survey respondent emphasised the importance of leadership and building trust: “…a note about how important it is to have trusted people in the area you’re working in, well respected. Leadership and trust is important.” Farmer clusters have been particularly successful in England for encouraging local collaboration between landowners. The perceived success of these English farmer clusters was largely attributed to the fact they can benefit from the CSFF, which supports the time and resources needed for facilitators to arrange meetings, create opportunities for information sharing and conduct administrative tasks. This can help bring farmers and land managers together, in the first place, to agree objectives and plan for long-term and evolving goals/projects to maintain engagement within the group.

        Bespoke projects

        Bringing groups of farmers and land managers together around a specific, common issue can be particularly effective, as this helps provide a clear reason and motivation for why collaborative landscape management is needed. If different farmers and land managers are able to relate with each other around challenges that they are facing, this can encourage strong relationships between them. The Tweed Forum was raised, by both conservation organisations and farmers, as an example of positive work being carried out around river management. It has focused on bringing local land managers and farmers together to tackle issues such as water quality and run-off. Their approach centres on strong leadership and trust building. Similarly, the Riverwoods project was mentioned as a successful network working towards creation of riverbank woodlands and healthy river systems across Scotland. The Deer Management Groups described themselves as a particular example of a bespoke arrangement, in that they bring people together to work on the specific issue of deer management. “… we represent 50 deer management groups which cover something like 3 million hectares of the uplands, the groups are entirely different in composition but all of them working at landscape scale, initially to manage a resource, which was deer”. Other examples that focused on management of a particular issue included management of beavers, management of habitats for partridge in the EU Interreg project, and removal of Himalayan Balsam in the Dee catchment. A farmer representative used these examples to argue that one-size-fits-all approaches are not always appropriate. He thus emphasised the importance of tailoring collaborative landscape management to specific contexts.

        Forums for sharing and learning

        Forums for sharing knowledge and experience were considered factors for success in several of the examples above. Such forums can help communicate the benefits of collaborative landscape management, as well as enable learning that could help others to achieve these benefits elsewhere. The FIRNS ‘Community of Practice’ was considered a useful forum by many stakeholders. This focuses on ensuring farmers, land managers and other stakeholders are informed and able to engage in, and see benefits from, environmental markets and private investment in natural capital. For instance, a representative from Bioregioning Tayside suggested that the “community of practice model has been very effective across Scotland and a smaller ‘sister’ fund to FIRNS would be helpful”. A Leven LENS representative stressed that whilst the term ‘communities of practice’ has become a slight buzzword, communities of practice are really important for building channels of communication. Examples of other successful forums included ‘study tours’ (in which farmers visit others in another location to share knowledge and learning), the CSFF conference in England, and the Farm Advisory Service (FAS), which helps farmers to stay informed of new initiatives as they come onstream.

        Integrated support

        Involving various stakeholder groups in supporting collaborative landscape management was also a factor in the success of the examples above. This includes involving stakeholders beyond just government and the agriculture sector. For instance, LENS are bringing private and public-sector organisations together to broker negotiations, and eventually transactions for organising the buying and selling of nature-based solutions. The Working with Waders project is achieving success in Strathspey, through funding from non-governmental organisations (NGOs) and collaboration between NGOs and farmers. Projects like this show that NGOs are willing to collaborate on and fund projects, and that involving a wide range of stakeholders can generally increase capacity for collaborative landscape management in Scotland.

        What is challenging?

        The catalogue of successful examples of collaborative landscape management signifies that there is a breadth of positive collaboration taking place, which may be learned from and built upon. However, stakeholders also highlighted significant challenges faced for promoting collaborative landscape management approaches, which are explained as follows.

        Inadequate facilitation and limited culture of collaboration

        Stakeholders perceived poor facilitation and poor communication as preventative to collaboration. For long-term collaboration to work, stakeholders considered the choice of facilitator and engagement methods as key, suggesting consultations cannot be the only engagement method moving forwards. Collaborative projects benefit from a trustworthy, engaging, non-biased and pragmatic facilitator, who regularly stays in touch with participants and is willing to adapt their facilitation method based on the group’s needs. In the workshop, stakeholders perceived that support for facilitation is currently limited, which limits the availability of skilled facilitators to effectively support collaborations.

        Stakeholders acknowledged that there is not generally a culture of collaboration between different farmers and land managers, or between the different government and non-governmental sectors involved in supporting collaborative landscape management, due to a historical culture of competition. The current competitive culture results in situations where new approaches, data and technologies are being copyrighted for individual financial gain, rather than shared and used collaboratively with other farmers and landowners for common benefit. Stakeholders in the survey, suggested this can result in hesitancy to engage and trust in new processes, as well as lose out on the benefits of collaboration between different sectors and organisations. For example, the projects listed in Section 5.1 show that NGOs are willing to work with farmers to fund and support collaborative projects. However, they do not currently benefit from agricultural support, which could widen their impact.

        Unsuitable funding mechanisms

        Our findings revealed a perception, among stakeholders, that current agricultural support is not suitable for supporting collaborative landscape management. Stakeholders consider existing agricultural support, particularly Agri-Environment Climate Scheme (AECS) and Nature Restoration Fund payments, as complicated, restrictive and competitive. This was considered a challenge for engaging in any kind of positive management for biodiversity and the climate, including collaborative approaches. According to stakeholders, the process of acquiring funding has a tendency to be extremely complex and time consuming, with ineffective mechanisms for distributing or releasing funds in a timely manner. Stakeholders also indicated that there is a lack of legal and legislative knowledge amongst farmers and landowners, and this is limiting their ability to apply for funding. Applications for funding, therefore, require a huge amount of effort and monetary investment. Indeed, the costs of initiating collaborations and preparing applications for grants and incentives, were considered significant challenges for engaging in collaborative landscape management. For example, a representative from the Deer Management Groups cited the financial burden of simply preparing an application as a major disincentive for farmers to engage in collaborative landscape management.

        Stakeholders considered the competitive nature of funding to exacerbate this, as there are significant costs involved in starting-up and applying for funding, but limited chance of success. Farmer representatives, in particular, agreed that when funding is competitive many farmers simply will not bother applying, as the high cost of applications, combined with the high risk of failure, simply makes it not worthwhile. Multiple stakeholders agreed this structure puts smaller farmers and land managers at a disadvantage and favours large landowners, who have sufficient time and resources for making applications and absorbing fines that could occur through mistakes.

        Stakeholders also perceived that, with the exception of getting extra points for collaborative projects in AECS, there is currently a lack of funding designed specifically to support collaboration. Stakeholders expressed concerns that existing grant funding is short term in nature (e.g. for AECS is only a 5-year agreement), which does not lend itself to building collaborations or implementing long term changes at a landscape scale. Additionally, AECS funding is points-based, meaning farmers are in competition with each other to meet the points threshold. This was considered a disincentive to engaging in collaboration.

        Existing mechanisms for supporting collaboration were also considered too restrictive, in terms of the types of landscape management options that could be funded. Stakeholders emphasised that a one-size-fits-all approach will never work, and policy support for collaborative landscape management must take this into account. A farmer representative highlighted the geographic differences across landscapes and catchments. He emphasised that even the top of a hill and the bottom of the hill can be very different, and different landowners will have different needs. This is true not just of the physical landscape but also in farming techniques, revenue, or funding streams. As one survey response stated: “Single outcome objectives can limit participation and success”.

        Siloed and top-down governance

        Stakeholders raised further challenges, related to the approach taken by government, that they thought were hindering support for collaborative landscape management. In the workshop, although farmer representatives stated that the Government has been very imaginative, and that successes should not be forgotten, they also highlighted shortcomings in the Government’s approach. Stakeholders expressed a sentiment that the Government have not listened to them enough, despite continually providing feedback. They perceived this top-down approach from government as perpetuating power imbalances that favour some views about land use and management, over others, and do not offer any real help for farmers.

        There was also a feeling that current policy exists in a siloed system in which agriculture, forestry and biodiversity policy do not interact. This can result in complexity and contested interests between different siloes and thus reduce political will and ability to act in support of collaborative landscape management. Some stakeholders, such as a representative from Scottish Environment LINK in the workshop, thought that existing initiatives were “very messy at the government level”. He argued that there are too many different targets and proposed initiatives, which, at the level of implementation at the landscape scale: “no one knows how it is supposed to fit together”. Some agricultural stakeholders also suggested that policies such as the Wildlife Bill and the Land Reform Agenda actually discourage collaboration, because they encourage fragmentation of land ownership.

        Limited evidence for the benefits of collaborative landscape management

        Stakeholders highlighted that there is limited awareness of successful examples of collaborative landscape management projects and their impacts. They considered this a barrier to promoting favourable attitudes and motivations for collaborative landscape management approaches. It is not always possible to imagine something you have never seen, and positive examples are needed for farmers and land managers to understand the potential benefits of collaborative landscape management. For example, a representative from Bioregioning Tayside felt that a lack of awareness around existing solutions has led to a lack of comprehension around how land could be managed to help deal with extreme weather events. Some stakeholders also highlighted successful landscape collaboration projects along the River Spey and the River Dee, but stressed that their impacts are limited by a lack of communication and knowledge-sharing amongst one another.

        Stakeholders’ needs and aspirations for collaborative landscape management

        Stakeholders were forthcoming in suggesting the types of support that they thought would enable and enhance collaborative landscape management. This section discusses the types of support that were suggested, as well as potential opportunities that could be taken.

        What types of support are needed?

        Stakeholders suggested a range of support mechanisms that they thought would help to deliver positive outcomes for climate and nature in Scotland

        Support for facilitation of collaboration

        Stakeholders considered facilitation as essential for organising collaborative landscape management approaches. This was considered important by stakeholders from across the range of perspectives represented in both the workshop and the survey. When asked how important facilitation of collaboration was for collaborative landscape management, 17 of 20 survey respondents agreed it was essential, with the remaining 3 suggesting it was somewhat important, as shown in Figure 1.

        When asked how important facilitation of collaboration was for collaborative landscape management, 17 of 20 survey respondents agreed it was essential, with the remaining 3 suggesting it was somewhat important.
        Figure 1 – Survey responses to a survey question asking stakeholders to rate the importance of facilitation for supporting collaborative landscape management (n=20)

        Facilitators can help, practically, to bring farmers and land managers together, from across a landscape, and help them to form groups that engage in collaborative activities together. In the survey responses, farmers, in particular, emphasised the importance of facilitators engaging with individuals, not just in a group setting, providing opportunities for social interaction, and establishing the conditions under which groups of farmers would be willing to collaborate. Others emphasised the importance of facilitators for building trust and long-term relationships, and who listen to and understand local needs and aspirations. For instance, a representative of a conservation NGO, stated: “To enable the group to come together and get underway, there needs to be a person who is good at bringing the group together and keeping them together.”

        Facilitators were considered useful for helping groups of farmers and land managers set clear goals and expectations, incorporating different individual goals and expectations. This was emphasised by another representative of a conservation NGO in the survey: “There needs to be clear objectives and purpose established from the start, so everyone is clear as to why they are collaborating and what outcomes are expected. There should be a clear project plan with clear timelines”. In the workshop, it was suggested that encouraging facilitators to develop formally constituted agreements with groups they work with, can help encourage those groups to take risks associated with collaboration.

        Stakeholders also thought that facilitators can help build the capacity of groups to ‘get things done’. This includes helping farmers and land managers to collect data for assessing biodiversity on their land, and then preparing maps and models of collaborative projects and their intended effects. It also includes supporting applications for funding to support collaborative landscape management projects, by conveying information and guidance about funding schemes, and then ensuring applications are prepared correctly, and in a professional format (which one existing farmer cluster facilitator stressed as highly important when groups are first starting up).

        Stakeholders recognised that effective facilitation requires skilled individuals and appropriate investment in their training, time and resources. Facilitators need a wide-ranging set of skills, including: project management, mapping, monitoring and evaluation, diplomacy to manage competing interests, awareness of funding schemes, experience of funding applications, a combined understanding of both agricultural economics and biodiversity, and an ability to draw information from across relevant sectors. Stakeholders therefore stressed that facilitators themselves need to be supported, through training, and funding to pay for their time, skills and training.

        In the survey, we asked stakeholders how long they thought support for facilitation of collaborative landscape management projects should last. As shown in Figure 2, the highest proportion of respondents thought support for facilitation should last 2-5 years (n=7), and the second highest proportion thought support should last 5-10 years (n=5). This emphasises the value of long-term support for facilitation.

        The highest proportion of respondents thought support for facilitation should last 2-5 years (n=7), and the second highest proportion thought support should last 5-10 years (n=5).
        Figure 2 – Survey responses regarding how long stakeholders think support for facilitation of a collaborative landscape management project should last (n=20)

        Funding to incentivise and implement collaborative activities

        Perhaps unsurprisingly stakeholders, across the board, considered financial incentives and funding for implementation as imperative for supporting farmers and land managers to engage in collaborative landscape management activities. As noted in Section 5.3, stakeholders considered existing agricultural support schemes, such as Agri-Environment Climate Schemes (AECS) and Nature Restoration Fund (NRF) as currently unsuited for supporting collaboration. There was therefore a strong push for ‘holistic’ funding for landscape-scale collaboration that would cover support for the full range of different aspects involved in collaborative landscape management. This included:

        • Start-up funding to help form groups in the first place.
        • Capital funding to help groups acquire resources, such as machinery, and other materials needed to implement a collaborative project.
        • Revenue funding for ongoing land management.
        • Funding for tasks such as mapping and surveying biodiversity.
        • Funding for administrative tasks such as writing and formatting applications.
        • Funding for monitoring, evaluation and knowledge sharing.
        • Funding for communications and publicity.

        Farmers, especially, stressed financial incentives as the single most important support measure for encouraging collaborative landscape management. However, they suggested that it is essential for funding to align with farmers’ interests, rather than simply being lucrative. In the workshop, one cluster farmer stated, strongly: “the motivation to do the best for the environment is there, but the support is not coming. The government need to up their game and provide incentives. Farmers will go along, as long as they are paid, but we need help to do that”.

        All stakeholders did recognise, however, that such holistic funding for collaborative landscape management would be expensive, and thus thought it would be challenging for public sector funding alone to provide this. In both the survey and the workshop, stakeholders showed interest in private sector investment as an alternative, or additional, source of funding for supporting collaborative landscape management. One advantage of this, that stakeholders identified, is that many businesses already have environmental targets and are ready and willing to invest in efforts to improve biodiversity and climate change outcomes. This may be for financial benefits (through nature finance), or to improve their reputation. Representatives from the Deer Management Groups and LENS explained that they are already working successfully with investment from private businesses, whilst several stakeholders cited FIRNS as an initiative that could help to build opportunities for private sector investment. One stakeholder, from Bioregioning Tayside, suggested that the government could encourage access to private sector funding by facilitating direct connections between groups of farmers and corporations with an interest in investing in them (such as large supermarkets). Another stakeholder, from a land agency cautioned about over-reliance on the private sector, noting that private sector investment is profit-driven and can make nature a marketable commodity.

        The survey asked respondents to rank the importance of support for implementation of a collaborative landscape management project, shown in Figure 3. The highest proportion thought support should last 5-10 years (n=7) and the second highest proportion thought it should last for 2-5 years (n=6). This indicates the importance of medium-to-long-term support for collaborative landscape management projects to be successful.

        The highest proportion thought support should last 5-10 years (n=7) and the second highest proportion thought it should last for 2-5 years (n=6). This indicates the importance of medium-to-long-term support for collaborative landscape management projects to be successful.
        Figure 3 – Survey responses regarding how long stakeholders think support for implementation of collaborative landscape management should last (n=20).

        Education and advocacy

        Whilst there was universal agreement on the importance of financial incentives, in the workshop, several stakeholders noted the importance of creating longer-term changes in attitudes and behaviour. Some stakeholders suggested that farmers, land managers, and others whose businesses depend on land and agriculture, need to understand the potential benefits of collaborative approaches to nature restoration for their business models. For example, crop production benefits from the presence of pollinating insects, so there is an inherent benefit to crop farmers managing land to protect those insects at the landscape scale. One stakeholder even questioned whether farmers and land managers should receive payment in instances where biodiversity is good for their businesses. However, there was some disagreement with this, especially from farmers, who argued that they already have the knowledge and motivation for nature restoration, they just need the funding.

        Increasing flows of knowledge, information and learning about the benefits of biodiversity emerged as an important incentive, in addition to funding. This was considered a potential opportunity to encourage longer-term changes in attitudes and motivations that would promote management of land for positive nature restoration and climate change outcomes. Such changes could reduce dependence on financial incentives for collaborative landscape management. This emphasises the importance of increasing the visibility of successful collaborative projects, including through communication between projects and increasing opportunities for advocacy and information sharing.

        Collaborative culture

        In the workshop, several stakeholders suggested ways in which a collaborative culture may be encouraged in Scotland. A farmer representative pointed to the French agricultural support system as a positive example of a collaboration being encouraged. There was also some discussion around the idea that collaboration could be made compulsory to ensure it happens. A farmer representative asserted that this could be necessary, because in cases where voluntary schemes for collaboration have ended, collaborative action has stopped, or even been reversed. Such a compulsory approach is taken in the Netherlands, where there is a long history of group/cluster development, apparently with some success. However, for a compulsory approach to be successful in Scotland, stakeholders thought there would be a need for major group development across farmers and land managers. The idea of a compulsory approach was also criticised by a land agent, who thought it would be politically undesirable to implement and enforce. A representative from Scottish Land and Estates suggested a culture of collaboration could be created through a compromise of points-based awards for collaboration within Tier 2 agricultural support payments and then making collaboration compulsory in Tier 3 support. This was contested by a conservation NGO, as points for collaboration already exist in AECS and the NRF. Nonetheless, these points systems could be increased in scale, to incentivise collaborative activities.

        Simplicity and flexibility.

        As explained in Section 5.3, there was a strong sentiment, across all of the participating stakeholders, that current support measures, such as AECS, are too complicated to effectively support collaborative landscape management. There is therefore huge demand for simplified application processes. As shown in Figure 4, 17 survey respondents considered the accessibility of application processes to be essential, whilst the remaining 3 considered it somewhat important.

        17 survey respondents considered the accessibility of application processes to be essential, whilst the remaining 3 considered it somewhat important.
        Figure 4 – Survey responses to survey question asking stakeholders to rate the importance of accessibility of application processes.

        Stakeholders also wanted to see greater flexibility, in terms of the types of landscape management options for biodiversity restoration that farmers can access support for. Stakeholders highlighted a need for different types of collaboration in different landscapes for different purposes, and a need for bespoke funding, information and facilitation to be tailored to different contexts. For example, one representative from Bioregioning Tayside called for measures that “allow for agency and different interpretations, depending on context.” Similarly, one member of a farmer cluster suggested a need for different measures, and different governance structures, for collaboration in different regions, citing an example from France, in which different regions are supported in different ways. Another cluster farmer contended that flexibility is needed within specific landscapes, not just across different regions, and suggested that support measures could be tailored to specific habitats. Specific options that stakeholders wanted to see funding for included: planting trees, using grasslands to sequester carbon, mixed livestock and forest farming, reducing fertiliser use, and adoption of hydrogen as a fuel.

        There were also calls for flexibility in terms of allowing for the fact that mistakes might be made during the implementation of collaborative landscape management approaches. Farmers were keen not to be punished too harshly for this and thought greater lenience would help reduce the risk of them engaging in collaborative landscape management. This was considered especially important for encouraging smaller farmers and land managers to engage in nature restoration. Stakeholders from Scottish Agricultural Organisation Society (SAOS) and Bioregioning Tayside thought the government needed to ‘let go’ of its risk aversion and accept that not all projects will work.

        These calls for simplicity and flexibility must, obviously, be measured against a need for regulation and accountability, to ensure that collaborative landscape management is done effectively and makes best use of public funds. This was acknowledged by stakeholders, to some extent, though there was a strong push to favour flexibility and incentives over regulation. There is also a potential tension between demands for flexibility and demands for simplicity. The greater the variety of options that are offered, the greater the complexity of support required.

        Integrated approach

        Stakeholders indicated a need for clear and joined-up support and advice from Scottish Government. In the survey, 16 out of 20 survey respondents felt that navigating complex and contested interests and priorities was essential, the remaining 4 felt it was somewhat important, as shown in Figure 5, below.

        16 out of 20 survey respondents felt that navigating complex and contested interests and priorities was essential, the remaining 4 felt it was somewhat important
        Figure 5 – Survey responses to survey question asking stakeholders to rate the importance of navigating complex and contested interests and priorities for supporting collaborative landscape management (n=20)

        Taking an integrated approach to designing and implementing support, as well as governance of collaborative landscape management was considered a solution that could help navigate this complexity and contestation, as well as balance flexibility with accountability and simplicity. Stakeholders strongly suggested that for policies to successfully support collaborative landscape management, they must be joined-up and ensure they complement each other. To aid this, stakeholders wanted to see greater integration of different sectors, policies and government departments, as well as regular and meaningful engagement with stakeholders, to listen to their needs. For example, non-governmental organisations, such as the RPSB, LENs, Bioregioning Tayside and the Deer Management Groups, who are already doing collaborative work with farmers and land managers at a landscape scale, stated they would benefit from increased collaboration with the government and agricultural sector. Such a collaborative approach was perceived, by stakeholders, as advantageous, because working across sectors could help to improve simplicity and efficiency of support for collaborative land management, as well as build on existing efforts to increase the scale of collaborative landscape management. However, there could be a danger that involvement of other sectors could diminish support for agriculture. Some stakeholders were therefore careful to ensure that agricultural funding stays ringfenced.

        Monitoring, evaluation and knowledge-sharing

        Stakeholders also emphasised the importance of support for monitoring and evaluation of collaborative landscape management approaches. In particular, they thought this should involve support for understanding and mapping the biodiversity that exists in a landscape, and then assessing the impacts of collaborative projects on this biodiversity, over time. Stakeholders suggested a range of approaches for understanding the success or efficacy of collaborative landscape management projects. This included more informal opportunities for learning and sharing knowledge, as well as more structured approaches to formal monitoring and evaluation. In terms of learning and sharing knowledge, ‘study tours’ (where groups of farmers visit farmers in another location to learn from each other), and forums such as conferences and the FIRNS ‘community of practice’, were considered important for encouraging reflection and learning about collaborative landscape management. Stakeholders suggested several potential benefits of such opportunities for learning and sharing knowledge. In the workshop, one land agent thought they could help farmers and land managers understand what work is needed to manage landscapes for nature restoration in their local areas, and understanding how collaborations may be set up. A cluster farmer thought they could be used for sharing how business and funding decisions and agreements are made.

        In terms of more formal, or structured, monitoring and evaluation, the importance of setting ‘baselines’ and maps of the biodiversity that exists in a landscape, at the start of a project, were considered essential by a range of stakeholders in both the survey and the workshop. For instance, a survey respondent from a conservation NGO stated that monitoring and evaluation should be conducted: “on a project scale by establishing the baseline and then how the project has moved beyond this”. In other words, farmers and land managers should establish what biodiversity exists in a landscape at the outset of a project, and then assess the success of the project according to whether and by how much biodiversity improves during the implementation of the project. This was reflected by similar suggestions across the survey and the workshop, with stakeholders indicating a need for farmers to be assisted in producing such baselines and associated maps. However, a GWCT representative in the workshop contended that such baselines of biodiversity need to be conducted at the level of individual farms, before they can be done at the landscape scale.

        As is often the case when discussing approaches for monitoring and evaluation, there was tension between assessing standardised indicators of biodiversity and exploring more contextual, qualitative experiences. In the survey, several respondents, across different perspectives, called for monitoring and evaluation in relation to general standards of biodiversity, such as standardised ‘measurement, recording and verification’ frameworks. In contrast, other survey respondents emphasised the importance of context-specific monitoring and evaluation that takes specific, landscape-scale objectives into account and includes qualitative data regarding people’s relationships with the landscape and the biodiversity within it. One farmer specifically objected to ‘simplified biodiversity metrics.’ A respondent from a conservation NGO suggested that monitoring and evaluation should include recreational and cultural elements, as well as those related to biodiversity and climate outcomes. This was reflected by the strong sentiment in the workshop around the importance of flexibility and context-specific approaches. Striking a balance between standardised and context-specific approaches to monitoring and evaluation therefore remains a challenge.

        Opportunities for supporting collaboration

        Further to the needs for support, outlined above, stakeholders suggested several opportunities for improving support for collaborative landscape management. Again, stakeholders were keen to emphasise the importance of building on existing efforts, rather than ‘reinventing the wheel’.

        Existing structures for enabling collaboration

        Stakeholders suggested several existing initiatives that could be invested in to help consolidate and encourage uptake of collaborative landscape management approaches. Farmer clusters, which were considered a successful example of collaborative landscape management approaches, are beginning to be developed in Scotland. Thus far, these have largely been supported by the Game and Wildlife Conservation Trust, and exist in Strathmore, Moray, Lunan Burn, and West Loch Ness. Efforts are also underway to develop LENs in Leven and elsewhere. Stakeholders also suggested that the Regional Land Use Partnerships and Deer Management Groups already have structures in place for encouraging collaboration, and these could be built upon. Several stakeholders suggested that investment in these existing structures for networking and collaboration should be increased, particularly the Regional Land Use Partnerships (RLUPs) and FIRNS Community of Practice. Funds such as the Just Transition Fund may also be used to support building partnerships, as in the given example of the Findhorn Watershed Initiative.

        Funding and training for facilitators

        For supporting facilitation, specifically, stakeholders advocated for the English Countryside Stewardship Facilitation Fund’ (CSFF) to be adopted in Scotland. Some also highlighted that some support for facilitation was included in the Environmental Cooperation Action Fund (ECAF), although this closed in 2017, without having issued any funding. Some stakeholders suggested something similar could be incorporated into Scottish Government’s Tier 1 and Tier 2 agricultural support mechanisms. In terms of providing training to create a cadre of skilled facilitators, the Farm Advisory Service (FAS) were considered well-placed to contribute to this. Their services already include communicating and explaining new support schemes as they come online. It was suggested this could be expanded to provide opportunities for learning and training for facilitators, as well as delivering proactive facilitation of collaborative projects.

        Incentives and funding for implementation

        Stakeholders were keen for funding and financial incentives to support collaborative landscape management approaches. In terms of financial incentives for farmers to engage in collaborative activities, stakeholders considered the current incorporation of points for collaborative projects within Agri-environment Climate Scheme (AECS) payments as a positive, and suggested that the availability of points for collaboration should be expanded. Similarly, several stakeholders suggested including a collaborative element in the Nature Restoration Fund. Incentivising collaborative landscape management within the Basic Payment Scheme was also considered an opportunity.

        Private sector investment

        Many stakeholders, particularly those representing agri-environment NGOs, acknowledged that providing holistic financial support for collaborative landscape management would be expensive. It may not be possible for such support to be entirely provided by the public sector. Stakeholders were therefore keen to see greater private sector investment to support incentivisation and implementation of collaborative landscape management activities. Conservation NGOs highlighted that current ‘rewilding’ initiatives are already funded mostly through private business, including foreign investors. Exploring similar opportunities to support collaborative landscape management could therefore offer a solution to increasing financial incentives for this.

        Various stakeholders highlighted opportunities to incentivise private companies to support collaborative landscape management. Some thought food companies could partner with or invest in collaborative groups of farmers, particularly local businesses operating within the same landscape. This was also thought to result in shorter supply chains, which could further complement biodiversity and climate goals. Others thought larger businesses (such as large supermarkets or chain restaurants) could be encouraged to build reputational capital in Scotland at a large scale, by investing in biodiversity and climate outcomes. Stakeholders highlighted that most businesses now have environmental targets and have an interest in contributing to positive outcomes for nature and climate. However, they still need a push from Government to take the initiative. Some stakeholders thought the role of Scottish Government could be to facilitate direct connections between farmer groups and private sector funders, whilst others suggested mandating companies to conduct ‘nature impact disclosures’ could push them to invest in nature restoration.

        Existing initiatives that encourage private sector investment in natural capital were also considered useful for stimulating private sector investment. In particular, stakeholders spoke positively about the Facility for Investment Ready Nature in Scotland (FIRNS), and saw increasing the investment and scale of this as an opportunity for supporting collaborative landscape management. A ‘Landscape Scale Natural Capital Tool’, is also being developed by NatureScot, to assess and value natural capital assets across a landscape. There was a strong appetite, particularly among those representing farmer clusters, for further development of this, in partnership with private companies who have nature restoration goals. Some agricultural stakeholders also highlighted the opportunity for new forms of land tenancy, in which natural capital gets integrated into the value of a farm. They thought this could incentivise groups of farmers to collaborate, to increase the value of natural capital across a landscape.

        Advocacy and education

        Increasing advocacy, education and information flows was considered a useful approach for highlighting the benefits of collaborative landscape management for nature and climate, as well as businesses that depend on the land for productivity. Several stakeholders suggested that building on the existing approach taken by the FAS could be an opportunity to promote this. The FAS already help to communicate and explain information about new initiatives, as they come onstream. Stakeholders therefore considered them well-placed to facilitate communication and sharing of information about successful examples of collaborative landscape management projects, as well as improving understanding of the benefits of managing landscapes for positive nature and climate outcomes. Other suggested opportunities to increase knowledge and information flows about collaborative landscape management included: advocacy campaigns and training, conferences, ‘study tours’, and ‘place-based apprenticeships’ to increase awareness of environmental challenges for young farmers.

        Some agricultural representatives also proposed that the farming media, and events, such as the Royal Highland Show, could do more to communicate the benefits of collaborative landscape management and provide recognition of successful collaborations. Printed, online or, podcast media, particularly those that farmers are actively listening to, represent an opportunity to highlight the need for collaborative landscape management. The wider group was in agreement and a representative from Scottish Land and Estates suggested their ‘Helping it Happen’ awards could incorporate a collaboration category to reward and promote collaborative approaches.

        Creating a culture of collaboration

        The opportunities presented above emphasise the importance and potential benefits of building on existing initiatives. Stakeholders were keen for a culture of collaboration to be created, in which all stakeholders are involved. Several stakeholders commended this engagement, as a useful step in taking stock of existing collaborations and involving stakeholders in planning support for collaborative landscape management. They were therefore keen for further such engagements. Some stakeholders, such as LENs and the Strathmore Farmer Cluster thought that accreditation of collaborative groups as ‘trusted operators’ would help consolidate their positions and encourage further collaboration. Stakeholders thought that greater integration across policies, as well as across sectors would help encourage collaboration. However, stakeholders acknowledged this is complex and agreed that agricultural support must remain ringfenced.

        Monitoring and evaluation

        Stakeholders also suggested several existing initiatives that could be built on to assist monitoring and evaluation of collaborative landscape management approaches. Farmer cluster groups were again highlighted as examples of best practice, in this case for developing standards and creating opportunities for data collection. For example, the Strathmore Cluster are currently using hand-held mapping systems for mapping key species. Deer Management Groups were also raised as an existing structure that could help to lead, pool and disseminate data. Similarly, Bioregioning Tayside are using ‘community science’, to involve local communities in monitoring biodiversity in their local area. Stakeholders thought such approaches could be useful for monitoring the effects of collaborative landscape management on biodiversity.

        Increasing ‘open access’ to data, mapping and modelling also has the potential to help land managers and communities understand why change is needed. The Landscape Scale Natural Capital Tool, being developed by NatureScot was considered a useful initiative to support access to data. This is taking a holistic approach to recording different elements of a landscape, and their condition, such as soil types, or water quality. This tool could prove useful for understanding and mapping what is needed for positive outcomes for nature and climate, and could be used by collaborative groups to plan and set goals. Open access to such data could also allow groups to feel some ownership over it. However, stakeholders did raise the question of how and by whom data collection and mapping should be paid for. Some emphasised the fact that this too needs to be funded and facilitated.

        Other useful data sources that stakeholders suggested, included ecological surveys and apps being rolled out by NatureScot, as part of the Agricultural Reform Programme, and the Linking Environment And Farming (LEAF) Sustainable Farming Review or data platforms like Omnia (a digital information tool for supporting farm management). One participant indicated that mobile apps for recording biodiversity, are being developed for biodiversity credit schemes. Several stakeholders also indicated that bringing in independent reviewers, such as universities and expert ecologists, could help to support monitoring and evaluation.

        Conclusions

        In this section, we draw conclusions in relation to what is currently working well, what is needed and what opportunities may be built upon for supporting collaborative landscape management. We also highlight some gaps and opportunities for further research and innovation. The conclusions are based on the input from stakeholders in this study. They are particularly relevant to the Scottish Government’s Agricultural Reform Programme but may also be relevant to other groups with resources and capacity to support collaborative landscape management.

        What is working well?

        It is important to build on existing initiatives and avoid reinventing the wheel. Successful collaborations in Scotland provide examples for how to bring people together and build relationships across landscapes and could thus be supported to build on their existing work. Stakeholders also consider that the English farmer cluster model works well. This is beginning to be replicated in Scotland. The main factors supporting these examples’ success were support for facilitation, bespoke projects that bring people together to work on an issue of common interest, forums for sharing knowledge and experience, and an integrated approach to supporting collaboration.

        What support is needed?

        Although the examples of success are encouraging, stakeholders thought that collaborative landscape management is currently hindered by limited support for facilitation, scarcity of suitable incentives and funding for implementation, poorly integrated approaches to support, and limited evidence of successful collaborations. Overall, Scotland was considered to lack a collaborative culture among farmers and land managers.

        Facilitators are required to bring groups together and enable planning, preparing for and implementation of collaborative landscape management approaches. Support for facilitators is therefore required in the form of training, to develop their skillsets, as well as funding to pay for their time and skills.

        Stakeholders also require incentives and long-term funding for development and implementation of collaborative landscape management activities. Encouraging private sector investment could act as an incentive, as well as supplementing public sector funding for implementation of collaborative activities. Balancing accessibility and flexibility of funding, with quality control and regulation, is a challenge, but stakeholders strongly thought that greater accessibility and flexibility are needed to encourage engagement in collaborative landscape management. Support for bespoke projects, perhaps utilising private sector funding, or tailored support for different landscapes and regions could help resolve this.

        Education and advocacy are considered necessary to change attitudes and highlight the benefits of collaborative landscape management. This would be aided by support for monitoring and evaluation that demonstrates the effects of collaborative approaches. A culture of collaboration may also be fostered through an integrated approach to supporting collaborative landscape management. Stakeholders are keen for integrated policies within government, as well as involvement of actors beyond those directly involved in government and the agriculture sector.

        What opportunities exist?

        Existing examples of collaborative structures, such as farmer clusters, Regional Land Use Partnerships, Landscape Enterprise Networks and Deer Management Groups may be used as foundations for future collaborative landscape management approaches. Investing in them could thus help to consolidate and enhance uptake of collaborative landscape management approaches.

        Funding for facilitation may be supported by adapting the English Countryside Stewardship Facilitation Fund for Scotland. The approach of the Farm Advisory Service could be elaborated to include training a cadre of skilled facilitators for collaboration.

        Incentives for collaboration may be built into the Agri-Environment Climate Scheme and the Nature Restoration Fund, through increasing the points available for collaborative approaches in these schemes. Opportunities exist to increase private sector investment in collaborative landscape management, including increasing the scale of the Facility for Investment Ready Natural Capital in Scotland (FIRNS), and completing development of NatureScot’s Landscape Scale Natural Capital Tool. The Scottish Government could also play a useful role by actively facilitating connections between farmers and private-sector organisations, such as local businesses and larger scale supermarkets and chain restaurants.

        Building on existing initiatives and networks could also help foster a culture of collaboration. This could include increasing opportunities for training, conferences and knowledge sharing, as well as communicating the benefits of collaborative landscape management approaches. There is growing access to data, including NatureScot’s Ecological Surveys and their developing Landscape Scale Natural Capital Tool, as well as other sources and types of knowledge, including participatory approaches like Bioregioning Tayside’s community science. These could help improve understanding of the effects of collaborative approaches, whilst promotion of collaborative landscape management approaches via the Farm Advisory Service, farming media and agricultural events could help raise awareness.

        Gaps and opportunities for future research and innovation

        The results of this project identified several tensions. Stakeholders appeared to prefer encouragement for collaboration via increasing incentives, but there was acknowledgement of the importance of regulation. They also requested both simplicity and flexibility to support context-specific, bespoke projects, but simplicity and flexibility are not always easily enabled together.

        Private sector investment may help to increase incentives and provide some of this flexibility, but it will require caution to ensure standards continue to be met. Exploring and testing mechanisms for involving the private sector in a way that ensures responsible and accountable nature restoration, whilst making favourable returns on investment is an important opportunity for research and innovation.

        Stakeholders also highlighted the importance of integration across government policies and between government and other stakeholders. However, questions about how such forms of integration may be achieved and who should be responsible for coordinating them, remain unresolved. Further research and innovation on the topic of integration is therefore important.

        Although this study identified and engaged with a range of stakeholders and initiatives, the timescale for this project required tight targeting. Further engagement and a more in-depth appraisal would be beneficial. In particular, the 2024 UK General Election hindered engagement with UK Government stakeholders involved in collaborative landscape management approaches. Further engagement with the Farm Advisory Service could also be useful. It may also be enlightening to conduct a more in-depth appraisal of international examples of support for collaborative landscape management.

        References

        HODGE, I. 2024. The potential for local environmental governance: A case study of Natural Cambridgeshire. Journal for Nature Conservation, 79, 126631.

        KUHFUSS, L., BEGG, G., FLANIGAN, S., HAWES, C. & PIRAS, S. 2019. Should agri-environmental schemes aim at coordinat-ing farmers’ pro-environmental practices? A review of the literature.

        LEACH, W. & SABATIER, P. 2003. Facilitators, coordinators, and outcomes. Promise and Performance Of Environmental Conflict Resolution. RFF Press.

        PRAGER, K. 2015. Agri-environmental collaboratives as bridging organisations in landscape management. Journal of Environmental Management, 161, 375-384.

        PRAGER, K. 2022. Implementing policy interventions to support farmer cooperation for environmental benefits. Land Use Policy, 119, 106182.

        PRAGER, K. & CREANEY, R. 2017. Achieving on-farm practice change through facilitated group learning: Evaluating the effectiveness of monitor farms and discussion groups. Journal of Rural Studies, 56, 1-11.

        RILEY, M., SANGSTER, H., SMITH, H., CHIVERRELL, R. & BOYLE, J. 2018. Will farmers work together for conservation? The potential limits of farmers’ cooperation in agri-environment measures. Land Use Policy, 70, 635-646.

        RUNHAAR, H. & POLMAN, N. 2018. Partnering for nature conservation: NGO-farmer collaboration for meadow bird protection in the Netherlands. Land Use Policy, 73, 11-19.

        WAYLEN, K. A., BLACKSTOCK, K. L., MARSHALL, K. & JUAREZ-BOURKE, A. 2023. Navigating or adding to complexity? Exploring the role of catchment partnerships in collaborative governance. Sustainability Science, 18, 2533-2548.

        WESTERINK, J., JONGENEEL, R., POLMAN, N., PRAGER, K., FRANKS, J., DUPRAZ, P. & METTEPENNINGEN, E. 2017. Collaborative governance arrangements to deliver spatially coordinated agri-environmental management. Land Use Policy, 69, 176-192.

        Appendices

        Appendix A. Methodology

        We began by identifying a conceptual framework of factors likely to enable collaborative landscape management. We then invited people with knowledge and interest in agriculture, land management and conservation in Scotland to share their perspectives in a stakeholder engagement in June 2024. This involved two activities: 1) a consultation, via an online survey; and 2) a stakeholder workshop, held in person, in Perth on 25th June 2024. Each of these invited a range of stakeholders to respond to discussion questions, structured around a conceptual framework based on existing research about factors that support collaborative landscape management. Each engagement approach engaged 20 stakeholders. The survey was anonymous, so it is difficult to say precisely how many stakeholders contributed overall, but based on the organisations represented in each activity, we estimate around 30 stakeholders contributed overall. This yielded expert insights regarding lessons learned from experience of existing support for collaboration, as well as aspirations, needs, and interests of those involved in promoting and delivering collaborative landscape management. Below we first describe the conceptual framework, and then summarise the two stakeholder engagement activities, and how the resulting data were analysed.

        Conceptual framework

        A growing number of studies exist that identify and suggest factors that can contribute to supporting collaborative landscape management. These elements are brought together by Westerink et al. (2017), into a framework which suggests that to support collaborative landscape management, it is important to consider the following characteristics:

        • Coordinating the collective effort of landholders across a landscape, and ensuring their efforts complement each other.
        • Promoting the involvement of both governmental and non-governmental actors in processes of decision making around landscape management
        • Enabling monitoring and learning from the effects of landscape management approaches

        A range of specific factors have been suggested by various authors to help in enabling these characteristics (Hodge, 2024, Prager, 2015, Prager, 2022, Riley et al., 2018, Runhaar and Polman, 2018) These include:

        • Building on existing relationships and collaborative activities.
        • Skilled facilitation.
        • Ensuring sufficient time, funding and resources are available, especially for facilitation.
        • Setting clear and realistic expectations.
        • Balancing top-down governance and bottom-up initiative.
        • Navigating complex and contested interests and priorities.
        • Learning, monitoring and knowledge exchange.
        • User-friendly procedures for accessing incentives.

        In this research, we used the above characteristics and specific factors to structure the questions for response in the consultation and discussion in the workshop, whilst remaining open-minded to responses emerging from beyond this framework.

        Online consultation survey

        The survey, administered online via Qualtrics, consisted of a mixture of open-ended and multiple-choice questions, which were structured around the factors that the conceptual framework identifies as important to consider for supporting collaborative landscape management. The open-ended questions asked stakeholders for their views on: supportive factors for collaborative landscape management; barriers to collaboration; the ideal roles of government and non-government actors; and understanding the impacts of collaborative activities. The multiple-choice questions asked stakeholders to rate how important they thought various factors would be in supporting collaborative landscape management, as well as how long they thought support should last for. The full list of questions is available in Appendix B.

        In-person workshop

        The workshop, held in-person at the Perth Subud Centre on 25th June 2024, brought together a group of 20 stakeholders to deliberate what was needed to support collaborative landscape management in a Scottish context. To provide a backdrop for the workshop discussions, the workshop began with a brief presentation by an academic expert on lessons for thinking about collaborative landscape management from elsewhere, followed by presentation of initial results from the online survey. Stakeholders were then asked to discuss the following set of four questions, based on the conceptual framework, in small groups, and list their responses:

        • What is currently working well in terms of support for collaborative landscape management (drawing on examples from within Scotland and elsewhere)?
        • What barriers exist for collaborative landscape management (drawing on examples from within Scotland and elsewhere)?
        • In general, what types of support are needed to enable collaborative landscape management?
        • How can learning and knowledge exchange about collaborative landscape management be supported?

        The small group activity was followed by a full group session, in which stakeholders were asked to consider and discuss the question of how support for collaborative landscape management in Scotland could be done better, and then finally to note down suggested next steps. The full programme for the workshop is available in Appendix C

        Recruitment of stakeholders

        To recruit stakeholders for both the survey and workshop, we capitalised, initially, on contacts held by the research team with farmer clusters and non-governmental organisations working on biodiversity restoration and climate outcomes. We then expanded the selection through these networks, as well as via recommendations from Scottish Government partners. All of the stakeholders were invited to participate in both the survey and the workshop, though not all were able to participate in both. This resulted in a group of stakeholders who represented a range of different perspectives, including: farmers, farmer cluster facilitators, land agents, landowners, academic experts, and non-governmental organisations working in agriculture, land management and conservation. We also invited organisations involved in administering the Farm Advisory Service, but did not receive a response. Overall, 20 stakeholders participated in the survey and 20 (not all the same people) attended the workshop. These are listed in Table 1, below.

        Sector represented

        Organisations

        Farmer clusters

        West Loch Ness Farm Cluster; Lunan Burn Wildlife Cluster; Strathmore Wildlife Cluster; Buchan Farm Cluster; Moray Farm Cluster

        Agri-environment NGOs

        Bioregioning Tayside; Linking Environment and Farming; South of Scotland Enterprise; ScotFWAG; Scottish Agricultural Organisation Society; Scottish Environment LINK; Leven Landscape Enterprise Networks

        Conservation NGOs

        SEDA Land; GWCT; RSPB Scotland; Forth Rivers Trust; Deer Management Groups

        Landowners/estates

        Crown Estate Scotland; Scottish Land and Estates

        Land agents

        Sylvestris

        Academic institutions

        The James Hutton Institute; University of Aberdeen

        Environmental agencies

        NatureScot

        Other

        Individual Consultant

        Table 1 – Sectors and organisations represented in the study.

        Overall, this stakeholder engagement included representation from a range of stakeholders involved in agriculture, conservation and land management. Existing farmer clusters, in particular, were well-represented, as were agri-environment and conservation NGOs. However, the tight targeting for this project meant that it was not possible for all possible stakeholders to be included. Perspectives from providers of farmer advisories could have been better represented, as could land agencies and the private sector. A UK Government General Election also hampered efforts to include perspectives from UK Government agencies involved in collaborative landscape management. The focus of the study on agriculture also meant that perspectives associated with other land uses, such as forestry and recreation, were not represented. The findings therefore strongly reflect farming and conservation perspectives and, whilst this is relevant to the agricultural reform programme, further studies may be enriched through inclusion of a wider range of perspectives.

        Analysis

        By design, both the survey and the workshop produced mainly qualitative data, regarding stakeholders’ views on what was needed to support collaborative landscape management. The data was collated by the research team into sets of summary notes, which we read through, carefully, and identified themes across the stakeholders’ responses. For rigour, we compared themes from the survey against those from the workshop, and from both activities against the proposed supportive factors for collaborative landscape management, identified in the conceptual framework. We also compared the themes across different groups of stakeholders, to explore if there was agreement/disagreement or difference between different sectors.

        Limitations

        We are confident that this methodology enabled us to invite and explore expert insights across a range of agricultural and conservation perspectives, including from actors already involved in collaborative landscape management activities. The combination of an asynchronous online survey with an in-person workshop helped ensure that the study benefited from both anonymous input from individuals, in their own time, and without their responses being influenced by others, as well as in-depth knowledge exchange and deliberation in the workshop. Nonetheless, as with any workshop, it is possible that the discussions, and thus the data, were influenced by the most vocal participants and the general biases of those present, whilst the survey had limited opportunities to yield in-depth responses. We have therefore made efforts to present the results in a balanced way and highlighted areas of disagreement and uncertainty. Both activities were limited by the amount of time available for the study, and a richer picture may have been painted with more time for in-depth inquiry.

        Appendix B. Examples of landscape scale collaboration from outside of Scotland that were suggested by survey respondents

        Name

        Location

        Link

        EU Interreg PARTRIDGE project

        North Western Europe

        PARTRIDGE, Interreg VB North Sea Region Programme

        Fiji 4 Returns Framework

        Fiji

        4-Returns-for-Landscape-Restoration-June-2021-UN-Decade-on-Ecosystem-Restoration.pdf (commonland.com)

        Landscape Enterprise Networks

        Established in England, Italy, Poland and Hungary, and being developed in Scotland

        Home – Landscape Enterprise Networks

        Norway Nature Index

        Norway (and being trialled in Cairngorms)

        The Norwegian Nature Index (nina.no)

        Heart of Borneo Initiative

        Indonesia, Malaysia, Brunei

        Heart of Borneo (HoB) | WWF (panda.org)

        North East Cotswold farmer cluster

        England

        Home | The North East Cotswold Farmer Cluster | England (cotswoldfarmers.org)

        Selborne Landscape Partnership

        England

        Home Page (selbornelandscapepartnership.org.uk)

        The Australian National Landcare Programme

        Australia

        https://www.dcceew.gov.au/environment/land/landcare

        Home – Landcare Australia Landcare Australia

        The Sustainable Farming Incentive

        UK

        Sustainable Farming Incentive – Farming for the future

        The Cevennes National Park

        France

        Cévennes National Park | Cévennes Tourism (cevennes-tourisme.fr)

        FASB Initiative

        Brazil

        https://inovaland.earth/2024/05/31/landscape-restoration-beyond-numbers-fasb-changing-lives-in-brazil/

        FASB (inovaland.earth)

        Dutch Farmer Collectives

        Netherlands

        English | BoerenNatuur

         

        Appendix C. Online consultation survey questions

        Online Consultation: How can landscape scale collaboration be supported to help deliver nature restoration, climate change mitigation and adaptation?

        Introduction – *Watch short, recorded presentation* – embed in Qualtrics.

        Thank you for taking the time to contribute your insights to this study on how landscape scale collaboration can be supported to deliver nature restoration, and climate change mitigation and adaptation.

        This short survey will ask you to respond to a series of questions regarding the factors you think are important for supporting landscape scale collaboration. The questions build on the framework outlined in the presentation, in particular:

        • how you think collaborative landscape management should be facilitated,
        • how you think government and non-governmental actors should support collaborative landscape management,
        • what would help support learning in collaborative landscape management,
        • and what conditions and resources are needed for all of this.

        The survey consists of a mixture of open-ended questions and sliding scales and should take around 10-15 minutes to complete. You will be asked to name the organisation you represent, but this will not be linked with your responses in the findings or outputs from this study, to ensure you are not identifiable (please refer to the information sheet and consent form for further details).

        1) Do you consent to take part in this survey? (You do not have to answer all questions and you may withdraw at any point).

        Yes/No (Conditional question – Yes needed to advance).

        3) For which organisation do you work?:

        Free Text

        4) What measures (e.g. administrative, funding, logistical, etc) are required to support land managers to undertake collaborative landscape-scale management to benefit biodiversity and climate mitigation?

        Free text

        5) What should be the role of a) governmental and b) non-governmental actors in decision-making around collaborative landscape management?

        a) governmental actors

        Free text

        b) non-governmental actors

        Free text

        6) How can the impact of collaborative landscape-scale activities be monitored and evaluated?

        Free text

        7) To what extent do you agree that the following are important factors in enabling landscape-scale collaboration to benefit nature restoration and mitigate climate change?:

        Building on existing relationships and collaborative activities between landholders.

        Essential

        Somewhat important

        Neutral

        Not important

        Unnecessary

        Not sure

        Facilitation of collaboration (e.g. having an advisor who helps convene, plan for and enable collaborative activities).

        Essential

        Somewhat important

        Neutral

        Not important

        Unnecessary

        Not sure

        Availability of sufficient time, funding and resources for the planning and implementation of collaborative activities.

        Essential

        Somewhat important

        Neutral

        Not important

        Unnecessary

        Not sure

        Developing clear and realistic plans for collaborative activities.

        Essential

        Somewhat important

        Neutral

        Not important

        Unnecessary

        Not sure

        Balancing top-down governance and bottom-up initiatives.

        Essential

        Somewhat important

        Neutral

        Not important

        Unnecessary

        Not sure

        Navigating complex and competing interests.

        Essential

        Somewhat important

        Neutral

        Not important

        Unnecessary

        Not sure

        Support for monitoring and evaluating the effects of collaborative landscape-scale activities.

        Essential

        Somewhat important

        Neutral

        Not important

        Unnecessary

        Not sure

        Ensuring application processes for accessing incentives are accessible and user-friendly.

        Essential

        Somewhat important

        Neutral

        Not important

        Unnecessary

        Not sure

        8) Are there any other factors you think are important for supporting landscape-scale collaboration? If so, please elaborate.

        Free text

        9) Are there any factors that tend to constrain or hinder landscape collaboration? If so, please elaborate.

        Free text

        10) For how long do you think support for facilitation of collaborative landscape activities should last (from the point at which any particular collaboration commences)?

        Less than 1 year

        1-2 years

        2-5 years

        5-10 years

        Longer than 10 years

        Indefinitely

        11) For how long do you think support for implementation of collaborative landscape activities should last (from the point at which implementation of a particular activity commences)?

        Less than 1 year

        1-2 years

        2-5 years

        5-10 years

        Longer than 10 years

        Indefinitely

        12) Are there any lessons from your experiences or knowledge of collaborative landscape management you would like to share?

        Free text

        13) Are you aware of any examples of landscape scale collaboration in other countries that could be useful for Scotland to learn from? If so, please mention them here.

        Free text

        14) Any additional comments.

        Free text

        *End survey.*

        Appendix D. Workshop activities

        Landscape-scale collaboration to benefit biodiversity and climate change outcomes – stakeholder engagement – Stakeholder workshop 25/06/2024 Subud Centre, Perth

        Aim: To explore stakeholder perspectives and encourage dialogue regarding what is needed to encourage landscape-scale collaboration in the Scottish context.

        Welcome and introductions (11:00 – 11:15)

        • A brief welcome from the project team.
        • Housekeeping stuff – include mention that we will be audio recording and taking notes.
        • Expectation that we want to hear from everyone, and everyone’s views are welcome and ought to be respected, including where there are disagreements.
        • Run through the agenda.
        • An overview from Scottish Government, explaining why we are all here today and Scottish Government’s interest in exploring the possibilities around developing some form of future Landscape Scale Collaboration mechanism within an agri-environment context.
        • Brief introductions – name, organisation/sector representing, plus icebreaker question (e.g. favourite vegetable).

        Session 1 – Setting the scene (11:15 – 11:50)

        Aim: to set the scene with regards to understanding of ‘collaborative landscape management’ for agricultural land and holdings.

        To do that, we will hear short talks from:

        i) Expert on landscape collaboration approaches, about current understanding in research on landscape-scale collaboration;

        ii) initial results from the online consultation survey.

        Each presentation will be around 10 minutes, plus 15 minutes for questions at the end of the session.

        Session 2 – Share ideas about what is needed to support landscape-scale collaboration in Scotland (11:50 – 13:00)

        Aim: to facilitate discussion regarding what participants think is needed to support landscape-scale collaboration in a Scottish context.

        This will involve a ‘Carousel’-style activity, whereby stakeholder participants will be split into small groups, rotating around four ‘stations’, each featuring a different discussion question. Proposed questions are:

        • What is currently working well in terms of support for collaborative landscape management (drawing on examples from within Scotland and elsewhere)?
        • What barriers exist for collaborative landscape management (drawing on examples from within Scotland and elsewhere)?
        • In general, what types of support are needed to enable collaborative landscape management?
        • How can learning and knowledge exchange about collaborative landscape management be supported?

        Participants will be asked to write their group’s responses on pieces of flipchart paper at each station. These will be stuck up around the room for participants to read during the lunch break.

        45 minutes – 10-minute explanation – then diminishing amounts of time at subsequent stations (15 mins – 10 mins – 5 mins – 3 mins) 15-minute buffer for overrunning.

        Lunch 13:00 – 13:45: Good food & networking.

        Session 3 – Plenary discussion (13:45 – 15:00).

        Aim: clarify what is needed to support landscape-scale collaboration in Scotland.

        This will start with a summary of points brought up during Session 2. Participants will have had time to look at all of the responses that have come up on the flipcharts for the carousel activity. Lead facilitator (SP) will give a brief summary of these as well.

        We will then do a ‘think-pair-share’ activity, whereby each participant writes down their thoughts on a sticky note, then compares with the person next to them, and then we ask participants to share with the room. This will be framed around the question:

        • how could support for collaborative landscape management in Scotland be done better?

        Facilitation note: Encourage participants to be specific about what needs to change, and who can do what, and even, optionally, when.

        Then, finally, we will move into more of an open, plenary discussion around opportunities, actions and potential next steps for supporting collaborative landscape management in Scotland.

        Facilitation note: Make sure to check and acknowledge differences and disagreements, if not already aired – explore why they might be coming up.

        75 minutes – 10-minute review of previous session – 5-minute explanation of next task – 10 minutes for ‘think-pair-share’ question (5 min ‘think’, 5 min ‘pair’) – 50 minutes for general discussion. Then 15 minutes for closing comments.

        Finish by around 15:15 – buffer of 15 minutes for closing and leaving.

        © The University of Edinburgh, 2024
        Prepared by The James Hutton Institute 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. This refers to the RESAS Strategic Research Programme ‘People and Nature’ project (JHI-D4-1), which aims to examine the indirect drivers of biodiversity loss – social values and behaviours. https://sefari.scot/research/projects/people-and-nature ↑


        Research completed August 2024

        DOI: http://dx.doi.org/10.7488/era/4836

        Executive summary

        Aims

        This report presents indicators for monitoring the four domestic outcomes of the third Scottish National Adaptation Plan (SNAP3). These outcomes are summarised as:

        • Nature Connects
        • Communities
        • Public Services and Infrastructure
        • Economy, Business and Industry

        It establishes a baseline prior to the implementation of SNAP3 for monitoring and determining progress at the end of the Plan’s five-year period.

        The report addresses the challenges of developing indicators for a national adaptation plan by adopting an approach that balances robustness and practicality, considering available resources and data. We have developed a set of indicators for each outcome, assessing their relevance and feasibility for monitoring, through desk-based review and stakeholder engagement. The assessment has been grounded in the practical reality of what data is available rather than theoretically ideal indicators.

        Findings

        The indicators proposed for each of SNAP3’s outcomes are listed below. For each indicator, there was sufficient data available to allow for a pre-SNAP3 baseline to be established and then reported against after a five-year period.

        • Nature Connects – outcome indicators
        • Habitat Connectivity Index​ 
        • Proportion of surface water bodies classified in high and good condition
        • Proportion of Scotland’s protected sites in favourable condition
        • Proportion of soft shorelines affected by coastal erosion
        • Extent of green-blue land cover in urban areas 
        • Proportion of adults who live within a five-minute walk of their nearest green or blue space

        These six indicators cover elements of ecological connectivity, ecosystem health, and nature-based solutions (NbS) for climate adaptation. A marine ecosystem indicator could not be included due to insufficient data availability.

        • Communities – outcome indicators
        • Level of community awareness around climate change
        • Level of community climate action
        • Progress of actions in local flood risk management plans
        • Level of community wellbeing

        The four indicators cover elements of community resilience, wellbeing, and climate action. It was particularly challenging to capture the complexity of health and equity in relation to climate adaptation with only a few high-level indicators. The onus was placed on monitoring levels of community action in creating resilient, healthy, and equitable places.

        • Public Services and Infrastructure – outcome indicators
        • Level of collaboration across public services
        • Level of adaptation actions across public services

        The two indicators monitor collaboration and adaptation action among public bodies. While these indicators provide high-level insights into public sector collaboration and adaptation efforts, they do not measure the effectiveness or inclusiveness of these actions, which would require numerous sector-specific indicators that would be onerous to monitor.

        • Economy, Business and Industry – outcome indicators
        • Proportion of businesses monitoring climate-related risks
        • Proportion of businesses taking action to adapt to the effects of climate change
        • Number of green jobs
        • Uptake of grants for agriculture storage reservoirs and off-season storage lagoons​

        The five indicators cover elements of business preparedness, adaptation actions, and economic opportunities related to climate change. These indicators provide an overview of Scotland’s economic adaptation to climate change. However, they do not cover investment in climate adaptation initiatives or economic resilience to climate-related hazards, as there were insufficient available data.

        Recommendations

        Key recommendations for the outcome indicators following this project include:

        • Consistent application of indicators. The indicator set for SNAP3 should be finalised as soon as possible and consistently applied to enable meaningful and coherent monitoring over the Plan’s five-year period. Any changes made to individual indicators or the data that underpin them may compromise the ability to track progress consistently relative to the baseline.
        • Maintain continuity, quality and availability of data required by each indicator. It is vital to maintain the allocation of resources to the collection, maintenance and accessibility of datasets used by the indicators across all relevant Scottish Government departments.
        • Maintain flexibility regarding potential for additional indicators. New indicators may be added in the immediate term if relevant data becomes available, as may be anticipated regarding, for example an ecosystem functions indicator for Nature Connects or a green finance indicator for Economy, Business, and Industry. While the suite of indicators addresses the needs for monitoring the outcomes of SNAP3, it may be viewed as a foundation to build upon regarding monitoring of SNAP4.
        • Establish a working group to sustain the functioning of the indicators. The working group could comprise key stakeholders and data providers who could meet annually to review the functioning of the indicators and address any issues regarding their deployment, e.g., continuity and availability of data and its quality.

        The findings of this report may also be of interest to anyone interested in monitoring and evaluation of climate adaptation planning more generally.

        Glossary / Abbreviations table

        BICS

        Business Insights and Conditions Survey

        CCAH

        Community Climate Action Hubs

        LPP

        Local Place Plans

        MEL

        Monitoring, Evaluation and Learning

        NAP

        National Adaptation Plan

        NbS

        Nature-based solutions

        ONS

        Office of National Statistics

        SEPA

        Scottish Environment Protection Agency

        SHeS

        Scottish Health Survey

        SHS

        Scottish Household Survey

        SNAP3

        3rd Scottish National Adaptation Plan

        SSN

        Sustainable Scotland Network

        WEMWBS

        Warwick-Edinburgh Mental Wellbeing Scale

        Introduction

        Aims of this report

        The third Scottish National Adaptation Plan (SNAP3)[1] will be published in Autumn 2024 and Scottish Ministers have agreed that there is a need to improve monitoring of its outputs and outcomes, as compared with the way previous adaptation plans in Scotland have been monitored. The central aim for monitoring, evaluation and learning (MEL) of SNAP3 is to ensure that the indicators are as robust and relevant as possible for monitoring its specific outcomes, while remaining practical and accessible to implement in terms of resources and data available. We have sought to strike this balance between robustness and feasibility in the outcome indicators presented in this report.

        The structure of SNAP3 is based around five long term outcomes and 23 objectives that set out adaptation priorities for the Scottish Government between 2024-2029. These five outcomes are (with abbreviations used hereinafter in brackets):

        1. “Nature connects across our lands, settlements, coasts, and seas” (Nature Connects)
        2. “Communities are creating climate-resilient, healthy, and equitable places” (Communities)
        3. “Public services are collaborating in effective and inclusive adaptation action” (Public Services and Infrastructure)
        4. “Economies and industries are adapting and realising opportunities in Scotland’s Just Transition” (Economy, Business and Industry)
        5. “Scotland’s international role supports climate justice and enhanced global action on climate adaptation”​ (International Action)

        The indicators developed here address the first four outcomes, which are focused on Scotland’s resilience at the national level. Through a process of desk-based research and engagement with the Scottish Government’s departments and relevant organisations, we have developed a suite of indicators to monitor progress of these outcomes. Each indicator was assessed using criteria to determine its inclusion. The criteria addressed the indicator’s conceptual relevance and practical implications, including availability of baseline data. Our development of indicators for the four outcomes of SNAP3 took place concurrently with work undertaken by the Scottish Government to develop a suite of indicators for the 23 objectives that sit beneath the outcomes.

        This report takes the following structure: first, Section 1.2 provides a brief overview of MEL in national adaptation contexts. Section 2 outlines the process undertaken to develop the outcome indicators. Section 3 provides information for each indicator and is structured by each outcome. Baseline data is presented in the Section 4. Section 5 concludes with a discussion and recommendations for next steps. Annexes provide further details on methodology and technical information.

        Context

        A key takeaway from the COP28 in December 2023 was the importance of monitoring, evaluation, and learning (MEL) to understand and report on the effectiveness of the design and implementation of national adaptation planning processes (Beauchamp & Józefiak, 2023). Due to the iterative nature of climate adaptation, MEL is essential to periodically understand the effectiveness of adaptation plans effectiveness and improve their design accordingly (GEF, 2016). Furthermore, national MEL systems are of importance for fulfilling national reporting commitments, such as the Enhanced Transparency Framework under the Paris Agreement (UNDP, 2022).

        Developing indicators of climate adaptation is challenging, conceptually and practically, due to the complex, multi-sectoral and context-specific nature of climate impacts that need to be addressed (UNFCC, 2022). Challenges include: the length of time it can take to implement adaptation actions due to their scope and scale; the length of time for adaptation actions to mature and deliver measurable outcomes; and the need for monitoring to be sustained, which poses practical issues regarding maintenance of a consistent methodology using comparable data and associated long-term funding and policy cycles.

        No standard metrics exist to capture adaptation nor an off-the-shelf indicator framework to apply to a country’s context (New et al., 2022). Nevertheless, there are numerous efforts to structure MEL of climate adaptation in the form of checklists and toolkits. Examples include: the BASE Evaluation Criteria for Climate Adaptation, which offers a checklist for evaluation focused on outcomes and processes; and the ‘Toolkit for MEL for National Adaptation Plan (NAP) Processes’ for developing countries (Beauchamp et al., 2024).

        The Global Goal on Adaptation (GGA) framework adopted at COP28 (known as the UAE Framework for Global Climate Resilience) represents a concerted effort at a global level to establish universal targets to guide countries’ adaptation pathways. However, identifying a set of indicators to monitor progress remains a fundamental challenge (Gabbatiss & Lempriere, M, 2024). This is exemplified by the wide-ranging list of potential indicators found in the recent UAE – Belém work programme that synthesises countries’ submissions to the United Nations Framework Convention on Climate Change (UNFCCC) (UNFCCC, 2024).

        In Scotland, the approach to climate adaptation M&E monitoring and evaluation has been robustly developed through the previous Scottish Climate Change Adaptation Programmes (SCCAPs). The Climate Change Committee (CCC) has provided significant recommendations on enhancing the M&E framework within Scotland. A key recommendation from the CCC has been to establish clear, measurable outcomes and associated indicators that can effectively capture the progress and impact of adaptation initiatives (CCC, 2022). Recognising the benefits of this approach, the Scottish Government has adopted an outcomes-focused approach for its Adaptation Plan. The importance of aligning national adaptation indicators with local contexts, ensuring that the indicators are relevant and actionable for Scotland’s unique environmental, social, and economic conditions has been highlighted in previous ClimateXChange research (Moss, A., 2019). he work presented in this project builds upon this background of previous MEL work.

        Developing the suite of indicators

        To develop the suite of indicators for monitoring the four outcomes of SNAP3, we followed a five-step approach, as illustrated in Figure 1 and described below.

        The first step was a desk-based, data-mapping process. This involved reviewing draft SNAP3, the previous adaptation national plans, the published relevant Scottish policies and some international guidelines on MEL to identify possible indicators. The second step involved developing criteria to rank the indicators and facilitate their selection. At the third and fourth steps, this first longlist of indicators was presented and discussed with several stakeholders, during both one-to-one interviews and four workshops organised on each of the four SNAP3 outcome areas. This dynamic process enabled us to refine and amend the longlist of indicators, clearly identify gaps and limitations, and provide some recommendations. The final step of the process was the presentation of the indicator framework containing 12 outcome indicators.

        Figure 1: The five-step approach to develop the suite of indicators

        Figure 2:: visualisation of the indicator development process

        Desk-based research

        The first stage of developing indicators involved data mapping through review of:

        • Sectoral policies listed in the draft SNAP3 and their implementation plans, where published, to search for relevant existing indicators and associated datasets (See Annex 1).
        • Relevant existing indicators and associated datasets used by previous Scottish adaptation plans (CCC, 2023; Moss, A., 2019,) and unpublished meeting notes from a stakeholder workshop led by CXC in May 2023 entitled ‘Monitoring and evaluation of Scotland’s Climate Change Adaptation Programme 2024-2029’.
        • A selection of international guidelines and frameworks on national climate change adaptation monitoring and evaluation (EPA, 2017; FAO, 2017; Mäkinen et al., 2018; OECD, 2015; UNFCCC, 2023; UNFCCC, 2024) to learn from others’ approaches to the identification of outcome indicators and to identify if they used any adaptation outcome indicators that might be modified for use regarding SNAP3.

        The four outcomes cover a wide range of different elements. Therefore, we used an approach based around theory of change (ToC) to identify those core elements that the indicators for each outcome should cover. This approach complemented the ToC work undertaken by Scottish Government as part of the draft SNAP3. We identified core elements through interpretation and analysis of each outcome section in the draft SNAP3. The core elements identified were:

        • Nature Connects: Ecological connectivity (terrestrial, marine, and coastal); ecosystem health (terrestrial, marine, and coastal); and connection to nature.
        • Communities: Community action; community resilience; health and equity.
        • Public Services: Public sector collaboration; public sector adaptation action; effectiveness of public sector action; and inclusiveness of public sector action.
        • Economy, Business, and Industry: Business preparedness and action; and economic adaptation.

        This approach provided a broad structure and scope for the development of a longlist of potential indicators. The latter emerged from this desk-based research (See Annex 2). The longlist was refined by applying the indicator criteria (see Section 2.2 below) and amended based on the inputs gathered during the stakeholder engagement.

        Indicator criteria

        The indicator criteria (see Table 1) built upon established indicator criteria, such as SMART (Specific, Measurable, Achievable, Relevant and Time-Bound) (Biden, 2022) and RACER (Relevant, Accepted, Credible, Easy and Robust) (Peter & Peter, 2009), while refining elements to the specific context (e.g. adaptation relevance). Indicator ranking “low” for any criterion were excluded.

        Table 1: Criteria for selecting outcome indicator for SNAP3

        CriterionDescriptionLowModerateHigh

        Adaptation relevance

        The indicator should relate to key elements of climate adaptation, including vulnerability, risk, exposure, and adaptive capacity.

        Minimal to no relevance to key climate adaptation elements.

        Some relevance to key climate adaptation elements.

        Clear relevance to key climate adaptation elements.

        Representativeness

        The indicator represents a core element of the outcome area within the adaptation plan that it fits under.

        Indicator only represents a small element of the outcome area.

        Indicator somewhat represents the key characteristics of the outcome area.

        Indicator represents well the key characteristics of the outcome area.

        Understanding

        The indicator should be easily understandable by a wide range of stakeholders, including non-experts, to ensure effective communication.

        Technical expertise required to fully understand indicator.

        Some technical expertise required but broadly understandable to non-expert audiences.

        Indicator is clearly understandable to a wide audience.

        Data availability

        Data for the indicator is readily available and accessible for use by wide range of stakeholders

        No data available or heavily restricted access to necessary data.

        Data exists but requires resources and expertise to fully access.

        Data fully and freely available.

        Sensitivity

        The indicator is sensitive enough to detect changes over five-year period.

        Changes in indicator not detectable over the required time-period.

        Indicator data is somewhat sensitive enough to detect changes over the required time-period.

        Indicator data is sensitive enough to detect changes over the required time-period.

        Baseline

        It should be possible to set clear, quantifiable baseline for the indicator to track progress.

        Data not available to establish a baseline.

        Baseline data is possible but requires resources to obtain.

        Baseline data is easily accessible.

        Practicality

        Indicator should be cost-effective to use and have low resource requirements for data collection and analysis.

        Prohibitively expensive and/or impractical to use indicator data.

        Some expenses and resources required to use indicator data.

        Cost-effective and low-resource to use indicator data.

        Stakeholder engagement

        With support from the Scottish Government’s steering group, and drawing upon our desk-based research, we identified relevant stakeholders that could help validate and refine indicators within each outcome area. Stakeholders were considered from various backgrounds relevant to outcome areas, who could offer insights into data availability and gaps, as well as practicality of indicators.

        We conducted one-to-one interviews with experts who could offer insights into data availability and gaps to discuss specific areas of the SNAP3 and four stakeholder workshops were organised; one for each outcome area[2]. We also gathered 66 participants over four workshops, from more than 25 different organisations, detailed in Annex 3. They were invited based on their expertise in fields relevant to each outcome area discussed and their knowledge of climate adaptation. The participants received the longlist of indicators before the workshop and were asked: (a) whether the indicators proposed covered well the targeted outcome area and (b) if there were any aspects missing.

        The overall aim of stakeholder engagement was to engage with relevant teams across the Scottish Government on existing monitoring work to date, review existing available datasets, and amend the longlist of quantitative indicators developed by Ricardo. Experts confirmed, advised against, or suggested indicators that would best reflect the outcome areas. The workshops helped identify limitations of the selected indicators, as well as highlighting suggested outcomes that should not be included (for example, due to lack of data availability).

        Outcome indicators

        This section presents the proposed outcome indicators for SNAP3. Figure 2 visually presents the proposed outcome indicators, with each indicator categorised under the relevant outcome area. An overview is provided for each outcome before detailing each indicator. This information includes the indicator title, description, data holder, unit and rationale for inclusion. Detailed information for how the indicator criteria was applied to each indicator is provided in Annex 4.

        Figure 2: Proposed outcome indicators for SNAP3

        Nature connects across our lands, settlements, coasts, and seas

        Overview

        The outcome Nature Connects places emphasis on nature’s role in climate adaptation. It emphasises connectivity across landscapes, settlements, coasts, and seas to bolster ecosystem resilience. Key actions include developing nature networks in every local authority area, managing invasive species, and enhancing natural carbon stores like peatlands and forests. Taking a holistic approach aims to improve Scotland’s climate resilience while delivering co-benefits for biodiversity, flood mitigation and human wellbeing. Figure 3 illustrates the SNAP3’s pathway from objectives to outcome and impact for the Nature Connects outcome.[3]

        Figure 3: SNAP3’s pathway for the Nature Connects outcome

        Considerations for indicator selection

        Following the desk-based review and stakeholder engagement, several considerations emerged regarding indicator selection for the Nature Connects outcome:

        • The importance of acknowledging that connectivity indicators do not necessarily reflect habitat quality or overall ecosystem resilience. Hence, ideally, there would be a focus on ecosystem functions and processes. However, while indicators focused on ecosystem functions are currently under development by Nature Scot, they will not be operational in time for use in monitoring SNAP3.
        • Despite the high-level nature of indicators, there is a need to reflect Scotland’s diverse environment. Freshwater environments were highlighted as both a useful proxy for the extent of ecological connectivity and with a comprehensive and accessible dataset.
        • Urban green infrastructure is an important aspect of this outcome and the indicators should capture the extent of accessibility to nature and green spaces.
        • Species indicators are not sufficiently sensitive to show a significant trend over SNAP3’s five years. Changes in species abundance and distribution due to climate change are often gradual. Species’ adaptation, whether through genetic changes, changes in behaviour, or moves to new areas, often require longer than five years to be observable. Over a shorter period, it can be difficult to distinguish between short-term fluctuations and longer-term changes driven by climate change. While five-year studies can provide valuable snapshots and early indicators, longer timeframes are typically needed to confidently assess significant trends in species abundance and distribution related to climate adaptation. Therefore, indicators like “terrestrial species’ abundance” developed by Nature Scot were deemed inappropriate for inclusion.
        • As outlined in SNAP3, marine ecosystems will make a vital contribution to Scotland’s adaptation to climate change. However, there is very limited data available to measure marine habitat connectivity. Furthermore, there is difficulty capturing adaptation of the marine environment in a single, general indicator. For example, NatureScot’s marine species’ abundance indicator focuses upon the average abundance of 14 species of breeding seabird. Such an indicator was not considered to be suitably representative of marine ecosystems and, therefore, not selected.
        • Not all the natural habitat types are captured in this framework. Specific indicators were considered but not selected. For example, the baseline for the Woodland Ecological Condition indicator was too old and the indicator would not cover the 2024-2029 period.

        Nature Connects – proposed indicators

        When setting out to develop a list of indicators for the Nature Connects outcome, it was important to cover ecological connectivity between habitats across land and sea, ecosystem health, and the implementation of NbS for climate adaptation. To a large extent, the six indicators chosen for this outcome efficiently achieve this coverage by using established indicators and available data held for various Scottish Government agencies.

        The proposed indicators are:

        • Habitat Connectivity Index
        • Proportion of surface water bodies classified in high and good condition
        • Proportion of Scotland’s protected sites in favourable condition
        • Proportion of soft shorelines affected by coastal erosion
        • Extent of green-blue land cover in urban areas
        • Proportion of adults who live within a five-minute walk of their nearest green or blue space.

        Immediately below we present the baseline information foreach of the six indicators proposed to monitor the Nature Connects outcome. For each indicator, we provide the baseline value, a description of the baseline, the recent trend and desired trend for each indicator to provide context. More information on baseline data is available in Annex 5. This is followed by a further detailed summary of each indicator and the rationale for their inclusion.

        Nature Connects – baseline

        Habitat Connectivity Index 

        • Description: In 2020, the total Equivalent Connected Area (Probability of Connectivity) (ECA (PC) value for Scotland was 35,570 ha for semi-grassland (2.9%), 5,655 ha for woodland (1.4%) and 214,277 ha for heathland (8.3%).
        • Recent trends: None.
        • Desired trend: Increase
        • Baseline
          • Semi-grassland: 2.9%
          • Woodland: 1.4%
          • Healthland: 8.3%

        Proportion of surface water bodies classified in good and better condition

        • Description: In 2022, 445 (13.7%) surface water bodies were in better condition and 1664 (51.2%) surface water bodies were in good condition.
        • Recent trends: This percentage has remained broadly stable in recent years, rising slightly from 61.8% in 2014.
        • Baseline: 64.9%
        • Desired trend: Increase

        Proportion of Scotland’s protected sites in favourable condition

        • Description: In March 2024, the proportion of natural features in favourable condition on protected sites was 75.6%.
        • Recent trends: The trend between 2023 and 2024 is relatively stable, slightly decreasing by 0.9%.  However, the proportion of features in favourable condition has decreased by 4.8 percentage points since 2016 when it peaked at 80.4%.
        • Baseline: 75.6%
        • Desired trend: Increase

        Proportion of soft shorelines affected by coastal erosion

        • Description: In 2021, 46% of the soft coast is affected by coastal erosion. The average rate of erosion is 0.43 m/year.
        • Recent trends: In 2017, 38% of the soft coast was affected by coastal erosion, representing an 8% increase in eight years. Note, the proportion of shorelines experiencing coastal erosion, and the rate of erosion, increases under all climate change emissions scenarios.
        • Baseline: 46%
        • Desired trend: Decrease

        Extent of green-blue land cover in urban areas 

        • Description: The total area of urban greenspace in Scotland as defined by Ordnance Survey is 3,167 km².
        • Recent trends: April 2024 represents the only OS MasterMap Greenspace data currently available from the Ordnance Survey.
        • Baseline: 3,166km2
        • Desired trend: Increase

        Proportion of adults who live within a 5-minute walk of their nearest green or blue space

        • Description: In 2022, 70% of adults reported living within a 5-minute walk of their nearest green or blue space.
        • Recent trends: This percentage has remained broadly stable since 2013, where it was 68%. There has been a slight, steady increase from 2017 from 65% to 70%. 
        • Baseline: 70%
        • Desired trend: Increase

        Nature Connects – indicator summaries

        ECOSYSTEM HEALTH AND CONNECTIVITY

        Habitat Connectivity Index 

        Indicator​ 

        Habitat Connectivity Index​ 

        Description​ 

        This habitat connectivity indicator measures ‘functional connectivity’. This refers to how well species can move from one habitat patch to another. This indicator shows the functional connectivity of three habitats (Woodland; Heathland; Grassland;).​ 

        Data holder​ 

        Nature Scot​ 

        Unit​ 

        % of total habitat area per catchment ​ 

        ​The Habitat Connectivity Index was selected to represent the functional health of natural ecosystems in Scotland. Habitat networks enable species to follow their shifting climate envelope and move to new habitats, ensuring their survival and the continuity of ecosystem services. Connectivity is crucial for promoting the survival, migration, and adaptation potential of species populations in response to climate change. By assessing functional connectivity, this indicator provides valuable insights into ecosystem resilience, highlighting areas where habitat fragmentation might increase the risk and exposure of species to climate-related impacts. Enhancing habitat connectivity directly supports the adaptive capacity of species by facilitating movement and gene flow, thereby reducing vulnerability, and supporting biodiversity conservation (Haddad et al., 2015). It reflects the interconnectedness of ecosystems and underscores the importance of maintaining and improving habitat connectivity to mitigate climate risks and enhance the adaptive capacity of natural systems (Krosby et. al., 2010).

        Proportion of surface water bodies classified in good or better condition

        Indicator

        Proportion of surface water bodies classified in high or good condition

        Description

        This indicator shows the proportion of surface water body with an overall status classified either “good” or “high”. SEPA monitors the environment to assess the condition of water quality, water resources, physical condition, fish migration and the impact of invasive non-native species. If any single aspect of a water body is classified as below good, that water body’s overall condition is reported as below good.

        Data holder

        Scottish Environment Protection Agency (SEPA)

        Unit

        % 

        We chose ‘proportion of surface water bodies classified in high or good condition’ as a proxy for climate change adaptation because it reflects the health and quality of water ecosystems. Healthy water bodies are more resilient to climate change impacts such as altered precipitation patterns, increased temperatures, and pollution. By maintaining high and good conditions, these water bodies can better support biodiversity and delivery of ecosystem services that fulfil human needs, particularly regarding climate adaptation (Palmer et al., 2009).

        Proportion of Scotland’s protected sites in favourable condition

        Indicator​ 

        Proportion of Scotland’s protected sites in favourable condition

        Description​ 

        This indicator shows the efforts to improve the condition of natural features in protected sites as they will ensure terrestrial habitats are in good ecological health in Scotland. This indicator relates to the quality of natural habitats.

        Data holder​ 

        Nature Scot​ 

        Unit​ 

        %

        We chose ‘proportion of Scotland’s protected sites in favourable condition’ as a proxy to reflect the health and resilience of Scottish ecosystems. Healthy and well-managed protected sites are better able to withstand and adapt to the impacts of climate change, such as shifting species distributions and extreme weather events (Watson et al., 2014). This indicator shows how effectively Scotland is preserving biodiversity and ecosystem services, which are crucial for climate resilience. It is important to look at the proportion of sites in favourable condition by habitat type. Indeed, habitats such as native woodland, which are vulnerable to overgrazing and invasive non-native species, have a lower percentage (56.8%) of sites in favourable condition than the other types of habitats (average of 73.4%).

        Proportion of soft shorelines affected by coastal erosion

        Indicator​ 

        Proportion of soft shorelines affected by coastal erosion

        Description​ 

        This indicator shows the proportion of shorelines experiencing coastal erosion in Scotland.

        Data holder​ 

        Ordnance Survey

        Unit​ 

        %

        Scotland’s coastline is estimated to be 18,743 km in length along the high-water line. This indicator was chosen as coastal erosion affects society’s assets such as infrastructure and cultural heritage, and contributes to more frequent coastal flooding. Coastal erosion is exacerbated by climate change. Implementing adaptation strategies to protect Scotland’s coasts is crucial to protect the biodiversity of coastal ecosystems. It also ensures the safety and resilience of coastal communities against climate impacts, as well as the resilience of regional and national infrastructure (McGranahan et al., 2007).

        URBAN GREEN INFRASTRUCTURE

        Extent of green-blue land cover in urban areas 

        Indicator​ 

        Extent of green-blue land cover in urban areas 

        Description​ 

        This indicator shows the accessible and non-accessible greenspaces (woodland open semi-natural areas, inland water, beach or foreshore, manmade surface, multi-surface) in urban areas in Scotland.

        Data holder​ 

        Ordnance Survey

        Unit​ 

        %

        This indicator is chosen as a proxy for integration of nature into urban settlements. Green infrastructures within towns and cities are NbS designed to reduce the urban heat island effect, improve resilience to flooding and provide an opportunity for people to enjoy and benefit from nature. Compared to technology-based solutions to climate challenges, NbS like green-blue land cover in urban areas are often more cost-effective and longer lasting. They also have multiple co-benefits, such as reducing net emissions, providing habitats for biodiversity, enhancing human health and well-being (Demuzere et al., 2014; Gill et al., 2007).

        Proportion of adults who live within a five-minute walk of their nearest green or blue space

        Indicator​ 

        Proportion of adults who live within a five-minute walk of their nearest green or blue space.

        Description​ 

        This indicator measures the proportion of adults who live within a five-minute walk of their nearest green or blue space. 

        Data holder​ 

        Scottish Household Survey

        Unit​ 

        %

        This indicator is chosen as a proxy to reflect the extent communities have access to natural spaces. Easy access to green and blue spaces enhances community resilience in the face of climate stressors by promoting well-being (e.g. air quality improvement, mental and physical health, etc.) (Maas et al., 2006). Access to green and blue spaces helps mitigate the urban heat island effect, providing cooler areas that can reduce heat-related health risks during extreme weather events. Lastly, green and blue spaces contribute to biodiversity and water management, supporting ecosystems that buffer against climate impacts such as flooding (Demuzere et al., 2014).

         

        Communities are creating climate-resilient, healthy and equitable places

        Overview

        This outcome focuses on empowering communities to create climate-resilient, healthy and equitable places. It adopts a place-based approach, acknowledging that climate impacts vary by local context. Key initiatives include establishing Climate Action Hubs, developing collaborative planning partnerships and providing capacity-building support. This community-centred approach seeks to ensure adaptation efforts are inclusive, address local needs and build societal resilience to climate impacts. Figure 4 presents the SNAP3’s pathway from objectives to outcome and impact for the Communities outcome.[4]

        Figure 4: SNAP3’s pathway for the Communities outcome

        Considerations for indicator selection

        Following the desk-based review and stakeholder engagement, several considerations emerged regarding indicator selection for the Communities outcome:

        • Data on exposure to climate-related hazards provides information on the places where efforts need to be intensified to limit inequalities, for example, if hazard data is coupled with data on deprivation or social vulnerability (Sayers, PB., et al., 2021). We explored one indicator related to the exposure of vulnerable populations to climate-related hazards. This indicator sought to understand inequality in how communities are impacted by climate hazards. There are limitations to such an indicator focusing on exposure to flood, heat, drought, or wildfire, as it does not consider the resilience of the population exposed. While exposure is unlikely to change in the short to medium term, measures to reduce the vulnerability of those most exposed to risks will be key to increasing their resilience. It is, therefore, important data but less suitable as an indicator measuring increased community resilience for the purposes of this work. The overall conclusion was that the indicators for the Communities outcome should focus more on actions being taken by communities that are indicative of resilience.
        • Flooding and the action taken to adapt to this hazard was a focus for consideration due to its significance as a climate-related hazard for Scotland. Example indicators include the ‘proportion of flood resilience action undertaken’ or ‘uptake of property flood protection measures in deprived areas’, or ‘responses to surveys on adaptation action’. Indicators around property flood protection measures and insurance were considered. However, although schemes such as “Build back better” exist, there were insufficient national data available to include this indicator.
        • A combination of two indicators, ‘progress of actions in local flood risk management plans’ and ‘percentage of the population declaring that they understand what actions they should take to help tackle climate change’ were selected as proxies to capture community action in climate adaptation.
        • Collaboration at community level was often mentioned as essential when it comes to adaptation to ensure the salience, credibility and legitimacy of actions and common understanding, ownership, and a desire to implement. The level of community climate collaboration is captured through monitoring the Community Climate Action Hubs (CCAH) and Local Place Plans.
        • Health is embedded in all the areas of SNAP3. This makes it difficult to have a general indicator linking health to climate-related hazards and issues, such as heatwaves, cold, flooding, vector-borne diseases, and food systems. This could only be captured by a fuller set of indicators focusing on health and well-being. A dataset measuring climate morbidity in Scotland could be relevant as a future outcome indicator for SNAP4 should suitable data become available. For this indicator set, a focus on wellbeing is taken using national data on the Warwick-Edinburgh Mental Wellbeing Scale (WEMWBS).

        Communities – proposed indicators

        When setting out to develop a list of indicators for the Communities outcome, we aimed to cover aspects of community resilience, health, and equity. Of the four indicators selected for this outcome, three indicators reflected the community resilience aspect (level of community awareness; level of community climate action; and progress of actions in local flood risk management plans). There was a particular challenge in capturing the complexity of health and equity in relation to climate adaptation with only a few high-level indicators in this framework. Instead of health, a focus on community wellbeing was taken with the use of national data on the Warwick-Edinburgh Mental Wellbeing Scale (WEMWBS). With elements of health and equity not explicitly covered, we have instead put onus on using established indicators and available data to monitor levels of community action in creating resilient, healthy, and equitable places. Monitoring this level of community action, be it in increased community awareness, the growth of Community Climate Action Hubs (CCAH) and Local Place Plans (LPP) or in specific community actions around flood management, provides important insight on how communities are adapting to climate change.

        The proposed indicators are:

        • Level of community awareness around climate change
        • Level of community climate action
        • Progress of actions in local flood risk management plans
        • Level of community wellbeing.

        Below we present the baseline information for each of the four indicators proposed to monitor the Communities outcome. For each indicator, we provide the baseline value, a description of the baseline, the recent trend and desired trend for each indicator to provide context. More information on baseline data is available in Annex 5. This is followed by a further detailed summary of each indicator and the rationale for their inclusion.

        Communities – baseline

        Proportion of adults viewing climate change as an immediate and urgent problem

        • Description: In 2022, 74% of adults viewing climate change as an immediate and urgent problem.
        • Recent trends: The Scottish population concerned about climate change representing an immediate and urgent problem has risen every year since 2013, where 46% held this view. In 2017, 61% held this view.
        • Baseline: 74%
        • Desired trend: Increase

        Proportion of the population declaring that they understand what actions they should take to help tackle climate change

        • Description: In 2022, 80% of adults agreed that they understood what actions they should take to help tackle climate change.
        • Recent trends: In 2018, 74% of adults stated they understood what actions they should take to help tackle climate change.
        • Baseline: 80%
        • Desired trend: Increase

        Number of Community Climate Action Hubs

        • Description: In 2024, 20 hubs across Scotland support community-led climate action, covering 81% of the Scottish council areas.
        • Recent trends: The first two hubs launched in September 2021 and the network has now expanded, consisting of the 20 hubs.
        • Baseline: 81%
        • Desired trend: Increase

        Number of Local Place Plans

        • Description: In 2024, no local place plans have been adopted.
        • Recent trends: Many councils have recently invited communities to prepare Local Place Plans so that they can play a proactive role in defining the future of their places.
        • Baseline: 0
        • Desired trend: Increase

        Progress of actions in local flood risk management plans

        • Description: In 2019, 90% of the actions to avoid an increase in flood risk were complete. By 2021, 100% of the actions were expected to be complete. In 2019, 84% of the actions to reduce flood risk were complete. By 2021, 96% of the actions were expected to be complete.
        • Recent trends: progress was assessed for cycle 1 (2015-2021).
        • Baseline: 90% (completed actions to avoid an increase in flood risk), 84% (completed actions to reduce flood risk)
        • Desired trend: Increase

        Level of community wellbeing

        • Description: In 2022, the mean WEMWBS score for all adults was 47.0
        • Recent trends: The mean WEMWBS score for all adults remained stable between 2008 and 2019, between 49.4 and 50.0. Since 2019, it has decreased to 48.6 in 2021 and now 47.0 in 2022.
        • Baseline: 47.0
        • Desired trend: Increase

        Communities – indicator summaries

        Community awareness around climate change

        Indicator

        Level of community awareness around climate change

        Description

        This indicator is measured by the following:

        • Percentage of the population declaring that they understand what actions they should take to help tackle climate change.
        • Percentage of adults viewing climate change as an immediate and urgent problem.

        Data set holder

        Scottish Household Survey

        Unit

        % 

        ​This indicator is chosen as it combines the knowledge of what is required to tackle climate change with the perception of urgency in addressing climate change. This combination is a critical aspect of community resilience. A well-informed community that recognises the urgency of climate action is more likely to engage in adaptive behaviours (Marshall et al., 2013; Shi et al., 2016). This indicator provides insights into the adaptive capacity of communities and their readiness to implement adaptation measures.

        Community action on climate change

        Indicator

        Level of community climate action

        Description

        This indicator covers the number of Community Climate Action Hubs (CCAH) and Local Place Plans in Scotland.

        Community Climate Action Hubs are centers that support local initiatives focused on climate resilience, providing resources, education, and networking opportunities to empower communities in addressing climate challenges. This indicator will look at the percentage across all Scotland’s regions that have at least one CCAH.

        Local Place Plans are community-led plans that detail the aspirations and priorities of residents for the development and improvement of their areas, ensuring that local voices are integrated into the broader planning process.

        Data set holder

        Scottish Government

        Unit

        CCAH – % / LPP – Number

        This indicator was selected as the number of Community Climate Action Hubs in Scotland indicates strong community resilience. This is done through fostering local engagement, resource distribution, capacity building, innovation, network-building, and policy advocacy for climate adaptation (Agrawal, 2008). Local Place Plans act as a good proxy for community-led collaboration and action. The data is available and how the hubs and plans relate to action is understandable to wider audiences.

        Community flood resilience

        Indicator

        Progress of actions in local flood risk management plans

        Description

        This indicator measures the progress of actions to reduce or avoid flooding set in the Flood Management Plans.

        Data set holder

        The 14 lead local authorities in charge of local Flood Risk Management Plans

        Unit

        % of actions completed

        This indicator focuses on actions of local authorities to build community flood resilience. It emphasises the importance of communities playing an active role in reducing the impact of climate change effects, in this case increased flooding (McEwen et al., 2014). This aspect is a key part of communities creating climate-resilient, healthy, and equitable places. These flood risk management plans are part of Scotland’s route map for reducing the effects of flooding on communities. This is key to Scotland’s health, wellbeing and economic success, with an estimated 284,000 homes, businesses and services identified as at risk of flooding.

        Community wellbeing

        Indicator

        Level of community wellbeing

        Description

        This indicator measures adults (aged 16+) average score on the Warwick-Edinburgh Mental Wellbeing Scale (WEMWBS). The WEMWBS scale comprises 14 positively worded statements designed to assess positive affect, satisfying interpersonal relationships and positive functioning.

        Data set holder

        Scottish Health Survey

        Unit

        Mean score on WEMWBS scale

        This indicator captures the extent of wellbeing within communities. Evidence shows that experience of the effects of climate change, for example a flooding event, and the capacity to adapt or react to it has a direct impact on mental health (Berry et al., 2018; Palinkas & Wong, 2020). Therefore, it is representative of communities and their health in relation to adaptation.

        Public services are collaborating in effective and inclusive adaptation action

        Overview

        This outcome addresses the need for public services to collaborate effectively on adaptation. It aims to enhance governance, culture, skills and resources within public services to enable effective adaptation. Key actions include strengthening the Public Sector Climate Adaptation Network, modernising water industry adaptation and embedding adaptation across transport networks. This approach seeks to ensure continued delivery of essential services and infrastructure resilience amidst climate change. Figure 5 presents the SNAP3’s pathway from objectives to outcome and impact for Public Services.[5]

        Figure 5: The SNAP3’s pathway for the Public Services outcome

        Considerations for indicator selection

        Following the desk-based review and stakeholder engagement, several considerations emerged regarding indicator selection for the Public Services outcome:

        • We determined that focusing on specific sectoral indicators related to the adaptation of critical infrastructure would result in numerous indicators. This would go against a core aim of our work to develop a concise and clear set of indicators. As discussed, the Scottish Government’s work developing indicators at an objective level has taken place alongside development of the outcome indicators presented in this report. Specific sectoral indicators have been determined at the objective level rather than being included in the high-level outcome indicators developed through this work.
        • We explored the possibility of an indicator around participation levels at a recently established infrastructure adaptation forum. However, the objectives and the ambitions of this forum are still at an early stage and it was not possible to determine a baseline, so it was not included here.
        • Collaboration is an important aspect of this outcome. The extent of collaboration of public service bodies is captured through the Sustainable Scotland Network annual report. The quality of collaboration is equally as important to capture. However, there is currently insufficient data available to incorporate this element within the outcome indicators.

        Public services – proposed indicators

        When setting out to develop a list of indicators for the Public Services outcome, we aimed to cover the extent of collaboration between public services, as well as the extent of effective and inclusive adaptation. These indicators use data available to capture high-level insights on the extent of public sector collaboration and adaptation actions that public bodies are taking. These indicators do not cover the extent to which these actions are effective or inclusive. Ultimately, this can only be captured at a sector-specific level, as no generalised metric for effectiveness or inclusiveness of public services and infrastructure exists. It was not possible to go to the level of sector-specific indicators for public services and infrastructure as this would result in numerous indicators.

        The proposed indicators are:

        • Level of collaboration across public services
        • Level of adaptation actions across public services.

        Below we present the baseline information for each of the two indicators proposed to monitor the Public Services outcome. For each indicator, we provide the baseline value, a description of the baseline, the recent trend and desired trend for each indicator to provide context. More information on baseline data is available in Annex 5. The is followed by a further detailed summary of each indicator and the rationale for their inclusion.

        Public services – baseline

        This section presents baseline information. For each indicator, we provide the baseline value, a description of the baseline, the desired trend for each indicator and recent trends for each baseline to provide context.

        Number of public bodies members in the Public Sector Climate Adaptation Network 

        • Description: In 2024, the Public Sector Climate Adaptation Network counted 50 members.
        • Recent trends: the Public Sector Climate Adaptation Network was launched in 2019 with 40 major organisations. 10 additional 10 organisations joined the Network in October 2023.
        • Baseline: 50
        • Desired trend: Increase

        Number of public bodies citing the Work in partnership & collaborations as a priority for the year ahead in relation to climate change adaptation 

        • Description: In 2022-2023, 53.2% of the 188 listed public bodies (100 public bodies) submitting an annual compliance report cite “Work in Partnerships & Collaborations” in their top five priorities for the year ahead in relation to climate change adaptation.
        • Recent trends: In 2021/22, 36.2% of public bodies declared that they prioritized “Work in Partnerships & Collaborations”.
        • Baseline: 53.2%
        • Desired trend: Increase

        Level of risk assessment across the public sector 

        • Description: 70.2% of the public bodies submitting an annual compliance report have completed some form of risk assessment during or prior to the 2022/23 reporting period.  43.6% of bodies have carried out a limited risk assessment. 20.7% of bodies have carried out a comprehensive risk assessment. 5.8% have completed an advanced risk assessment,  involving stakeholders and considering a range of climate or socioeconomic scenarios.
        • Recent trends: In 2021/22 reporting, 66.0% of public bodies submitted some form of adaptation risk assessment​.
        • Baseline:
          • Limited risk assessment: 43.6%
          • Comprehensive risk assessment: 20.7%
          • Advanced risk assessment: 5.8%
        • Desired trend: Increase

        Level of adaptation action taken across the public sector

        • Description: 71.8% of all listed public bodies submitting an annual compliance report have taken adaptation action during or prior to the 2022/23 reporting period. 44% of bodies have taken some action, 21% of all bodies are taking good action. 6% of bodies are taking advanced action.
        • Recent trends: In 2021/22 reporting, 67.0% of public bodies reported taking some form of action on adaptation.
        • Baseline:
          • Some actions taken: 44%
          • Good action taken: 21%
          • Advanced action taken: 6%
        • Desired trend: Increase

        Public Services – indicator summaries

        Level of collaboration across public services

        Indicator

        Level of collaboration across public services

        Description

        This indicator is a combination of:

        • the number of public bodies participating in the Public Climate Adaptation Network run by Adaptation Scotland

        and

        • The proportion of the 188 public bodies citing the “work in partnership & collaborations” as a priority for the year ahead in relation to climate change adaptation. This information is reported according to Section 44 of the Climate Change (Scotland) Act 2009. The Sustainable Scotland Network manages the annual reporting process and analyses the returns on behalf of the Scottish Government.

        Data set holder

        Adaptation Scotland and Sustainable Scotland Network on behalf of Scottish Government

        Unit

        Number of public bodies / %

        This indicator is selected as a proxy to demonstrate the level of collaborative effort between different public bodies on shared outcomes and priorities. Collaboration is vital to tackling the complex challenges involved in strengthening climate resilience. Effective collaboration can enhance adaptive capacity, reduce vulnerability, and ensure a cohesive response to climate change (Runhaar et al., 2018).

        Level of adaptation actions across public services

        Indicator

        Level of adaptation actions across public services

        Description

        This indicator is measured by the following:

        • The level of risk assessment across the public sector
        • The level of adaptation action taken across the public sector

        This indicator is a combination of two pieces of information reported by 188 public bodies according to Section 44 of the Climate Change (Scotland) Act 2009. The level of risk assessment (none, limited, comprehensive, advanced) and of adaptation action (none, some, good, advanced) taken across the public sector are assessed. The Sustainable Scotland Network manages the annual reporting process and analyses the returns on behalf of the Scottish Government.

        Data set holder

        Sustainable Scotland Network on behalf of the Scottish Government

        Unit

        %

        This indicator captures the level of climate adaptation actions undertaken by public bodies. The public sector must assess and address climate risks through adaptation planning and action to ensure the quality of its services to the population in a changing climate (Runhaar et al., 2018). By monitoring the level of risk assessment and adaptation actions, this indicator provides insights into the preparedness and resilience of public services.

        Economies and industries are adapting and realising opportunities in Scotland’s Just Transition.

        Overview

        This outcome focuses on adapting the economy and industries to realise opportunities in Scotland’s Just Transition. It aims to support businesses in understanding and responding to climate risks, whilst fostering innovation in adaptation solutions. Key actions include increasing business awareness of climate risks, supporting adaptation in sectors like farming and forestry, and promoting Scotland as an innovation hub for adaptation solutions. This approach seeks to ensure Scotland’s economy remains competitive and resilient whilst capitalising on emerging opportunities. Figure 6 presents SNAP3’s pathway from objectives to outcome and impact for Economy, Business and Industry.[6]

        Figure 6: SNAP3’s pathway for the Economy, Business and Industry outcome

        Considerations for indicator selection

        Following the desk-based review and stakeholder engagement, several considerations emerged regarding indicator selection for the Economy, Business and Industry outcome:

        • Investments in climate resilience, with a specific taxonomy for adaptation-related investment, was considered a potential indicator. Such a taxonomy would prove a useful indicator for how the economy is adapting to climate change. However, while initiatives are emerging, this has not been fully implemented at national level yet. It is something to consider for inclusion in the next SNAP.
        • The direct economic loss associated with climate-related hazards, such as flooding was considered. Some stakeholders felt that many businesses could be reluctant to invest in resilient infrastructure because its benefits are not easily quantified. Capturing direct loss associated with climate-related hazards helps industries understand the value of investments in adaptation. Nevertheless, no viable dataset currently exists for such an indicator in the Scottish context.
        • An indicator on green jobs is included in the indicator set. However, it does not capture the development of adaptation skills needed by existing Scottish businesses to address the challenges of climate change. Training employees to increase adaptation knowledge and skills specific to the needs of individuals or businesses is an important aspect that is not captured as no viable dataset currently exists.
        • Sustainable practice in the agriculture sector is the focus of one indicator, given it accounts for 69% of Scotland’s total land use. Another area of the economy initially considered was the forestry sector. An indicator “percentage of certified woodland area in Scotland” was considered. However, considering that certification mostly applies to woodlands used for timber production and not woodlands more generally, the coverage of this indicator was considered too limited.
        • The proportion of agricultural land categorised as High Nature Value (HNV) Farming has initially been chosen as a proxy of adaptation to climate change in agriculture in Scotland. High Nature Value (HNV) Farming is an indicator used to identify agricultural systems that support high levels of biodiversity through low-intensity, traditional farming practices. HNV farms are more likely to be resilient to climate variability and extreme weather events. However, this indicator was not selected because the latest baseline is from 2013 and has not been updated since then. Should new data become available this indicator could be reviewed in the future.
        • Capturing innovation in Scotland’s economy was considered as an important aspect of this outcome. However, given the broad scope, complexity and subjectivity around what constitutes innovation, it is a difficult aspect to capture in a single quantitative indicator and is, therefore, not included.

        Economy, Business and Industry – proposed indicators

        It is important that the indicators cover the preparedness and adaptation of businesses and industries and the extent into which they take advantage of economic opportunities linked to climate change. The five indicators selected cover business preparedness and action using data periodically recorded by the Business Insights and Conditions Survey. The use of Office of National Statistics (ONS) data on green jobs provides an indicator for the transition towards a climate-smart economy and workforce skills development for the green economy. Another indicator focused specifically on adaptation action in the agricultural sector, which is a significant part of the Scottish economy. Taken together, this set of indicators uses available data to provide a broad indication of whether Scotland’s economy is adapting to climate change. Nevertheless, there are some key aspects that are not covered. These include levels of investment in climate adaptation initiatives and economic resilience (e.g., economic loss related to climate-related hazards) as well as the level of innovation from businesses in responding to climate risks.

        The proposed indicators are:

        • Proportion of businesses monitoring climate-related risks
        • Proportion of businesses taking action to adapt to the effects of climate change
        • Number of green jobs
        • Uptake of grants for agriculture storage reservoirs and off-season storage lagoons​.

        Below we present the baseline information for each of the five indicators proposed to monitor the Economy, Business and Industry outcome. For each indicator, we provide the baseline value, a description of the baseline, the recent trend and desired trend for each indicator to provide context. More information on baseline data is available in Annex 5. This is followed by a further detailed summary of each indicator and the rationale for their inclusion.

        Economy, Business and Industry – baseline

        Proportion of businesses monitoring climate related risks

        • Description: In 2023, 15.6% of Scotland businesses have assessed risks for supply chain disruption and distribution, 6.2% for increased flooding and 4.4% for temperature increase.
        • Recent trends: August 2023 was the first time the question related to businesses monitoring climate related risks was asked.
        • Baseline:
          • Supply chain disruption: 15.6%
          • Increased flooding: 6.2%
          • Temperature increase 4.4%
        • Desired trend: Increase

        Proportion of businesses taking action to adapt to the effects of climate change  

        • Description: In 2023, 26.5% of Scotland businesses have taken action to adapt supply chain disruption and distribution, 11.5% to adapt to increased flooding and 4.4% to adapt to temperature increase.
        • Recent trends: August 2023 was the first time the question related to businesses taking adaptation action was asked.
        • Baseline:
          • Supply chain disruption: 25.6%
          • Increased flooding: 11.5%
          • Temperature increase 5.7%
        • Desired trend: Increase

        Number of green jobs 

        • Description: In 2022, Scotland employment in green jobs in 2022 was estimated at 46,200 full-time equivalents (FTEs).
        • Recent trends: This number has increased yearly since 2015 (32,800 FTE), except between 2021 and 2022.
        • Baseline: 46,200
        • Desired trend: Increase

        Uptake of grants for agriculture irrigation lagoons 

        • Description: In 2024, 5 AECS applications for irrigation lagoons were successful. 14 applications were submitted.
        • Recent trends:  the number of applications submitted and successful are usually between 0 and 2 per year.
        • Baseline: 5
        • Desired trend: Increase

        Economy, Business and Industry – indicator summaries

        Business awareness of climate adaptation

        Indicator

        Proportion of businesses monitoring climate related risks

        Description

        This indicator is a survey question from the Business Insights and Conditions Survey.

        Data holder

        Office for National Statistics

        Unit

         %

        This indicator captures the level of knowledge and awareness of climate-related risks by businesses. Ensuring businesses across Scotland are aware of the risks that climate change may pose to their operations, premises, staff, and supply chains is a crucial component of a climate resilient economy (Linnenluecke et al., 2013; Surminski, 2013).

        Business preparedness in climate adaptation

        Indicator

        Proportion of businesses taking action to adapt to the effects of climate change

        Description

        This indicator is a survey question from the Business Insights and Conditions Survey.

        Data holder

        Office for National Statistics

        Unit

         %

        This indicator captures businesses’ capacity to respond to the risks posed by climate change. Ensuring businesses across Scotland have a plan to face the risks climate change may pose to their operations, premises, staff and supply chains will be crucial to building a more climate resilient economy (Linnenluecke et al., 2013; Surminski, 2013).

        Green jobs in the Scottish economy

        Indicator

        Total Scotland employment in green jobs

        Description

        This indicator looks at green jobs, as defined as “employment in an activity that contributes to protecting or restoring the environment, including those that mitigate or adapt to climate change”; they can be estimated using industry, occupation, and firm approaches. This indicator follows an industry-based approach which includes all jobs in a green industry or sector and provides our headline estimate of employment in green jobs.

        Data holder

        Office for National Statistics

        Unit

        Number

        This indicator monitors the adaptation opportunity in Scotland’s Just Transition as it directly tracks employment in environmentally sustainable sectors. This indicator reflects the economic growth and industry shift towards sustainable practices, essential for climate adaptation and effective Just Transition (Martinez-Fernandez et al., 2010).

        Agriculture water-use efficiency

        Indicator

        Uptake of grants for agriculture irrigation lagoons

        Description

        This indicator follows the number of applied and approved agricultural projects (AECS) to improve water-use efficiency by collecting and storing water in an irrigation lagoon.

        Data set holder

        Scottish Government

        Unit

         Number of applications and approved grants

        This indicator represents proxy of adaptation by the agricultural sector. Improving water storage efficiency through irrigation lagoons is a strategic adaptation measure that addresses several challenges posed by climate change: it helps mitigate the variability of rainfall patterns and allow farmers to store water during periods of excess rainfall to ensure a steady water supply for crops. It will also contribute to reduce the stress on Scotland’s water resources and reduce flood risk at times by capturing and storing excess rainfall runoff (Schmitt et. al., 2022).

         

        Discussion

        Conclusions

        Climate adaptation is complex and multifaceted, spanning across sectors and scales. Therefore, MEL of climate adaptation will always be challenging. Nevertheless, monitoring the extent to which an adaptation plan’s outcomes are achieved is essential to understand the effectiveness of its associated activities and policies. Ultimately, efforts to monitor adaptation plans, such as SNAP3, must navigate this complexity, seeking a balance of indicators that is relevant, robust, and practical to implement. We have sought to achieve this balance by taking a systematic approach to the selection of indicators through desk-based review and extensive engagement with stakeholder groups across Scottish governmental departments and associated organisations. The assessment has been grounded in the practical reality of what data is available rather than theoretically ideal indicators.

        In relation to the relevance and robustness of indicators, we have developed outcome indicators that efficiently capture most of the core elements of four of SNAP3’s outcomes.

        For the Nature Connects outcome, the indicators proposed cover ecological connectivity, ecological health, and urban-nature connection. Taken together, these indicators will provide useful insights on progress in securing the resilience of Scotland’s natural ecosystems to climate change. Lack of an indicator specifically for marine ecosystems, due to inadequate available data, is a key, is a key limitation.

        For the Communities outcome, capturing health and equity in high-level, generalised indicators was challenging due to the complexity of these issues. Therefore, the proposed indicators focus on monitoring community action of relevance to climate adaptation.

        For the Public Services outcome, the proposed indicators focus upon collaboration and adaptation actions at a high-level. It was impractical to address the effectiveness of actions, as the number of different sectors associated with this outcome would result in numerous indicators.

        For the Economy, Business, and Industry outcome, the indicators proposed cover areas of business preparedness and action, the extent of the transition to green economy, and the extent to which an important sector of the economy (agriculture) is undertaking climate adaptation. While acknowledging that the level of investment in climate adaptation initiatives and economic losses resulting from climate-related hazards is not addressed, these indicators will still provide useful insights about the delivery of this outcome.

        Regarding practical implementation, the proposed indicators redeploy established indicators that, crucially, are based on accessible data. Most are publicly reported, although some require correspondence with the relevant Scottish Government data holder. The proposed indicators allow for a baseline to be established at the start of SNAP3 and then reported against after a five-year period. There is variation on the extent of historic data available across the indicators; there; there is more extensive data on previous trends for some than others. Importantly, we believe the relevance of proposed indicators is clear and they are straightforward to apply. As such, they can be used at the end of the five-year period by those who have not been closely involved in their development.

        The stakeholder engagement process was critical in the development of the outcome indicators. A wide range of relevant stakeholders across Scotland engaged in one-to-one calls, workshops or written feedback to provide insights both conceptually on what indicators might capture SNAP3 outcomes and practically on what data are available. This engagement provided sector- and topic-specific knowledge, as well as offering validation of the final proposed set of indicators. Several themes emerged from this process of engagement. First, there was an inherent tension between what is ideal and what is possible. Discussions sometimes veered more towards enthusiasm about theoretically ideal indicators that monitor outcomes rather than being grounded in the practical reality of what data is available. While this certainly did not negate the importance of discussing ideal indicators, it was important to ensure, insofar as possible, that an onus on what is practically possible influenced the discussion.

        Second, often data limitations lay at the heart of challenges regarding identification of suitable indicators. The limitations took different forms: no data existed (e.g., economic loss from climate-related hazards); it was insufficiently captured (e.g., marine species’ abundance); or it was not easy to access or publicly available (e.g., data on Build Back Better grants). It is not uncommon for data limitations to be a significant obstacle to developing indicators for climate adaptation (Vallejo, 2017).

        Third, the SNAP3 outcomes are structured in a clearly defined way, which was beneficial for developing the set of proposed indicators, these outcomes overlap in ways that should be acknowledged. One example relates to the Communities outcome and the Public Services outcome, as collaboration is of significance for both community resilience and for effective public services. Hence, community actors and public service actors cannot be clearly distinguished from each other. Another example is the emphasis of Nature Connects outcome on access to green space and associated health benefits that overlaps with the community health and wellbeing aspects of the Communities outcome. Such overlaps are not inherently problematic but did point to the need for the net to be cast as wide as possible when considering stakeholder engagement for when identifying indicators.

        Recommendations

        Several recommendations and next steps emerge from this work. It is important to finalise the outcome indicators for SNAP3 as soon as possible, as applying these indicators consistently will be crucial to enable meaningful comparisons against the baseline. Any changes made to individual indicators or the data that underpin them may compromise the ability to track progress consistently relative to the baseline. Furthermore, it is important to maintain continuity, quality and availability of data required by each indicator. It is vital to maintain the allocation of resources to the collection, maintenance and accessibility of datasets used by the indicators across all relevant Scottish Government departments.

        Whilst the indicators represent a complete and operational indicator set, there should be a flexibility regarding potential for additional indicators. New indicators may be added in the immediate term if relevant data becomes available. For example, an ecosystem functions indicator for Nature Connects or a green finance investment indicator for Economy, Business, and Industry are anticipated in the near future. While the suite of indicators addresses the needs for monitoring the outcomes of SNAP3, it may be viewed as a foundation to build upon regarding monitoring of SNAP4.

        Lastly, we recommend establishing a working group to sustain the functioning of the indicators. The working group could comprise key stakeholders and data providers who could meet annually to review the functioning of the indicators and address any issues regarding their deployment, e.g., continuity and availability of data and its quality. Furthermore, this working group would build on the strong interest evident across a wide range of stakeholders to engage in the topic of climate adaption MEL.

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        Annexes

        Annex 1 – Policies reviewed

        The following policies were reviewed for sectorial indicators that could be relevant for the SNAP3 outcome indicators.

        Scottish policies listed in the draft SNAP3 for the outcome area “Nature connects across our lands, settlements, coasts and seas”:

        Scottish policies listed in the draft SNAP3 for the outcome area “Communities creating climate-resilient, healthy and equitable places”:

        Scottish policies listed in the draft SNAP3 for the outcome area “Public services are collaborating in effective, inclusive adaptation action”:

        Scottish policies listed in the draft SNAP3 for the outcome area “Economies and industries are adapting and realising opportunities in Scotland’s Just Transition”:

        Annex 2 – Initial longlist of indicators

        The initial longlist of indicators is listed below. This longlist was shared with stakeholders and revised through engagement as described in section 2.

        Initial longlist of indicators for the outcome area “Nature connects across our lands, settlements, coasts and seas”:

        • Woodland connectivity indicator by catchment
        • Heathland connectivity indicator by catchment
        • Grassland connectivity indicator by catchment
        • Fen/marsh/swamp connectivity indicator by catchment
        • Seabird species’ abundance
        • Terrestrial species abundance
        • Terrestrial species’ occupancy
        • Proportion of adults who live within a 5-minute walk of their nearest green or blue space
        • Number of visits to forests and woodlands
        • Population within a ten-minute walk
        • Provision per person of green space
        • Reduced negative health effects (respiratory distress and heat stroke)

        Initial longlist of indicators for the outcome area “Communities creating climate-resilient, healthy and equitable places”:

        • Percentage of the population declaring that they understand what actions they should take to help tackle climate change
        • Proportion of adults viewing climate change as an immediate and urgent problem
        • Percentage of vulnerable population (low multiple deprivation index areas, elderly) impacted by climate risks
        • Percentage of built-up area exposed to flooding risk
        • Percentage of the population living in flood risk areas
        • Percentage of population living in high heat hazard risk areas
        • Speed and reach of early warning systems
        • Local government and communities have clear response plans and procedures
        • Number of local communities and civil society included in planning and with recognized role in EWS
        • Percentage of community members who are aware of emergency procedures
        • Percentage of the population with access to Floodline

        Initial longlist of indicators for the outcome area “Public services are collaborating in effective, inclusive adaptation action”:

        • Number of public bodies members in the Public Sector Climate Adaptation Network
        • Number of public bodies citing the Work in partnership & collaborations as a priority s for the year ahead in relation to climate change adaptation
        • Number of Community climate action hubs
        • Affordability of energy: Price of electricity in Scotland
        • Quality of the public services in rural communities
        • Quality of the public services in the 20% most deprived areas
        • Level of adaptation action taken across the public sector
        • Level of risk assessment across the public sector
        • Number and length of power outrages
        • Percentage of roads considered for maintenance treatment
        • Number of new major infrastructure projects located in areas at risk
        • Level of satisfaction of island residents on mainland ferry services
        • Number of Water Quality Incidents reported to DWQR
        • Number and length of spills from sewer overflows events

        Initial longlist of indicators for the outcome area “Economies and industries are adapting and realising opportunities in Scotland’s Just Transition”:

        • Number of businesses monitoring climate related risks (flooding, temperature increase, supply chain disruptions)
        • Number of businesses located in potential vulnerable areas
        • Number of businesses taking action to adapt to the effects of climate change
        • Gross Value Added (GVA) for rural local authorities
        • Number of Farmers receiving training about climate change and adaptation from the Farm Advisory Service
        • Number of Farmers entering the Forestry Grant Scheme
        • Total area of forests and woodlands
        • Sustainability of Fish Stocks indicator
        • Amount of green finance and investment mobilised for adaptation (via an established UK Green Taxonomy adaptation category)
        • Number of green jobs (as defined by the ONS)

        Annex 3 – Workshop participation

        The following organisations participated in the workshops.

        Organisations represented in the workshop “Nature connects across our lands, settlements, coasts and seas”:

        • Centre of Expertise for Waters
        • Edinburgh Council
        • Forestry and Land
        • Glasgow City Council
        • Highlands and Islands Airports
        • James Hutton Institute
        • Marine Directorate of Scottish Government
        • National Centre for Resilience
        • Nature Scot
        • Public Health Scotland
        • SEPA
        • Scottish Government
        • Scottish Water
        • Sniffer

        Organisations represented in the workshop “Communities creating climate-resilient, healthy and equitable places”:

        • FloodRe
        • Glasgow City Council
        • National Centre for Resilience
        • National Resilience Scotland
        • Nature Scot
        • Public Health Scotland
        • Scottish Dynamic Coast
        • Scottish Flood Forum
        • Scottish Government
        • Scottish Land Commission
        • Scottish Waters
        • Sniffer
        • Strathclyde University

        Organisations represented in the workshop “Public services are collaborating in effective, inclusive adaptation action”:

        • Climate Change Committee
        • Glasgow City Council
        • MET Office
        • Nature Scot
        • Network Rail
        • Public Health Scotland
        • SEPA
        • Scottish Flood Forum
        • Scottish Government
        • Scottish Water
        • Sniffer
        • Transport Scotland
        • University of Strathclyde

        Organisations represented in the workshop “Economies and industries are adapting and realising opportunities in Scotland’s Just Transition”:

        • Climate Change Committee
        • Forestry and Land Scotland
        • Glasgow City Council
        • Marine Directorate of Scottish Government
        • Scottish Government
        • SEPA
        • Scottish Water
        • Sniffer

        Annex 4 – Indicator criteria

        OUTCOME: Nature connects across our lands, settlements, coasts, and seas

        ECOSYSTEM HEALTH AND CONNECTIVITY

        Habitat Connectivity Index 

        Criterion

        Rating

        Assessment

        Adaptation Relevance

        Green

        This indicator addresses habitat connectivity and quality, which are important aspect for assessing the vulnerability of ecosystems to climate change. By evaluating how well species can move and adapt to changing conditions, the indicator provides valuable insights into the adaptive capacity of habitats.

        Representativeness

        Amber

        The indicator covers four key types of habitats: Woodland, Heathland, Grassland, and Fen/Marsh/Swamp – habitats that are representative of the broader landscape and crucial for maintaining ecological functions and services. However, the indicator does not cover freshwater, marine and coastal environments, and therefore has some limitations in its representativeness of indicating ecological health and connectivity.

        Data Availability

        Amber

        Data is collected by NatureScot. Data for CSGN area is publicly available on NatureScot’s website. However, data for the whole Scotland is provided directly by NatureScot and is not published online.

        Sensitivity

        Amber

        Updating this indicator every five years is considered a sensible frequency to observe meaningful changes in habitat connectivity.

        There may be a lag in reporting years, with data being published on average 2 years after. The up-to-date data may therefore not be available immediately at the end of the Plan.

        Understanding

        Green

        This indicator on habitat connectivity can be widely understood by a broad range of stakeholders in relation to improved ecological health and associated resilience.

        Baseline

        Green

        The indicator was last updated in 2022 for semi-natural grassland, heathland, and semi-natural woodland. Baseline maps are available on the Nature Scot website, providing a reference point for measuring changes over time. These baselines are crucial for assessing the progress and effectiveness of adaptation measures.

        The metric uses to calculate the habitat connectivity it is the Equivalent Connected Area (Probability of Connectivity), the ECA (PC).

        Practicality

        Green

        The data is publicly available and detailed by catchment area, making it practical for use in planning and decision-making processes. This accessibility ensures that stakeholders can utilize the information to enhance habitat connectivity and support climate adaptation strategies. The practical application of this data supports localized adaptation efforts and helps to mitigate the impacts of climate change on biodiversity and ecosystem services.

        Proportion of surface water bodies classified in good or better condition

        Criterion

        Rating

        Assessment

         Adaptation relevance​ 

         Green

        This indicator is relevant for climate adaptation as it addresses the quality and health of water ecosystems, which are critical for reducing vulnerability and enhancing adaptive capacity. By tracking the proportion of water bodies in good or high condition, this indicator provides insights into the resilience of water ecosystems and their capacity to adapt to changing climatic conditions.

        Representativeness​ 

         Amber

        The indicator is broadly effective for monitoring ecological health as it encompasses key aspects of ecosystem quality. Although it has limitations due to its primary focus on surface water bodies, it can be used as a useful proxy for the status of broader ecological and biodiversity conditions.

        Data availability

        Green

        Full GIS data for this indicator is available on the SEPA website, ensuring that data is current and reliable. The data is updated every year by SEPA.

        Sensitivity​ 

        Green

        Changes in water quality and ecosystem health can be noted over a five-year timescale interventions.

        Understanding​ 

        Green

        This indicator on water quality can be widely understood by a broad range of stakeholders in relation to improved ecological health and associated resilience.

        Baseline​ 

        Green

        The indicator is publicly available on SEPA’s website has an established baseline from 2007 to 2022.

        Practicality​ 

        Green

        Statistical and mapping data for this indicator is already being collected and publicly accessible, making it practical to monitor as an indicator.

        Proportion of Scotland’s protected sites in favourable condition

        Criterion

        Rating

        Assessment

         Adaptation relevance​ 

         Green

        Protected sites play a role in improving the adaptive capacity of vulnerable species by providing safe havens with the functional network that species can migrate from or too. This indicator is relevant for climate adaptation as it directly relates to the resilience of ecosystems and their ability to adapt to changing environmental conditions.

        Representativeness​ 

         Amber

        While the indicator is a useful proxy for ecological health and connectivity, its limitation should be noted. The indicator does not include offshore marine sites and features in Scotland beyond 12 nautical miles, and primarily focuses on protected sites and not all natural sites, which may limit its representativeness of the broader ecological health and connectivity.

        Data availability

         Green

        The Site Condition Monitoring (SCM) program is a rolling monitoring effort that aims to assess the condition of a sample of designated natural features each year. Detailed data per type of habitat is publicly available on the Nature Scot website, ensuring that data is current and reliable.

        Sensitivity​ 

         Amber

        The indicator has shown longer-term changes, though it may not reflect notable changes within shorter periods, such as from 2023 to 2024. While a five-year timescale may be too short to observe long-term trends, the indicator is suitable to detect significant changes over longer periods.

        Understanding​ 

        Green

        This indicator on condition of protected sites can be widely understood by a broad range of stakeholders in relation to improved ecological health and associated resilience.

        Baseline​ 

        Green

        The indicator has an established baseline from 2005 to 2024, with historical data available for comparison.

        Practicality​ 

        Green

        Statistical and mapping data for this indicator is already being collected and publicly accessible, making it practical to monitor as an indicator.

        Proportion of soft shorelines affected by coastal erosion

        Criterion

        Rating

        Assessment

         Adaptation relevance​ 

        Green

         Monitoring the extent of coastal erosion is relevant to climate adaptation as it reflects the efficacy of implemented adaptation measures in enhancing coastal resilience.

        Representativeness​ 

        Green

         This indicator represents the coastal component of the Nature Connects outcome of the SNAP3.

        Data availability

         Amber

        Data is publicly available, however, it is not specifically stated how long the programme hosting the data is running for.

        Sensitivity​ 

        Green

        Changes in this indicator are sufficient sensitive to the time-period of SNAP3.

        Understanding​ 

        Green

        The connection between the extent of coastal erosion as a proxy for coastal adaptation to climate change is generally recognised.

        Baseline​ 

        Green

        Baseline data available from 2017 and 2021.

        Practicality 

        Green

         The indicator is publicly available on the Center of Expertise for Waters (CREW) website. It has been developed under the Dynamic Coast project.

        URBAN GREEN INFRASTRUCTURE

        Extent of green-blue land cover in urban areas 

        Criterion

        Rating

        Assessment

         Adaptation relevance​ 

         Green

        Green-blue land cover in urban areas reflects the extent of natural spaces in cities that provide crucial ecosystem services. It is relevant for climate adaptation as it captures how well cities are prepared to adapt to the challenges posed by climate change, making urban environments more sustainable and liveable.

        Representativeness​ 

        Amber

        This indicator offers a good coverage of Scotland, with urban areas defined as those with a population more than 500. It covers public and private greenspaces, including woodland, open semi-natural, inland water, beach or foreshore, and manmade surface. It also distinguishes the different functions of greenspaces, such as public park or garden, school grounds, private garden, allotments, playing fields, etc. However, it does not cover the tree canopy over hard surfacing or green roofs, which are also relevant in terms of adaptation.

        Data availability

        Amber

        This dataset “OS MasterMap Greenspace Layer” is updated every 6 months by Ordnance Survey, but requires a licence to access it.

        Sensitivity​ 

        Green

        Land use modification in urban areas can be noted over a five-year timescale.

        Understanding​ 

        Green

        This indicator on green-blue land cover in urban areas can be widely understood by a broad range of stakeholders in relation to the extent of natural spaces in cities associated with resilience.

        Baseline​ 

        Green

        This dataset “OS MasterMap Greenspace Layer” can be purchased on the Ordnance Survey website

        Practicality​ 

         Amber

        Data is available in ESRI Shapefile, GML 3.2.1, GeoPackage and Vector Tiles format. The GIS map has to be purchased and analysed to be transformed to actual percentage.

        Proportion of adults who live within a five-minute walk of their nearest green or blue space

        Criterion

        Rating

        Assessment

         Adaptation relevance​ 

         Amber

        The indicator captures the distance to the nearest public or open space, but does not reflect the level of accessibility, the perception of safety people have toward the green and blue spaces nor the frequency of access.

        Representativeness​ 

        Green

        The figures for this indicator come from the Scottish Household Survey (SHS). It covers the whole Scottish territory and includes people resident in Scotland aged 16 and over.

        The SHS sample has been designed to allow annual publication of results at Scotland level and for local authorities. To meet these requirements, the target sample size for Scotland was 10,450 household interviews with a minimum local authority target of 250.

        Data availability

        Green

        The data is published annually in the Scottish Household Survey Annual Report.

        Sensitivity​ 

         Amber

        Changes in the proportion of adults who live within a five-minute walk of their local green or blue space can be noted over a five-year timescale.

        There is a lag in reporting years up to a maximum of one year (e.g. 2024 fieldwork ending in January 2025 with publication of results later in 2025) The up-to-date data will therefore not be available immediately at the end of the Plan.

        Understanding​ 

        Green

        This indicator can be widely understood by a broad range of stakeholders.

        Baseline​ 

        Green

        The figures for this indicator come from the Scottish Household Survey (SHS) which is a National Statistics product produced by the Scottish Government. This indicator is also part of the National Performance Framework.

        Practicality​ 

        Green

        Statistical data for this indicator is already being collected and publicly accessible, making it practical to monitor as an indicator.

        OUTCOME: Communities are creating climate-resilient, healthy and equitable places.

        Community awareness around climate change

        Criterion

        Rating

        Assessment

        Adaptation relevance​

         Amber

        This indicator is relevant for climate adaptation as it improves community adaptive capacity through knowledge enhancement. By understanding what actions are necessary to tackle climate change and recognizing the urgency of these actions, communities can better prepare for and respond to climate impacts. This knowledge reduces vulnerability and increases resilience.

        However, the question asked does not specifically address the impacts of climate change, the criteria is therefore orange.

        Representativeness​

        Green

        The survey provides useful snapshot on the awareness and knowledge of communities around climate change.

        The SHS sample has been designed to allow annual publication of results at Scotland level and for local authorities. To meet these requirements, the target sample size for Scotland was 10,450 household interviews with a minimum local authority target of 250.

        Data availability

        Green

        The Scottish Household Survey climate awareness and action questions are asked biennially on odd years. The results are publicly available.

        Sensitivity​

         Amber

        This indicator is sensitive to changes for the purposes of SNAP3 monitoring, as observed the marked changes that occurred in public perception and knowledge between 2019-2022.

        There is a lag in reporting years up to a maximum of one year (e.g. 2024 fieldwork ending in January 2025 with publication of results later in 2025)The up-to-date data will therefore not be available immediately at the end of the Plan.

        Understanding​

        Green

        There is a clear connection on how understanding climate actions and the urgency of these actions relate to progress in climate adaptation.

        Baseline​

        Green

        The baseline data for this indicator is available since 2019, providing a reference point for measuring changes in community awareness and perception over time.

        Practicality​

        Amber

        The Scottish Household Survey has been collecting data since 1999, making it a practical, cost-effective, and well-established method for gathering information.

        Community action on climate change

        Criterion

        Rating

        Assessment

        Adaptation relevance​

         Green

        Community climate action hubs will improve knowledge of communities and enhances the preparedness of communities.

        Representativeness​

         Amber

        This indicator does not capture the quality of action and may therefore not be fully representative of the effectiveness of climate actions. While it shows the presence of CCAHs and LPPs, it does not measure the depth or impact of the actions taken through these hubs/plans.

        Data availability

         Green

        Data is held by the Scottish Government, and is publicly accessible on the Scottish Government website: Community climate action hubs: contact details – gov.scot (www.gov.scot) .

        Sensitivity​

         Amber

        This indicator is sensitive to changes for the purposes of SNAP3 monitoring, as observed by marked changes that between 2019-2022.

        Understanding​

         Green

        It is easy to see the connection between the existence and maintenance of CCAHs and LLPs as metrics for climate action, although it might not be clear what specific actions arise from these.

        Baseline​

        Amber

        20 CCAHs as of June 2024 (81% of the council areas covered).

        Practicality​

        Amber

        Information on LPPs is not located in one centralised place, so requires time and resource to obtain.

        Community flood resilience

        Criterion

        Rating

        Assessment

        Adaptation relevance​

        Green

        This indicator is relevant to climate adaptation progress as it indicates the implementation effectiveness of strategies to mitigate flood risks and enhance community resilience.

        Representativeness​

        Green

        Flooding is considered a significant climate hazard, as outlined in the SNAP3, therefore an indicator that captures action for this is representative of climate-resilient communities.

        Data availability

        Green

        Updated data on progress will be publicly available in 2025 and 2028. Data will be published by the 14 lead local authorities in charge of local Flood Risk Management Plans, and information will be centralised by SEPA.

        Sensitivity​

        Green

        Changes in this indicator are sufficiently sensitive to the time-period of SNAP3 monitoring.

        However, reports are not published annually so the up-to-date data will therefore not be available immediately at the end of the Plan.

        Understanding​

        Green

        The extent that actions are taking place to manage the impacts of flooding are clear to understand for a wide audience.

        Baseline​

         Amber

        Actions to reduce or avoid flood are collated by the 14 lead local authorities in charge of Local Flood management Plans in their Flood Management Plan assessment report. The latest report was published in 2021, and the next one is expected in December 2025.

        Practicality​

         Green

        Data is easy to obtain and easy to use to understand progress.

        Community wellbeing

        Criterion

        Rating

        Assessment

         Adaptation relevance​ 

        Amber

        Not directly related to climate change adaptation, but the experience of the effects of climate change, for example a flooding event, and the capacity to adapt or react to it has a direct impact on mental health. This indicator highlights the intersection between mental wellbeing and climate resilience, showing how adaptive capacity influences community health.

        Representativeness​ 

        Amber

        Wellbeing metrics are useful indicators of community health, however, health and its impacts from climate change are wide-ranging in scope. Therefore, there is ultimately limitations that must be acknowledged with this indicator when representing overall community health.

        Data availability

         Green

        Data is publicly available from Scottish Government.

        Sensitivity​ 

        Amber

        Whilst minor changes have been observed since 2006, this does not necessarily point to a lack of sensitivity in relation to the information this indicator provides.

        There is a lag in reporting years, with data being published on average one year later. The up-to-date data will therefore not be available immediately at the end of the Plan.

        Understanding​ 

        Amber

        Whilst the concept of mental wellbeing and its importance as a metric of community resilience is easy to understand, how this indicator relates to climate adaptation is not clear.

        Baseline​ 

        Green

        The baseline data from 2022 shows a mean score of 47.0 on the WEMWBS scale.

        Practicality​ 

        Green

        Data has been monitored since 2006, the established data collection processes ensure that this indicator can be consistently and reliably monitored.

        OUTCOME: Public services are collaborating in effective and inclusive adaptation action

        Level of collaboration across public services

        Criterion

        Rating

        Assessment

         Adaptation relevance​ 

         Green

        Collaboration is vital component of climate adaptation planning. Effective collaboration can enhance adaptive capacity, reduce vulnerability, and ensure a cohesive, equitable response to climate change.

        Representativeness​ 

         Amber

        While this indicator shows the level of participation and collaboration, it does not capture the quality or depth of progress in terms of collaboration. It measures quantity rather than the effectiveness of the collaborative actions being taken.

        Data availability

         Green

        Data on the participation of public bodies in the Public Climate Adaptation Network is publicly available from Adaptation Scotland and the Sustainable Scotland Network.

        Sensitivity​ 

         Amber

        While the indicator data is sensitive enough for the purposes of SNAP3 monitoring, the number of public bodies participating to the Public Climate Adaptation Network is not expected to rise significantly because Adaptation Scotland’s strategy is to integrate few members at a time to insure their good and lasting integration into the network.

        For the Public bodies climate change duties reporting, there is a lag in reporting years, with data being published on average 1 year after. The up-to-date data will therefore not be available immediately at the end of the Plan.

        Understanding​ 

        Green

        This indicator is widely understood with the importance of collaboration in climate adaptation is broadly recognised and easily communicated.

        Baseline​ 

        Green

        The baseline data is from 2024 for the Public Climate Adaptation Network and from 2022/23 for the SSN report.

        Practicality​ 

        Green

        Data is easy to obtain and utilise to monitor progress over the SNAP3 monitoring period.

        Level of adaptation actions across public services

        Criterion

        Rating

        Assessment

         Adaptation relevance​ 

        Green

        This indicator is highly relevant to adaptation, providing information on levels of risk assessments undertaken by public sector and the extent that adaptation action is taking place.

        Representativeness​ 

        Green

        The indicator is representative insights on the extent public services are engaging in adaptation action. However, it only captures the level of risk assessment and action of public bodies subject to mandatory reporting.

        Data availability

        Green

        Data is collected annually, providing a regular update on the level of adaptation action across public services. Data is publicly available.

        Sensitivity​ 

        Amber

        Changes in collaboration will likely be observed over a five-year time period.

        There is a lag in reporting years, with data being published on average 1 year after. The up-to-date data will therefore not be available immediately at the end of the Plan.

        Understanding​ 

        Amber

        This indicator requires some understanding of SSN’s analytical framework (and subjective nature of assessment) but the concept of risk assessment is widely understood.

        Baseline​ 

        Green

        The baseline for this indicator is established from data collected in 22022-3.

        Practicality​ 

        Green

        Data is easy to obtain and utilise to monitor progress over the SNAP3 monitoring period.

        OUTCOME: Economies and industries are adapting and realising opportunities in Scotland’s Just Transition.

        Business awareness of climate adaptation

        Criterion

        Rating

        Assessment

         Adaptation relevance​ 

         Green

        Business action in relation to adaptation can make them more resilient and prepared for climate hazards, thereby reducing vulnerability.

        Representativeness​ 

         Amber

        This indicator represents well the business adaptation component of the Economy, Business and Industry outcome area. It should be noted that it represents businesses with 10 or more employees.

        Data availability

         Green

        Data is publicly available and reported on annually.

        Sensitivity​ 

         Amber

        Notable changes in the number of business monitoring climate risks is observable in the five-year period.

        This question was asked in August 2023. There exists potential for it to be asked soon after the end of the plan and therefore no lag in reporting.

        Understanding​ 

        Green

        There is a clear connection between the extent in which businesses are monitoring climate risks and how this relates to adapting economy, business and industry.

        Baseline​ 

        Green

        Baseline data available from August 2023.

        Practicality​ 

        Green

        Data is being captured by BICS already, and practical to use.

        Business preparedness in climate adaptation

        Criterion

        Rating

        Assessment

        		 

         Adaptation relevance​ 

         Green

        Business action in relation to adaptation can make them more resilient and prepared for climate hazards, thereby reducing vulnerability.

        		 

        Representativeness​ 

         Amber

        This indicator represents well the business adaptation component of the Economy, Business and Industry outcome area. It should be noted that it represents businesses with 10 or more employees.

        		 

        Data availability

         Green

        Data is publicly available and reported on annually.

        		 

        Sensitivity​ 

         Amber

        Notable changes in the number of business monitoring climate risks is observable in the five-year period.

        This question was asked in August 2023. There exists potential for it to be asked soon after the end of the plan and therefore no lag in reporting.

        		 

        Understanding​ 

        Green

        There is a clear connection between the extent in which businesses are monitoring climate risks and how this relates to adapting economy, business and industry.

        		 

        Baseline​ 

        Green

        Baseline data available from August 2023.

        		 

        Practicality​ 

         Green

        Data is being captured by BICS already, and practical to use.

        		 

        Green jobs in the Scottish economy

        Criterion

        Rating

        Assessment

         Adaptation relevance​ 

        Amber

        The green jobs definition signifies its relevance to adaptation. However, important to realise limitations around green jobs, for example – adaptation considered as thinking embedded into all businesses, and not just new jobs created.

        Representativeness​ 

        Amber

        In its focus on employment/skills in relation to climate adaptation, this indicator represents well the business adaptation component of the Economy, Business and Industry outcome area.

        Data availability

         Green

        Data is publicly available and captured annually. It should be noted that this data is currently categorised as ‘official statistics in development’. This means the data is potentially subject to revision. However, as stated by the Office of National Statistics, this data, even when in development, is considered sufficient quality to be used.[7]

        Sensitivity​ 

        Amber

        Changes in this indicator are sufficiently sensitive to the time-period of SNAP3 monitoring.

        There is a lag in reporting years, with data being published on average 2 years after (e.g. 2022 data was published in March 2024). The up-to-date data will therefore not be available immediately at the end of the Plan.

        Understanding​ 

        Amber

        The connection between a ‘green job’ and its relevance to climate adaptation is potentially unclear, therefore terminology and definitions used must be clearly stated.

        Baseline​ 

        Green

        Baseline data available between 2015-2022.

        Practicality​ 

        Green

        Statistical data for this indicator is already being collected and publicly accessible, making it practical to monitor as an indicator.

        SUSTAINABLE PRACTICE IN THE AGRICULTURE SECTOR

        Agriculture water-use efficiency

        Criterion

        Rating

        Assessment

         Adaptation relevance​ 

         Green

        Improve water use efficiency in agriculture increases the resilience of farms against several effects of climate change.

        Representativeness​ 

        Amber

        The east of Scotland is more concerned by drought risk than the west of the country.

        Moreover, irrigation lagoons are large-scale projects, but other ways to increase water-use efficiency can also be implemented on farms and will not be captured by this indicator.

        Data availability

        Amber

        Data is captured annually by Scottish governmentGovernment but is not publicly available.

        Sensitivity​ 

        Green

        Changes in this indicator are sufficiently sensitive to the time-period of SNAP3 monitoring.

        Understanding​ 

        Green

        There is a clear connection between water use efficiency and adaptation in the agricultural sector.

        Baseline​ 

        Green

        Data has been collated annually since 2015.

        Practicality​ 

         Amber

        This information is not publicly available.

        Annex 5 – Baseline information for each indicator

        Indicator

        Year

        Baseline

        Data source

        Nature Connects Nature connects across our lands, settlements, coasts, and seas

        Habitat Connectivity Index​ 

        2020

        Equivalent Connected Area (Probability of Connectivity) (ECA (PC)) values from 2020 are available for Scotland for semi-grassland, woodlands and heathland. The data used was the 2020 EUNIS Level 2 landcover map produced by Space Intelligence.

        To get an overall ECA (PC) value from the local authorities data, each value needs to be squared, the totals summed and then the square root taken.

        The total Equivalent Connected Area (Probability of Connectivity) (ECA (PC) value for Scotland was 35,570 ha for semi-grassland (2.9%), 5,655 ha for woodland (1.4%) and 214,277 ha for heathland (8.3%).

        The overall national percentage figure is always going to be lower for each habitat than the individual local authority figures.  This is because in a larger area you have more individual habitat patches which results in a lower connectivity measurement.

        For CSGN data visualisation: Habitat Connectivity Indicator – CSGN (arcgis.com)

        The data for whole Scotland was provided directly by NatureScot.

        Proportion of surface water bodies classified in good or better condition

        2022

        445 (13.7%) surface water bodies in high condition, 1664 surface water bodies in good condition (51.2%) on a total of 3 249 surface water bodies monitored.

        Water Classification Hub (sepa.org.uk)

        Proportion of Scotland’s Protected Sites in Favourable Condition

        2024

        65.1% of natural features in favourable condition ‘Site condition monitoring assessment). If we include the sites where monitoring has detected signs of recovery, but favourable condition has not been reached (6.1%) and the sites with positive management is in place that is expected to improve the condition of the site (4.4%), the overall number reaches 75.6%.

        For woodlands (the least favourable habitat type), the proportion of sites in favourable condition is 56.8%.

        The Proportion of Scotland’s Protected Sites in Favourable Condition 2024 | NatureScot

        Proportion of soft shorelines affected by coastal erosion

        2021

        46% of the soft coast is affected by coastal erosion. The average rate of erosion is 0.43 m/year.

        CREW_DC2_SYNOPSIS_FINAL+link.pdf

        Extent of green-blue landcover in urban areas

        2024

        As of April 2024, the total area of urban greenspace in Scotland, as defined by Ordnance Survey, is 3,166 km².

        Ordnance Survey website

        Proportion of adults who live within a 5-minute walk of their nearest green or blue space

        2022

        70% of adults reported living within a 5-minute walk of their nearest green or blue space.

        Supporting documents – Scottish Household Survey 2022: Key Findings – gov.scot (www.gov.scot)

        Communities creating climate-resilient, healthy and equitable places

        Proportion of adults viewing climate change as an immediate and urgent problem

        2022

        74% of adults viewing climate change as an immediate and urgent problem.

        “Adult” refers to those aged 16 and over.

        7. Environment – Scottish Household Survey 2022: Key Findings – gov.scot (www.gov.scot)7. Environment – Scottish Household Survey 2022: Key Findings – gov.scot (www.gov.scot)

        Proportion of the population declaring that they understand what actions they should take to help tackle climate change

        2022

        80% of adults agreed that they understood what actions they should take to help tackle climate change.

        “Adult” refers to those aged 16 and over.

        7. Environment – Scottish Household Survey 2022: Key Findings – gov.scot (www.gov.scot)7. Environment – Scottish Household Survey 2022: Key Findings – gov.scot (www.gov.scot)

        Number of Community Climate Action Hubs

        2024

        There are currently 20 hubs across Scotland supporting community-led climate action.

        It covers 81% of the Scottish council areas (26 council areas covered by the 20 hubs).

        Community climate action hubs: contact details – gov.scot (www.gov.scot)Community climate action hubs: contact details – gov.scot (www.gov.scot)

        Number of Local Place Plans

        2024

        No local place plans have been adopted yet.

        Many councils have recently invited communities to prepare Local Place Plans so that they can play a proactive role in defining the future of their places.

        This information has not been centralised and published in one place by the Scottish government.

        Progress of actions in local flood risk management plans

        2019/21

        90% of the actions set out in the strategies to avoid an increase in flood risk are green. 10% of the actions are amber. By 2021, 100% of the actions are expected to be complete.

        84% of the actions described in the strategies to reduce flood risk are green, 12% of the actions are amber and 4% are red. With 96% of the actions completed or underway by 2021, the actions developed to meet the reduce objectives will mostly be achieved.

        Flood Risk Management Plans | SEPA

        Mental wellbeing score (WEMWBS)

        2022

        In 2022, the mean WEMWBS score for all adults was 47.0.

        Scottish Health Survey 2022 Main Report Volume 1 (www.gov.scot)

        Public services are collaborating in effective, inclusive adaptation

        Number of public bodies members in the Public Sector Climate Adaptation Network

        2024

        50 organisations are currently members of the Public Sector Climate Adaptation Network.

        Adaptation Scotland :: Public Sector Climate Adaptation Network

        Number of public bodies citing the Work in partnership & collaborations as a priority s for the year ahead in relation to climate change adaptation

        2022/23 

        53.2% of the 188 listed public bodies (100 public bodies) submitting an annual compliance report cite “Work in Partnerships & Collaborations” in their top 5 priorities for the year ahead in relation to climate change adaptation. 

        Public Bodies Climate Change Reporting – Analysis Report 2022/23 (sustainablescotlandnetwork.org) 

        Level of risk assessment across the public sector 

        2022/23 

        70.2% of all listed public bodies submitting an annual compliance report have completed some form of risk assessment during or prior to the 2022/23 reporting period. 

        43.6% of bodies have carried out a limited assessment which does not provide an in-depth risk assessment addressing a range of climate hazards or risks.

        20.7% of bodies have carried out a comprehensive risk assessment. 

        5.8% have completed an advanced risk assessment involving stakeholders and considering a range of climate or socioeconomic scenarios. 

        Public Bodies Climate Change Reporting – Analysis Report 2022/23 (sustainablescotlandnetwork.org) 

        Level of adaptation action taken across the public sector

        2022/23 

        71.8% of all listed public bodies submitting an annual compliance report have taken adaptation action during or prior to the 2022/23 reporting period. 

        44% of bodies have taken some action where a range of actions or policies exist but it is unclear how the actions are contributing to addressing specific climate risks or hazards.

        21% of all bodies are taking good action, meaning the bodies are taking action to reduce specific risks and/or taking significant sector-specific adaptation actions. 

        6% of bodies are taking advanced action where a comprehensive set of actions are in place to address specific climate risks and plans are in place to measure progress against the management of these risks. 

        Public Bodies Climate Change Reporting – Analysis Report 2022/23 (sustainablescotlandnetwork.org)  

        Economies and industries are adapting and realising opportunities in Scotland’s Just Transition

        Proportion of businesses monitoring climate related risks (flooding, temperature increase, supply chain disruptions)

        2023

        15.6% of Scotland businesses have assessed risks for supply chain disruption and distribution.

        6.2% of Scotland businesses have assessed risks for increased flooding.

        4.4% of Scotland businesses have assessed risks for temperature increase.

        60.6% of Scotland businesses have not assessed any risks related to climate change.

        The scope of “businesses” taken into account by this survey are businesses which have not permanently stopped trading, with 10+ employees and with a presence in Scotland (n=1,061).

        Climate Change – BICS weighted Scotland estimates: data to wave 88 – gov.scot (www.gov.scot)

        Proportion of businesses taking action to adapt to the effects of climate change

        2023

        26.5% of Scotland businesses declare they have already taken action to adapt to supply chain disruption and distribution.

        11.5% of Scotland businesses declare they have already taken action to adapt to increased flooding.

        5.7% of Scotland businesses declare they have already taken action to adapt to temperature increase.

        21.2% of Scotland businesses have not assessed any risks related to climate change.

        18.1% of businesses reported that they do not expect to be impacted by these climate change effects.

        The scope of “businesses” taken into account by this survey are businesses which have not permanently stopped trading, with 10+ employees and with a presence in Scotland (n=521).

        Climate Change – BICS weighted Scotland estimates: data to wave 88 – gov.scot (www.gov.scot)

        Number of green jobs

        2022

        Using the industry approach, Scotland employment in green jobs in 2022 was estimated at 46,200 full-time equivalents (FTEs).

        Experimental estimates of green jobs, UK: 2015 to 2022 – Office for National Statistics (ons.gov.uk)

        Uptake of grants for agriculture storage reservoirs/ off season storage lagoons​

        2024

        5 AECS applications for irrigation lagoons were successful in 2024. 14 applications were submitted.

        Scottish government – unpublished data

        © The University of Edinburgh, 2024
        Prepared by Ricardo 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.

        ClimateXChange
        Edinburgh Climate Change Institute
        High School Yards
        Edinburgh EH1 1LZ

        +44 (0) 131 651 4783

        info@climatexchange.org.uk

        www.climatexchange.org.uk

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


        1. https://www.gov.scot/isbn/9781836017264 ↑



        2. Meeting notes from the four workshops are provided as supplementary materials to this report. ↑



        3. Note: the objectives used here are taken from the draft SNAP3. The wording in the final SNAP3 differs slightly. ↑



        4. Note: the objectives used here are taken from the draft SNAP3. The wording in the final SNAP differs slightly. ↑



        5. Note: the objectives used here are taken from the draft SNAP3. The wording in the final SNAP differs slightly. ↑



        6. Note: the objectives used here are taken from the draft SNAP3. The wording in the final SNAP differs slightly. ↑



        7. See Office of National Statistics – https://www.ons.gov.uk/economy/environmentalaccounts/bulletins/experimentalestimatesofgreenjobsuk/2024#measuring-the-data ↑


        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

        Air-to-air (A2A)

        Air to air. A type of heat pump that sources heat from external air and distributes it internally by recirculating air through heat exchangers

        Air-to-water (A2W)

        Air to water. A type of heat pump that sources heat from external air and distributes it internally using water in pipes and radiators or underfloor heating

        ASHP

        Air source heat pump

        Clean heating

        Defined by the Scottish Government as a system capable of providing heat without producing any greenhouse gas emissions at point of use (Scottish Government, 2023a)

        EPC

        Energy Performance Certificate

        Flats and tenements

        Any building that contains multiple dwellings. This includes, four-in-a-blocks, low rise blocks, high rise blocks and tenements.

        GSHP

        Ground source heat pump

        PV

        Solar photovoltaic panels

        Working fluid

        The fluid that is compressed and expanded in heat pumps to transfer heat. Also called the refrigerant.

        ZDEH

        Zero direct emissions heating (Also called ‘clean heating’ for short, throughout this document)

        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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        Brown, K.J., Farrelly, R., O’Shaughnessy, S.M., Robinson, A.J., 2016. Energy efficiency of electrical infrared heating elements. Appl Energy 162, 581–588.

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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? 

        Scope of the work

        Boundaries

        Geography 

        Scotland (and other countries with similar economies and policy drivers i.e., wider UK and Europe where applicable)

        Date

        Since 2010 

        We agreed that research carried out within the last 5 years would be the most relevant in terms of technology adoption and the regulatory/ policy framework with what is in place presently. We viewed research carried out in the last 5-10 years to be less relevant but may still be applicable and therefore has been included in this work. Research older than 10 years is anticipated to be the least relevant, using older technologies than available now, and adhering to different standards and policies that are currently in place. 

        Outcome

        Immediate cost/ benefit to occupants and building owner in terms of technical feasibility, practicality, user acceptance, capital cost and operating cost. 

        Keyword search

        Population 

        dwellings; homes; houses; hard to treat; flats; apartments; traditional; solid wall; heritage; small 

        Intervention 

        low carbon heat; heat pump; zero carbon heat; renewable heat 

        Comparator 

        (we are comparing vs business as usual) 

        Outcome 

        economics; costs; comfort; consumer; skills; supply chain 

        Other

        case study; evaluation 

        Search locations 

        Peer-reviewed literature 

        Engineering, policy, and social science databases 

        Grey literature 

        Engineering, policy, and social science databases for conference proceedings and non-peer reviewed academic publications

        Search engines

        Unpublished data 

        Members of Heat Source; professional contacts of review team; contacts of Steering Team. 

        Secondary review 

        Semi structured interviews with industry experts to further complement the findings of the literature review.

        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

        Boolean operator

        		 

        AND

        Either (OR)

        dwellings

        hard to treat

        low carbon heat

        economics

        case study

        homes

        flats

        heat pump

        costs

        evaluation

        houses

        apartments

        zero carbon heat

        comfort

         

         

        traditional 

        renewable heat

        consumer

         

         

        solid wall

        zero emissions heat

        skills

         

         

        small

         

        supply chain

         

         

        traditional

         

        		 

         

         

        Search 1

        		 

        Search 2

        		 

        Search 3

        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

        Category 

        Thresholds  

        Score

        Year  

        2018 onwards 

        Green

        2013-2018 

        Amber

        Pre 2013 

        Red

        Source    

        Peer Reviewed publication OR Book  

        Green

        Independent Research (not peer reviewed) OR Government Policy 

        Amber

        Industry grey literature 

        Red

        Location 

        Scotland or UK 

        Green

        Europe 

        Amber

        Rest of World 

        Red

        Restrictions 

        Relevant to all 3 

        Green

        Relevant to 2 

        Amber

        Relevant to 0 or 1  

        Red

        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.

        Title of source

        Faster deployment of heat pumps in Scotland: Settling the figures

        Year

        Type of research

        Country/Climate zone

        Contains hard to treat and clean heat research evidence

        Author/ For

        2023

        Modelling

        Scotland

        Yes

        Cambridge Architectural Research/ WWF

        Note

        The study emphasises integrating heat pumps with energy efficiency measures to reduce emissions in Scottish homes, focusing on the cost, energy efficiency needs, and impact on energy bills and fuel poverty. It leverages the ScotCODE model for dynamic, cost-effective strategies in low-carbon heating deployment.

        Key observations/Implications

        Evidence of technically feasibility (or not)
        “The study found that it is technically possible to fit larger heat pumps to these homes without external wall insulation, but overall costs are higher”
        “Flats are less likely than houses to see a benefit from heat pumps because they use proportionately more energy for hot water”
        “It is technically possible to fit heat pumps in almost all flats and tenements, with ASHP selected in most cases, and air to air units selected where internal and external space for ASHP equipment is limited (also in some flats with electric storage heaters)”
        Evidence of cost-effectiveness (or not)
        “The modelling and optimisation revealed that homes require a good standard of energy efficiency to ensure efficient and cost-effective heat pump operation”
        “Around 80% of all homes would require at least one upgrade to reach the cost-optimal level of energy efficiency”
        “Although in many cases running costs are lower with heat pumps, high capital costs lead to higher whole-life costs. This gap is what Government financial support needs to close in order to make converting to heat pumps more attractive to households”
        “This modelling indicates that the most effective way to reduce carbon emissions from Scottish housing is to prioritise dwellings using oil-fired heating, and older homes with solid walls first, then gas-heated homes and bungalows, and finally newer dwellings built since 1982 and flats, where the potential savings are lower”
        “the cost and carbon savings from switching to heat pumps are greatest for homes that currently have oil-fired heating”
        Evidence of other ZDEH tech
        “Shared external units serving multiple flats may work out more cost-effective than separate systems serving individual flats, both for installation and maintenance.

        Title of source

        Affordable warmth next steps for clean heat in Scotland

        Year

        Type of research

        Country/Climate zone

        Contains hard to treat and clean heat research evidence

        Author/ For

        2023

        Mixed

        Scotland

        Yes

        Fabrice Leveque/
        WWF Scotland

        Note

        It shows that energy efficiency, electric heat pumps and heat networks can help cut energy bills and lower carbon emissions. With energy prices likely to remain elevated, these solutions are our best strategy to minimise fuel poverty and tackle climate change
        at the same time.

        Key observations/Implications

        Evidence of technically feasibility (or not)
        “It is possible to install individual heat pumps in flats, but there are extra challenges to doing so that shared systems like heat networks and communal systems (potentially receiving heat from large heat pumps) could overcome”
        “a recent field trial for UK Government found internal space to be a limiting factor in only 2% of over a thousand UK homes

        Evidence of cost-effectiveness (or not)
        “All the typical houses in the study starting with oil and electric storage heating, and just over half of those on gas, make savings”
        “electric heat pumps, combined with some insulation improvements, are the cheapest way for most Scottish homes to achieve the crucial cuts in climate emissions that we must achieve by 2030”
        “Air source heat pumps (ASHP) are the least-cost solution for homes starting with gas and oil boilers, with Air to Air heat pumps the best solution for homes with electric storage heaters”
        “Some houses on gas see modest increases… This is because they have high hot water demand and are relatively more modern and energy efficient and before upgrades already had the lowest energy bills. These factors also prevent the flats from making savings against gas”
        “heat pump running costs could be further lowered by: … time of use tariff…, solar energy…, more energy efficiency and radiator upgrades…, innovation”

        Evidence of other ZDEH tech
        “Potential challenges to installing heat pumps in homes were explored… cost-effective alternatives such as air to air heat pumps… and internal wall insulation were found”
        “there is a risk that space for these may be limited in some smaller homes. The modelling found that in these cases, Air to Air heat pumps and instant hot water heaters provide a cost effective and space-saving alternative. Although not part of this study, heat batteries also provide a smaller alternative to traditional hot water tanks”

        Evidence of non-ZDEH tech
        “hydrogen heating in Scotland. It found that if available at all, deployment at scale is unlikely to be possible until the mid2030s. It is also likely to be much more expensive to run than natural gas heating”

        Title of source

        How to Heat Scotland’s Homes An analysis of the suitability of properties types in Scotland for ground and air source heat pumps.

        Year

        Type of research

        Country/Climate zone

        Contains hard to treat and clean heat research evidence

        Author/ For

        2021

        Mixed

        Scotland

        Yes

        Energy Systems Catapult/Nesta Scotland

        Note

        Narrative summary of barriers. Quantitative assessment of Scottish housing stock. Some view on flats for heat pumps ‘difficult’. ” It was found that installing a heat pump into a pre-1914 flat without retrofit measures would leave the house below acceptable comfort levels for more than 22% of the time during the coldest periods of the year.

        Key observations/Implications

        Evidence of technically feasibility (or not)
        “25% of homes surveyed for a heat pump were deemed unsuitable by the surveyor or homeowner because of the lack of a suitable external location, because the routing of services was problematic, or because of significant disruption”
        “Typically, heat pumps provide a lower temperature than fossil fuel boilers, therefore achieving an equivalent heating experience is affected by the energy efficiency of the property, as well as the detailed design and installation of the system itself.”
        “Space inside the flat for a hot water tank may also be a challenge”
        “Consideration should also be given to the cumulative noise effect of multiple heat pumps across multiple dwellings.”
        Evidence of cost-effectiveness (or not)
        “Installing a heat pump can be 4x the cost of replacing a gas boiler plus potential additional costs for distribution system upgrades, hot water storage and/or fabric retrofit”
        “it is known that heat pumps generally result in lower running costs for off-gas households and can be competitive with on-gas where a heat pump system is properly sized”
        “Heat pumps have a higher capital cost than incumbent heating technologies, without clearly delivering a better experience for the household”
        “In off-gas grid dwellings, where heating oil, LPG, direct electric or solid fuels are being replaced, heat pumps can offer a competitive alternative when considering running costs, particularly when the heat pump system is well sized and maintains a good coefficient of performance”
        Evidence of other ZDEH tech
        “Opportunities for pre-1914 flats could include a communal heating system which would reduce the amount of ancillary equipment required within each flat and share the costs associated with installation and maintenance”

        Title of source

        Niddrie Road, Glasgow: Tenement Retrofit Evaluation

        Year

        Type of research

        Country/Climate zone

        Contains hard to treat and clean heat research evidence

        Author/ For

        2023

        Case Study

        Scotland

        Yes

        UK Collaborative Centre for Housing Evidence/ Scotland Funding Council

        Note

        Evaluating the deep ‘green’ retrofit of a traditional, pre-1919, sandstone tenement in Niddrie Road, Glasgow. A partnership consisting of Southside Housing Association, Glasgow City Council, John Gilbert Architects and CCG Construction to deliver an Enerphit level retrofit. The report contains an evaluation and its wider lessons for retrofitting tenements and older building stock.

        Key observations/Implications

        Evidence of technically feasibility (or not)

        “ASHPs were constructed into the ground and first floor with gas boilers in the upper two floors. s. This was a direct result of the planning decisions – the hot water piping could only reach the first two floors from the back yard with sufficient heat distribution retained to meet the manufacturing warranty”

        Planning guidance initially ruled out external wall insulation (EWI) at the rear and partial gable end of the block. It also later argued that residential air source heat pumps could not be used if attached to the rear of the building at windows. It also ruled out photo-voltaic panels on the roof, and it did not approve proposed wider gutters.

        Tenement planning policy is critical to aligning the fabric first needs of the retrofit (air -tight insulation combining external wall insulation and internal wall insulation as well as mechanical ventilation with heat recovery and other specific components) alongside renewables to deliver low energy. Niddrie road is a standard sandstone tenement. Even so, planning permission for the retrofit was complex and challenging

        Evidence of cost-effectiveness (or not)

        “The decision to commit to an EnerPHit approach was made possible because the association had control of a complete (and empty) tenement block or close. On the other hand, this means that the approach and the standard are not suitable for most situations where ownership patterns are more fragmented.”

        “Like many other older tenements, 107 Niddrie Road had been poorly maintained and suffered from a wide range of long-term problems such as failing finishes and decayed floor structure which significantly impacted on time and costs”

        Evidence of other ZDEH tech

        When the space heating demand is reduced by as much as it is at Niddrie Road, then the biggest component of most peoples’ fuel bills are hot water costs. Wastewater heat recovery systems can reduce costs (and carbon emissions) of hot water can be reduced by around 40%

        © 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

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