The Climate Change (Scotland) Act 2009 was passed by the Scottish Parliament in June and received Royal Assent on 4 August. The Act introduces targets to reduce carbon emissions in Scotland by at least 80% by 2050 with an interim target reduction of 42% by 2020. Existing buildings, the way in which buildings are constructed, and the way in which they function all use substantial amounts of energy and produce significant carbon dioxide emissions, which makes them obvious targets for making inroads into emissions reduction. There are therefore specific provisions in the Act which relate to non-domestic property in Scotland and which are likely to affect businesses.

Assessment of the Energy Performance of Non-Domestic Buildings

The Act introduces a new requirement for assessment of the energy performance of and emissions from non-domestic buildings. These are defined as all buildings (other than dwellings, or ground or buildings associated with dwellings) and so includes shops and offices. The details of this requirement will be in Regulations which will include provisions for:

  • the assessment of the energy performance of non-domestic buildings, and the emissions of greenhouse gases produced or associated with them, or with activities carried out in those buildings; and
  • once the assessment has been carried out, obliging owners to implement the recommendations in the assessment that will improve the energy efficiency of the buildings and reduce greenhouse gas emissions. This could include improving insulation, taking measures to reduce draughts, improving the efficiency of equipment within buildings, and once new technologies become more cost effective, introducing low and zero carbon equipment.

The Act does not contain any indication of when this requirement will come into force and Regulations will only be produced at that stage. However the Act indicates the type of provisions which may be included in these Regulations and these include:

  • the circumstances where the Regulations will apply
  • the types of non-domestic buildings which would be covered which are likely to include shops and offices
  • the persons who would be required to obtain the assessments which will involve the owner (it is not clear whether this will extend to occupiers)
  • the time period for carrying out the assessments
  • procedures for assessing energy performance of non-domestic buildings.
  • procedures for assessing greenhouse gas emissions from non-domestic buildings
  • who will carry out the assessments
  • the issuing of Certificates following assessment. This could include (a) the form, manner and content of the Certificates and (b) the time period for carrying out any recommendations and the manner in which they are carried out
  • enforcement of the provisions
  • registration, record-keeping and disclosure arrangements; and
  • possible offences and penalties.

Once this section of the Act comes into force the Scottish Ministers will have twelve months to produce a report setting out what measures they intend to take to reduce emissions from non-domestic buildings, and providing a timescale for when they will set out the form that the recommendations contained in the Certificates should take, and the way in which owners must implement these recommendations.

At this stage therefore, there are no details available of the likely form of the Certificates, or the scope of the recommendations. The Act gives an indication of the maximum penalties which could be imposed, if an owner fails to carry out any recommendations following assessment of non-domestic buildings, which in the case of a summary cause (without a jury) would be a fine of up to £10,000, and in the case of other prosecutions, of an unlimited amount.

Relationship between Energy Performance Certificates and assessments of energy performance

There is also a possible overlap with Energy Performance Certificates, for which there is already a legal requirement when an owner sells or leases a building. If an owner has already obtained an Energy Performance Certificate will this be sufficient to comply with this new requirement or will a new Certificate be required? While Energy Performance Certificates currently include recommendations for improving the energy efficiency of a building, there is no obligation on the owner to implement any of the recommendations or carry out any work on the building to improve energy efficiency.

As Energy Performance Certificates and assessments of existing non-domestic buildings are regulated by different statutory regimes there is a potential tension between the two. It is not clear at this stage how this will be resolved.

Financial Incentives

Section 67 of the Act introduces the proposals for a discount on non-domestic rates where energy efficiency measures have been carried out. This section amends Section 153 of the Local Government etc (Scotland) Act 1994, which enables Scottish Ministers to set a different rate in the pound in respect of non–domestic buildings which can demonstrate greater energy efficiency resulting in reduced greenhouse gas emissions.

Climate Change Burdens

A new type of title condition – the Climate Change Burden - is introduced by Section 68 of the Act. Once that section comes into force it will become competent to impose a real burden in the title of a property in favour of a public body or trust, which has been identified as a conservation body, or the Scottish Ministers for the purpose of reducing greenhouse gas emissions. The burden will consist of an obligation on the owner to ensure that the property meets specified standards in the event that the property is developed.

Planning and Permitted Development Rights

The Scottish Ministers are obliged under Section 57 of the Act to devise a land use strategy in relation to sustainable land use by 31 March 2011. This strategy includes setting out objectives for the sustainable use of land, with proposals and policies indicating how those objectives are to be met, as well as the time periods over which they policies are expected to take effect.

Permitted development rights under the planning system are to be extended to include the installation in non-domestic buildings of microgeneration, that is, plant which generates electricity or heat from renewable sources.

What happens next?

The Climate Change (Scotland) Act 2009 is enabling legislation which sets out the broad aims and targets for the reduction of carbon emissions in Scotland and gives power to local authorities and to the Scottish Ministers to require improvements to the energy performance of domestic and non-domestic buildings. It is likely to be some time however before the Regulations are passed which will put these broad aims into practice.