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Proposals to limit Renewable Heat Incentive scheme detrimental to Scottish rural business

Rural business in Scotland could be hardest hit by proposed changes to the Renewable Heat Incentive scheme, Scottish Land & Estates has said.

The organisation, which represents land-based businesses across Scotland, said proposals to remove support for ‘drying’ through the scheme – which would include wood fuel drying, crop drying, drying of material used for animal bedding, drying of animal feed and waste drying – would have a profound effect on businesses which have been encouraged to diversify. The comments were made in response to the UK Government consultation, The Non-Domestic Renewable Heat Incentive: Further Proposed Amendments

Scottish Land & Estates said that it was important that the scheme operated effectively and was not misused for financial gain but that it would support the introduction of a proportionate ‘test’ to ensure that any RHI applications for the purposes of drying are legitimate.  

Gavin Mowat, Policy Officer (Communities & Rural Development) at Scottish Land & Estates, said: “The UK Government is responding to concerns about the misuse of the Renewable Heat Incentive and we appreciate the need for this to be examined. However, rural businesses in Scotland that are legitimately accessing the scheme to support the generation of heat from renewable sources should not be disadvantaged by the actions of a minority.

“The RHI scheme is designed specifically to offset the use of fossil fuels. The process of drying is a major consumer of fossil fuels in value adding and processing agricultural and forestry products, especially in Scotland with its relatively wet climate. We are concerned that without an appropriate level of support, investment in renewable drying will stop and businesses will opt to remain using fossil fuels, thus undermining the drive towards lowering carbon emissions.

“We believe the government also needs to take into account the value to the rural economy that systems such as biomass can create. Using biomass in rurally based drying systems allows fuel to be sourced locally, thereby contributing to the sustainability of the rural economy whilst reducing transportation distances associated with fossil fuels.”

Scottish Land & Estates added that proposals to limit the proportion of heat that can be provided to a domestic building with non-domestic heat use, and supported by non-domestic RHI, was counterproductive.

Mr Mowat continued: “The government needs to be clear on the original purpose of RHI, which is to encourage a decrease in carbon emissions. Many older buildings, including visitor attractions that were not built to current energy efficient standards, have adopted biomass systems for heating properties. The proposal that RHI support available to these buildings is capped would not be prudent in terms of achieving reductions in carbon emissions. We have seen many examples where large properties produce significant energy savings to the benefit of everyone including one example where 25,000 litres of oil per year has been saved on heating one property. It makes little sense in terms of climate change targets for support to be no longer available to this type of property when it would take 20 small buildings each using 1250 litres a year to achieve a similar level of savings.

“We firmly believe the amount of heat should be appropriate for the size of the building and there should be no wasting of heat to claim RHI. However, rather than penalising businesses, we want to see greater work from the government to ensure the scheme is being accessed legitimately.

“Scottish Land & Estates believes that the importance of the scheme to rural Scotland needs to be taken into account and secondly, the UK government needs to do more to ensure RHI applications are legitimate and fair rather than simply curtailing the scheme as it stands.”

Scottish Land & Estates’ full consultation response is available to read below.


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