Building regulations - proposed changes to energy and environmental standards: stage 2 consultation and BRIA

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Scotland is firmly committed to meeting its statutory net zero targets and ensuring that the transition to a low‑carbon future is fair and delivers real benefits for people and communities. The quality and performance of our buildings are central to this ambition. Energy‑efficient, well‑designed buildings reduce emissions, lower energy bills and support healthier indoor environments; benefits that must be accessible to everyone. They also play a direct role in reducing household costs for families on low incomes, supporting our national mission to tackle child poverty.

High‑performance standards such as Passivhaus already demonstrate these benefits in practice. They improve energy efficiency, enhance indoor air quality and strengthen construction quality through robust assurance processes. These features help close the performance gap, support compliance and contribute to safer buildings, reinforcing wider work on building safety and resilience across Scotland.

Recognising these advantages, the Scottish Government committed to developing a Scottish equivalent to the Passivhaus standard, ensuring that new buildings are equipped to meet the demands of a changing climate while supporting household wellbeing.

Our Stage 1 consultation showed broad support for a standard that is ambitious, achievable and deliverable. This Stage 2 consultation presents more detailed proposals on how such a standard could be embedded within building regulations and guidance. It sets out the technical requirements, performance metrics and compliance processes necessary to deliver a consistent, outcomes‑focused, approach across all new buildings.

In the context of the urgent need to accelerate housing delivery, I recognise that any new regulatory requirements must be practical and achievable. Local authorities, housing associations and developers must be able to deliver high‑quality, energy‑efficient homes at pace. Our intent is to introduce a standard that strikes the right balance between improved performance and deliverability, and we will continue to work closely with industry, local authorities, professional bodies and the public to achieve this within a pragmatic delivery timeline.

I encourage all interested parties to consider these proposals and share their views. Together, we can ensure that Scotland continues to lead in creating buildings that are energy efficient, climate resilient, safe and capable of delivering lasting benefits for the people who use them.

Shirley-Anne Somerville MSP

Cabinet Secretary for Social Justice and Housing

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1.1 Introduction

1.1.1. Purpose

The purpose of this review is to consider changes to The Building (Procedure) (Scotland) Regulations 2004 (as amended) and guidance supporting the standards and processes within The Building (Scotland) Regulations 2004 (as amended) and The Building (Procedure) (Scotland) Regulations 2004 (as amended) to introduce a Scottish equivalent to the Passivhaus standard. These changes are intended to further improve the energy and environmental performance of new buildings and provide greater assurance of regulatory compliance, to deliver buildings that perform as intended.

Changes will contribute to the achievement of the Scottish Government’s priority to eradicate child poverty by focussing on action that reliably delivers reduced energy demand and a healthy indoor environment. Both offering a positive contribution to broader action to address energy poverty which will be of benefit to occupants of new buildings.

Additionally, further improvements to energy efficiency will reduce delivered energy demand thereby reducing any associated upstream emissions resulting from operational energy use in new buildings.

1.1.2. Scottish Government Fuel Poverty Strategy

The Fuel Poverty (Targets, Definition and Strategy) (Scotland) Act 2019 includes statutory fuel poverty targets with the intention that no more than 5% of households will be in fuel poverty by 2040. It is important that new homes contribute to reductions in fuel poverty.

Fuel costs are the single biggest driver for fuel poverty. We want our regulations and standards to deliver homes that are warmer and cheaper to heat and which also produce zero emissions from heating. This will help to ensure that we meet both our climate change and fuel poverty targets. In some instances, households may require access to affordable warmth 24/7, emphasising the importance of achieving high energy efficiency standards for households in fuel poverty and ensuring that those most exposed to the health risks of living in a cold home are prioritised for support, with a reduction in heating demand and in turn lower household energy bills.

Further improvement to the energy efficiency of new homes and greater assurance of regulatory compliance will deliver highly efficient buildings that perform as intended, thereby contributing to the delivery of our fuel poverty targets for 2040.

1.1.3. Scotland’s Climate Change Act

The Climate Change (Scotland) Act 2009 (the 2009 Act), which originally received Royal Assent on 4 August 2009, remains the key climate legislation of the Scottish Government.

As per the 2009 Act, Ministers must ensure that Scotland’s emissions are net zero by 2045. The 2009 Act also legislates the Scottish carbon budgets for each five-year period between 2026 and 2045, setting out the trajectory to net zero.

Our target of net-zero emissions by 2045, five years ahead of the rest of the UK, is firmly based on the advice of the independent Climate Change Committee.

With the introduction of the New Build Heat Standard in April 2024 there is a shift in the way we heat our new buildings. The standard requires that heating in new buildings is not by ‘direct emission heating systems’ such as gas and oil boilers, as such, supporting our climate targets. A further step reduction in delivered energy will reduce total upstream emissions associated with the operational energy use in these new buildings.

The review also offers another opportunity to set out how action through building regulations may best support our broader net zero objectives.

1.1.4. The driver for the current review

In May 2022, Alex Rowley MSP put forward a draft proposal for a Proposed Building Environmental Standards (Scotland) Bill. A final proposal for “a Bill to introduce new minimum environmental design standards for all new-build housing to meet a Scottish equivalent to the Passivhaus standard, in order to improve energy efficiency and thermal performance” was lodged in the Scottish Parliament in November 2022, receiving cross-party support.

In December 2022, Ministers committed to give effect to the Members’ Bill to deliver ‘a Scottish equivalent to the Passivhaus standard’.

Engagement commenced in January 2023 to consider further improvements to the standards set with a focus on two outcomes:

•Improvements to the setting of energy and environmental (ventilation) performance standards for new buildings, leading to lower energy demand (and reduced running costs) and a healthy indoor environment; and

•Improvements to the design and construction process to give greater assurance that compliance, and therefore the performance sought, is delivered in practice.

Following Ministerial agreement, an industry Working Group was convened in June 2023 with a role to offer advice and expertise to the Scottish Government to help define how an equivalent to the Passivhaus standard will look in Scotland.

Themed industry workshops were held through Autumn/Winter 2023 to gather feedback on topics related to very low energy building design and construction. Working Group members and wider industry stakeholders have been actively engaged in the review process to date and, following a series of industry led engagement sessions, the Working Group released a consensus report in November 2024 detailing the Group’s recommendations on how a Scottish equivalent to the Passivhaus standard should look.

This review considers both domestic and non-domestic buildings. Any standard that is introduced will apply to every new building constructed in Scotland. It must be deliverable in practice nationally. The form that provisions will take and the level of challenge set by improvements to targets and processes should reflect this scope of application.

This review is not simply a response to Mr Rowley’s Bill proposal, but an opportunity to determine what further beneficial change can be set out for our new buildings, particularly in relation to improved evidence to demonstrate compliance with standards.

In July 2024, our stage one consultation sought views on the form and approach that a Scottish equivalent to the Passivhaus standard, implemented through building regulations, should adopt and on the proposed delivery timetable. Review of the stage one consultation informed the laying of amendment regulations on 12 December 2024, introducing a requirement for an “energy and environmental design statement” to be submitted when making a building warrant application and an “energy and environmental construction statement” to be provided when submitting a completion certificate.

The stage two consultation seeks views on proposals for performance targets, including the level of challenge that could be set within updated guidance to deliver the new standard. Proposals are made for both the main and secondary compliance metrics and the method through which targets are set. Views are sought on the proposed compliance methodologies, including the potential recognition of the Passivhaus Planning Package as an alternative methodology. Items related to indoor air quality and overheating are also presented. Views are also sought on the proposals for an enhanced compliance process, including guidance to support the new requirement to submit energy and environmental design and construction statements.

Given delays to launch this second consultation, a proposal for an updated review timeline is also presented.

Additionally, information is provided on the next steps to recognise fully certified Passivhaus buildings as an alternative means of compliance with standard 6.1 ‘Energy demand’.

1.1.5. The Scottish building standards system

The building standards system in Scotland is established by The Building (Scotland) Act 2003 (The 2003 Act). The Act gives powers to Scottish Ministers to make building regulations, procedure regulations, fees regulations and other supporting legislation as necessary, to fulfil the purposes of the Act.

The purpose of the building standards system is to protect the public interest. The system regulates building work on new and existing buildings, to provide buildings that meet reasonable standards which:

•Secure the health, safety, welfare and convenience of persons in or about buildings and of others who may be affected by buildings or matters connected with buildings;

•Further the conservation of fuel and power; and

•Further the achievement of sustainable development.

The thirty-two local authorities in Scotland are appointed by Scottish Ministers as verifiers to administer the building standards system in their geographical areas. Responsibility for compliance with the building regulations lies with the “relevant person” as the party instructing building work and, ultimately, with the building owner.

The building standards system is pre-emptive and is designed to check that design proposals meet building regulations. The main principles of the system are that a building warrant must be obtained from a verifier before work commences on site and a completion certificate is accepted by a verifier if, after undertaking reasonable inquiry, they are satisfied the building work meets the building regulations, prior to the building being occupied.

Requirements applicable to building work are set through The Building (Scotland) Regulations 2004 (as amended) as a set of mandatory functional standards. These are statements on what outcomes must be achieved when undertaking building work. These standards are supported by a body of guidance set out in Domestic and Non-domestic Technical Handbooks. This published guidance assists by defining the scope of action expected under each standard by providing one or more examples of how compliance with the standard can be achieved. However, it is quite acceptable to use alternative methods of compliance provided they fully satisfy the regulations.

The Building Standards Division (BSD) is part of the Scottish Government Building Safety and Standards Directorate (BSSD). Our purpose is to provide and maintain a robust legislative framework to ensure that the building standards system in Scotland protects the public interest. BSD prepares and updates building standards legislation and guidance documents, conducting any necessary research and consults on changes as The 2003 Act requires.

We also work in partnership with Local Authority verifiers and other stakeholders in the delivery and updating of the system and contribute to wider policy objectives of government on issues such as energy efficiency, climate change and building safety.

1.1.6. Scottish Government Heat in Buildings Strategy

We published the Heat in Buildings Strategy in October 2021, which set out our vision for decarbonising Scotland’s buildings by 2045. We remain committed to this vision and continue to lay the foundations which will support the growth of the clean heat and energy efficiency sectors in Scotland. This includes introducing the New Build Heat Standard in April 2024 and new Energy Performance Certificate (EPC) regulations which will bring an improved EPC rating system into force. We have also recently published a draft Buildings (Heating and Energy Performance) and Heat Networks (Scotland) Bill to support the decarbonisation of heat in buildings.

The Heat in Buildings: progress report 2025 shows that emissions from our buildings have continued to fall, reducing by 31% between 1990 and 2024. The number of homes with a heat pump installed is higher than ever before, and energy efficiency across all tenures has improved.

1.1.7. Energy and environmental standards within building regulations

Since the introduction of national building regulations to Scotland in 1964, there have been energy standards, in one form or another. Initially these only applied to the external fabric of certain residential buildings and were minimal in nature. Later, they evolved to take account of commercial and industrial non-domestic buildings and to address the energy efficiency of those building services essential to provide comfort to occupiers of buildings.

Prior to 2000, reviews of energy standards were less frequent, with the outcome of such reviews resulting in modest standards that kept pace with change but which could be comfortably achieved by all aspects of industry. An impact assessment carried out on subsequent changes over this era would show a cost-benefit for modest improvements which would pay back quickly through reduction in the occupier’s energy bills.

Following the introduction of The 2003 Act and our current system of building standards in May 2005, energy standards within section 6 of the Building Standards Technical Handbooks were reviewed and improved in 2007, 2010, 2015 and most recently in 2023. For new buildings, 2007 saw the introduction of a single means of demonstrating compliance on the basis of calculated carbon dioxide emission targets, using the Standard Assessment Procedure (SAP) for dwellings and the Simplified Building Energy Model (SBEM) (or equivalent) for non-domestic buildings.

It is assessed that emissions arising from energy use in new buildings constructed to the 2023 standards are, on aggregate, around 32% lower for new homes and 20% lower for new non-domestic buildings, compared to the previous 2015 standards and more than 80% lower than standards in force in 1990, the baseline reporting year for CO₂ emissions.

Key actions taken forward in the 2023 standards include:

•A focus on actions at a building level that reduce energy demand, including improved fabric insulation in new homes, to reduce space heating demand

•The introduction of a new energy target for new buildings, measuring ‘delivered energy’ (energy which is supplied to the building)

•In setting targets for new buildings, an amended approach for on-site generation of power, excluding credit for energy exported from the building

•A simplified process when connecting a new building to a heat network (standardising the building performance needed to comply).

•Changes to ventilation standards to reflect the expectation of improved levels of insulation, resulting in reduced air leakage/infiltration.

A further, specific change was introduced by the New Build Heat Standard (NBHS), which applies to new buildings and certain conversions where a building warrant application was submitted on or after 1 April 2024. The NBHS was further amended in January 2025 to permit bioenergy and peat heating and exempt secondary heating appliances from the standard.

1.1.8. Summary of Stage One Consultation

A stage one consultation on determining the form and approach that a Scottish equivalent to the Passivhaus standard should take was undertaken between July and October 2024. The consultation sought views on:

•The components of an ‘equivalent standard’

•Proposals to improve the setting of energy performance and ventilation standards for new buildings, leading to lower energy demand (and reduced running costs) and a healthy indoor environment

•Proposals to improve assurance that the design intent for energy performance and ventilation standards for new buildings is achieved in practice

•General topics material to the ongoing development of energy and environmental standards set by building regulations

•A programme to deliver the current energy standards review and the commitment on a ‘Scottish equivalent to the Passivhaus standard’

•The extent of proposed amendments to regulations

The consultation analysis report and Part 1 of the Scottish Government Response were published in December 2024.

The Part 1 response focussed on the necessary regulatory changes and confirmed that no changes were needed to current powers or technical provisions but that a means of defining a more evidenced approach to compliance with standards should be progressed via changes to The Building (Procedure) (Scotland) Regulations 2004. The amending regulations introduce a requirement for a design stage and construction stage compliance statement on specified energy and environmental standards.

Part 2 of the Scottish Government Response was published in December 2025.

The Part 2 response discussed the next steps and ongoing action to develop amended performance targets and supporting processes.

1.2 The Consultation Process

1.2.1. Scope of this consultation

This stage two consultation seeks views on proposed performance targets for the new standard, including the level of challenge that could be set within updated guidance.

Where the term ‘level of challenge’ is used in this consultation document this refers to the level of delivered energy demand performance for new dwellings and/or new buildings when compared to the 2023 energy standards.

Proposals are made for both the main and secondary compliance metrics and the method through which targets are set. Views are sought on the proposed compliance methodologies, including the potential recognition of the Passivhaus Planning Package as an alternative methodology. Items related to indoor air quality and overheating are also presented. Views are also sought on proposals for an enhanced compliance process in support of the new requirements introduced by The Building (Procedure) (Scotland) Amendment Regulations 2024.

1.2.2. Consultation documents

This consultation comprises of the following elements:

•Consultation proposals and questions (this document, published in html and pdf) with a Partial Business and Regulatory Impact Assessment (Stage 2 review) included as Annex A;

•Draft Energy and Environmental Compliance Handbook;

•Interim consultation versions of the standard 6.1 compliance methodologies for domestic and non-domestic buildings are also presented;

•The online consultation form for your response; and

•A Respondee Information Form and list of consultation questions is provided in Word format on the consultation webpage for consultees who are not able to provide a consultation response online.

Any other related draft impact assessments will be listed on the consultation webpage.

References are made within this document and the review webpage to external resources produced as part of the review process. Consultees may find these useful in setting out engagement and discussion on the review topic to date.

1.2.3. The Scottish Government consultation process

Consultation is an essential part of the policy-making process. It gives us the opportunity to consider your opinion and expertise on a proposed area of work. You can find all our consultations online at http://consult.gov.scot/. Each consultation details the issues under consideration, as well as providing a way for you to give us your views – either online or by post.

Responses will be analysed and used as part of the decision-making process, along with a range of other available information and evidence. We will publish a report of this analysis for every consultation. Depending on the nature of the consultation exercise, the responses received may:

•indicate the need for policy development or review;

•inform the development of a particular policy;

•help decisions to be made between alternative policy proposals; or

•be used to finalise legislation before it is implemented.

While details of circumstances described in a response to a consultation exercise may usefully inform the policy process, consultation exercises cannot address individual concerns and comments, which should be directed to the relevant public body.

When responding to questions which offer a choice of responses, please also provide information or evidence to explain your view on the topic wherever possible. This assists us in assessing and understanding the reason for your view and presenting the overall picture when reporting on each topic and on the overall proposal in general.

1.2.4. Handling your response

If you respond using Citizen Space, you will be directed to the ‘About You’ page before submitting your response. Please indicate how you wish your response to be handled and whether you are content for your response to be published. If you ask for your response not to be published, we will regard it as confidential and we will treat it accordingly.

All respondents should be aware that the Scottish Government is subject to the provisions of the Freedom of Information (Scotland) Act 2002 and would therefore have to consider any request made to it under that Act for information relating to responses made to this consultation exercise.

To find out how we handle your personal data, please see our privacy policy.

1.2.5. Next steps in the process

Following the consultation closing date, all responses will be analysed and considered along with any other available evidence provided. After we have checked that they contain no potentially defamatory material, responses will be published (where we have been given permission to do so) on the consultation webpage.

The Scottish Government will review consultation responses received and the issues raised during engagement with stakeholders to determine the extent of updates to proposed regulations and guidance. A consultation analysis report and Scottish Government response will then be published on the consultation webpage.

1.2.6. Comments and complaints

If you have any comments about how this consultation exercise has been conducted, please send them to:

Consultation: Proposed changes to energy and environmental standards

Scottish Government

Building Safety and Standards Directorate

Building Standards Division

Denholm House

Almondvale Business Park Livingston

EH54 6GA

Email: bsdenergystandardsreview@gov.scot

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2.1 Overview of the Scottish equivalent to the Passivhaus standard

The Scottish equivalent to the Passivhaus standard – consists of the following aspects. Please refer to sections 3 to 9 of this consultation for further information.

•Delivery programme

As part of the laying of amendment regulations in December 2024 the Scottish Government applied a coming into force date of 31 March 2028 to enable the construction sector to prepare for the changes.

As the development of the Stage 2 proposals, supporting guidance and assessment tools has taken longer than originally anticipated, the timetable set out in the Stage 1 consultation has been reviewed. Following analysis of consultation responses, we now aim to publish guidance and approved methodologies under standard 6.1 in Autumn 2027.

Consequently, to maintain a sufficient industry preparation period, we will amend the implementation date in regulations to Autumn 2029. We will also consider the most appropriate approach, including introducing the standard in full, phasing it in, or supporting voluntary adoption before compliance becomes mandatory.

•Alternative means of compliance

Responses to the July 2024 stage one consultation indicated strong support to amend standard 6.1 ‘Energy demand’ to recognise Passivhaus certification as an alternative means of compliance. This change will be progressed for implementation alongside wider review changes.

It is anticipated that such a change will require amendments to the Building (Scotland) Regulations 2004 (as amended), in particular paragraph 6.1 of Schedule 5.

•Primary compliance metric – delivered energy

Delivered energy (as opposed to primary energy) remains the main compliance metric for standard 6.1 ‘Energy demand’ as this continues to be the most relevant metric for those that occupy and manage buildings. We propose to present unregulated loads as information sitting outwith but alongside the delivered energy metric.

•Secondary compliance metric – space heating demand

Proposals introduce a space heating demand rate, as calculated through the approved methodologies, that takes into account the fabric efficiency of a new dwelling and new building.

•Level of challenge for new dwellings

Three level of challenge options for new dwellings are presented resulting in aggregate emissions reductions of between 0% and 37% against the February 2023 energy standards.

Where new dwellings are supplied from a high efficiency communal heating system it is proposed that dwellings supplied from such a source can report the net efficiency of the heat supply rather than the current default 100% efficiency.

•Method of target setting for new dwellings

It is proposed that the current notional dwelling target setting method within standard 6.1 ‘Energy demand’ is replaced with a set of target range tables. The ranges being determined by a limited number of variables including: dwelling location, dwelling archetype, dwelling orientation and dwelling heat source.

•Fabric performance for new dwellings

The maximum ‘backstop’ U-values within the guidance to standard 6.2 ‘Building insulation envelope’ are proposed to remain unchanged.

It is proposed to set a maximum upper limit of 5 m³/(h.m²) to the declared design air infiltration rate.

•Standard 6.1 compliance approved methodologies for dwellings

An interim version of a Scottish ‘wrapper’ linked to the UK Government Home Energy Model is presented as a work in progress standard 6.1 compliance tool, to be developed further before being adopted as an approved methodology prior to implementation.

It is proposed that a modified version of the Passivhaus Planning Package (PHPP) will also be developed and adopted as an approved compliance methodology.

•Level of challenge for new non-domestic buildings

Three level of challenge options for new non-domestic buildings are presented resulting in aggregate emissions reductions of between 0% and 11.5% against the February 2023 energy standards.

Where new non-domestic buildings are supplied from a high efficiency communal heating system it is proposed that buildings supplied from such a source can report the net efficiency of the heat supply rather than the current default 100% efficiency.

•Method of target setting for new non-domestic buildings

It is proposed that the current notional building target setting method within standard 6.1 ‘Energy demand’ is replaced with a set of target range tables. The bounds of the target range will be determined by a limited number of variables including: building location, building type, activity types, building heat source and building orientation.

•Fabric performance for new non-domestic buildings

The maximum ‘backstop’ U-values within standard 6.2 ‘Building insulation envelope’ are proposed to remain unchanged.

It is proposed to set a maximum upper limit of 5 m³/(h.m²) to the declared design air infiltration rate.

•Standard 6.1 compliance approved methodologies for new non-domestic buildings

An interim Scottish version of the Simplified Building Energy Model v7 is presented as a work in progress standard 6.1 compliance tool, to be developed further before being adopted as an approved methodology prior to implementation.

It is proposed that a modified version of the PHPP will also be developed and adopted as an approved compliance methodology.

•Ventilation and indoor air quality

It is proposed to continue to accept any system/solution of achieving the performance sought in standard 3.14 ‘Ventilation’. However, we will procure research outwith the stage two consultation to understand where additional guidance would be beneficial, including on the use of Mechanical Ventilation with Heat Recovery in new dwellings and non-domestic buildings. Engagement will commence at the appropriate time to be captured in confirmed guidance.

•Overheating

Scottish Government has initiated work to review and update the guidance in support of standard 3.28 ‘Overheating risk’ to identify further information that will provide greater clarity on the actions required to achieve compliance with the standard. This includes developing guidance on the potential use of PHPP as an additional option to assess and mitigate overheating risk in dwellings and some non-residential buildings.

•Compliance and assurance

We propose to introduce a ‘Building Standards Energy and Environmental Compliance Handbook’, which will provide guidance on the production of the design and construction statements as required by the Building (Procedure) (Scotland) Amendment Regulations 2024.

Consultation Question 1

With reference to the Partial Business and Regulatory Impact Assessment (BRIA) at Annex A of the consultation paper, are you able to provide any information, in confidence, that could aid in the production of the final BRIA?

Yes

No

If you have answered ‘Yes’ please contact the review team at: bsdenergystandardsreview@gov.scot

Consultation Question 2

Do you have any comments on the merits of introducing the standard on a mandatory basis through a phased implementation?

Yes

No

Please provide a summary of the reason(s) for your view.

Consultation Question 3

Do you have any comments on the merits of introducing the proposed standard initially on a voluntary basis?

Yes

No

Please provide a summary of the reason(s) for your view.

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3.1 Introduction

Standard 6.1 focuses on the reduction of energy demand arising from the use of heating, hot water, lighting, ventilation and cooling systems in new buildings (regulated loads). The February 2023 energy standards introduced a new compliance metric for new buildings – delivered energy i.e. the energy needed to be supplied to a building from external sources to meet regulated these uses

The Passivhaus standard considers all of the energy use at the building, including energy used for cooking, appliances and plug-in items (unregulated loads), applying a ‘primary energy renewable’ factor to derive an overall consumption value.

3.2 Proposals

No change is planned to the method introduced in February 2023. Delivered energy (as opposed to primary energy) remains the main compliance metric for standard 6.1 ‘Energy demand’ as this continues to be the most relevant metric for those that occupy and manage buildings.

It is proposed that unregulated energy use, as calculated by the standard 6.1 compliance calculation methodology, will be reported but will not be assigned within the compliance calculation. Presentation of unregulated loads as information rather than as part of the compliance calculation is an appropriate enhancement. Introduction of reporting within a transparent framework would be beneficial in establishing a clearer picture of overall energy demand in use, albeit still applying standard occupancy assertions.

The delivered energy demand metric will continue to assign benefit from on-site generation of power to both fixed and plug-in energy demands, excluding any export component from the compliance calculation given that no benefit accrues at the building from that portion of energy generation.

Consultation Question 4

Do you agree with the proposal to present unregulated loads as information within reported outputs from the compliance calculation?

Yes

No

Please provide a summary of the reason(s) for your view.

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4.1 Introduction

Standard 6.1 ‘Energy demand’ allows flexibility in building design by enabling a whole-building approach to meeting a single energy target. To help maintain a high standard across all parts of the building envelope, the use of elemental backstop values or space-heating demand limits offers designers reasonable flexibility while still ensuring good overall energy performance.

Under SAP 10, the approach previously used relies on a calculation commonly known as the “box 99” space-heating demand. This calculation takes account of both fabric performance and the reduction in heat loss achieved through ventilation heat-recovery where Mechanical Ventilation with Heat Recovery (MVHR) is installed. While this metric shows the energy savings gained from heat recovery in reducing space-heating demand, it can also allow poorer fabric performance to be offset by the inclusion of an active mechanical ventilation system.

By contrast, the Passivhaus standard sets a clear and absolute limit for space-heating demand of no more than 15 kWh/m²/year. This requirement strongly encourages an energy-efficient building form and a very high standard of fabric performance. Achieving this target also depends on extremely low air infiltration and the use of an efficient MVHR system to recover heat from ventilation losses.

The Scottish Government’s Climate Change Plan Monitoring Report tracks the proportion of new homes with a space-heating demand of no more than 20 kWh/m²/year, as calculated using SAP. As of May 2025, this accounted for 15.9% of annual housing completions. In addition, Standard 7.1 ‘Statement of Sustainability’ sets space-heating demand targets to achieve optional upper levels of sustainability: 30 - 40 kWh/m²/year for houses and 20 - 30 kWh/m²/year for flats or maisonettes, calculated using the SAP 10 box 99 method.

4.2 Proposals

Given the response to proposals within the July 2024 stage one consultation (88% of all respondents supporting further consideration of the introduction of a space heating demand limit). We propose that compliance with standard 6.2 ‘Building insulation envelope’ should now go beyond demonstrating exceeding a set of maximum U-values and reporting on the calculated performance of building junctions and the infiltration rate of the building envelope within the standard 6.1 energy target compliance calculation.

For all new buildings this will be via the introduction of a target space heating rate as calculated using the Home Energy Model / Scottish ‘Wrapper’ for new dwellings and SBEM for new non-domestic buildings, set at a level of challenge indicated in sections 5.1 and 6.1 for new dwellings and new non-domestic buildings respectively.

We propose that this target space heating rate will only include elements of the specification related to the fabric and not take the benefit of active services systems into account.

Consultation Question 5

Do you agree with the proposal to introduce a target space heating rate that only includes elements of the specification related to the fabric performance?

Yes

No

Please provide a summary of the reason(s) for your view.

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5.1 Level of challenge for new dwellings

The February 2023 energy standards introduced a level of challenge for new dwellings with an aggregate reduction in carbon emissions of 32% over the 2015 standards. This level of challenge is implemented through the Target Delivered Energy Rate (TDER): set based on a specification linked to the choice of main heating fuel type.

Through 2024 and 2025 the Scottish Government carried out detailed modelling to determine whether an uplift in performance standards for new dwellings is reasonable and the options available at which the level of challenge could be set at the time of implementation.

The modelling undertaken by the Scottish Government’s technical consultant, defined a set of archetype characteristics that are reflective of the current build mix in Scotland:

•Detached house;

•End terrace house;

•Mid terrace house; and

•Block of flats of 16 dwellings over 4 storeys

The modelling considered four levels of building specification:

•As defined by the 2023 notional dwelling;

•Option 1 - Good Practice Level of Challenge;

•Option 2 - Best Practice Level of Challenge; and,

•Option 3 - Business as Usual (BAU) model to reflect what is being built in Scotland at the point of undertaking the modelling.

Three modelling packages were utilised in the research to allow comparison of results:

•Standard Assessment Procedure (SAP) version 10.2;

•Home Energy Model (HEM) version 0.33 with the Future Homes Standard Wrapper (FHS) version 0.24; and

•Passivhaus Planning Package (PHPP) version 10.6.

5.1.1. Proposals

Following discussion with the Technical Working Group Option 1 and Option 2 are applied and indicated for consultation alongside an option to retain the current 2023 level of challenge for new dwellings.

To best reflect the proposed calculation methodology (see section 8 of this consultation) the figures from the HEM/FHS modelling are utilised in the summary presented in Table 1 for Option 1 and Option 2.

Please refer to the associated published research for full details of the target setting specifications used to generate the potential reductions in carbon emissions presented above: ‘Identification and Assessment of Improvements to Energy Standard for New Domestic Buildings within Scottish Building Regulations’.

The main elements are presented in Table 2:

The February 2023 standards introduced a step change in the performance of new dwellings with the research associated with the current review indicating that improvements in most measures that result in lower energy buildings would not be cost effective to introduce at this time.

However, the slight increases in services efficiencies do reflect improvement in technology over the past few years. One area that has been improved is a step reduction in the proposed target setting notional dwelling air permeability. This is to complement the proposals in section 9 of this consultation and to reflect the importance that is drawn to this element within the Passivhaus system.

Consultation Question 6

Do you have any comments on the roof U-value proposals across the Good and Best Practice options noting that these represent a relaxation in the level of challenge for this element?

Yes

No

Please provide a summary of the reason(s) for your view.

Consultation Question 7

What uplift to the current energy standards for new dwellings do you consider appropriate as an outcome of this review?

Option 1: ‘Good Practice’ standard (6% emissions reduction)

Option 2: ‘Best Practice’ standard (37% emissions reduction)

Option 3: Retain current standard (0% emissions reduction)

Other (please specify)

Please provide a summary of the reason(s) for your view.

For new dwellings connecting to a communal heating system

Consultation proposals maintain the current option of three dwelling specifications based on the heat source: heat pumps, heat networks and any other solution, the latter being assessed against the direct electric heating specification.

It is proposed, where dwellings on a development are supplied from a communal heating system (as defined in the Heat Networks (Scotland) Act 2021), also located within the development, that the use and benefit of high efficiency generation on site should be recognised.

This would be achieved by enabling dwellings supplied from such a communal heating system to be modelled against the heat pump notional dwelling, with the net efficiency of communal heat supply determined by a suitably qualified party and input into the calculation.

Such an option will support the use of high-efficiency communal heating systems which give an overall delivered energy outcome for the development, similar to the use of individual heat pumps.

Consultation Question 8

Do you support an approach to enable recognition of higher efficiency generation within a development regardless of whether it takes place within individual buildings or a communal heating system?

Yes

No

Please provide a summary of the reason(s) for your view.

Cost neutrality

The development and confirmation of the proposed levels of challenge across the available heat sources has been completed with a focus on capital cost neutrality. As indicated within the associated published research the capital cost fluctuation to build a heat pump, heat network or direct electric dwelling is minor. This principle allows the current and proposed energy metrics to fluctuate to compensate for the differences in efficiencies and costs for each of the available heat solutions.

Consultation Question 9

Are you currently designing or building dwellings to the February 2023 standards and able to share cost information in confidence for any of the available heat solutions?

Yes

No

If you answered ‘Yes’, please contact the review team on bsdenergystandardsreview@gov.scot.

5.2 Method of target setting for new dwellings

Standard 6.1 aims to limit the delivered energy needed at a new dwelling to meet energy demand through the setting of an overall performance target calculated by an approved methodology.

The calculated delivered energy demand for the proposed dwelling: the Dwelling Delivered Energy Rate (DDER) measured in kilowatt hours per square metre per year (kWh/m²/yr), should be less than or equal to the Target Delivered Energy Rate (TDER). The TDER is calculated by a ‘notional dwelling’. The notional dwelling includes a range of specification items that are either defined or those that replicate what is specified in the actual dwelling.

However, it must be recognised, that when a given dwelling specification is fully defined and is modelled in the approved methodology a single DDER and single TDER will be reported.

Given the proposal in section 4, the following section should be read noting the intent to introduce a space heating demand target alongside retaining the delivered energy demand target.

Target fixed elements

When a dwelling specification item differs from those that are defined within table 6.1 of the current domestic building standards technical handbook the TDER does not change. For example, the TDER for a given dwelling specification does not consider the actual building fabric U-values as these are ‘fixed’ by the notional dwelling i.e. at 0.15 W/m²K for walls. When everything else within a given dwelling specification remains the same the infinite choice of fabric U-values should always result in a single TDER as the DDER fluctuates. This principle is the same for all elements of the notional dwelling with a stated value in Table 6.1 of the current domestic building standards technical handbook.

Target fluctuating elements

For dwelling specification items that are defined as being the same as the actual dwelling, the TDER will fluctuate depending on the final dwelling specification. For example, the TDER for a given dwelling specification will be modified based on the heat source defined in the actual dwelling. This principle is the same for all elements of the notional dwelling where the specification item is defined as the ‘same as the actual dwelling’ or a similar phrase in Table 6.1 of the current domestic building standards technical handbook.

Passivhaus

The Passivhaus system does not use a notional dwelling approach, instead a single ‘absolute’ target must be met for total energy use and space heating demand. Where this single target is set, it is in effect ‘fixing’ all elements of the notional dwelling on a single dwelling specification that results in those targets being met. There are no notional dwelling aspects that are defined as the same as the actual dwelling. This means that any modification to the actual dwelling specification does not modify the ‘absolute’ targets that need to be met.

5.2.1. Proposals

The Scottish Government proposes to reduce the number of ‘target fluctuating elements’ within a target setting dwelling to a number of clearly defined principles. We propose that the specification items that allow the TDER to fluctuate are:

•Dwelling location;

•Dwelling archetype (flat, mid-terrace, end-terrace and detached);

•Dwelling orientation; and

•Dwelling heat source

Dwelling location

It is proposed that the target setting dwelling location is defined as the actual dwelling location. For a given dwelling specification this will produce a range of TDERs, the range being determined by the number of climate data files within the compliance methodology.

Scottish building regulations currently apply a single climate data set within the domestic calculation methodologies. Responses within the stage one consultation were in favour of a move to adopt regional climate data to enable a more informed approach to dwelling design and reporting on performance which better reflects the impact of location on the building. Given this response we have implemented the use of available climate data within the consultation version of the domestic tool.

The final version of the tools will implement the 14 weather files available from CIBSE 2025 (or a more appropriate updated set). Given the proposal to allow the TDER to fluctuate based on the dwelling location this will result in a range of TDERs determined by these 14 locations.

Dwelling archetype

It is proposed that the target setting dwelling archetype is defined as the actual dwelling archetype. For a given dwelling specification this will produce a range of TDERs, the range being determined by the four dwelling archetypes currently identified in research: flat, mid-terrace, end-terrace and detached.

Dwelling orientation

It is proposed that the target setting dwelling orientation is defined as the actual dwelling orientation. For a given dwelling specification this will produce a range of TDERs, the range being determined by the 360 degrees that are available for dwelling placement.

Dwelling heat source

It is proposed that the target setting dwelling heat source is defined as the actual dwelling heat source. For a given dwelling specification this will produce a range of TDERs, the range being determined by the three available heat options: heat pumps, heat networks and any other solution (direct electric).

It is proposed that all other dwelling specification items will be ‘fixed’ within a target setting dwelling and will not allow the TDER to fluctuate.

Consultation Question 10

Do you support the proposal to allow the target rates for dwellings to fluctuate based only on the location, orientation, archetype and heat source of the dwelling?

Yes

No

Please provide a summary of the reason(s) for your view.

When the majority of dwelling specification items are ‘fixed’ within a target setting dwelling a specific range of Target Delivered Energy Ratings (TDERs) and Target Space Heating Rates (TSHRs) are more easily defined around the four items indicated above.

The Scottish Government proposes to replace the presentation of a notional dwelling within the Technical Handbooks with a set of target range tables. These tables will present a range in which the actual DDER value should sit. It will be through the use of the approved methodologies that the dwelling specification single target and actual figures will be defined as is the case in the current method.

It is proposed that the Technical Handbooks will include a similar table to that shown in Table 3 noting that the figures are for illustration purposes only and will be defined by the level of challenge chosen (see section 5.1 of this consultation).

To add further clarity using two examples:

•For an end-terrace dwelling that has a heat pump as its heat source the TDER for that dwelling will sit within a range. The target range is defined by the fluctuation in TDER dependent on where the actual dwelling is located and the orientation in which it is fixed.

•For an end-terrace dwelling the target space heating rate for that dwelling will sit within a range. The target range is defined by the fluctuation in space heating rates dependent on where the actual dwelling is located and the orientation in which it is fixed. Note that the space heating rate should not be affected by the choice of heat solution in the actual dwelling and so the range is the same across all heat options

Consultation Question 11

Do you agree with the proposal to present the target rates for dwellings within a target range table, replacing the notional dwelling specification currently shown in Table 6.1 in the Technical Handbooks?

Yes

No

Please provide a summary of the reason(s) for your view.

5.3 Fabric performance for new dwellings

The guidance to Standard 6.2 sets out robust maximum recommended thermal (‘backstop’) values for elements of the building insulation envelope. This defines the general level of expectation in limiting heat loss. That level is set, alongside the requirements of standard 6.1, to enable a degree of flexibility in the delivery of cost-effective levels of fabric performance that are viable for projects across Scotland.

The guidance also emphasises the importance of addressing air infiltration in new dwellings to reduce heat loss and energy demand. Whilst it remains difficult to achieve a specified air infiltration rate to any degree of accuracy, the February 2023 energy standards introduced the requirement for air pressure tests to be performed on all new dwellings as set out in CIBSE TM23: ‘Testing buildings for air leakage’, to verify that the infiltration rate declared at the design stage is achieved on completion.

The Passivhaus system sets a single total energy use and a single space heating demand target without being explicit on the fabric U-values that must be met. Additionally, one of the key principles of Passivhaus is to achieve a particular airtightness level set at equal to or less than 0.6 ACH @ 50 Pa.

5.3.1. Proposals

Given the extent of change within building standards with the implementation of the February 2023 standards and the effect of other measures within Section 6 and proposals within this consultation has on the need to improve fabric U-values, we propose to retain the maximum U-values as indicated in table 6.2 of the current domestic building standards technical handbook and as copied in table 4 below. This position reflects the reporting on the cost/benefit of further improvements to fabric performance within the associated research paper: ‘Identification and Assessment of Improvements to Energy Standard for New Domestic Buildings within Scottish Building Regulations’, and also the need to maintain a reasonable degree of flexibility between the consultation proposal for the domestic level of challenge set in section 5.1 of this consultation and the maximum performance of individual elements.

Given the theme of this review, responses to the stage one consultation and the associated research papers, we propose to set a provision in guidance for an ‘upper limit’ for fabric infiltration. For any new building that has a declared design infiltration of 5 or poorer, we propose that a design statement should be provided alongside the application for building warrant. This should set out the approach taken in the fabric specification and the specific considerations that have led to less of an emphasis on limiting fabric infiltration. We would anticipate that this would be integrated with the reporting on compliance for energy and environmental standards indicated in section 9 of this consultation.

Consultation Question 12

Do you agree with the proposal to set a provision in guidance for a maximum ‘upper limit’ to the declared design air infiltration rate?

Yes

No

Please provide a summary of the reason(s) for your view.

5.4 Standard 6.1 approved compliance methodologies for new dwellings

Standard 6.1 ‘Energy demand’ requires that “the energy performance is calculated in accordance with a methodology of calculation approved under regulation 7(a) of the Energy Performance of Buildings (Scotland) Regulations 2008”. The current approved methodology for dwellings is identified in guidance published in support of standard 6.1: Standard Assessment Procedure (SAP) with version 10 the methodology to be used for compliance with the current standards.

A significant review of the UK calculation methodology for determining the energy performance of dwellings is underway with further information provided in the July 2024 stage one consultation. Information on the current development of the Home Energy Model (HEM) as a replacement to the Standard Assessment Procedure (SAP) can be found at: Home Energy Model: replacement for the Standard Assessment Procedure (SAP) - GOV.UK.

The Scottish Government has procured the development of an updated compliance tool for dwellings with its core engine based on the Home Energy Model. This work has comprised of several iterative steps.

Assessment of available potential compliance tools

The key outcome sought from a calculation methodology should be that it is robust and representative of the performance of the building, presenting an accurate illustration of the effect that any combination of building elements will deliver. That representation should approximate the outcome expected in the real world.

Through 2024 the Scottish Government procured research to review the outputs of various building energy models against a number of standardised dwelling specifications: ‘Identification and Assessment of Improvements to Energy Standard for New Domestic Buildings within Scottish Building Regulations’.

The building energy models reviewed were:

•Standard Assessment Procedure (SAP) version 10.2

•Home Energy Model (HEM) version 0.33 with the Future Homes Standard (FHS) wrapper version 0.24

•Passivhaus Planning Package (PHPP) version 10.6.

Table 5 indicates a summary of the delivered energy outputs from the building energy models across the four building archetypes. The specification applied across the archetypes are defined as the Business as Usual models which represent what is currently being developed in Scotland.

The modelling indicates that there is a step change increase in reported outcome of Delivered Energy between the current SAP 10.2 and the HEM/FHS version developed at the time of the modelling. The development of HEM/FHS has brought outputs closer to the current PHPP modelling tool with the average difference between SAP and PHPP output being in the range of 20% and the average difference between the HEM/FHS and PHPP in the range of 10%, the remaining difference being due to the standardisation of assumptions and climate locations in the HEM/FHS methodology.

Development of Scottish consultation compliance tool

Building on the 2024 research the Scottish Government procured the development of a Scottish ‘wrapper’ linked to the UK Government base HEM tool, taking the place of the FHS ‘wrapper’.

Given the development timelines the current development of this HEM/Scottish wrapper is based on HEM v0.34; a later iteration of the HEM methodology than that modelled in the above research.

The Scottish Government ‘wrapper’ applies updates to the UKG FHS ‘wrapper’ to capture changes that were implemented within the February 2023 standards that differed from approaches applied in the rest of the UK, including:

•The benefit of electricity generated onsite that is applied within the standard 6.1 compliance calculation will only be that proportion that is used onsite

•Focus on Delivered Energy as the main compliance metric with changes to the methodology for dwellings connected to heat networks

The development work also applies aspects that are proposed elsewhere within this stage two consultation; however, this work is still live and the version of the tool provided alongside the consultation does not capture all the proposed changes. The current consultation version of the HEM/Scottish wrapper has been tested for usability prior to launch.

Consultation Question 13

Do you have any views or comments on the development and usability of the consultation version of the HEM/Scottish wrapper for new dwellings?

Yes

No

Please provide a summary of the reason(s) for your view.

Future development of the Scottish compliance tool

A final version of the Scottish compliance tool will build on the consultation version and an agreed base UK Government HEM and will apply confirmed actions once the responses to this consultation have been analysed. The Scottish government continues to be involved in the development of HEM and will decide on the base version to be applied at an appropriate point.

Consideration of additional compliance methodologies

The Passivhaus standard is supported by the Passivhaus Planning Package (PHPP) as a design and calculation tool for use within certified Passivhaus projects from inception. PHPP is based on the same building physics principles as SAP and HEM/FHS and with slight modifications to the reporting could produce the equivalent proposed metrics.

5.4.1. Proposals

As part of confirming the Scottish equivalent to the Passivhaus standard we propose to recognise a modified version of PHPP as an approved methodology indicated in guidance to Standard 6.1 ‘Energy demand’ for new dwellings. We will work with the Passivhaus Trust and Passive House Institute to modify the existing PHPP tool to align it with the requirements of a Building Regulations compliance tool and capture the intent of additional changes as part of this review as indicated in proposals to other questions. This work will also compare outputs from PHPP and the proposed Scottish version of HEM and wrapper to capture potential updates to both methodologies, so outputs are aligned where possible.

The final modified PHPP regulatory compliance tool will be presented for testing once complete.

Consultation Question 14

Do you agree with the proposal to recognise a modified version of PHPP as an additional tool that implements the approved methodology for standard 6.1 ‘Energy demand’ for new dwellings?

Yes

No

Please provide a summary of the reason(s) for your view.

Source page 7

6.1 Level of challenge for new non-domestic buildings

The February 2023 energy standards introduced a level of challenge for new non-domestic buildings with an aggregate reduction in carbon emissions of 16% over the 2015 standards. This level of challenge is implemented through the Target Delivered Energy Rate (TDER): set based on a specification linked to the choice of main heating fuel type.

Through 2025, the Scottish Government carried out detailed modelling to determine whether an uplift in performance standards for new non-domestic buildings is reasonable and the options available at which the level of challenge could be set for implementation.

The modelling, undertaken by the Scottish Government’s technical consultant, considered four levels of building specification:

•As defined by the 2023 notional building

•Low level of challenge

•Medium level of challenge – Option 1

•High level of challenge – Option 2

Two modelling packages were utilised in the research to allow comparison of results:

•Simplified Building Energy Model v 6.1

•Passivhaus Planning Package (PHPP) version 10.6.

6.1.1. Proposals

Following discussion with the Technical Working Group Option 1 and Option 2 are applied and indicated for consultation alongside an option to retain the current 2023 level of challenge (Option 3).

Table 6 presents the proposed annual abatement in carbon emissions compared to the 2023 standards for Option 1 and Option 2 as calculated in SBEM v6.1 noting that retaining the current 2023 level of challenge results in a 0% annual abatement.

Please refer to the associated published research piece for full details of the target setting specifications used to generate the potential reductions in carbon emissions presented above: ‘Improvements to Energy Standards for New Buildings within Scottish Building Regulations 2025: Modelling Report – Non-Domestic’.

The main elements are presented in table 7.

As reflected in the full non-domestic report, a Low Option was modelled. Given that this results in an increase in energy use and emissions across the modelled building stock, this has not been presented as an option for consultation, however, an option to retain the current February 2023 energy standards is presented.

The February 2023 standards introduced a step change in the performance of new non-domestic buildings with the research associated with the current review indicating that improvements in most measures that result in lower energy buildings would not be cost effective to introduce at this time.

However, the slight modifications in services efficiencies do reflect more closely the development in technology over the past few years.

Consultation Question 15

Do you have any comments on the cooling efficiency proposals across the Medium and High options noting that these represent a relaxation in the level of challenge for this element?

Yes

No

Please provide a summary of the reason(s) for your view.

Consultation Question 16

What level of uplift to the current energy standards for new non-domestic buildings do you consider should be introduced as an outcome of this review?

Option 1: ‘Medium’ standard (10% emissions reduction)

Option 2: ‘High’ standard (11.5% emissions reduction)

Option 3: Retain current standard (0% emissions reduction)

Other (please specify)

Please provide a summary of the reason(s) for your view.

For new buildings connecting to a communal heating system

Consultation proposals maintain the current option of three building specifications based on the heat source: heat pumps, heat networks and any other solution, the latter being assessed against the direct electric heating specification.

It is proposed, where buildings on a development are supplied from a communal heating system (as defined in the Heat Networks (Scotland) Act 2021), also located within the development, that the use and benefit of high efficiency generation on site should be recognised.

This would be achieved by enabling buildings supplied from such a communal heating system to be modelled against the heat pump notional building, with the net efficiency of communal heat supply determined by a suitably qualified party and input into the calculation.

Such an option will support the use of high-efficiency communal heating systems which give an overall delivered energy outcome for the development broadly similar to the use of individual heat pumps.

Consultation Question 17

Do you support an approach to enable recognition of higher efficiency generation within a development regardless of whether it takes place within individual buildings or is communal?

Yes

No

Please provide a summary of the reason(s) for your view.

6.2 Method of target setting for new non-domestic buildings

Standard 6.1 aims to limit the delivered energy needed at a new building to meet energy demand through the setting of an overall performance target calculated by an approved methodology.

Designers should demonstrate that the calculated Building Delivered Energy Rate (BDER) for the actual building does not exceed the Target Delivered Energy Rate (TDER). The TDER is calculated by a ‘notional building’ generated automatically by applying the National Calculation Methodology (NCM) for Scotland. The notional building has several items that are the same as the actual building (target fluctuating elements) and items that are fixed i.e. are not the same as the actual building (target fixing elements).

When a given building specification is fully defined and is modelled in the approved methodology a single BDER and a single TDER will be reported.

Note that given the proposal in section 2 of this consultation the following section should also be read noting the intent to introduce a space heating demand target alongside retaining the delivered energy demand target.

Target fixed elements

If a given building specification is modified there are a number of building specification elements that do not result in the TDER fluctuating. For example, the TDER for a given building specification does not consider the actual building fabric U-values as these are ‘fixed’ by the notional building i.e. at 0.15 W/m²K for walls. When everything else within a given building specification remains the same the infinite choice of fabric U-values should always result in a single TDER as the BDER fluctuates. This principle is the same for all elements of the notional building with a stated value in Table 6.1 of the current non-domestic building standards technical handbook and stated figures or action in the NCM.

Target fluctuating elements

If a given building specification is modified there a number of building specification elements that allow the TDER to fluctuate. For example, the TDER for a given building specification will be modified based on the orientation, conditioning strategy and zone activities defined in the actual building. This principle is the same for all elements of the notional building where the specification item is defined as the ‘same as the actual building’ or similar phrase within Table 6.1 of the current non-domestic building standards technical handbook and stated figures or action in the NCM.

Passivhaus

The Passivhaus system does not use a notional building approach, instead a single ‘absolute’ target must be met for total energy use and space heating demand. Where this single target is set, it is in effect ‘fixing’ all elements of the notional building on a single building specification that results in those targets being met. There are no notional building aspects that are defined as the same as the actual building. This means that any modification to the actual building specification does not modify the ‘absolute’ targets that need to be met.

6.2.1. Proposals

The Scottish Government proposes to limit the number of elements that allow the TDER to fluctuate within a target setting building to a number of clearly defined principles. These are:

•Building location;

•Building type (as defined in Table 1 of the SBEM technical manual);

•Activity type (as defined in Table 2 of the SBEM technical manual);

•Building orientation; and

•Building heat source

Building location

It is proposed that the target setting building location is set as the actual building dwelling location. For a given building specification this will produce a range of TDERs, the range being determined by the number of climate data files within the compliance methodology.

Scottish building regulations currently apply limited climate data set within the non-domestic calculation methodologies. Responses within the stage one consultation were in favour of a move to adopt regional climate data to enable a more informed approach to building design and reporting on performance which better reflects the impact of location on the building. Given this response we have implemented the use of available climate data within the consultation version of the non-domestic tool.

The final version of the tools will implement the 14 weather files available from CIBSE 2025 (or a more appropriate updated set). Given the proposal to allow the TDER to fluctuate based on the building location this will result in a range of TDERs determined by these 14 locations.

Building type

It is proposed that the target setting building type, as defined within Table 1 of the SBEM technical manual, is set as the actual building type. For a given building specification this will produce a range of TDERs, the range being determined by the 22 available building types.

Activity type

It is proposed that the target setting activity type, as defined within Table 2 of the SBEM technical manual, is set as the actual activity type. For a given building specification this will produce a range of TDERs, the range being determined by the mix of available activity types.

Building orientation

It is proposed that the target setting building orientation is set as the actual building orientation. For a given building specification this will produce a range of TDERs, the range being determined by the 360 degrees that are available for building placement.

Building heat source

It is proposed that the target setting building heat source is set as the actual building heat source. For a given building specification this will produce a range of TDERs, the range being determined by the three available heat options: heat pumps, heat networks and any other solution (direct electric).

It is proposed that all other building specification items will be ‘fixed’ within a target setting building.

Consultation Question 18

Do you agree with the proposal to allow the building target rates to fluctuate based only on the location, building type, activity types, heat source and orientation of the new building?

Yes

No

Please provide a summary of the reason(s) for your view.

When the TDER is only allowed to fluctuate depending on the limited items proposed and the remaining specification items fixed, a specific range of TDERs could be more easily defined around the five items indicated above.

The Scottish Government proposes to replace the presentation of notional buildings within the Technical Handbooks with a set of target range tables. These tables will present a range in which the actual given building delivered energy value should sit. It will be through the use of the approved methodologies that the building specification single target and actual figures will be defined as is the case in the current method.

Given the remaining high number of activity and building types able to be defined for non-domestic buildings we will consider the responses to this consultation and undertake additional research into 2026 and 2027 to understand how such a target table range could be presented in a useful manner for building designers. For illustration, it is proposed that the Technical Handbooks will include a similar table to that shown in Table 8. The target ranges would be determined by the level of challenge indicated in section 6.1 of this consultation.

To add further clarity using two examples:

•For ‘Office and Workshop businesses’ that have a heat pump as its heat source the TDER for that particular building will sit within a range dependent on the level of challenge that is chosen and defined by the fluctuation in TDER dependent on where the actual building is located, the mix of activity types, and the orientation in which it is fixed.

•For ‘Office and Workshop businesses’ the target space heating rate for that building will sit within a range dependent on the level of challenge chosen and where the actual building is located, the mix of activity types and the orientation in which it is fixed. Note that the target space heating rate should not be affected by the choice in heat solution in the actual building.

Consultation Question 19

Do you agree with the proposal to present the target rates for new non-domestic buildings within a target range table, replacing the notional building specification currently shown in Table 6.1 in the Technical Handbooks?

Yes

No

Please provide a summary of the reason(s) for your view.

6.3 Fabric performance for new non-domestic buildings

The guidance to standard 6.2 ‘Building insulation envelope’ sets out robust maximum recommended thermal (‘backstop’) values for elements of the building insulation envelope. This defines the general level of expectation in limiting heat loss. That level is set, alongside the requirements of standard 6.1, to enable a degree of flexibility in the delivery of cost-effective levels of fabric performance that are viable for projects across Scotland.

The guidance also emphasises the importance of addressing air infiltration in new buildings to reduce heat loss and energy demand. Whilst it remains difficult to achieve a specified air infiltration rate to any degree of accuracy, the February 2023 energy standards introduced the requirement for air pressure tests to be performed on most new buildings as set out in CIBSE TM23: ‘Testing buildings for air leakage’, to verify that the infiltration rate declared at the design stage is achieved on completion.

The Passivhaus system sets a single total energy use and a single space heating demand target without being explicit on the fabric U-values that must be met. Additionally, one of the key principles of Passivhaus is to achieve a particular airtightness level set at equal or less than 0.6 ACH @ 50 Pa.

6.3.1. Proposals

Given the extent of change within building standards with the implementation of the February 2023 standards and the effect other measures within Section 6 and proposals within this consultation have on the need to improve fabric U-values we propose to retain the maximum U-values as indicated in table 6.3 of the current non-domestic building standards technical handbook and as copied in table 9 below. This position reflects the reporting on the cost/benefit of further improvements to fabric performance within the Non-Domestic Research Paper and also the need to maintain a reasonable degree of flexibility between the consultation proposal for the non-domestic level of challenge set in section 6.2 of this consultation and the maximum performance of individual elements.

Given the theme of this review, responses to the stage one consultation and the Non-Domestic Research Paper we propose to set a provision in guidance for an ‘upper limit’ for fabric infiltration. For any new building that has declared a design infiltration of 5 or poorer, we propose that a design statement should be provided alongside the application for building warrant. This should set out the approach taken in the fabric specification and the specific considerations that have led to less of an emphasis on limiting fabric infiltration. We would anticipate that this would be integrated with the reporting on compliance for energy and environmental standards indicated in section 9 of this consultation.

Consultation Question 20

Do you agree with the proposal to set a provision in guidance for an ‘upper limit’ to the declared design air infiltration rate?

Yes

No

Please provide a summary of the reason(s) for your view.

6.4 Standard 6.1 approved compliance methodologies for new non-domestic buildings

Standard 6.1 ‘Energy demand’ requires that “the energy performance is calculated in accordance with a methodology of calculation approved under regulation 7(a) of the Energy Performance of Buildings (Scotland) Regulations 2008”. The current approved methodology for non-domestic buildings is identified in guidance published in support of standard 6.1: Simplified Building Energy Model (SBEM) version 6 of the methodology is to be used for compliance with the current standards.

The Scottish Government has procured the development of an updated compliance tool for non-domestic buildings based on the UK Government’s version 7.

The key outcome sought from a calculation methodology should be that it is robust and representative of the performance of the building, presenting an accurate illustration of the effect that any combination of building elements will deliver. That representation should approximate the outcome expected in the real world.

Through 2025 the Scottish Government procured research to review the outputs of building energy models against several standardised building specifications. This research is published here:

The building energy models reviewed were:

•Simplified Building Energy Model v 6.1

•Passivhaus Planning Package (PHPP) version 10.6.

Table 10 indicates a summary of the delivered energy outputs from the building energy models across seven building archetypes. The specification applied across the archetypes are defined as the Business as Usual models which represent what is currently being developed in Scotland.

The Non-Domestic Research has found that SBEM and PHPP agree on the direction and magnitude of changes to energy consumption arising from changes in specification. However, there is a wide range in the difference in output between SBEM v6.1 and PHPP v10.6 across the indicated building types. The results also indicate that the building physics of the PHPP model does align with SBEM and these predict a similar level of impact for individual and grouped specification changes. However, there are some areas of building energy consumption such as heating, cooling and auxiliary systems that are significantly different to SBEM. Even though the two building models may disagree on the total energy consumption of a building there are suggestions that they may agree on the percentage improvement that differences to the target setting specification would yield.

Development of Scottish consultation compliance tool

Building on the 2025 research the Scottish Government procured the development of a Scottish version of the UK Government’s SBEM v7.

The Scottish Government version 7 applies updates to the UKG version to capture changes that were implemented within the February 2023 standards that differed from approaches applied in the rest of the UK, including:

•The benefit of electricity generated onsite that is applied within the standard 6.1 compliance calculation will only be that proportion that is used onsite

•Focus on Delivered Energy as the main compliance metric with changes to the methodology for buildings connected to heat networks

The development work also applies aspects that are proposed elsewhere within this stage two consultation, however, this work is still live and the version of the tool at the link below does not capture all proposed changes. The current consultation version of the Scottish SBEM v7 tool has been tested for usability prior to launch.

Consultation Question 21

Do you have any views on the development and usability of the consultation version of the Scottish SBEM v7?

Yes

No

Please provide a summary of the reason(s) for your view.

Future development of the Scottish compliance tool

A final version of the Scottish non-domestic compliance tool will build on the consultation version and will apply confirmed actions once the responses to this consultation have been analysed.

Consideration of additional compliance methodologies

The Passivhaus standard is supported by PHPP as a design and calculation tool with the tool being used within certified Passivhaus projects from inception. PHPP is based on the same building physics principles as SBEM and with slight modifications to the reporting could produce the equivalent proposed metrics.

6.4.1. Proposals

As part of confirming the Scottish equivalent to the Passivhaus standard we propose to recognise a modified version of PHPP as an approved methodology indicated in guidance to Standard 6.1 ‘Energy demand’ for new non-domestic buildings. We will work with the Passivhaus Trust and Passive House Institute to modify the existing PHPP tool to align it with the requirements of a Building Regulations compliance tool and capture the intent of additional changes as part of this review as indicated in proposals to other questions. This work will also compare outputs from PHPP and the proposed Scottish version of SBEM v7 to capture potential updates to both methodologies, so outputs are aligned where possible.

The final modified PHPP regulatory compliance tool will be presented for testing once complete.

Consultation Question 22

Do you agree with the proposal to recognise a modified version of PHPP as an additional tool that implements the approved methodology for standard 6.1 ‘Energy demand’ for new non-domestic buildings?

Yes

No

Please provide a summary of the reason(s) for your view.

Source page 8

7.1 Introduction

Standard 3.14 ‘Ventilation’ of the building standards requires that ventilation be provided so that the air quality inside the building is not a threat to the building or the health of the occupants.

For new homes a basic compliance guide, Annex 3.A within the Domestic Technical Handbook, was introduced in February 2023 covering the selection of systems and delivery through to commissioning. The approach applied is based on the level of fabric infiltration, and that while any system/solution for ventilation is currently accepted, the guidance that supports standard 3.14 does recommend a particular strategy based on the design infiltration level of the building fabric: mechanical supply and extract systems are recommended for very low fabric infiltration, below 3m³/(h.m²) @50Pa.

The Passivhaus standard takes a more prescriptive approach with the expectation that a mechanical ventilation with heat recovery system (MVHR) will be used to manage the delivery of thermal comfort and indoor air quality.

7.2 Proposals

It is proposed that the revised guidance will continue to accept any system/solution of achieving the performance sought in standard 3.14. However, the July 2024 stage one consultation sought views on how effective ventilation of new buildings is best achieved and on whether further guidance should be given on the application of MVHR in hew homes.

Given the strong support for the use of MVHR and the role it plays within the Passivhaus system, we will procure research outwith the stage two consultation to understand where additional guidance would be beneficial. This will consider previous research procured on the 2015 standards. Additionally, this work will consider the potential to decouple the link between fabric air infiltration and ventilation solution on the basis that such infiltration is uncontrolled and unpredictable and therefore should not be relied upon to inform a ventilation solution. Engagement will commence at the appropriate time to be captured in confirmed guidance.

Consultation Question 23

Do you agree with the proposal to accept any ventilation system/solution of achieving the performance sought in standard 3.14 ‘Ventilation’?

Yes

No

Please provide a summary of the reason(s) for your view.

Consultation Question 24

Do you have any views on additional guidance for MVHR systems that would be beneficial to be included in future guidance?

Yes

No

If you answered ‘Yes’ please provide details for your response.

Consultation Question 25

Do you have any views on the proposal to decouple the link between fabric air infiltration and ventilation solution?

Yes

No

If you answered ‘Yes’ please provide details for your response, in particular thoughts on methodologies that could be implemented to determine the appropriate ventilation solution.

Source page 9

8.1 Introduction

The February 2023 standards introduced the need to undertake an overheating risk assessment in dwellings and similar non-domestic buildings in support of compliance with mandatory standard 3.28 overheating. Guidance signposts two potential methodologies: a simple method; and Dynamic Thermal Analysis modelling.

The criteria for a certified Passivhaus building include the requirement that the percentage of hours in a calendar year with indoor temperatures above 25^oC be less than 10% for buildings without active cooling with this stress tested via a calculation within the Passivhaus Planning Package (PHPP) software.

8.2 Proposals

Given themes within responses to the July 2024 stage one consultation and review engagement, recognising the use of PHPP as an alternative, third methodology is a useful action to be incorporated into the guidance to mandatory standard 3.28.

Scottish Government will be developing updated guidance in support of standard 3.28 ‘Overheating risk’ to identify further information that will provide greater clarity on the actions required to achieve compliance with the standard. This has been in response to concerns from users of the guidance relating to the ‘simple method’ since its introduction in February 2023. We will also develop draft guidance on the use of PHPP as an option to assess and mitigate overheating risk in dwellings and some non-residential buildings. To inform this updated guidance a research project was procured in Winter 2025 with the guidance being made available for consultation once finalised. It is proposed that implementation of this guidance would align with the implementation date for the wider review.

Consultation Question 26

With regards to the proposal to reference the use of PHPP as an additional overheating risk assessment methodology option, do you know of any risks and opportunities that should be considered to inform the development of draft guidance?

Yes

No

If you answered ‘Yes’, please provide information summarising your experience.

Source page 10

9.1 Introduction

New buildings and new building work require to comply with current building regulations and should function to offer the performance that is set out at design stage when complete.

Section 1.1.3 of this document and part 4 of the July 2024 stage one consultation summarises the form and intent of the building standards system in Scotland. A key element of this is the building warrant process. The system is pre-emptive, requiring that designs need to be checked and approved by local authority verifiers before work on site can commence.

Part 4 of the July 2024 stage one consultation also provides a background to the work of the Building Standards Futures Board and the Compliance Plan Approach. The latter will see the creation of the role of Compliance Plan Manager to oversee compliance with building regulations from concept to completion on behalf of the relevant person and be the verifier’s point of contact to support the verification process. The Compliance Manager’s role would be to support the relevant person and assume responsibility for managing the compliance plan, in which actions of others, which are needed to provide assurance that work is completed in accordance with building regulations and all agreed verification compliance requirements are documented.

The Compliance Plan Manager role will not be introduced until legislative change can be made to provide the role with duties and corresponding offences. The Compliance Plan document has been introduced through recent guidance (early 2026) and sets out the actions and evidence planned to be delivered for an in scope project, record if these were delivered as planned or not, and detail any alternatives to planned measures carried out.

In 2023, two outcomes were set as part of the review of energy standards:

•improvements to the setting of energy and environmental (ventilation) performance standards for new buildings, leading to lower energy demand (and reduced running costs) and a healthy indoor environment; and

•improvements to the design and construction process to give a greater assurance that compliance, and therefore the performance sought, is delivered in practice.

Sections 3 to 8 of this consultation capture proposals related to the first objective. This section (9) will cover the second objective.

Following review and consideration of responses to the July 2024 stage one consultation, regulations amending The Building (Procedure) (Scotland) Regulations 2004 were laid on 12 December 2024. These introduce the requirement for developers to provide an “energy and environmental design statement” with building warrant applications and an “energy and environmental construction statement” with each completion certificate. These statements will describe how the design and construction of the building comply with paragraphs 3.13, 3.14, 3.28, 6.1 to 6.7, 6.10, 7.1 and 7.2 of schedule 5 of the Building (Scotland) Regulations 2004. These are the mandatory standards relevant to the delivery of energy and environmental performance.

Since 2024, the Scottish Government, in collaboration with the Scottish Futures Trust and review partners, has developed guidance to support preparation of the design and construction statements introduced by the Amendment Regulations of 12 December 2024. Application of such guidance is intended to also offer a means of demonstrating that an informed and robust approach to compliance has been applied to the standards related to energy and environmental performance. The guide will follow principles already under development for the Compliance Plan Approach but will also be applicable as a stand-alone process.

9.2 Proposals

We propose to introduce a Building Standards Energy and Environmental Compliance Handbook. This handbook will provide guidance on the production of the design and construction statements, and it will be expected that the design and construction statements will consist of actions identified in the Handbook. Application of the guidance will also offer a means of demonstrating that an informed and robust approach to compliance has been applied to the standards related to energy and environmental performance.

A draft Building Standards Energy and Environmental Compliance Handbook is presented for consultation.

Consultation Question 27

Do you have any comments on the structure of the proposed Building Standards Energy and Environmental Compliance Handbook and its application for the production of the Energy and Environmental Design and Construction Statements?

Yes

No

Please provide a summary of the reason(s) for your view.

Consultation Question 28

Do you have any comments on the presentation of the principle of communication and collaboration throughout the Handbook?

Yes

No

Please provide a summary of the reason(s) for your view.

Consultation Question 29

Do you have any comments on how the use of the Handbook could help to mitigate the risks associated with achieving compliance?

Yes

No

Please provide a summary of the reason(s) for your view.

Consultation Question 30

Do you have any comments on the emphasis made within the Handbook on robust evidence gathering and effective process management to aid in achieving compliance?

Yes

No

Please provide a summary of the reason(s) for your view.

Consultation Question 31

Do you agree with the roles and responsibilities of the actors identified in the Handbook related to the production of the Energy and Environmental Design and Construction statements?

Yes

No

Please provide a summary of the reason for your view.

Consultation Question 32

The Handbook focusses on five energy and environmental considerations:

•Airtight construction

•High performance insulation

•Thermal bridge free design

•Ventilation

•Optimised energy use

Do you have any comments on the use of these considerations as main themes throughout the Handbook?

Yes

No

Please provide a summary of the reason for your view.

Consultation Question 33

Focussing on the associated schedules to the Handbook, do you have any comments on the actions identified to prove compliance with the standards?

Yes

No

Please provide a summary of the reason for your view.

Source page 11

1 Purpose and intended effect

1.1 Title of proposal

Delivering a Scottish equivalent to the Passivhaus standard.

1.2 Objective

Buildings have significant implications for health, safety, the environment and our communities. Through the appropriate application of minimum building standards, set by regulations and supported by published guidance, the design and construction of Scotland’s built environment can benefit all owners, users and people in and around buildings.

This impact assessment forms part of a wider review that has considered changes to requirements and processes set within The Building (Scotland) Regulations 2004 and The Building (Procedure) (Scotland) Regulations 2004. Changes under consideration are to introduce updates within Scottish building regulations and supporting guidance to define a Scottish equivalent to the Passivhaus standard. The intent is that these changes will deliver two outcomes:

•Improvements to the setting of energy and environmental (ventilation) performance standards for new buildings, leading to lower energy demand (and reduced running costs) and a healthy indoor environment; and

•Improvements to the design and construction process to give greater assurance that compliance, and therefore the performance sought, is delivered in practice.

This Impact Assessment considers the second stage in the review and will consider the technical, commercial and wider policy implications of proposed updates and provision of guidance supporting the Building (Scotland) Regulation 2004 (as amended) and the Building (Procedure) (Scotland) Regulations 2004 (as amended).

The second stage consultation seeks views on the detail of the supporting guidance to the regulations that a Scottish equivalent to the Passivhaus standard, implemented through building regulations, should adopt. It seeks information to enable confirmation of the extent of amendment of guidance proposed for implementation. It also seeks views on the review programme which modifies the current March 2028 implementation date within the Building (Procedure) (Scotland) Regulations 2024.

Details on the review to date can be found on the review webpage.

1.3 Background

The building standards system in Scotland is established by The Building (Scotland) Act 2003 (The 2003 Act). The Act gives powers to Scottish Ministers to make building regulations, procedure regulations, fees regulations and other supporting legislation as necessary, to fulfil the purposes of the Act.

The purpose of the building standards system is to protect the public interest. The system regulates building work on new and existing buildings, to provide buildings that meet reasonable standards which:

•Secure the health, safety, welfare and convenience of persons in or about buildings and of others who may be affected by buildings or matters connected with buildings;

•Further the conservation of fuel and power; and

•Further the achievement of sustainable development.

The thirty-two local authorities in Scotland are appointed by Scottish Ministers as verifiers to administer the building standards system in their geographical areas. Responsibility for compliance with the building regulations lies with the “relevant person” as the party instructing building work and, ultimately, with the building owner.

The building standards system is pre-emptive and is designed to check that proposals meet building regulations. The main principles of the system are that a building warrant must be obtained from a verifier before work commences on site and a completion certificate is accepted by a verifier if, after undertaking reasonable inquiry, they are satisfied the building work meets the building regulations, prior to the building being occupied.

Requirements applicable to building work are set through The Building (Scotland) Regulations 2004 (as amended) as a set of mandatory functional standards. These are statements on what outcomes must be achieved when undertaking building work. These standards are supported by a body of guidance set out in Domestic and Non-domestic Technical Handbooks. This published guidance assists by defining the scope of action expected under each standard by providing one or more examples of how compliance with the standard can be achieved. However, it is quite acceptable to use alternative methods of compliance provided they fully satisfy the regulations.

The Building (Procedure) (Scotland) Regulations 2004 (as amended) outline the procedures that underpin the building standards system, such as the building warrant and completion processes. The regulations also deal with other matters covered in the Act, for example the serving of notices for dangerous buildings.

The Building Standards Division (BSD) is part of the Scottish Government Building Safety and Standards Directorate. Our purpose is to provide and maintain a robust legislative framework to ensure that the building standards system in Scotland protects the public interest. BSD prepares and updates building standards legislation and guidance documents, conducting any necessary research and consults on changes as The 2003 Act requires.

We also work in partnership with Local Authority verifiers and other stakeholders in the delivery and updating of the system and contribute to wider policy objectives of government on issues such as energy efficiency, climate change and building safety.

1.4 Energy environmental standards within building regulations

Since the introduction of national building regulations to Scotland in 1964, there have been energy standards, in one form or another. Initially these only applied to the external fabric of certain residential buildings and were minimal in nature. Later, they evolved to take account of commercial and industrial non-domestic buildings and to address the energy efficiency of those building services essential to provide comfort to occupiers of buildings.

Prior to 2000, reviews of energy standards were less frequent, with the outcome of such reviews resulting in modest standards that kept pace with change but which could be comfortably achieved by all aspects of industry. An impact assessment carried out on subsequent changes over this era would show a cost-benefit for modest improvements which would pay back quickly through reduction in the occupier’s energy bills.

Following the introduction of The 2003 Act and our current system of building standards in May 2005, energy standards within section 6 of the Building Standards Technical Handbooks were reviewed and improved in 2007, 2010, 2015 and most recently in 2023. For new buildings, 2007 saw the introduction of a single means of demonstrating compliance on the basis of calculated carbon dioxide emission targets, using the Standard Assessment Procedure (SAP) for dwellings and the Simplified Building Energy Model (SBEM) (or equivalent) for non-domestic buildings.

Each review introduced further staged improvement to energy standards and related changes on topics such as ventilation. It is assessed that emissions arising from energy use in new buildings constructed to the 2023 standards are, on aggregate, around 32% lower for new homes and 20% lower for new non-domestic buildings, compared to the previous 2015 standards and more than 80% lower than standards in force in 1990, the baseline reporting year for CO₂ emissions.

Key actions taken forward in the 2023 standards include:

•A focus on actions at a building level that reduce energy demand, including improved fabric insulation in new homes, to reduce space heating demand.

•The introduction of a new energy target for new buildings, measuring ‘delivered energy’ (that energy which is supplied to the building).

•In setting targets for new buildings, an amended approach for on-site generation of power, excluding credit for energy exported from the building.

•A simplified process when connecting a new building to a heat network (standardising the building performance needed to comply).

•Changes to ventilation standards to reflect the expectation of improved levels of insulation, resulting in reduced air leakage/infiltration.

A further, specific change was introduced by the New Build Heat Standard (NBHS), which applies to new buildings and certain conversions where a building warrant application was submitted on or after 1 April 2024. The NBHS was further amended in January 2025 to permit bioenergy and peat heating and exempt secondary heating appliances from the standard.

1.5 Rationale for Government intervention

The Climate Change (Scotland) Act 2009 (the 2009 Act), which originally received Royal Assent on 4 August 2009, remains the key climate legislation of the Scottish Government.

As per the 2009 Act, Ministers must ensure that Scotland’s emissions are net zero by 2045. The 2009 Act also legislates the Scottish carbon budgets for each five-year period between 2026 and 2045, setting out the trajectory to net zero.

Our target of net-zero emissions by 2045, five years ahead of the rest of the UK, is firmly based on advice of the independent Climate Change Committee.

With the introduction of the New Build Heat Standard in April 2024 there is a shift in the way we heat our new buildings. The standard requires that heating in new buildings is not by ‘direct emission heating systems’ such as gas and oil boilers, as such, supporting our climate targets. A further step reduction in delivered energy will reduce total upstream emissions associated with the operational energy use in these new buildings.

In December 2022, Ministers confirmed, that in response to Alex Rowley MSP’s Proposed Domestic Building Environmental Standards (Scotland) Bill, the Scottish Government would make subordinate legislation by 14 December 2024 to give effect to Mr Rowley’s final proposal “to introduce new minimum environmental design standards for all new build housing to meet a Scottish equivalent to the Passivhaus standard, in order to improve energy efficiency and thermal performance”. Regulations, satisfying the response to Alex Rowley MSP, were laid in December 2024.

1.6 The risks to be addressed

The actions proposed within this review are the reduction in delivered energy demand of new buildings and improvements in the indoor environment whilst introducing a robust compliance regime: actions drawn from useful lessons from the Passivhaus and other low energy building standards.

The reduction in energy use of new development will contribute positively to the Scottish Government’s Climate Change, Energy Strategy and Fuel Poverty Programmes as well as aiding achievement of the First Minister’s four priorities especially eradiating child poverty and tackling the climate emergency.

In delivering improvement, there are subsidiary risks that must also be considered. Minimum standards applicable to new buildings should still:

•Be achievable across the whole of Scotland;

•Be proposed with an understanding of the potential cost of improvement to the delivery and operation of buildings;

•Remain technically feasible;

•Offer flexibility in the ways in which standards can be achieved, to allow best value;

•Ensure proposals do not conflict with or duplicate other regulatory requirements; and

•Be implemented with consideration of wider societal issues related to the occupation and use of buildings.

Source page 12

2.1 Development phase

Before making or amending building regulations, Scottish Ministers are required, under Section 1(2) of the Building (Scotland) Act 2003, to consult “such persons as appear to them to be representative of the interests concerned”.

Prior to public consultation on the proposed changes to regulations, this duty is discharged through the development of proposals by a Departmental Working Group, comprising of officials and representatives of industry, together with communication with other parts of Government and bodies representing organisations of the construction industry. This is intended to provide assurance that proposals are proofed against considerations previously identified above.

In 2023, Scottish Ministers approved a Departmental Working Group to consider amendments to building regulations in respect of taking on the effect of Mr Rowley’s final bill proposal. Along with government officials, the Working Group included members of local authority verifiers, designers, building services engineers, energy modellers, academia and private sector organisations representing the commercial and domestic sector

Over four meetings between June 2023 and July 2024 alongside seven technical industry workshops, this group helped shape the development of proposals for the July 2024 stage one consultation. Working Group members and wider industry stakeholders have been actively engaged in the review process to date. Further meetings of the Working Group during the stage one consultation period were undertaken to develop a consensus paper which has, alongside consultation responses, informed the second stage of the review.

The stage one consultation activity ran from 31 July 2024 to 23 October 2024 and received a total of 350 responses. Of the 350 responses received, 64 instructed that their responses should not be published. Of these 64 responses, 25 were from individuals and 39 from organisations. Accordingly, following final quality assurance checks, 290 consultation responses were published via the consultation webpage alongside the full consultation analysis and report.

Following the review and consideration of responses to the July 2024 consultation, regulations amending the Building (Procedure) (Scotland) Regulations 2024 were laid on 12 December 2024. These introduce a requirement for developers to provide an “energy and environmental design statement” with building warrant applications and an “energy and environmental construction statement” with each completion certificate. These statements will describe how the design and construction of the building complies with paragraphs 3.13, 3.14, 3.28, 6.1 to 6.7, 6.10, 7.1 and 7.2 of schedule 5 of the Building (Scotland) Regulations 2004.

The focus of review activity through 2025 and 2026, through additional Working Group meetings, and wider stakeholder engagement has been to agree proposals for a stage two consultation on the changes and introduction of requirements and processes within guidance to the Building (Scotland) Regulations 2004 (as amended) and the Building (Procedure) (Scotland) Regulations 2004 (as amended). Changes under consideration are to introduce updates within Scottish building regulations and supporting guidance to define a Scottish equivalent to the Passivhaus standard.

2.2 Within Government

BSD has a network of stakeholder organisations with an interest in building regulations. Government organisations and departments with a policy interest in proposals are contacted in respect of these proposals and consultation documents are made available to these bodies.

This includes direct contact and discussion with the following during the development phase. This ensures that the implications of options on other policy areas is clearly understood and that proposals are developed with an awareness of similar or related work elsewhere within the UK:

•Scottish Government Directorate General Communities and External Affairs

•Scottish Government Directorate General Net Zero

•Building Regulations, Wales

•Building Regulations, Northern Ireland

•Building Regulations, England (Building Safety Regulator)

•Building Regulations, England (Department for Energy Security and Net Zero)

•Building Regulations, England (Ministry of Housing, Communities and Local Government)

2.3 Public consultation

As indicated above stage one consultation activity ran from 31 July 2024 to 23 October 2024 and received a total of 350 responses.

This Partial Impact Assessment forms part of a package issued alongside the stage two consultation. This consultation seeks comments on proposals to changes within Building (Procedure) (Scotland) Regulations 2004 and guidance to the Building (Scotland) Regulations 2004 and the introduction of guidance in support of the Building (Procedure) (Scotland) Regulations 2004 as amended in December 2024.

Notification of the consultation is issued to a list of individuals and organisations previously identified as having an interest in building standards.

The full consultation package will be published on the Scottish Government website for a period of 12 weeks.

2.4 Business consultation

While changes to building regulations affect any party who chooses to build a new building or carry out new building work to an existing building, such changes have the most significant impact on parties involved in the delivery of such building work for example; designers, developers, contractors; and manufacturers of building products.

Businesses have been represented on the Department Working Group through the development phase of this consultation and have also been represented on a range of themed industry workshops through Autumn/Winter 2023.

Further views of businesses, on the principles for regulation, were sought as part of the stage one consultation. This stage two consultation will continue engagement with businesses on the technical and financial implications of the proposed changes on Scottish firms.

Engagement will continue through 2026 as the second consultation is launched.

Source page 13

3.1 Introduction

The subject of this consultation is change to requirements set within guidance to the Scottish building regulations to deliver a Scottish ‘equivalent’ to the Passivhaus standard, with the intent that these changes will deliver two outcomes:

•improvements to the setting of energy and environmental (ventilation) performance standards for new buildings, leading to lower energy demand (and reduced running costs) and a healthy indoor environment; and,

•improvements to the design and construction process to give greater assurance that compliance, and therefore the performance sought, is delivered in practice.

To achieve the two outcomes, the proposals, as set out in the stage two consultation to deliver a Scottish ‘equivalent’ to the Passivhaus standard, are discussed in sections 3.2 to 3.14 below.

Detailed costings are made available for the review of energy standards for new dwellings and buildings. This, alongside costings for other elements, will be subject to further development, based upon consultation responses, in support of final recommendations to Ministers.

3.1.1. Benefits arising from policy objective

A reduction in energy demand (running costs) and associated greenhouse gas emissions from new dwellings and new building work provides a range of benefits, including:

•a significant and positive contribution to Government targets set for the reduction in greenhouse gas emissions;

•reduces energy costs arising from the operation of new buildings;

•reduces use of finite natural resources and promotes development and adoption of systems that incorporate renewable energy sources; and,

•an increased benefit where buildings are altered, extended or converted and also where existing building elements and equipment are replaced, where this must be to the current standards.

An improvement in the health of the indoor environment in new dwellings and new building work provides a range of benefits, including:

•an adequate and healthy supply of air for human occupation of a building;

•can aid reduce the effects of moisture in various forms; and,

•reduce the risk to health of occupants from overheating.

Improvements to the design and construction to give greater assurance that compliance, and therefore the performance sought, is delivered in practice will offer a means of demonstrating that an informed and robust approach to compliance has been applied to the standards related to energy and environmental standards. This provides greater assurance that the benefits indicated above are materialised.

3.1.2. Sectors and groups affected

Sectors and groups affected can be categorised as:

•persons procuring or occupying new buildings or building work, who may need to bear additional costs associated with delivering buildings which have improved energy performance. Whilst this relates to a specific activity, the group who may be affected at one time or another can be considered to be the majority of the population;

•developers who, in addition to the above, would have to review existing building specification, construction detailing and potentially, methods of working. This might include, where relevant, seeking amended Scottish type approvals for standard construction, possibly sooner than otherwise intended;

•building materials and component manufacturers, who may need to review and introduce changes to products and literature to address revised performance standards;

•those involved with the energy aspects of building design and construction, who would have to familiarise themselves with any revised standards and methodologies;

•building services contractors, who may need to invest to increase the capacity for commissioning and testing of buildings and engineering services; and,

•local authority verifiers, who may need to arrange training of staff on changes to energy standards and guidance, to ensure these can be verified at design submission and during construction where necessary.

3.2 Delivery programme

As part of the laying of amendment regulations in December 2024 the Scottish Government applied a coming into force date of 31 March 2028 to enable the construction sector to prepare for the changes.

As the development of the Stage 2 proposals, supporting guidance and assessment tools has taken longer than originally anticipated, the timetable set out in the Stage 1 consultation has been reviewed. Following analysis of consultation responses, we now aim to publish guidance and approved methodologies under standard 6.1 in Autumn 2027.

Consequently, to maintain a sufficient industry preparation period, we will amend the implementation date in regulations to Autumn 2029. We will also consider the most appropriate approach, including introducing the standard in full, phasing it in, or supporting voluntary adoption before compliance becomes mandatory.

3.3 Alternative means of compliance

Responses to the July 2024 stage one consultation indicated strong support to amend standard 6.1 ‘Energy demand’ to recognise Passivhaus certification as an alternative means of compliance. This change will be progressed for implementation alongside wider review changes.

It is anticipated that such a change will require amendments to the Building (Scotland) Regulations 2004 (as amended), in particular paragraph 6.1 of Schedule 5.

The Passivhaus standard is a well-established voluntary standard. The standard is focused on delivering buildings with very low energy demand and high levels of occupant comfort through an informed approach to the optimisation of building form, orientation and design and effective quality assurance processes. There is increasing recognition and application of the standard, which contributes positively to overall energy and net zero objectives.

Given that the proposal to recognise Passivhaus certification as an alternative means of compliance will be voluntary any potential cost/emissions uplift or benefit will only be experienced by those who voluntarily decide to go through the Passivhaus process and will not form part of mandatory standards for the whole of Scotland.

3.4 Primary compliance metric – delivered energy

Delivered energy (as opposed to primary energy) remains the main compliance metric for standard 6.1 ‘Energy demand’ as this continues to be the most relevant metric for those that occupy and manage buildings. We propose to present unregulated loads as information sitting outwith but alongside the delivered energy metric.

Given that no change to the February 2023 energy standards is proposed, no further analysis is provided on this element within this Impact Assessment.

3.5 Secondary compliance metric – space heating demand

Proposals introduce a space heating demand rate as calculated through the approved methodologies, that takes into account the fabric efficiency of a new dwelling and new building.

A focus on space heating demand is likely to help reduce energy demand for space heating, which still forms a significant portion of the overall delivered energy consumption in new dwellings and buildings. This could also ensure that a good level of fabric insulation is incorporated in building work, especially to construction elements which would be difficult or costly to upgrade in the future.

The level at which the space heating demand rate is set will be defined by the level of challenge options as indicated in section 3.8 and 3.10 below. The costs and benefits are indicated in the corresponding sections.

3.6 Method of target setting

It is proposed that the current notional dwelling and notional building target setting method within standard 6.1 ‘Energy demand’ is replaced with a set of target range tables. The ranges being determined by a limited number of variables. For new dwellings: location, archetype, orientation and dwelling heat source. For new non-domestic buildings: location, building type, activity types, building heat source and orientation.

Closing down the number of variables by which a target can fluctuate could increase the focus on items that improve the energy efficient built form of that building. The level at which these target rates are set will be defined by the level of challenge options as indicated in section 3.8 and 3.10 below. The costs and benefits are indicated in the corresponding sections.

3.7 Fabric performance for new dwellings

The maximum ‘backstop’ U-values within guidance to standard 6.2 ‘Building insulation envelope’ are proposed to remain unchanged.

It is proposed to set a maximum upper limit of 5 m³/(h.m²) to the declared design air infiltration rate. EPC data for current new dwellings and buildings indicate that the average air tightness test result is below 5 m³/(h.m²) and it is anticipated that further focus on air tightness will help to reduce energy demand for space heating, which still forms a significant portion of the overall delivered energy consumption in new dwellings and buildings.

3.8 Level of challenge for new dwellings

Research was commissioned to assess and identify potential improvements in energy performance for new domestic buildings and to evaluate the costs of improvement measures. This was to inform the setting of targets, or level of challenge, set within energy standards.

Three level of challenge options for new dwellings are presented resulting in aggregate emissions reductions of between 0 and 37% against the February 2023 energy standards.

Additionally, where new dwellings are supplied from a high efficiency communal heating system it is proposed that dwellings supplied from such a source are able to report the net efficiency of the heat supply rather than the current default 100% efficiency.

Cost and energy models were developed based on four dwelling archetypes derived from an analysis of an extract of the Energy Performance Certificate database for new domestic buildings.

Currently, within the February 2023 energy standards, specifications for the level of challenge to be achieved for new dwellings are provided for the two main space heating fuels (electricity in the form of an air source heat pump and supplied heat in the form of a heat network). An additional, all other solutions specification is provided based on a gas solution.

The proposals within the stage two consultation retain three heating fuel specifications for the level of challenge:

•Electricity (air source heat pump)

•Supplied heat (heat network)

•All other solutions (direct electric)

Following the identification of baseline levels of performance i.e. that being delivered by the February 2023 energy standards, three level of challenge specifications were identified and consultation proposals are being taken forward using these specification options:

•Good Practice

•Best Practice

•Business as usual i.e. retain current February 2023 energy standards

These specification options, when aggregated to a national profile are assessed at delivering a 6.5%, 37% and 0% reduction in annual greenhouse gas emissions respectively.

Option 1 – Reduce energy demand and associated greenhouse gas emissions through building regulations, with revised performance measures for new dwellings. Within this option, a good practice level of challenge is considered.

Option 2 – Reduce energy demand and associated greenhouse gas emissions through building regulations, with revised performance measures for new dwellings. Within this option, a best practice level of challenge is considered.

Option 3 – Do nothing. With this option, a Business as Usual level of challenge is considered.

Reducing Greenhouse Gas Emissions

The number of new buildings per annum may account for a change in less than 1% of the entire building stock, however, by the year 2045, buildings built from this point onwards will account for a substantial percentage of our total building stock.

It is therefore vital that new buildings continue to make a contribution to further reductions in energy demand and associated emissions.

The outcomes of this review support the Government’s agenda to tackle climate change and reducing the adverse effect of greenhouse gas emissions on the environment. The Scottish Government’s commitment to net zero emissions by 2045 means that future energy performance improvements to buildings, new and existing, will remain a strong review agenda.

Option 1 – Good practice

This option offers meaningful benefit in respect of the objectives of this review – to reduce delivered energy demand and associated greenhouse gas emissions from new dwellings and new building work. The potential annual abatement associated with the occupation and use of new dwellings for an implemented good practice level of challenge is assessed in Table 1.

In assessing the overall cost/benefit for dwellings, the appraisal time period for estimating the impact of the policy is 10 years and assumed 60 years building life from the year of construction.

Benefits in adopting the good practice level of challenge proposed in option 1, to reducing energy demand and emissions include:

•an established delivery method by setting standards within Scottish building regulations. This has proved to be an equitable and robust way of improving the energy performance of new dwellings. All new dwellings which are heated (or cooled) or new building work within existing buildings will attract the application of revised minimum standards;

•the proposed level of challenge applies across all dwelling types regardless of servicing strategy, archetype and location;

•in addressing the performance of buildings, building regulations offers certainty that all new building work to all new and existing dwellings will result in improved performance. This allows a quantitative assessment of improvement, which will assist the Government in meeting its targets for emissions reductions; and,

•where subject to building regulations and a mandatory need to address improved building performance, those persons commissioning building work have the incentive to meet the regulations in the most cost effective manner possible. This is supported and encouraged by the use of functional standards and supporting guidance within building regulations, which allows flexibility in solutions and value engineering.

Option 2 – Best practice

This option offers significant benefit in respect of the objectives of this review – to reduce delivered energy demand and associated greenhouse gas emissions from new dwellings and new building work. The potential annual abatement associated with the occupation and use of new dwellings for an implemented best practice level of challenge is assessed in Table 2.

In assessing the overall cost/benefit for dwellings, the appraisal time period for estimating the impact of the policy is 10 years and assumed 60 years building life from the year of construction.

Benefits in adopting the best practice option of level of challenge proposed in option 2 are the same as set out in option 1. Noting that increased specification does affect the cost/benefit analysis reported for the implemented change.

Option 3 – Do nothing

As noted above, the Scottish Government is committed to the delivery of net-zero greenhouse gas emissions by 2045. Whilst building regulations have reduced emissions from new buildings substantially since 1990, doing nothing offers no further contribution towards meeting national targets for emissions reduction with no benefits identified which relate to the intended objective.

Doing nothing would result in new dwellings which continue to produce emissions at current levels, creating a greater challenge for the future. This option would not support the delivery of climate change targets and may lead to buildings requiring expensive work at a later date to improve their energy performance.

Given the Scottish Government commitment to reducing greenhouse gas emissions, a potential reputational risk may also arise if this option was adopted.

Monetised benefits

Potential savings achievable through implementation of options 1 and 2 are categorised as direct savings to building users and costs to Government from not taking actions, as follows:

•direct savings to building users through reduction in energy demand and reduced fuel costs; and,

•emissions reductions from reduced fuel consumption are valued using the guidance provided by HM Treasury Green Book supplementary appraisal guidance on valuing energy use and greenhouse gas emissions.

Option 1 – Good practice

Costs include ongoing cost of energy used, capital construction costs, ongoing maintenance costs and lifecycle replacements over their lifetime. Full costing research which informed this review and which forms part of the consultation package is published online. The following tables are drawn from the above research.

Table 3 indicates that the good practice level of challenge option results in an 8% reduction in household fuel costs per year.

When calculated, Table 4 indicates that the good practice level of challenge option results in a capital cost reduction for new dwellings of between 1 and 2%.

Table 5 combines the reduction in annual fuel costs and capital cost of construction with ongoing maintenance costs and lifecycle replacements over a dwellings lifetime for the good practice level of challenge uplift option.

Option 2 – Best practice

Costs include ongoing cost of energy used, capital construction costs, ongoing maintenance costs and lifecycle replacements over their lifetime. Full costing research which informed this review and which forms part of the consultation package is published online. The following tables are drawn from the above research.

Table 6 indicates that the best practice level of challenge option results in an 34% reduction in household fuel costs per year.

When calculated, Table 7 indicates that the best practice level of challenge option results in a capital cost increase for new dwellings of between 4 and 5%.

Option 3 – Do nothing

This option presents no implementation costs.

National Impact – New Dwellings

Based on the build/fuel mix, capital and lifetime costs, benefits and transition period applied, the national costs and benefits for Options 1 and Option 2 are shown in Table 9. The counterfactual is Option 3 - the February 2023 energy standards. This is not shown as the cost and benefits are assessed as zero for this option. The analysis is based on the HM Treasury Green Book standards and accompanying supplementary guidance on valuation of energy use. Refer to the full domestic research for relevant assumptions and further commentary.

3.9 Standard 6.1 compliance approved methodologies for dwellings

An interim version of a Scottish ‘wrapper’ linked to the UK Government Home Energy Model is presented for consultation as a work in progress compliance tool, to be developed further before being adopted as an approved methodology prior to implementation.

Development of compliance methodologies has been a continuous process to ensure that they represent innovations in technology and the complexities of low and zero energy dwellings. We will continue to work with software developers to understand the cost impacts of such a change.

It is proposed that a modified version of the Passivhaus Planning Package (PHPP) will also be developed and adopted as an approved compliance methodology. This will allow flexibility in the choice of methodologies, however, the use of one methodology over the other should not give a benefit in terms of complying with standard 6.1.

3.10 Level of challenge for new non-domestic buildings

Research was commissioned to assess and identify potential improvements in energy performance for new non-domestic buildings and to evaluate the costs of improvement measures. This was to inform the setting of targets, or level of challenge, within the set of energy standards.

Three level of challenge options for new buildings are presented resulting in aggregate emissions reductions of between 0 and 11.4% against the February 2023 energy standards.

Cost and energy models were developed based on seven building types split across eleven sub types. These were derived from an analysis of an extract of the Energy Performance Certificate database for new buildings:

•Shallow office; district heat network (DHN) and natural ventilation (NV)

•Deep office; heat pump (HP) and air conditioning (AC)

•Health centre; DHN and mechanical ventilation (MV)

•Hotel; direct electric (DE) and NV

•Retail; HP and AC

•Retail; HP and MV

•Secondary school; DHN and AC

•Secondary school; HP and MV

•Secondary school; DE and NV

•Warehouse distribution; HP and AC

•Warehouse distribution; DE and MV

Currently, within the February 2023 energy standards, specifications to achieve the level of challenge to be achieved for new buildings is provided for the two main space heating fuels (electricity in the form of an air source heat pump and supplied heat in the form of a heat network). An additional, legacy specification is provided based on a gas solution.

The proposals within the stage two consultation retain three heating fuel specifications for the level of challenge:

•Electricity (air source heat pump)

•Supplied heat (heat network)

•All other solutions (direct electric)

Following the identification of baseline levels of performance i.e. that being delivered by the February 2023 energy standards, three level of challenge specifications were identified and consultation proposals are being taken forward using these specification options. Note that the options referenced are options within the non-domestic analysis and are not combined with the domestic options discussed above:

•Option 1 – Business as usual i.e. retain current February 2023 energy standards

•Option 2 – Medium level

•Option 3 – High level

Note that the non-domestic research had a low level of challenge option instead of a Business as usual option. The Business as usual option is progressed alongside the medium and high options.

These specification options, when aggregated to a national profile are assessed at delivering a 0%, 10.1% and 11.4% reduction in initial annual greenhouse gas emissions respectively.

Option 1 – Do nothing. With this option, a Business as Usual level of challenge is considered.

Option 2 – Reduce energy demand and associated greenhouse gas emissions through building regulations, with revised performance measures for new buildings. Within this option, a medium level of challenge is considered.

Option 3 – Reduce energy demand and associated greenhouse gas emissions through building regulations, with revised performance measures for new buildings. Within this option, a high level of challenge is considered.

Reducing Greenhouse Gas Emissions

The number of new buildings per annum may account for a small change in the entire building stock, however, by the year 2045, buildings built from this point onwards will account for a substantial percentage of our total building stock.

It is therefore vital that new buildings continue to make a contribution to further reductions in energy demand and associated emissions.

The outcomes of this review support the Government’s agenda to tackle climate change and reducing the adverse effect of greenhouse gas emissions on the environment. The Scottish Government’s commitment to net zero emissions by 2045 means that future energy performance improvements to buildings, new and existing, will remain a strong review agenda.

Option 1 – Do nothing

As noted above, the Scottish Government is committed to the delivery of net-zero greenhouse gas emissions by 2045. Whilst building regulations have reduced emissions from new buildings substantially since 1990, doing nothing offers no further contribution towards meeting national targets for emissions reduction with no benefits identified which relate to the intended objective.

Doing nothing would result in new buildings which continue to contribute to produce emissions at current levels, creating a greater challenge for the future. This option would not support the delivery of climate change targets and may lead to buildings requiring expensive work at a later date to improve their energy performance.

Given the Scottish Government commitment to reducing greenhouse gas emissions, a potential reputational risk may also arise if this option was adopted.

Option 2 – Medium level

This option offers meaningful benefit in respect of the objectives of this review – to reduce delivered energy demand and associated greenhouse gas emissions from new buildings and new building work. The potential annual abatement associated with the occupation and use of new buildings for an implemented medium level of challenge is assessed in Table 10.

In assessing the overall cost/benefit for buildings, the appraisal time period for estimating the impact of the policy is 10 years and assumed 60 years building life from the year of construction.

Benefits in adopting the medium level of challenge proposed in option 2, to reducing energy demand and emissions include:

•An established delivery method by setting standards within Scottish building regulations. This has proved to be an equitable and robust way of improving the energy performance of new buildings. All new buildings which are heated (or cooled) or new building work within existing buildings will attract the application of revised minimum standards.

•The proposed level of challenge applies across all buildings types regardless of servicing strategy, archetype and location.

•In addressing the performance of buildings, building regulations offers certainty that all new building work to all new and existing buildings will result in improved performance. This allows a quantitative assessment of improvement, which will assist the Government in meeting its targets for emissions reductions.

•Where subject to building regulations and a mandatory need to address improved building performance, those persons commissioning building work have the incentive to meet the regulations in the most cost effective manner possible. This is supported and encouraged by the use of functional standards and supporting guidance within building regulations, which allows flexibility in solutions and value engineering.

Option 3 – High level

This option offers significant benefit in respect of the objectives of this review – to reduce delivered energy demand and associated greenhouse gas emissions from new buildings and new building work. The potential annual abatement associated with the occupation and use of new buildings for an implemented high level of challenge is assessed in Table 11.

In assessing the overall cost/benefit for buildings, the appraisal time period for estimating the impact of the policy is 10 years and assumed 60 years building life from the year of construction.

Benefits in adopting the high level option of level of challenge proposed in option 3 are the same as set out in option 2. Noting that increased specification does affect the cost/benefit analysis reported for the implemented change.

Monetised benefits

Potential savings achievable through implementation of options 2 and 3 are categorised as direct savings to building users and costs to Government from not taking actions, as follows:

•Direct savings to building users through reduction in energy demand and reduced fuel costs

•Emissions reductions from reduced fuel consumption are valued using the guidance provided by HM Treasury Green Book supplementary appraisal guidance on valuing energy use and greenhouse gas emissions

Option 1 – Do nothing

This option presents no implementation costs.

Option 2 – Medium level

Costs include ongoing cost of energy used, capital construction costs, ongoing maintenance costs and lifecycle replacements over a building’s lifetime. Full costing research which informed this review and which forms part of the consultation package is published online. The following information is drawn from that research.

When calculated, Table 13 indicates that the medium level of challenge option results in a capital cost increase for new buildings of between 1 and 7% depending on the building sub-type:

Combining the annual fuel costs and capital cost of construction with ongoing maintenance costs and lifecycle replacements over a building lifetime results in a total cost uplift of £48M for the medium level of challenge.

Option 3 – High level

Costs include ongoing cost of energy used, capital construction costs, ongoing maintenance costs and lifecycle replacements over a building’s lifetime. Full costing research which informed this review and which forms part of the consultation package is published online. The following information is drawn from that research.

When calculated, Table 15 indicates that the high level of challenge option results in a capital cost increase for new buildings of between 2 and 11% depending on the building sub-type:

Combining the annual fuel costs and capital cost of construction with ongoing maintenance costs and lifecycle replacements over a building lifetime results in a total cost uplift of £349M for the high level of challenge.

National Impact – New Buildings

Based on the build/fuel mix, capital and lifetime costs, benefits and transition period applied, the national costs and benefits for Options 2 and Option 3 are shown in Table 16. The counterfactual is Option 1 - the February 2023 energy standards. This is not shown as the cost and benefits are zero for this option. The analysis is based on the HM Treasury Green Book standards and accompanying supplementary guidance on valuation of energy use. Refer to the full non-domestic research for relevant assumptions and further commentary.

3.11 Standard 6.1 compliance approved methodologies for new non-domestic buildings

An interim Scottish version of the Simplified Building Energy Model v7 is presented for consultation as a work in progress compliance tool, to be developed further before being adopted as an approved methodology prior to implementation.

Development of compliance methodologies has been a continuous process to ensure that they represent innovations in technology and the complexities of low and zero energy buildings. We will continue to work with software developers to understand the cost impacts of such a change.

It is proposed that a modified version of the Passivhaus Planning Package (PHPP) will also be developed and adopted as an approved compliance methodology. This will allow flexibility in the choice of methodologies, however, the use of one methodology over the other will not give a benefit in terms of complying with standard 6.1.

3.12 Ventilation and indoor air quality

It is proposed to continue to accept any system/solution of achieving the performance sought in standard 3.14 ‘Ventilation’. However, we will procure research outwith the stage two consultation to understand where additional guidance would be beneficial, including on the use of Mechanical Ventilation with Heat Recovery in new dwellings and non-domestic buildings. Engagement will commence at the appropriate time to be capture in confirmed guidance.

3.13 Overheating

Scottish Government has initiated work (contractor appointed) to review and update the guidance in support of standard 3.28 ‘Overheating risk’ to identify further information that will provide greater clarity on the actions required to achieve compliance with the standard. The includes guidance on the use of PHPP as an additional option to assess and mitigate overheating risk in dwellings and some non-residential buildings. This work will be confirmed and captured within guidance

3.14 Compliance and assurance

We propose to introduce a ‘Building Standards Energy and Environmental Compliance Handbook’ which will provide guidance on the production of the design and construction statements as now required by the Building (Procedure) (Scotland) Amendment Regulations 2024. Application of such guidance is intended to also offer a means of demonstrating that an informed and robust approach to compliance has been applied to the standards related to energy and environmental performance.

We consider it is important to emphasise that provisions introduced into guidance or via new guidance should reference current good practice and are intended to reinforce the need for this, not create new obligations. Noting that some expansion of provisions specific to the building standards system, such as the requirement to submit design and construction statements, will attract some small additional on-costs. It is not, therefore, expected that a more informed and evidenced approach to the delivery of energy efficiency in buildings should result in significant additional capital cost to development (compared to expected practice), beyond the need to engage a coordinating individual to manage the process.

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4.1 Intra UK trade and international trade

An assessment was made on the impact of these proposals to international trade and also in respect of trade within the UK. The measures proposed relate to the function or performance of construction work and how that is reported. They do not prescribe measures which:

•have the potential to affect imports or exports of a specific good or service, or groups of goods or services;

•affect trade flows with one or more countries; or

•include different requirements for domestic and foreign businesses.

At present, the proposals do not define technical regulations or conformity assessment procedures for which a relevant standard does not exist. Accordingly, proposals do not require a submission of a Technical Barrier to Trade notification to the World Trade Organisation. This assessment will be further reviewed as part of an updated full Business and Regulatory Impact Assessment.

4.2 EU alignment

The subject of this review has material relevance to impact on the Scottish government’s policy to maintain alignment with the EU.

Energy standards set though building regulations formed part of the transposition of Directive 2010/31/EU on the energy performance of buildings, with changes to our regulations as recent as June 2023 demonstrating awareness of issues relevant to the transposition of that Directive.

Recent amendment of this Directive as (EU)2024/1275, such as the phasing out of fossil fuels from new buildings, have already been put in place in support of our domestic heat decarbonisation agenda, through the 2024 New Build Heat Standard.

The ongoing review, examining changes to performance targets and processes, will assess the continued opportunities for, and risk to, alignment. The topic of this review supports the more effective delivery of very low energy buildings.

Source page 15

5.1 Competition assessment

Having reviewed the five competition filter questions provided with the Competition and Markets Authority Fair Trading document “Competition assessment guidelines, Part 2: guidelines”, it is considered that proposals set out in this consultation will not result in a significant impact on competition within the market place.

In support of the above, it is noted that:

•The manner in which standards for new buildings are set allows for flexibility in the solutions adopted which reduces the emphasis on performance of individual products or solutions;

•New regulations and improved standards are a recognised driver to product improvement and to innovation and as such, an element of challenge to all parties involved in delivering products and services is expected.

No significant areas where issues of competition, restriction or imbalance will arise have been identified as part of this review.

5.2 Consumer assessment

The Scottish Government definition of a consumer is “anyone who buys goods or digital content or uses goods or services either in the private or public sector, now or in the future.”

While changes to building regulations affect any party who chooses to build a new building or carry out new building work to an existing building, we must recognise that consumers will eventually use or live in these buildings.

New regulations and improved standards are a recognised driver to product improvement and to innovation and as such there is likely to be an associated cost uplift due to the changes that are brought about by the improvement in building standards. Any potential cost uplifts are reported in this partial BRIA and will be confirmed through development of the final BRIA.

At this stage, the proposed changes do not create any adverse impact on consumers beyond what may reasonably be expected by a regulatory regime of this type (application of minimum standards to a process).

5.3 Test run of business forms

There are no new business forms proposed within the confirmed regulatory changes. However, these changes do relate to the manner in which information will be presented to verifiers as part of the design and construction process.

Source page 16

The proposals put forward relate to the provision of physical systems within newly created buildings and focus on how information on specific issues will be reported. These requirements are set through national regulation and implemented as part of construction work. As such, there are no direct implications or unintended consequences identified in relation to the impacts of digital technology and technological services.

Of indirect relevance, it can be noted that digital technology is implemented widely within the construction and housing sectors in the management of information and to improve productivity and outcomes. Correspondingly, the Scottish Government has an improvement agenda that include the increased use of digital solutions in the management of the building standards process.

For the building standards system, this includes an online portal for the submission of applications and approval of building warrants required for the construction of new dwellings. Ongoing development of this digital strategy is a workstream being continued under the Building Standards Futures Board.

Source page 17

Proposals within this consultation that would be the subject of regulation follow established process and premise. It is not anticipated that there will be any greater demands placed on the legal system by the proposal. Accordingly, it is not considered that there will be any effect on individuals’ right of access to justice through availability of legal aid or on possible expenditure from the legal aid fund.

This will be reviewed further through the consultation period and verified in discussions with officials from the Scottish Government Access to Justice Team prior to the production of a final impact assessment.

Source page 18

8.1 Background

The changes confirmed in this consultation identify where amendment is needed to supporting guidance to the Building (Scotland) Regulations 2004 (as amended) and the Building (Scotland) (Procedures) Regulations 2004 (as amended).

Supporting guidance will include the Technical Handbooks which give guidance on ways of complying the mandatory standards. Guidance will also include the proposed new Energy and Environmental Compliance Handbook which will give guidance on the production of the energy and environmental design and construction statements.

It will also extend to the approved calculation methodologies required by regulations and cited in published guidance.

All matters relating to enforcement, sanctions and monitoring will be carried out under the existing processes, which form the building standards system in Scotland, as set out under the Building (Scotland) Act 2003. Parties responsible for operation of the system are currently the 32 Scottish Local Authorities, appointed as verifiers under the Act, and the Building Standards Division, on behalf of Scottish Ministers.

8.2 Enforcement and sanctions

The regulatory changes proposed apply where work subject to the Building (Scotland) Regulations 2004 requires that a building warrant must be obtained before work commences and a completion certificate accepted once works are finished. Whether or not such work requires a building warrant is set out under Regulation 5 of the Regulations, the person responsible for the building or work, the ‘relevant person’ as defined in Section 17 of the Building (Scotland) Act 2003, is required to ensure compliance with building regulations.

Regulation 4 and 41 of The Building (Procedure) Scotland) Regulations 2004 set out information which must be provided in support of an application for building warrant or amendment of building warrant and the submission of a completion certificate. Changes to these regulations require the provision of an energy and environment statement at both design and construction stages to support verification of compliance against specified mandatory standards.

Where a building warrant is required, proposals are subject to the scrutiny of verifiers prior to approval of building warrant or acceptance of a completion certificate. Local authorities have enforcement powers under the act to ensure compliance with approvals and the Regulations. Cases of non-compliance can be referred to the Procurator Fiscal and persons found guilty of offences in terms of the Act are liable on summary conviction to a fine not exceeding level 5 on the standard scale. Separate work is underway to review the sanctions which can be applied to non-compliance with building regulations.

8.3 Monitoring

The objective of this exercise is to deliver a reduction in delivered energy and a healthy indoor environment alongside the introduction of a robust compliance regime in new buildings through changes to building regulations. Building regulations are applied within a legislative framework summarised above. In line with Scottish Government policy, any implemented changes which address this issue should be subject to a review within a 10-year period. Any such review shall be accompanied by a further Impact Assessment.

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I have read the Business and Regulatory Impact Assessment and I am satisfied that, given the available evidence, it represents a reasonable view of the likely costs, benefits and impact of the leading options. I am satisfied that business impact has been assessed with the support of businesses in Scotland.

Signed by the accountable Minister:

Shirely-Anne Somerville MSP,

Cabinet Secretary for Social Justice and Housing

Date: DD MMMM YYYY

Policy contact:

Daniel Foulds

Scottish Government

Building Safety and Standards Directorate

Building Standards Division

Denholm House

Almondvale Business Park

Livingston

West Lothian

EH54 6GA

Telephone: 0300 244 4000

Email: bsdenergystandardsreview@gov.scot

Source page 20

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Scottish Government consultation process

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