Scottish Zero Emission Bus challenge fund

The aim of the Scottish Zero Emission Bus Challenge Fund (ScotZEB) is to support swift, and significant, change in the bus market in favour of zero-emission technologies. This will support the Scottish Government’s purpose to create sustainable and inclusive growth. In particular, the fund aims to support the National Outcomes relating to the Economy, the Environment, and Fair Work and Business.

By supporting the swift transition to zero emission vehicles and infrastructure, the fund will help to achieve targets to reduce greenhouse gas emissions, contribute to the delivery of Low Emission Zones, encourage inward investment and growth in the supply chain of zero carbon vehicle and energy solutions in Scotland, with associated employment, economic and social benefits.

ScotZEB is a new challenge fund focussed on supporting innovative business models designed around the characteristics and opportunities presented by zero-emission buses and associated charging or refuelling infrastructure. Bidders are strongly encouraged to put in place arrangements with partners or collaborators, to minimise the level of subsidy being requested. This may involve, for example:

  • collaborations across multiple bus operators to get the financial benefits of scaled demand for new buses
  • collaborations with non-bus vehicle operators or Local Authorities to get the benefits of scaled up demand for hydrogen
  • partnerships between energy companies, operators and financiers to use the charging infrastructure to generate new revenue streams
  • partnerships between financiers, manufacturers to purchase buses for leasing to operators
  • or a range of other possibilities

Phase 2

Phase 2 of ScotZEB, which opened to applications on 15 May 2023, is 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 buses, home-to-school buses, community buses, transport-to-health buses and tourist and private-hire coaches who can all potentially benefit. 

Effective private financing is key to making zero emission buses and coaches, and infrastructure, affordable to all operators. Financing that aggregates ownership to generate greater buying power, spreads the cost of these assets over their full useful lives, supports the transition of other transport operators and modes (such as goods vehicles, and vans), and transfers the risk and complexity of these assets from those operators who prefer not to deal with these issues are all essential considerations. Bids that provide solutions to these issues will be favoured. 

Who can apply to ScotZEB Phase 2

The following bodies will be eligible to bid for funding from ScotZEB Phase 2 as part of a consortium:

  • Financiers
  • Bus and coach operators, including home-to-school and tour coach operators
  • Community Transport Organisations
  • Original Equipment Manufacturers, including repowering companies
  • Infrastructure providers
  • Local authorities

Other bodies may also be eligible in addition to those listed above. For more information, please refer to the guidance available on the administrator’s website.

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 to be repowered with a zero-emission drive train
  • £60,000 for a zero emission bus or coach with at least 9 passenger seats and at least one wheelchair accessible space.
  • £105,000 for an accessible zero emission bus or coach with a total capacity for 32 or more passengers.
  • £135,000 for an accessible battery-electric zero emission bus or coach with at least 45 seats.
  • £135,000 for zero emission bus or coach with a total capacity for 60 or more passengers
  • For infrastructure, subsidy will be no more than 70% of the total capital costs for electric charging, or hydrogen refuelling infrastructure.

How to Apply

The deadline for applications to this Challenge Fund was 23:59, on Friday 15 September 2023. If you have any queries about the application process please contact

Phase one awards

ScotZEB phase one has offered awards of £62 million to nine bus operators and local authorities for 276 buses and associated charging infrastructure.

Bus Operator* Award offered Number of buses**
Bluebird Buses Ltd £3,066,547 13
Craig of Cambeltown Ltd £2,409,294 10
Dumfries and Galloway Council £633,934 4
Ember Core Ltd £5,562,126 26
Fife Scottish Omnibuses £7,329,923 32
First Aberdeen Ltd & First Glasgow No1 Ltd £18,599,858 74
Highland Country Buses Ltd £5,834,978 25
Houston Coaches £368,413 4
McGills Bus Service Ltd £9,086,933 41
Shuttle Buses Ltd £485,955 5
Stirling Council £595,404 3
Western Buses Ltd £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