Scottish Zero Emission Bus challenge fund
The Scottish Zero Emission Bus Challenge Fund (ScotZEB) accelerates Scotland’s shift to cleaner, greener buses. The Fund supports the rollout of zero emission buses and the associated charging and/or refueling infrastructure needed to run them – cutting emissions, improving air quality and supporting our just transition and climate goals.
ScotZEB also helps grow Scotland’s green economy by encouraging investment, supporting jobs, and building a strong supply chain for zero-emission transport and energy solutions in Scotland.
ScotZEB Phase 3
In August 2025, Transport Scotland announced the intention to extend (ScotZEB2) with an additional allocation of up to £40 million. This will now support a new and final third round of the scheme – ScotZEB3 – with a total value of up to £45 million.
This latest move builds on the success of the ScotZEB programme to date, which has already delivered hundreds of zero-emission buses, coaches and cutting-edge charging infrastructure across Scotland – with over £154 million invested by the Scottish Government since 2020.
By moving the available ScotZEB2 budget to ScotZEB3 and increasing the amount, the Scottish Government is ensuring that the funding continues to support the transition to a net zero transport system in a way that maximises impact and inclusivity across the sector.
Following careful consideration and recognising the need for collaborative and innovative approaches to decarbonise the heavy-duty vehicle sector, Ministers concluded that running a competitive ScotZEB 3 process is the fastest and most certain route to support new zero emission bus orders into the market. We are therefore taking forward ScotZEB3 – to introduce the additional funding to the market, and uplift this to £45 million. It comes ahead of future regulations (UK Bus Services Act 2025) prohibiting the use of new non-zero emission buses on local bus services, helping provide certainty to the bus manufacturing sector on the pipeline for new, clean buses As a result, Phase 3 is focused specifically on operators of registered local bus services, given this legislative direction.
ScotZEB3 has now launched. Applications can be submitted to Energy Saving Trust, who are administering the scheme on Transport Scotland’s behalf. Applications are open until midnight on 26 February 2026. Awards are expected to be made in early Spring 2026. Full eligibility and assessment criteria are available.
If you have any enquiries about ScotZEB3 please contact EST: scotzeb@est.org.uk
Subsidy Control
The favourable terms of the grant may constitute a public subsidy in terms of the law, regulations, rules and guidance applying in the UK and/or the UK's international obligations in relation to public subsidies ("the Public Subsidies Rules"). The grant is being provided in accordance with the UK subsidy control regime, as set out in, without limitation, the Subsidy Control Act 2022 and any other applicable law, statutory guidance, code of practice, judgment of a relevant court of law and international commitments on subsidy control arising from, amongst others, World Trade Organisation Membership, the UK-EU Trade and Cooperation Agreement, and international treaties and agreements to which the United Kingdom is a party, as amended or modified from time to time.
Your organisation must be eligible to receive the grant in accordance with the Value Thresholds set out below, and we may be required to withhold payment of, or reclaim all or any part of the grant from you, to the extent necessary to ensure that the grant, either on its own or when taken together with any other financial assistance given or to be given to you by us or any third party, complies with the Public Subsidies Rules.
Value Thresholds
- 50,000 for a diesel bus or coach to be repowered with a zero-emission drive train.
- £57,500 for an accessible zero emission bus or coach with at least 9 passenger seats and at least one wheelchair accessible space.
- £101,000 for an accessible zero emission bus or coach with at least 32 passenger seats.
- £122,000 for an accessible battery-electric zero emission bus or coach with at least 45 seats.
- 70% of total capital costs for infrastructure
ScotZEB Phase 2
The second phase of the Scottish Zero Emission Bus Challenge Fund (ScotZEB 2) opened to applications in May 2023, and was designed to provide capital funding to forward-thinking companies to disrupt the bus and coach market, and help make zero-emission vehicles the default choice for all operators from now on – that includes operators of public service vehicles, home-to-school buses, community buses, transport-to-health buses, tourist and private-hire coaches who could all potentially benefit.
One award of £41.7 million was made to the Zenobe Energy consortium. This project is now in the delivery phase, bringing 252 new buses and coaches, along with the supporting infrastructure, to Scotland’s roads.
ScotZEB2 is now closed to applications.
More information on ScotZEB 2 is available from the Energy Saving Trust, who administered the scheme on Transport Scotland’s behalf: Scottish zero emission bus challenge fund (phase II) - Energy Saving Trust.
Phase 1 awards
ScotZEB Phase 1 was designed to accelerate the transition to zero-emission buses by supporting early adopters across Scotland to replace older diesel vehicles, trial new technologies, and install the first wave of depot charging infrastructure. This initial phase focused on operators who were ready to move quickly, helping demonstrate the feasibility of zero-emission fleets and laying the groundwork for wider market transition in later rounds of ScotZEB.
Following assessment, ScotZEB1 has offered awards of £62 million to nine bus operators and local authorities for 276 buses and associated charging infrastructure. The awards offered under ScotZEB1 are set out in the table below:
| Bus Operator* | Award offered | Number of buses** | Final amount claimed*** | Buses purchased |
|---|---|---|---|---|
| Bluebird Buses Ltd | £3,066,547 | 13 | £3,066,547 | 13 |
| Craig of Cambeltown Ltd | £2,409,294 | 10 | £2,409,294 | 10 |
| Dumfries and Galloway Council | £633,934 | 4 | £523,739 | 4 |
| Ember Core Ltd | £5,562,126 | 26 | £5,562,126 | 26 |
| Fife Scottish Omnibuses | £7,329,923 | 32 | £6,809,264 | 32 |
| First Aberdeen Ltd & First Glasgow No1 Ltd | £18,599,858 | 74 | £18,597,293 | 74 |
| Highland Country Buses Ltd | £5,834,978 | 25 | £5,708,424 | 25 |
| Houston Coaches | £368,413 | 4 | £360,246 | 4 |
| McGills Bus Service Ltd | £9,086,933 | 41 | £8,664,557 | 41 |
| Shuttle Buses Ltd | £485,955 | 5 | £523,740 | 4 |
| Stirling Council | £595,404 | 3 | £0 | 0 |
| Western Buses Ltd | £8,029,890 | 39 | £8,029,890 | 39 |
* This table shows the operators who have been offered awards. There are more operators than there were bidders, as all the bids from Stagecoach owned operators were treated as a single bid.
** A variety of bus sizes, from minibuses to double decks, are being supported. All awards also include support towards the charging infrastructure, in some cases the charging infrastructure will support a greater number of vehicles than the number of buses shown in the table.
*** The difference from the estimated costs to the final costs drawn down could be as a result of various factors, such as changes in cost, suppliers or withdrawal from the scheme.