Infrastucture is needed to underpin drive to Net Zero

Net Zero is essential, for people, the planet and the economy. The actions we take now to secure the future of our planet are critical for generations to come.

This imperative is shared by the business community as we look beyond COP27 in Egypt.

This is backed up by the economic potential as illustrated by a recent Royal Bank of Scotland report which found that meeting net zero targets would give Scotland’s economy a £22 billion boost between now and 2030.

Just a year after world leaders agreed on the Glasgow Climate Pact, which set a global target to limit the rise in global warming to no more than 1.5 Celsius degrees compared with preindustrial levels, the legacy of both COP26 and COP27 will be key in determining our success.

The Glasgow Climate Pact has bolstered efforts to embed our resilience to climate change, which is becoming more necessary, particularly when we look back over 2022.

Extreme weather events in Scotland and across the world have illustrated the growing impact of climate change on ecosystems and the way we live, work and do business.

This focus has been challenged, as nations strain to secure their energy supply in the aftermath of the war in Ukraine and the energy crisis closely linked to it, but it is one that we cannot lose sight of.

A report by the UN Environment Programme has warned of a “rapidly closing window” to meet the temperature targets

made in the Paris Agreement of 2015.

Research from the Fraser of Allander Institute shows that nearly six in 10 (59%) Scottish businesses have either committed to, or achieved, net zero targets, which is slightly ahead of the rest of the UK at around 57%. This shows the impressive progress that has already been made.

Businesses know that more must be done, and there is great potential for Scotland to continue leading the way in areas such as renewables and low carbon energy alongside decarbonisation.

The Royal Bank of Scotland report also described the challenges to

fulfilling this potential, which businesses have continued to tell us are hampering their efforts to go all in on Net Zero goals and projects.

For example, Scotland’s housing stock already faces a chronic shortage, not to mention the lack of progress being made on existing stock being energy efficient.

Improving energy efficiency cuts climate emissions and it also reduces energy bills and exposure to energy shortages.

The Scottish Government has set a target for half of Scotland’s homes to be converted to zero emissions heating by 2030.

This means Scotland needs to more than double the rate of home energy upgrades per year, and double year on year the rate of zero emissions heat installations.

These are ambitious targets. We need increased support and new standards setting out exactly what is needed and when.

Otherwise, businesses will not be able to effectively drive forward the next decade of decarbonisation.

The report also states that Scotland’s buildings sector accounts for 44% of the revenue opportunity that could be realised through the delivery of improvements to premises

such as insulation and heat pumps. This would require a growth rate of 109% in the market of retrofitting by 2030.

Insulating homes in Scotland with poor energy efficiency levels should be prioritised and businesses are ready to support this with retrofitting, offering cheaper energy bills and warmer homes across the country.

Another area in which there is great potential to accelerate the road to Net Zero comes in connectivity and transportation.

The Scottish and UK Governments have pledged to phase out the need for new petrol and diesel cars and vans by 2030. The most accessible alternative is electric vehicles.

We continue to call for a strategic plan to drive the adoption of Low Emission Vehicles across the private and public sectors and more timely delivery of infrastructure such as charging locations and hydrogen refuelling stations.

However, a recent BBC Disclosure report found almost a quarter of EV charge points in Scotland were faulty. While uptake of EVS has improved over the past year, EVS still make up only 2% of vehicles on the road.

Without the infrastructure in place to support the rollout of EVS, the switch will not accelerate at the pace required to encourage more people to drive electric.

The problem is further compounded with the recent announcement by the Chancellor of removing the tax exemption on electric vehicles by 2025, which could slow the road to electrification.

Scotland’s businesses support the ambitions to reach Net Zero emissions , however, without both Governments delivering on a fully functioning transport infrastructure that’s fit for the 21st century, greater investment in green transport options and support to enable businesses transition, this severely limits our potential.

We know more can be done. Collaboration between the private and public sectors will be essential if we are to realise the potential of net zero.

EV chargers near V&A Dundee are sunk in the ground and pop up for use using an app. Pic by Kenny Smith.