UK Government net zero policy changes and what they mean for Scotland. – SPICe Spotlight

SPICe Spotlight | Solas air SPICe
On 20th September 2023, the UK Prime Minister gave a speech focused on setting out a ‘new approach to Net Zero’. It contained announcements of policy changes in key sectors such as transport and heating buildings. This blog focuses on those two sectors, although the announcements also contained commitments in various areas where policy does not currently exist, for example, taxing meat and compulsory car sharing. The blog explains what UK Government policy was prior to the announcements, what has been announced in detail and then what the implications are for net zero policy in Scotland.
There has been some misunderstanding as to what the planned phase-out dates mean. All the prior and newly adopted policy on the phase-out of transport and heating technologies, from UK and Scottish Governments, apply to the adoption of new systems / units and not to the phase-out of all systems i.e. from a certain date new cars or heating systems should be low carbon, however, existing high carbon cars and boilers can continue to be used from these dates.
Prior UK policy: The UK Government’s phase-out timeframe for the sale of new petrol and diesel vehicles has gradually developed over the last decade or so. The first announcement of its intention to end ‘conventional car and van sales’ by 2040, was made in 2011 and reaffirmed in a 2018 transport strategy. In early 2020, they brought forward the phase-out date to 2035 and removed hybrid vehicles from the definition of what was to be permitted. In November 2020 the phase-out date for the sale of new petrol and diesel cars and vans was brought forward to 2030, with all vehicles being required to have “significant zero emissions capability” from 2030 (plug-in and full hybrids still permitted) and be 100% zero emissions from 2035 (with hybrids no longer permitted). All of these phase-out dates were meant as policy signals (to industry and consumers) and were not legislated for.
Updated UK policy: the date for when the purchase of new petrol and diesel vehicles will no longer be permitted has been postponed five years until 2035. There is, however, still a zero-emission vehicle (ZEV) mandate in place. This requires all vehicle manufacturers to ensure that 80% of their new cars (70% of vans) sold in 2030 (in Great Britain) must be ZEVs, reaching 100% in 2035.
Impact on Scottish ambitions: existing Scottish Government policy in this area involves a commitment to
The Scottish Government does not have the powers to ban these vehicles with representatives stating that they will now ‘have to move to 2035’. The existing policy wording of phasing out ‘the need for’, may relate to ensuring there is adequate charging infrastructure to enable electric vehicle use in Scotland, an area where the Scottish Government does have a large amount of control.
It is worth noting that UK electric vehicles sales have been growing at a rate above that which is forecast for the achievement of net zero (although Scotland’s uptake is slightly behind target), and the ZEV mandate will also apply to the vast majority of new vehicles in 2030. The UK Labour Party has said that it would reverse the change if it were in power.
There is less recent history of policy development regarding the phase out of new fossil fuel boilers in existing buildings – and there is also more variety, with different timeframes for different types of boilers i.e. gas and oil, and for new and existing buildings. This variety has led to some confusion, with the earlier prospective dates in some areas e.g., new buildings, sometimes conflated with those in others e.g., existing buildings.
Prior UK policy
New oil/liquid petroleum gas (LPG) boilers in existing buildings: previous policy with respect to phasing out new oil boilers had been trailed in the 2021 UK Heat and Buildings Strategy with plans to
There had been a UK Government consultation and an impact assessment over 2021/22 on this proposal but the government had not published a response to the consultation.
New gas boilers in existing buildings: again, policy here was set out in the UK Heat and Buildings Strategy
Updated UK policy: the September speech announced policy for the phase out of both new gas and oil boilers from the same date; 2035.
As highlighted, previous policy was only due to apply when replacing a boiler, and 2035 was also the existing date for new gas boilers phase out – and this has not changed. Thus, it is only the date for the phase-out of new oil/LPG boilers that has changed.
Although moving the phase out date for new oil boilers by nearly ten years is a very substantial change for these heating systems, only around 6% of UK domestic properties use oil or similar heating, and so the overall impact to emission reduction expectations is limited.
It is also still UK Government policy for there to be a clean heat market mechanism (CHMM), (similar to the ZEV mandate). This would require a rising share of new heating system sales to be zero-emissions from 2024.
Impact on Scottish ambitions: the 2021 Scottish Heat in Buildings Strategy commits to
UK Government policy in this area has, therefore, diverged further from that of the Scottish Government and there is now marked differences in their respective plans. The Scottish Government language of ‘phasing out the need to install’ belies some complexity in this area of policy. The Climate Change Committee has stated that the ‘Scottish Government … does not have powers to restrict the sale of replacement fossil fuel boilers’. The Heat in Buildings Strategy, however, states that ‘regulatory proposals to require the installation of zero or very near zero emissions heating systems in existing buildings’ are coming this parliamentary term. There is currently no official statement from the Scottish Government on what regulations could look like, but there is a target of over 1 million homes moving to zero carbon heat by 2030, and a consultation on proposals due either by the end of 2023, or potentially into 2024.
The UK Internal Markets Act (UKIMA) 2020  exists to ‘ensure traders can continue to sell their goods freely across the UK without barriers’ and means that goods available for sale in one part of the UK ‘can be sold in any other part of the UK’. An exclusion from UKIMA’s market access principles can be sought, an example being the earlier single use plastics ban in Scotland. Any attempt to effectively prohibit the ability to sell a product such as a boiler, in Scotland, before the rest of the UK, would need to consider the relevance of UKIMA.
There are reasons to think that the UK policy change for fossil fuel boiler phase-out is very significant to Scottish Government ambitions. For one, heat pump (a key low carbon heat technology) uptake across the UK is very slow and for another, a UK Government policy reversal seems much less likely, with the UK Labour Party likely to stick with the changes to boiler targets.
The oil and gas boiler phase out timeframes set out above related to the installation of new heating systems in existing buildings. There is a different timeframe for ending the installation of fossil fuel heating in new buildings.
Prior UK policy: The Future Homes or Future Buildings Standard is due to be implemented in England from 2025 and would mean:
This policy has been subject to a period of consultation, but the specific details have not been released. ‘Zero carbon ready’ means that once the electricity supply is zero carbon, so the related heating will be.
Updated UK policy: there was no reference in the speech to any changes to the Future Homes Standard, although as mentioned above, the final details of this plan are still to be published. At present, judging by the latest UK Government statement in this area, it is still policy to prohibit the installation of fossil fuel heating in new homes consented from 2025.
Impact on Scottish ambitions: the Scottish New Build Heat Standard (NBHS) will prohibit the use of ‘direct emissions heating systems’ in new buildings applying for a building warrant from 1 April 2024 onwards. There is no uncertainty over the Scottish Government’s ability to do this as it is ‘implemented using the Scottish Government’s fully devolved building regulations’.

Phase-out dates for new fossil-fuel vehicles and heating systems in UK and Scottish policy
Overall, the recent policy announcements from the UK Government may impact on Scottish net zero ambitions but perhaps to a variable degree in transport and heating buildings. According to the Scottish Government, while the announcements may ‘have a potentially significant impact … on the preparation of our draft climate change plan’ , the Plan will still ‘demonstrate how the Scottish Government will meet our targets’. With significant setbacks in other important areas of emission reduction, there may need to be substantial policy changes in some sectors to ensure that overall emission reductions continue to progress and legally binding targets are reached. 
Niall Kerr, Senior Researcher, Climate Change and Net Zero
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