The international market opportunity for the Scottish low carbon heat sector

The report aimed to provide a review of the most attractive overseas export markets for Scottish businesses involved in ‘low carbon heat’, defined as those technologies that provide renewable heat or cooling, and any technology that improves the efficiency of providing, distributing or using heat or cooling.

The first stage of the methodology consisted of the identification of the top eight most attractive export markets for low carbon heat, based on a range of indicators including gross domestic product (GDP), energy prices and ease of doing business. Further analysis of each of these eight countries was then conducted, which then lead to the identification of the four most attractive export markets for the Scottish low carbon heat sector.

The review identified the following eight countries as the most attractive export markets for the Scottish low carbon heat sector: China, France, Germany, Italy, Poland, Sweden, Turkey and the USA. Further analysis then indicated China, France, Sweden and the USA as being the most attractive from these initial eight options. The report suggests that while China offers a potentially vast opportunity for Scottish companies, there are also major challenges posed in terms of market entry. It is also suggested that China is likely to be the world’s leading market for low carbon heat investment by 2020. The French market is highlighted as offering a strong opportunity across a range of sector clusters, and the benefits of its proximity to Scotland are noted. The report raises concerns over the stability of the French economy, however. It is suggested that Sweden also offers a strong export opportunity, as a world leader in the promotion of low carbon heat, with the small size of the Swedish market identified as its only major limitation. Finally, the report identifies the USA as offering another major, strategic opportunity for Scottish low carbon heat companies, although the importance of choosing opportunities carefully, due to policy variances between states, is emphasised. The report also considers the strength of the UK low carbon heat market, and suggests that it presents a good opportunity across most sector clusters, with Scotland in particular likely to see faster growth rates, particularly in terms of renewable heat and district heating development, due to its cooler climate and some stronger policy intervention.

The report makes no specific recommendations.