Chamber and committees

The consultation on the draft Energy Strategy and Just Transition Plan closed on 9 May and we received a very high level of responses. We will shortly publish all consultation responses on the Scottish Government’s Citizen Space website (according to the preferences stated by respondents in their Respondent Information Form).

The judicial review was brought against Circularity Scotland, which is a private, non-profit entity, created by industry to act as the scheme administrator for DRS. The Scottish Government was not involved in the proceedings.

The court has found that CSL wrongly applied one aspect of the Deposit and Return Scheme for Scotland Regulations 2020 in setting the reasonable handling fee for retailers operating return points. The court did not find that the DRS Regulations are unlawful, nor did it find that the Scottish Government acted unlawfully in setting up DRS or in making the DRS Regulations. The Scottish Government will consider the decision in this case as well as any implications for the Deposit Return Scheme as we work towards launch of the scheme in October 2025 at the earliest.

This is a matter for individual private and public organisations as the Scottish Government is not part of any public-private partnerships directly developing heat networks in Scotland. Other public bodies may be part of public-private heat network delivery partnerships but this information is not held centrally by the Scottish Government. Therefore, the Scottish Government is not in a position to answer this question accurately.

Heat Networks are large scale infrastructure projects requiring multiple years of development before reaching capital readiness and beginning construction. Therefore, we have committed multi-year funding though Scotland’s Heat Network Fund (SHNF) which makes £300 million available to support the development and roll out of heat networks across Scotland during this parliamentary term. The fund aims to stimulate investment and grow the low carbon heat sector, whilst reducing greenhouse gas emissions.

To date Scotland’s Heat Network Fund has allocated £6,727,389 to four heat network projects in Scotland. Of these, three are public sector heat networks, receiving a combined £6,339,315. The other is a housing association which received £388,000 in SHNF funding. In addition to this, we currently have several applications undergoing a formal assessment process and are engaging with many pre-capital stage projects through our Heat Network Support Unit.

In September 2022, we launched the Heat Network Support Unit (HNSU) which is already working to develop ambitious heat network projects that will help us progress towards our deployment targets. The HNSU provides advice and grant funding for pre-capital works such as developing feasibility studies and Outline Business Cases. This support is predominantly aimed at the public sector in order to increase the scale and pace of heat network project development across Scotland and build capacity across the sector to deliver successful projects. The Heat Network Support Unit has provided approximately £500,000 of support creating a pipeline of multiple projects that, if found to be viable, may progress towards capital funding and construction in the near future with a potential total capital value of approximately £150 million. Many of these projects may be supported via Scotland’s Heat Network Fund.

Scottish Government is also currently providing approximately £26 million of support to seven heat network projects through the Low Carbon Infrastructure Transition Programme (LCITP) which are due to commission by the end of 2024.

Support offered through our heat network funding programmes is reflected within our quarterly reports which provide industry, investors and other stakeholders with a view of the pipeline of heat networks projects progressing in Scotland.

The Scottish Government regularly discusses net zero policy and progress towards targets with the UK Government. The primary vehicle for our engagement with the UK Government is the Net Zero Inter-ministerial Group (IMG), which meets regularly and involves all four governments of the UK. In the last year, the Net Zero IMG has met on 26 October 2022, 27 April 2023 and 28 June 2023.

Furthermore, the Scottish Government regularly corresponds with the UK Government regarding net zero issues to assure continued progress in achieving our gas emission targets. For example, I recently wrote to the Secretary of State for Transport, on 12 July 2023 to highlight the role Scotland could play in the production of Sustainable Aviation (SAF) - which could help to significantly reduce emissions - and to ask whether the UK Government intends to provide a form of price support mechanism for the substantially higher costs of SAF. Likewise, the Circular Economy Minister recently met with the Minister for Environmental Quality and Resilience in June 2023 to discuss the future of deposit return schemes (DRS) across the UK following the UK Government’s decision to refuse an exemption for Scotland’s DRS from the Internal Market Act.

Throughout our engagement with the UK Government, the Scottish Government continually advocates for the greater ambition required in reserved areas in order for both UK and Scottish emissions targets to be met. The Scottish Government agrees with the Climate Change Committee’s recent UK progress report, which emphasises that greater urgency is required from the UK Government if emissions targets for 2030 and beyond are to be met. We support the Committee’s calls for further and faster UK Government action in a range of crucial reserved areas such as hydrogen, electricity grid upgrades and decarbonisation of the gas network. We will continue to press for more ambitious action in these areas in our discussions with the UK Government.

The consultation on the Zero Emissions Vehicle mandate and CO2 regulations for new cars and vans closed on 24 May 2023. The UK and devolved governments are currently analysing the responses to the consultation ahead of the publication of a response from all four nations this year.

Ministers and officials did meet with Circularity Scotland in April, May and June. A range of issues were discussed at these meetings including matters relating to operational aspects of the Deposit Return Scheme, milestones and planning, and the impacts of the 11 th hour decision by the UK Government to grant only a partial and temporary exclusion to the Internal Market Act. All Ministerial engagements are published on the Scottish Government website .

Circularity Scotland informed the Scottish Government in March 2023 that a substantial delay to the scheme would pose significant financial challenges for them. This issue was highlighted to the UK Government via a letter to the Prime Minister which urged the UK Government to agree to an exclusion from the Internal Market Act for the deposit return scheme.

Copies of the correspondence between the Scottish Government and UK Government have been published as part of an EIR and can be found on the Scottish Government website .

As part of deposit return scheme governance, the Scottish Government meets with a range of stakeholders via the Ministerial Assurance Group, Executive Oversight Group and Producer, Retailer and Hospitality Sectoral Groups. Many of these businesses have told us that, because of the 11th hour decision of the UK Government to impose vague and unworkable conditions on Scotland’s scheme and make progress impossible, their businesses have been impacted - both operationally and financially.

Nearly every sector of the economy, from finance to chemistry to engineering, has a vital role to play as we transition to a net zero economy. This is why green skills are central to the Scottish Government’s National Strategy for Economic Transformation.