Net Zero, Energy and Transport Committee Report on the Draft Climate Change Plan

Progress in reducing emissions has stalled in recent years, with the Scottish Government in 2024 reluctantly accepting that its next major statutory milestone could not realistically be met. Everyone agrees that the Climate Change Plan is the key document for the Scottish Government to provide a reset, with clear, credible and sufficiently detailed proposals for improved delivery. It requires both careful scrutiny and the opportunity and space for the Scottish Government to respond to that scrutiny.

There was disappointment that a draft Plan was not laid in 2024 (in line with then current legal requirements) but the Committee notes the Scottish Government’s view that it considered itself to be in a position where there was no alternative but to delay. It is also disappointing now to be in a situation where the Scottish Government has given itself a maximum of three weeks to reflect on recommendations from Parliamentary Committees and consultation responses from experts, industry and the public. While we accept that the process laid out in statute does not give the Scottish Government complete control over timetabling, this is not good practice and lowers confidence that we have a robust consideration process.

There are steps a future Scottish Government could take to ensure this result is avoided when the next draft Plan is laid. The Committee also considers that the absence of a statutory minimum period before the Scottish Government can lay a finalised Plan: so that it has time to reflect on Parliamentary recommendations and consultation responses, should be addressed early in the next parliament. We will revisit this in our forthcoming legacy report to our successor committee in Session 2026-31.

It was deeply disappointing that the Climate Change Committee, the key independent expert advisor on governmental climate change policies, did not consider itself able to provide formal evidence during the period of committee scrutiny. The Committee, the Parliament and the public lost out on their expertise. Early in the next session, the Scottish Government, the Scottish Parliament and the CCC should work together to find a constructive way forward, addressing any perceived or actual barriers to the CCC providing evidence during this crucial period. We also propose to write to the CCC asking for a response to the conclusions and recommendations in this report.

Scotland’s Climate Change Plan must be first about delivery: it must explain how the Scottish Government will use its powers and capacity to bring down emissions in line with carbon budgets and with the principles of a just transition. It should be clear about areas where the Scottish Government does not have all the levers, but in the many areas where it does, should set out how it will use them. This means setting out those policies, current or future, that the Scottish Government proposes to use to drive down emissions. Wherever possible, these should have timelines and targets, be costed, and state clearly who within government or elsewhere in the public sector will lead on delivery. The role of partners outside of government in relation to each major policy should also be set out. Specific, measurable policies with clear outcomes should be at the centre of the Plan.

There are good aspects to the draft Plan, such as the inclusion of Just Transition indicators discussed later in this report, but the Committee agrees with stakeholder views that it falls short in some areas as a delivery document, with insufficient detail on key policies and the mechanism to achieve specific outcomes. There are some specific recommendations later in this report on particular policies within specific sectors which the Committee considers require a clearer focus.

Having a comprehensive mix of “early warning indicators” across the breadth of the Plan will also be vital if it is to be a successful delivery document. Not only would this assist the Parliament, academia and regulatory bodies in their scrutiny work, it would also provide a public service of setting out progress in particular areas in a relatively straightforward way. The Committee recommends that:
the Scottish Government should publish early warning indicators at the earliest opportunity;
the Scottish Government should consider renaming the indicators to be “performance indicators”. Regardless of this, they should frame the indicators clearly around performance – with each one tracking a clear delivery goal with read across to corresponding significant policies in the CCP;
the Scottish Government should consider developing an indicators-based “dashboard” as a transparent and accessible way of communicating net zero progress to the public. The CCC should have a role in monitoring progress against the relevant indicators.

Emissions reduction policy is built on long-term climate and economic modelling, with large built-in uncertainties. Broadly, governments seeking to map a long-term plan of action can respond to this in one of two main ways:
they can share only the outputs (i.e. the final figure that is reached on a cost or benefit calculation) and not the underlying assumptions which are key inputs for their modelling. Governments could defend this approach by reference to the technical and contingent nature of modelling inputs, and the risk of these becoming a distraction, when the focus should be on overall policy direction and prioritisation and on delivery. They could also compensate by providing more detailed narrative sections about the detail of policy and its delivery;
or they can publish all their main assumptions and modelling processes within or alongside the Plan, making these part of the overall conversation about whether the action plan looks likely to meet its aims, and where the main risks might lie.

The CCC's Balanced Pathway is based on their own modelling using the policy assumptions in their Carbon Budget advice. Alongside their advice, the CCC published a " full dataset " setting out the data for each measure that can be used to reduce emissions and a methodology report setting out the analytical approach behind their advice.

This is the first Climate Change Plan to include estimates of the costs and benefits of the transition. This amounts to progress and is welcome: it partially improves our understanding about the levels of investment required and what mitigation policies might produce savings, and at what level. However data and assumptions, and information on modelling, is presented inconsistently in the Plan and key information is often missing. The Committee recommends that the final Plan should:
Provide more of the underlying data used for its modelling and outline how the modelling was used to produce cost and benefit estimates.
Especially in cases where the Scottish Government lacks significant agency in relation to a particular policy or outcome (an example might be how the affordability of electric vehicles could affect take-up), set out any significant uncertainties and risks and how they have sought to address these.
Overall, the Scottish Government should welcome informed commentary and constructive criticism on the data and assumptions from policy experts (even if it cannot be provided within the period of Parliamentary scrutiny) recognising the iterative nature of climate change policy-making.

Some narrative sections of the draft Plan allude broadly to costs falling on particular sectors or refer to private sector investment or UK Government investment being needed. Other than this, the draft does not quantify which costs associated with a particular policy fall where. The Committee accepts that it would be challenging to do so, and that longer-term estimates in particular would be highly contingent. However, there is a balance to be struck and the Scottish Government should reflect on whether the draft falls short as a “signal” to the public and stakeholders (including private investors) about where costs, incentives, and reliefs will fall, especially in the current absence of long-term Scottish Government strategies on heat in buildings, energy and the just transition and rural support.

As highlighted by the Scottish Fiscal Commission's report, climate mitigation policies that meet the carbon budgets will require significant upfront public sector investment. The annual budget process is therefore crucial to ensure that the policies and proposals outlined in the CCP can be delivered in line with the projections. To allow the Parliament to properly scrutinise this the Scottish Government should set out the linkages between the final Plan and the annual budget process using the tools developed through the Joint Budget Review.

The Scottish Government should now have had time to reflect and act upon findings by Audit Scotland and the Public Audit Committee on sharpening its governance arrangements for delivery of climate change policy. The Committee notes that the Scottish Government undertook to carry out a "full climate governance framework review" within this parliamentary term and asks for an update on the progress of this review, and the changes made as a result of it.

Effective cooperation and coordination at inter-governmental level will be crucial in relation to many, if not most, major policies in the Plan. In some areas, successful delivery is significantly dependent on UK Government actions. The draft CCP is largely dependent on electrification. The pace of decarbonisation set by the carbon budgets is challenging, with changes required across all sectors of the economy to meet them. However lower electricity costs would help several key areas decarbonise at the pace required. The Committee calls on the Scottish Government to work with the UK Government and other UK administrations on a joint plan of action for more affordable electricity including by considering the decoupling of electricity and gas prices and the role of different renewable energy technologies.

The Committee asks the Scottish Government to note the findings of the Local Government, Housing and Planning Committee, including that local authorities feel they lack clarity on sources of net zero funding, and still lack the “roadmap” to net zero that this Committee recommended in 2023.

The Local Government, Housing and Planning Committee’s report underlines the critical role local authorities will play in reducing emissions from three sectors in particular - buildings, transport, and waste. But they will be unable to play this role fully without more support and the sharing of best practice. We welcome the advent of a local government climate change intelligence service in this Session, but consider that local government needs additional resourcing and clear delivery plans for specific policies agreed with central government in order for it to play its required role in net zero delivery.

Procurement is another area where all levels of government and public bodies, can help deliver significant emissions reductions, along with the twin benefit of promoting local produce and services and local, regional and national supply chains. The Committee welcomes that updated guidance on sustainable procurement is being developed. We see this as an opportunity for the public sector to deliver emissions reductions by embedding sustainable procurement practices while also securing value for money. The Committee recommends that the updated guidance empowers and equips decision-takers to make sustainable procurement choices and, where consistent with emissions goals, take decisions that support local goods and services, and local supply chains. It should be backed up by the availability of training.

Communities and community groups are delivery partners in efforts to reduce emissions. However we heard concerns about lack of long-term and revenue funding and how this inhibited the role local groups could play. The Committee recommends the CCP set out how community‑led and place‑based climate action will be enabled through multi‑year funding, including revenue funding, and capacity support which could include support through the Just Transition Fund.

In the final Climate Change Plan, the Scottish Government should set out clearly how households and individuals will be supported to understand what is required of them and to access clear information, advice, funding and practical help - including through trusted local organisations.

The Committee welcomes the Cabinet Secretary’s announcement of the reopening of the Climate Engagement Fund. The Committee believes that engagement should focus on areas and groups most affected by the transition, in line with the principles of a Just Transition.

As the focus turns from scrutiny of the CCP to delivering its policies, the Scottish Government should communicate its contents clearly and accessibly using a variety of formats and approaches. This should include setting out what the Plan will mean for people’s everyday lives, how progress will be tracked, and the wider social, economic and health benefits of the transition. It could make use of the early warning indicators “dashboard” we proposed earlier. The Scottish Government’s communication on net zero delivery should be developed with input from communities and other relevant groups, including young people, cultural bodies and researchers.

The draft Plan is significantly reliant on negative emissions technologies to stay within carbon budgets. Notably, it models for double the level of abatement during Scotland’s third budget period than the Climate Change Committee did in their “balanced pathway”. It is to be hoped that NETs will play a major role in decarbonisation. However, they remain a developing technology, largely untested at scale. The economics of their use at this scale is also uncertain. Placing this level of reliance on NETs does appear to be a significant delivery risk that will require careful monitoring and reappraisal in the light of new evidence and data. Assuming the finalised Plan maintains a similar position to the draft on NETs, we see this as a legacy issue for a future energy committee to investigate in the next Parliamentary session.

In the meantime, we ask the Scottish Government to outline how it proposes to monitor whether NETs are developing at the pace required to meet the ambitions set out in the Plan and what contingency planning it has undertaken for a scenario in which NETs do not deliver at this scale.

The success of the entire Climate Change Plan substantially depends on an abundance of affordable, clean electricity. This will require an effective inter-governmental strategy to achieve three-long term strategic needs:
Increased generation of electricity from renewables;
Increased Grid capacity and robust Grid infrastructure;
Increased electricity storage, whether in batteries, pumped storage hydro, or through “storage” as fuel (i.e. hydrogen).

The Energy Supply section of the draft Plan is useful in setting out the Scottish Government's ambitions for renewables, but with insufficient detail on how the Scottish Government proposes to get there, especially in the absence in this Session of an updated energy strategy that could be read alongside it. The Committee asks the Scottish Government to reflect on how this section of the Plan could be strengthened to provide clearer signals to the renewables sector of the specific actions the Scottish Government proposes to take, especially in relation to increasing generation and storage.

Specifically, we also recommend that the Scottish Government conduct an audit to identify key existing infrastructure which could be utilised in renewable energy infrastructure. The Committee has heard recently about opportunities for hydrogen and sustainable aviation fuel development at Grangemouth, but other sites will also present opportunities.

Community benefit and ownership present strong opportunities to ensure benefits of the net zero transition are felt by communities across Scotland. The Committee welcomes the recently announced review of the good practice principles on community benefit from onshore renewable energy. This is an opportunity to set out a clear message on how future community benefit from renewable energy developments will be strengthened, including clearer expectations for developers and transparent guidance for communities.

Particularly in the light of larger-scale renewables projects, including offshore developments, the Committee recommends that the Scottish Government, in guidance, set out a more strategic approach to community benefit, taking account of community need across Scotland and the just transition.

The Committee asks the Scottish Government to note views in evidence that the Plan should set out a clearer vision on the future for the oil and gas industry in Scotland, whether that is, as some argued, that it should commit to a clear end to oil and gas extraction in Scottish waters and map a path to it or, as others argued, that it should make a case for continued (albeit declining) oil and gas extraction, within an overall context of achieving a Just Transition to net zero by 2045.

The draft Plan places a significant reliance on the uptake of EVs - if this policy fails it seems unlikely the carbon budgets will be met. The Committee heard concerning evidence from industry and community groups about the challenges in delivering change at the pace required. There are challenges around upfront affordability, the cost of charging, and the significant inequalities that exist within that, and the knock-on effects on efforts to reduce car mileage.

The Committee recommends that the final Plan set out how the Scottish Government intend to work with the UK Government and relevant stakeholders to overcome these barriers. The uptake of EVs and the delivery of charging infrastructure should be monitored through specific early-warning (or performance) indicators.

The 4% reduction in car mileage by 2030 target in the draft CCP is a considerable move away from the real terms 20% reduction target committed to in the last CCP update. Even with the much more manageable target, the Committee heard evidence that efforts to encourage modal shift were likely to be unsuccessful with a focus entirely on “carrots” and not on “sticks” in the draft CCP. Despite this, the Committee also heard that improvements to active and sustainable travel were still needed to encourage people out of cars. With 2030 not far away, the CCP should set out more about how the Scottish Government plans to reach its modal shift targets and the role it sees for policies to discourage car use.

The Committee is concerned by industry views that the draft Plan sets out ambitions for electrification or modal shift that appear unrealistic and with insufficient detail on delivery. We note views that “drop-in” biofuels may offer a more realistic route to decarbonisation in the short term. The Committee asks the Scottish Government to reflect on this evidence and continue to engage the industry in discussions.

The delay in implementing the ban on biodegradable municipal waste, announced around the time the draft Plan was laid, raises doubts about the draft's projection that emissions from energy from waste will peak in 2026. Whilst emissions have been low, relative to other sectors, they are rising and there is a clear risk that if they continue to rise they could offset some progress in other areas. Some waste is still to be diverted from landfill into other waste management streams, including likely energy from waste, up until the BMW ban begins to be enforced in 2028. The Committee asks the Scottish Government to:
set out in the final Plan revised projections on emissions in this area, as a consequence of the delay in full enforcement of the ban, and any other relevant developments;
set out in the final Plan any further actions the Scottish Government intend to take to stem the increase in emissions from energy from waste pending the ban;
indicate whether other parts of the Plan require revision to account for such revisions.

While the focus of the Plan is necessarily on emissions from within Scotland, the bigger picture of global climate emissions should not be lost. Consumption emissions are referenced in the draft Plan. However, the Committee heard that there should be better alignment between emissions reduction policies and the circular economy strategy, to mitigate the risk of offshoring emissions. The Committee recommends that the Scottish Government consider including an early-warning or performance indicator specifically tailored to prevent emissions being moved “off balance sheet” through offshoring goods consumed in Scotland that could be produced here.

The Committee notes the crucial role the decarbonisation of buildings will need to play for Scotland to meet its carbon budgets. The Committee welcomes the Local Government, Housing and Planning Committee’s scrutiny of the buildings sector and agrees with the recommendations and conclusions set out within their report.

The Committee welcomes the Economy and Fair Work Committee’s scrutiny of the Business and Industrial Process sector and agrees with the recommendations and conclusions set out within their letter to us. The Committee requests the Scottish Government include in its responses to Committee reports, a response to the conclusions and recommendations outlined in the letter (Annexe F).

The Committee notes the relationship between the decarbonisation of industry and several of the issues considered within our own scrutiny – including negative emissions technologies, the cost of electricity, and the Just Transition and asks the Scottish Government to consider the relationships between these areas.

The Committee welcomes the Rural Affairs and Islands Committee’s scrutiny of the Agriculture sector and agrees with the recommendations and conclusions on this topic set out within their report. The Committee notes the Rural Affairs and Islands Committee could not come to a conclusion on the emissions reductions pathway in the draft Plan without clarity on the agricultural reform programme.

The Committee notes the significant role the draft Plan envisions for woodland creation and peatland restoration. The Committee welcomes the Rural Affairs and Islands Committee’s scrutiny of the Land Use, Land Use Change and Forestry sector and agrees with the recommendations and conclusions on this topic set out within their report.

The Committee notes the Economy and Fair Work Committee’s scrutiny in relation to Just Transition and agrees with the conclusions and recommendations in their letter.

We welcome the inclusion of Just Transition indicators in the draft Plan – this is a positive step forward towards monitoring what progress is being made in delivering a Just Transition, and critically, taking corrective action where progress is lacking.

During scrutiny of the draft Plan, we have seen the Just Transition in action, supported by both UK and Scottish Government funding, for instance in the launch of Aberdeen’s new Energy Transition Skills Hub. However, we also heard concerns about the economic future of Aberdeen and the wider north-east, as oil and gas energy scales down. Other communities in Scotland face broadly similar challenges. The Scottish and UK Governments must work together to develop site-specific Just Transition plans everywhere they are needed, focusing on what communities will need during the energy transition period and what new opportunities the transition will create.

Just Transition funding from both governments will be crucial in the short to medium term for communities going through the energy transition but should also have a strategic purpose, attracting business to invest in renewable energy projects and associated supply chains. As noted earlier in the report, this also requires government to set clear signals to the market, in the Plan and in other key strategy documents. The Committee is concerned to note that less than 20% of the £500 million Just Transition Fund for the North East and Moray has been committed to so far given the vital role Just Transition funding can play, and asks the Scottish Government to outline in the draft Plan how it proposes to make use of remaining funding. We ask the Scottish Government to note views that groups working at the “front line” of the Just Transition may need revenue funding more than capital funding in order to provide sustainable support.