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It is absolutely about encouraging people and creating the circumstances in which it is possible for people not to need to buy a new fossil fuel car.

I accept that growth in the charging infrastructure will be required to support the transition towards zero emissions vehicles. Currently, as you will have heard me say a number of times, we are in a good position. Department for Transport statistics recently restated that Scotland has the second most comprehensive public charging network in the UK, outside of London. We have invested tens of millions of pounds in that. My colleague Fiona Hyslop recently announced our new vision for public charging in Scotland, which looks to take us to 6,000 public charging points by 2030, with £60 million of investment, some of which will be public investment, some of which will leverage in private investment. [Màiri McAllan has corrected this contribution. See end of report.] We are in the early days of working with local authorities on their plans and how to do that.

Màiri McAllan has identified errors in her contributions and provided the following corrections.

At col 3, paragraph 2—

Original text—

“The schemes will put legal obligations on car and van manufacturers in the UK to sell zero emissions vehicles each year and for a percentage of their sales to constitute zero emissions vehicles, ramping up from 22 per cent of all those sold in 2024 to 80 per cent of new cars in 2030.”

Corrected text—

“The schemes will put legal obligations on car and van manufacturers in the UK to sell zero emissions vehicles each year and for a percentage of their sales to constitute zero emissions vehicles, ramping up from 22 per cent in 2024 to 80 per cent of new cars in 2030.”

At col 6, paragraph 5—

Original text—

“My colleague Fiona Hyslop recently announced our new vision for public charging in Scotland, which looks to take us to 6,000 public charging points by 2030, with £60 million of investment, some of which will be public investment, some of which will leverage in private investment.”

Corrected text—

“My colleague Fiona Hyslop recently announced our new vision for public charging in Scotland, which looks to take us to 6,000 public charging points by 2026, with £60 million of investment, some of which will be public investment, some of which will leverage in private investment.”

I will do my best, convener, thank you very much. I begin by apologising for the slight delay in getting started this morning and thanking you for inviting me to the committee today to discuss the draft Vehicle Emissions Trading Schemes Order or as it is more commonly known, the zero-emissions vehicle—ZEV—mandate.

We know that we urgently need solutions to support our journey to net zero and that critical to that is the decarbonisation of transport. Transport is the largest contributor to Scottish greenhouse gas emissions, making up 29 per cent of all emissions in 2019, and road transport contributes 66 per cent of those emissions. It is critical that the Government does its utmost to ensure that everyone has options for cleaner and greener ways of getting out and about in a way that is cognisant of their way of life.

Working jointly with the UK Government, the Welsh Government and Northern Ireland’s Department for Infrastructure, I am bringing the draft Vehicle Emissions Trading Schemes Order to the committee for consideration today. The schemes will put legal obligations on car and van manufacturers in the UK to sell zero emissions vehicles each year and for a percentage of their sales to constitute zero emissions vehicles, ramping up from 22 per cent of all those sold in 2024 to 80 per cent of new cars in 2030. [Màiri McAllan has corrected this contribution. See end of report.] In parallel, the CO₂ standards schemes for new non-zero emissions cars and vans will help to drive down the emissions of the manufacturers’ new petrol and diesel car and van fleets. They work in parallel and bear down in different directions.

The cost-benefit analysis estimates that, under these schemes alone, 420 million tonnes of carbon dioxide in carbon emissions would be saved across the UK by 2050. The figure for Scotland alone is around 40 million tonnes of carbon dioxide. I will bring to the committee’s attention that it is intended there will be a mid-point review to monitor the implementation of the schemes. That will be done on a four-nations basis and published in quarter 1 of 2027.

The Climate Change Committee supports the introduction of the schemes. It has highlighted how important they are, stating:

“The switch to electric cars and vans is the largest single driver of future emissions reduction in the UK’s Net Zero pathway. The mandate will be vital in delivering these savings.”

We know that it is critical for everyone in every part of Scotland, and we have been cognisant of that when designing the schemes. We have asked for the inclusion of analysis of the impact on remote and rural communities in the cost-benefit analysis. Although the schemes were designed on a four-nations basis, the Scottish Government was able to ask for that and to have it done.

We are bringing the schemes forward in the context of the Prime Minister’s recent announcement to push the UK ban on non-zero cars and vans back from 2030 to 2035. My colleague Julie James in the Welsh Senedd noted that the ZEV mandate is a way of providing certainty with that change having taken place and, as she put it, of holding the UK Government’s feet to the fire.

I hope that we can agree that the shift to net zero cars and vans is an important part of how we move to a just transition to net zero and I ask the committee to endorse the draft legislation. Thank you.

That is correct. In the days after the Prime Minister’s announcement, we continued to work with the UK, Wales and the Northern Ireland Executive on the scheme. In my view, it will be a helpful way of reintroducing the certainty that the Prime Minister’s announcement removed.

It will work in two different directions. The sale of zero emissions vehicles as a percentage of the total is quite straightforward. The other part of it, the bearing down on the emissions from non-zero vehicles, is a little bit more complicated but I have taken some time to formulate an example, which I can give to the committee if that would be helpful.

I will read aloud the one that my officials and I worked out and we can pause and take questions on any part of it that you wish to have clarified.

If manufacturer A has a target of 140g of CO₂ per kilometre driven across the whole fleet of new cars, and that is based on the average that was registered in 2021, if in 2024 they sell and register 10,000 new cars with average emissions of 140g of CO₂ per kilometre driven, they will be allocated 1.4 million allowances by the administrator, based on the 2021 average. If the average emissions of those 10,000 new cars sold was 130g, manufacturer A would have a surplus of 100,000 allowances and could trade them with other manufacturers or convert them to credits—there is a mandate car scheme. It is a similar model to the cap and trade model for emissions trading schemes generally. I was here not that long ago discussing some of the developments in emissions trading schemes, but that is how it will work.

Of course, that is just one part of it. The other part is requirement for the overall percentage of cars sold to be zero emissions having to increase gradually to 80 per cent by 2030.

It has not changed. That is a reasonable observation. All our primary transport policies are under consideration as part of the development of the climate change plan. Our commitment to phase out the need for petrol and diesel by 2030 has not changed. I should point out that Scotland does not have the power to ban, so it is very much about phasing out the need. I think that the ZEV mandate will contribute positively to that, with more zero emissions vehicles being available, prices being driven down and so on. It is the floor to our ambition rather than the ceiling. We will bring in other policies to support phasing out the need for petrol and diesel by 2030, including seeking a modal shift in a 20 per cent reduction in car kilometres driven. It will be a package of measures, of which this is an important part.

Well, largely. We do not have domestic car and van manufacturers in Scotland. We have Alexander Dennis, the bus manufacturer, but buses are not part of the scheme, so we have not had to look particularly closely at that, although colleagues in the other nations have. We have 10 per cent of the UK dealerships in Scotland and we have reached out to them. We met representatives from Arnold Clark recently and they raised no concerns, but we have agreed to keep in touch with them. Another particular Scottish interest in business is—

—Allied Vehicles, who are specialists in converting non-zero, standard petrol and diesel cars into wheelchair friendly vehicles. It has raised some concerns about how it will operate the new allowances system. We have set up a working group with it as part of the work with the four nations. We met recently, set terms of reference and have agreed to monitor the impact of the scheme on its ability to continue retrofitting cars to be wheelchair compliant.

Good morning. Given how complicated the topic can be, I will take the opportunity to make an opening statement, so that I can set things out as simply as I can.

I am pleased to be able to give evidence on the draft affirmative instrument to amend the Greenhouse Gas Emissions Trading Scheme Order 2020. In July, the emissions trading scheme authority, which is formed of the Scottish, UK, Welsh and Northern Irish Governments, published a joint Government response to last year’s consultation. The response contains substantial changes to strengthen the ETS and to better align it with our net zero objectives. We have already brought into law some of the minor decisions that arose from that Government response, via a negative statutory instrument earlier this year. We are now implementing additional—mostly minor—amendments through this affirmative instrument.

The thrust of today’s amendments is to amend the free allocation policies to ensure the correct functioning of the ETS. The committee will remember that free allocations are the allowances that are given for free to operators who are at risk of carbon leakage—that is, the risk of industries moving offshore to jurisdictions with less rigorous carbon policies. Specifically, the instrument would cap the amount of free allocation for the aviation sector. That is being done to amend a current anomaly in the system, whereby data used to allocate free allocations to aircraft operators is inconsistent with current activity levels, resulting in some operators receiving an overallocation of free allowance and creating a competitive distortion.

Today’s provisions, therefore, provide that free allocations will not exceed 100 per cent of the air operator’s verified emissions, and they will be in place until the withdrawal of the aviation free allowance in 2026, which is a separate commitment from the joint response and is, I stress, not being legislated for presently, although I will be happy to keep the committee updated on it.

Two other minor issues are covered in today’s instrument. First, it will introduce an amendment to allow installations with carbon capture and storage to receive free allocations. Again, the issue has arisen as a result of inconsistencies in the legislation whereby it is currently not possible to do that—and, clearly, we see that as lowering the incentive to install carbon capture and storage. As that was never the policy intent, we are changing it.

Secondly—and finally—the instrument contains three technical amendments to the free allocation rules for electricity generation, to more accurately reflect operator activity and to incentivise electricity produced by means of high-efficiency co-generation.

I also want to make a brief point about parliamentary processes. The Senedd and the UK Parliament are running a similar scrutiny process on the matters in today’s order. The Northern Ireland Assembly will do so as soon as it can, but in the meantime the order will apply only to Great Britain. We aim to bring forward in due course the remaining changes to the ETS that are set out in the response, such as expanding the scope of the ETS and phasing out free allocation for aviation.

As I wrote to the committee on 7 July, one of the most significant changes—that of aligning the cap with a net zero trajectory—is currently being taken through the UK Parliament. I would have preferred it to have been taken through the Scottish Parliament in the first instance, but it is a pragmatic, albeit not ideal, response to the fact that there is no sitting Northern Ireland Assembly. As soon as there is one, we will lay the affirmative measures for that provision, and the committee will have the opportunity then to scrutinise it.

That is quite enough by way of opening remarks. My colleagues and I are very happy to take questions.