The Scottish Government published a draft Climate Change Plan (CCP) on the 6 November 2025, with this date marking the start of 120 days of parliamentary scrutiny of the Plan. This blog addresses the background to the publication, some of the most important statutory requirements for the Plan and finally it looks at how the requirements to publish costs and benefits have been implemented.
Background
The Bute House Agreement committed the Scottish Government to publish a draft Plan during the first half of the current parliamentary session (by the end of November 2023). This commitment was abandoned in early November 2023, with the Government citing changes to the UK Government’s net zero policies, the ‘constraints of devolution’ and an ‘uncertain economic outlook’.
The then Chief Executive of the Climate Change Committee (CCC) stated that he was ‘very disappointed in this delay’ and that he was ‘not sure why the UK Prime Minister’s September 2023 speech on Net Zero would require a delay by the Scottish Government’. There is a SPICe blog on these net zero policy changes from the UK Government.
This decision to postpone the CCP also delayed the CCC’s annual report on progress in reducing emissions in Scotland. The CCC’s Progress Report, arrived in March 2024 and reported that achievement of the statutory 2030 emissions target was now “beyond what is credible” and that “overall policies and plans in Scotland fall far short of what is needed to achieve the legal targets.”
The following month the Scottish Government announced their intention to make changes to climate legislation to redraw the 2030 target, to move Scotland to a system of 5-yearly carbon budgets and away from a system of annual targets, and to remove the statutory obligation to produce a draft CCP by late 2024. At this time they also published a set of 19 climate policy actions, addressed by another SPICe blog, and recommitted to the net zero target for 2045.
These changes were implemented by the Climate Change (Emissions Reduction Targets (Scotland) Bill which became an Act on 22 November 2024. In order to set new emission reduction goals for the period between now and 2045, the Scottish Government first waited on advice from the CCC, which came on 21 May 2025. The draft regulations proposing emission levels for the period 2026-2045, were laid on 19 June 2025. The regulations were subject to the affirmative procedure, and were ultimately passed on the 8th October. From this date there was a statutory 2 month period before a draft CCP must be published. The draft Plan arrived on the 6th November 2025.
CCP statutory requirements
The CCP is a document which is meant to outline how the Scottish Government intends to meet its emissions reduction targets. It’s publication is required by law, with the details of some of the things it should contain underpinned by three pieces of legislation: The Climate Change (Scotland) Act 2009, the Climate Change (Emissions Reduction Targets) (Scotland) Act 2019 and the Climate Change (Emissions Reduction Targets) (Scotland) Act 2024).
Under this legislation, requirements have changed. Section 35 of the existing legislation sets out the current requirements, and below we detail some of the key points:
- Policies and proposals (Section 35 (2)): must be set out for meeting the emissions reduction targets during the plan period (the current Plan period is 2026-40). In this context, a policy is roughly a course of action that has been agreed, whereas a proposal is a suggested course of action which has not been confirmed and for which the detail may change. This subsection also sets out that the timescales over which the proposals and policies will take effect must also be set out.
- Sectors (35 (2 and 3)): introduced in the 2019 legislation, proposals and policies must be broken down across seven sectors; energy supply, transport (including international aviation and shipping), business and industrial process, residential and public (in relation to buildings in those sectors), waste management, land use, land use change and forestry, and agriculture). Previous CCPs have been broken down differently. The 2019 change was included to move to a structure that aligned to international emissions classifications used by the UN.
- Contributions to meeting emission reduction targets (35 (5)): the Plan must set out the respective contributions (‘in measurable terms’) towards meeting emissions reduction targets by ‘each sector’ and ‘each group of associated policies’
- Costs and benefits (35 (21)): an estimate of the costs and benefits associated with the policies set out in the plan. Introduced in 2019, with the current draft the first CCP required to adhere to this.
- Just Transition (35 (20, 22 and 24)): for the first time, the incorporation of the principles of just transition and climate justice are required, including how proposals and policies will affect different regions and sectors.
- an Assessment of the progress (35 (25)) towards implementing proposals and policies set out the immediately preceding plan. In the draft Plan this is carried out by sector in Annex 2, with the progress reported since the CCP update in 2020, as opposed to the last full Plan in 2018.
There are various other requirements set out in the legislation. For example, in addition to the seven sectors, proposals and policies must be set out across a number of themes including establishing regional land use partnerships, development of district heating, public procurement of ultra-low emission vehicles, and whole farm approaches to emissions accounting.
The last full CCP was in 2018, with a Climate Change Plan update (CCPu) published in 2020. In February 2024, Environmental Standards Scotland (ESS) reported on its investigation of the effectiveness of the Scottish Government’s CCP. It found that the CCPu did not fully meet statutory requirements to:
- provide quantified emission reductions for individual proposals and policies and
- provide clear timelines for all proposals and policies.
The effectiveness of the Scottish Government’s monitoring and delivery of proposals and policies was also a potential concern to ESS.
ESS noted that the 2019 Act had introduced new reporting requirements, which the CCPu was not required to meet. The Scottish Parliament’s Session 5 Environment, Climate Change and Land Reform (ECCLR) Committee had also acknowledged in its report that the 2021 CCPu did not have to incorporate all the new requirements of the 2019 Act, as it was an update of the 2018 CCP. ESS called for the Scottish Government’s next CCP to address these two failings and stated that “they will consider further intervention” if the draft of the next CCP is not compliant with statutory requirements “or poorly implemented”.
Elsewhere, since the last CCP, Audit Scotland have published multiple documents related to climate policy scrutiny:
- How the Scottish Government is set up to deliver climate change goals, April 2023
- Decarbonising heat in homes, February 2024
- Sustainable transport, January 2025
The Scottish Fiscal Commission published one of their Fiscal Sustainability Perspectives on Climate Change in March 2024, updating this with the latest data in September 2025. These explore how climate change could affect the Scottish Government’s fiscal sustainability looking at the potential effects on public finances from the damage caused by climate change, the costs of adapting to a changing environment and of taking action to meet Scotland’s statutory emissions targets.
A key element of parliamentary scrutiny will be considering whether the Plan has clearly set out the impact that policies and spending have had on emissions. In advance of the CCP being laid, the NZET committee wrote to Audit Scotland (AS), the Climate Change Committee (CCC), Environmental Standards Scotland (ESS), and the Scottish Fiscal Commission (SFC) to ask them to set out what a ‘good’ CCP would look like. This includes on how costs are set out in the CCP and how spending allocations are set out in the Scottish budget. In April 2025, NZET shared a summary of the responses and the full responses with the Acting Cabinet Secretary on Net Zero, and encouraged the Government to consider this advice and engage with these bodies in preparing the draft CCP. On the back of the draft CCP publication the NZET committee followed up with some of these bodies on the 25 November.
Deep dive into the costs and benefits in the draft Plan
Climate legislation in Scotland sets out requirements for the content of CCPs. Relating to the costs and benefits of the policies, the 2009 Act, as amended, states that:
“The plan must also set out the Scottish Ministers’ proposals and policies for assessing the impact of major capital projects (as defined in the plan) on meeting Scottish carbon budget targets.
The plan must also set out an estimate of the costs and benefits associated with the policies set out in the plan, broken down by reference to the period covered by a Scottish carbon budget in which those costs and benefits are expected to arise.”
Table 1 in the main CCP publication sets out the total estimated cost savings and financial benefits associated with the CCP, broken down into 8 sectors, and set out across three five-year periods aligned to carbon budgets. This sets out that total benefits expected to result from the policies in the CCP are worth £42.3 billion between 2026 and 2040.
The Scottish Government state that:
“Our analysis suggests that most of the direct benefits are anticipated to go to households and businesses. This is largely driven by the substantial forecasted financial benefits associated with the switch to EVs. But further substantial benefits are expected for farming businesses from the Common Agricultural Payment, and for forestry businesses through the economic activity around timber and carbon credits.”
Table 2 presents the estimated costs minus the savings and other benefits identified in Table 1. This suggests that over the same period the total net cost will be £4.8 billion, with benefits expected to be greater than costs during the 2036-40 carbon budget period.
If we combine the data in these two tables, this suggests that the total gross costs associated with the CCP between 2026 and 2040 will be £47.1 billion.
Table 1: SPICe calculated gross costs
Sector | 2026-30 | 2031-35 | 2036-40 | Total |
Residential and Public Buildings | 1,726 | 556 | 644 | 2,905 |
Transport | 7,677 | 7,237 | 5,832 | 20,746 |
Agriculture | 3,230 | 3,230 | 3,230 | 9,690 |
Business and Industrial Process (inc NETs) | 1,275 | 3,166 | 4,145 | 8,587 |
Forestry | 482 | 656 | 662 | 1,799 |
Peatland | 272 | 326 | 326 | 924 |
Waste | 1,225 | 1,146 | 99 | 2,470 |
Energy Supply | 0 | 0 | 0 | 0 |
Total | 15,887 | 16,317 | 14,938 | 47,142 |
Source: Scottish Government CCP tables 1 and 2, all values in £ million in 2025 terms.
However, the Scottish Government presentation of the costs in this way leaves several important questions unanswered. It is not possible to see any granularity around who will pay these costs; households, industry or the public sector. The same is true of the financial benefits and savings identified in the plan – so it is not possible to set out what the Scottish Governments gross or net cost might be to implement these policies. This is important to understand, as analysis from the Scottish Fiscal Commission suggests that the Scottish Government is likely to face higher costs per person than the rest of the UK to deliver the investment required in every carbon budget between now and 2050.
As the CCP presents the costs and benefits over a five-year period, there is only limited information on the spending profile associated with each sector, which will make aligning these anticipated costs with the annual budget settlements difficult. In addition to the presentation of the costs, it is also worth noting that Annex 3 states that:
“proposals are not costed owing to the absence of sufficient certainty, though their estimated emissions impact is recorded.”
These uncosted proposals present a risk that actual costs will be higher than estimated in the CCP.
On the calculation of benefits, there is reference to ‘co-benefits’ or ‘wider impacts’ in various sectors but it is not clear to what extent the ‘co-benefits’ of policy are included in total benefits and if so what these are.
Earlier in 2025, the Net Zero, Energy and Transport Committee wrote to Audit Scotland and the Scottish Fiscal Commission (SFC) asking for their views on how the CCP should present information. With respect to the costs associated with the plan, Audit Scotland stated that:
“We would expect to see estimated resource and capital costs attached to each policy over the five-year period of the CCP. It would also be helpful, where relevant, to identify the potential total costs over the period to 2045. Ideally, the plan should show how costs are likely to split between public and private finance, to help quantify the scale of public funding that the Scottish Government needs to deliver the plan, assess general affordability, and inform future spending decisions.”
Audit Scotland also suggested that it would be important for there to be clear line of sight between costs set out in the CCP, and spending allocations in the Scottish Budget.
In their response to the Net Zero, Energy and Transport Committee, the SFC stated that:
“The cost associated with each policy should be clearly set out including the cost for each financial year, how the cost is split between the public and private sectors, and where relevant how the cost is split between different levels of government.”
The SFC also stated that the CCP should include all charts and tables in spreadsheets with the underlying data, and to be transparent about the methodology used to estimate costs associated with each policy.
In addition to the main publication, Annex 3 sets out further detail on the analytical approach taken in preparing the CCP. This provides a table for each of the eight sectors identified which restates the information from the main publication, but subsequent tables add a little more granularity. For example, the costs and benefits associated with the sector “Residential and public buildings” is split into the residential and public buildings components, while the transport sector is split into five packages of policy.
However, the Annex does not provide the additional granularity that Audit Scotland and the SFC have called for. There is no public/ private split identified in the cost, nor is there a split between capital and resource funding. The costs are not identified for individual policies, but rather packages of policy. No spreadsheets have been provided.
Niall Kerr, Andrew Feeney-Seale and Abbi Hobbs, SPICe