Published
March 13, 2018

What Scotland’s new Climate Change Plan means for business

On Wednesday 28th February 2018 the Scottish Government published its new Climate Change Plan, setting the country’s emissions reduction targets for the next 15 years as well as a plan for how to meet them.

Wondering how it relates to your business? We’ve picked out the top 5 things businesses need to know.

1. The Plan sets out how Scotland will continue to become a low carbon country

In 2009, the Scottish Government unanimously passed one of the most ambitious pieces of climate change legislation anywhere in the world: Scotland’s Climate Change Act. The Act specified how Scotland would reduce its greenhouse gas emissions: 42% by 2020 and 80% by 2050 (from a 1990 baseline). It also stated how Scotland would transition to a low carbon economy and increase sustainable economic growth. The country is on track to meet its 2020 target, largely due to the decarbonisation of its energy sector.

The new Climate Change Plan is the third to be published since 2009 and specifies the targets Scottish Government has set itself for the next 15 years in order to meet this Act. The overarching target is a 66% reduction in greenhouse gas emissions by 2032.

What is a low carbon economy?

Greenhouses gases, such as carbon dioxide and methane, are produced by many of the activities central to economic activity: from generating electricity and food production to disposing of waste. A low-carbon economy is based on low-carbon power sources, such as renewables, and is thus more climate-friendly than an economy based on fossil fuels. Businesses further contribute to a low-carbon economy by lowering their own carbon footprints, usually through a reduction in energy consumption, improved efficiency, and an improvement in the sustainability of their operations.

2. The Plan sets clear emissions reduction targets for 7 ‘sectors’

The Plan identifies 7 ‘sectors’ which currently produce most of the country’s emissions: electricity generation, buildings, transport, industry, waste, agriculture, and LULUCF – land use, land use changes and forestry. Every Scottish business relies on at least three of these fundamental things in order to operate – and so is useful when setting your own targets.

Scotland’s “Pathway to 2032” showing where emissions reductions will come from. Click to enlarge. © The Scottish Government

Electricity

  • By 2030, 50% of Scotland’s energy needs will be met by renewables
  • By 2032, emissions will fall by 28% over the period covered by the plan (2018 – 2032) and Scotland’s electricity system will supply a growing share of Scotland’s energy needs
  • Electricity will be increasingly important as a power source for heat and transport
  • An Energy Strategy was published in December 2017 and sets out the future of energy in Scotland in more detail

Buildings

  • 33% reduction in emissions from Scotland’s buildings as a whole between 2018 and 2032
  • 53% from non domestic buildings
  • This will largely come from improvements in insulation, building fabric, heating and cooling and energy efficiency

Transport

  • 37% reduction in transport emissions between 2018 and 2032
  • Achieved largely by phasing out new petrol and diesel cars and vans by 2032
  • Increased uptake of ultra-low emissions electric and hydrogen vehicles
  • Low emissions zones in Scotland’s 4 biggest cities

Industry

  • 21% reduction in industrial sector emissions by 2032
  • Driven by diversification of the fuel supply, increasing energy efficiency and fuel recovery, and participating in the EU Emissions Trading System (EU ETS)

Waste

  • 52% reduction in emission from the waste sector by 2032
  • Landfilling of biodegradable municipal waste phased out by 2021
  • Achieve 50% reduction in food waste by 2030, in line with a UN Sustainable Development Goal
  • Adopt a circular economy approach to resource management

Agriculture

  • Agricultural emissions expected to fall by 9% by 2032
  • Increase in adoption of low carbon farming practices
  • Agricultural land will act as a carbon sink

Land use, land-use change and forestry

  • This sector will increasingly act as a net carbon sink
  • 50,000 hectares of degraded peatlands restored by 2020, and 250,000 by 2030
  • Woodland cover will increase from 18% to 21% by 2032

3. Every business will be affected…

Scottish businesses rely on the infrastructure, goods and services provided by the ‘sectors’ above, and so will undoubtedly be affected by these targets. In order to prepare, now is a good time to begin looking at the emissions associated with your businesses and how these can be reduced.

A simple way of doing this is to think about your supply chain: how are the goods and services your business buys produced, and what do your customers do with your finished product or service?

What are the different types of emissions?

Emissions associated with business fall into 3 different categories:

  • Emissions your business generates directly, such as by manufacturing something (scope 1)
  • Emissions related to the utilities you purchase and use, such as electricity (scope 2)
  • Emissions related to other goods and services purchased, such as transportation and investments (scope 3)

Find out more about the different ‘scopes’ of emission on the Carbon Trust website.

4. … and every business effects the Plan’s success

The ‘sector’ targets described above cannot be achieved without businesses lowering their carbon footprint; and so in the words of the plan, “the Scottish Government will continue to work closely with businesses to provide an economic environment that encourages and supports them in their efforts to decarbonise”.

The plan elaborates on this, saying:

“We will continue the work that we have been doing with businesses in Scotland to support the low carbon economy – helping businesses use their experience, adaptability and willingness to diversify in order to become more competitive. The Scottish Government, and its enterprise agencies, will continue to deepen engagement with Scotland’s business community to better understand the opportunities and to build a supportive regulatory and business development environment within which Scottish businesses can thrive.”

Responding to the Plan, Dame Susan Rice, chair of Scotland’s 2020 Climate Group, said:

“The ambitious changes outlined by the Climate Change Plan will require the full support of business if they are to be successfully delivered. It is crucial that Scottish Government inspires, engages and supports businesses to make climate-positive changes to their operations, particularly in decarbonising energy usage, electrifying transport and reducing waste, all of which require considerable private investment and commitment.”

5. Decarbonisation is an opportunity for businesses; not decarbonising is a risk

© Nick Youngson

At the moment only public bodies in Scotland have to report on emissions as part of Climate Change Reporting. However, other businesses who understand their emissions and actively try to reduce them will reap the benefits.

This latest Climate Change Plan aims to encourage more businesses to become low carbon, stating:

“Businesses that can demonstrate to consumers that they follow a low carbon route will secure a competitive advantage over those that do not and will save costs through efficiencies along the way. Through this Plan, and other companion documents such as our Energy Strategy, we are creating the best possible business environment in Scotland, sending a clear signal that Scotland is the place to be for investment in low carbon and associated technologies.”

Conclusion

Scotland can’t be a low carbon country without a low carbon economy. The targets set by the Scottish Government have implications for all Scottish businesses, and present a chance to gain competitive advantage for early adopters of a low carbon business model. Spend time understanding how your business will be affected, and where opportunities exist to lower the carbon footprint of your operations. Reducing emissions will always make good business sense.

More Information