The Scottish Government’s decision to drop the Heat in Buildings Bill in its current form may have been a relief to many households and businesses but equally there is frustration and disappointment.
What we can all agree on, however, is that the drive to net zero is a laudable but complex balance we need to get right.
In my role as president of the Scottish Chambers of Commerce, Scotland’s leading business community, we support all industry sectors and raise concerns so that we can protect and grow jobs and create much needed economic growth.
So, I echo the view of my vice-president that we had faced a flawed Bill that failed to fully understand the impact on the Scottish property market and non-domestic premises such as factories, offices, warehouses, and even surgeries.
However, as a business leader with Mitsubishi Electric, the delay is certainly bad for business – and not just ours. As the largest producer of heat pumps in the UK, with the main plant in Scotland, we can see the fantastic economic growth and investment opportunities for renewable heating in Scotland.
What is not in dispute is that decarbonising home heating is an essential part of meeting net zero. Tens of thousands of homes in Scotland already have a heat pump but this needs to grow and that requires decisiveness, not delay and division.
Yes, we need to address the concerns of those negatively impacted but we also can’t afford to delay at a time when we should be supporting the switch to renewable home heating and encouraging businesses to invest and innovate at a more rapid rate.
Uncertainty
Providing clear policy guidance and regulation needs to happen well before the upcoming Scottish elections in May next year. Industry needs certainty around policy and direction to fuel the dynamism that already exists in the industry, and increase employment, help growth in the green economy and protect the environment.
A prolonged delay and potentially kicking it into the long grass until after the Holyrood election will further exacerbate the issues with planning, installers’ training, energy price realignment, and misinformation.
Only 11 % of installers are capable of installing a heat pump – significantly short of the requirement to meet the target in Scotland – and this will further delay the investment in training.
If we are going to make positive progress on the whole heating market, we need to work together on it and understand that commercial and residential, homes and businesses, are not the same challenge.
What doesn’t help is the confusion after the recent comment by the Scottish Government that hydrogen power is an exciting development.
The Climate Change Committee is scheduled to report to the Scottish Government on May 21, with the recommendations likely to be the same as to the UK Government, i.e. there is no room for hydrogen in residential heating.
Low-carbon heating systems are all electric and hydrogen is not a solution for domestic heating. Heat pumps are crucial to the Scottish Government’s net zero target of 2045.
We need accelerated progress on energy price realignment with gas currently the cheapest option, although all policies push to non-burning of fossil fuels.
Reducing energy prices to consumers means electric heating systems will be cheaper to run and support fuel poverty aspirations.
The negative comments on the performance of heat pumps and promotion of hydrogen are inaccurate distractions to slow down policy, and in this case it appears successfully.
In England, the Future Homes Standard will become mandatory, with a stated aim to ensure that new homes built from 2025 will produce 75-80% fewer carbon emissions than homes built under the current building regulations. The Heat in Buildings Bill was the Scottish equivalent.
The UK Government will implement changes to permitted development rights in England to remove the condition that air source heat pumpa can’t be installed within one metre of the property boundary.
The budget for the Boiler
Progress, it appears, does not come quickly with the flick of a switch in Scotland
Upgrade Scheme in 2024/25 will increase from £150 million to £180m and, in 2025/26, from £150m to £295m. The clean heat market mechanism will force boiler manufacturers to move to heat pump manufacturing.
England is improving and supporting a move to low-carbon heating for homes, while Scotland is now dragging its heels, albeit providing an opportunity for a quick fix to some of the issues the original Bill raised. We need to use this pause to shape any proposed revised legislation so that it better balances the needs of households and businessesb and delivers the clarity and certainty that underpins any opportunity for progress.
The SCC, and indeed Mitsubishi Electric, are ready and willing to work with Holyrood on a revised Bill that balances the complexities of the drive to renewable energy within an informed, practical framework.
Progress, it appears, does not come quickly with the flick of a switch in Scotland. It’s time for our politicians to pump our drive to a greener future.
Originally published in The Herald on 16/03/2025.
