The UK must reduce its greenhouse gas emissions by 87% by 2040 to stay on track for net zero by 2050, according to a new report from the Climate Change Committee (CCC).
The advisory body has recommended a Seventh Carbon Budget (CB7) of 535 million tonnes of CO2 equivalent (MtCO2e) for the period 2038-2042, including emissions from international aviation and shipping.
The budget outlines a strategy to accelerate the country’s energy transition and drive down emissions while delivering economic benefits, energy security and long-term savings for businesses and households.
At the core of the CCC’s plan is electrification, which will account for 60% of emissions reductions by 2040.
The shift will require a fully decarbonised power grid and the replacement of fossil-fuelled transport and heating with electric alternatives such as electric vehicles (EVs) and heat pumps.
Globally, investment in clean energy now outpaces fossil fuels nearly two to one, with $2 trillion expected to be spent on clean technologies in 2025. The UK’s own investment in renewables, grid infrastructure and green technology will be key to achieving its carbon targets.
How each sector will contribute
Transport is set to deliver 27% of the required emissions reductions by 2040, making it the single biggest contributor. The transition to EVs is already well underway, with new sales growing year-on-year. By 2030, nearly all new cars and vans are expected to be electric, and by 2040, three-quarters of all vehicles on the road will be zero-emission.
Homes and buildings will contribute 14% of emissions reductions, mainly through the adoption of low-carbon heating systems like heat pumps. The CCC recommends that the supply chain and workforce for heat pump installation be rapidly expanded so that by the mid-2030s, all new and replacement heating systems are low carbon.
Electricity supply will see 12% of emissions reductions, driven by the need to meet rising demand from transport and heating. The CCC expects offshore wind to form the backbone of the UK’s energy system, with rapid expansion of renewable capacity needed to ensure reliability.
Industry will deliver 11% cuts, largely through electrification of industrial heat processes. The use of carbon capture and storage (CCS) will be critical for reducing emissions in hard-to-abate sectors, while hydrogen will play a limited but important role in areas where electrification is not viable.
Agriculture and land use are expected to contribute 7% of emissions reductions. The CCC calls for low-carbon farming techniques, more efficient livestock management and a shift in land use towards tree planting and bioenergy crop production.
Aviation will be responsible for 5%, with emissions managed through sustainable aviation fuels and policy measures ensuring the environmental cost of flying is reflected in ticket prices.
The remaining 24% of emissions reductions will come from other sectors, including waste, fuel supply, shipping and non-residential buildings.
The CCC also highlights the role of engineered carbon removals, which will scale up from 2030 onwards to offset emissions in sectors where reductions are harder to achieve.
Cost savings and energy security
One of the key takeaways from the CCC report is that investment today will lead to significant savings in the future.
If the UK follows this net zero pathway, household energy bills could be £700 lower by 2050, while driving costs could also fall by around £700 per year.
Energy efficiency measures and greater reliance on renewables will shield consumers from volatile gas prices, reducing households’ exposure to future energy price spikes by a factor of 15 compared to current levels.
Private sector investment will be critical, with businesses expected to fund 65-90% of the transition between 2025 and 2050.
The public sector’s role will focus on policy support, market incentives and infrastructure investment, with public spending never exceeding 2% of total managed expenditure in the CCC’s estimates.
The Committee is delighted to be able to present a good news story about how the country can decarbonise while also creating savings across the economy. For a long time, decarbonisation in this country has really meant work in the power sector, but now we need to see action on transport, buildings, industry and farming. This will create opportunities in the economy, tackle climate change, and bring down household bills.
“Our analysis shows that there is no need to pitch action on climate change against the economy. We will need Government and business to deliver the investment, but we are confident that this Seventh Carbon Budget offers a secure, prosperous future for the UK.”
Professor Piers Forster, Chair CCC
7 steps to zero…
To ensure the UK stays on track, the CCC has outlined seven key recommendations:
1. Make electricity cheaper
A key barrier to electrification is the high cost of electricity relative to fossil fuels. The CCC urges the government to rebalance policy levies, removing them from electricity bills to encourage consumers and businesses to switch to electric alternatives.
2. Remove barriers to deployment
Expanding EV charging infrastructure, grid connections and energy storage is essential. Slow permitting, planning delays and regulatory constraints must be addressed to accelerate the rollout of clean energy technologies.
3. Provide certainty for industry and investors
Uncertainty over government policy has been a major stumbling block for businesses. The CCC calls for clear timelines and policy commitments, including a definitive end to fossil fuel heating in homes and businesses. Providing long-term certainty will boost investor confidence and accelerate deployment of new technologies.
4. Support households in the transition
While the transition to net zero will lower energy bills in the long run, upfront costs remain a challenge, especially for low-income households. The government must ensure that subsidies, grants and financing options are available to support the shift to low-carbon heating, insulation and energy efficiency measures.
5. Set out a clear strategy for businesses
The UK’s emissions trading scheme (UK ETS) and carbon border adjustment mechanisms will play a key role in ensuring businesses remain competitive while decarbonising. The government must provide clarity on how these measures will be implemented, while also supporting industries that are transitioning to low-carbon manufacturing. Farmers and landowners will also need financial incentives to shift towards woodland creation, peatland restoration and renewable energy production.
6. Develop a skilled workforce
The transition to net zero will require tens of thousands of skilled workers in sectors such as heat pump installation, offshore wind, home retrofitting and grid expansion. The CCC urges the government, businesses and trade bodies to work together to develop training programmes and apprenticeships to fill these roles. In industries where jobs will be lost, the government must ensure a just transition, supporting workers and communities affected by economic shifts.
7. Improve public engagement
The government must actively engage with the public, providing clear and accessible information on how net zero policies will impact them. Raising awareness of the benefits of low-carbon choices, energy efficiency, and cost savings will be essential in securing public support for the transition.
The road ahead
The Seventh Carbon Budget will be a critical milestone in the UK’s net zero journey. The CCC’s analysis says reaching an 87% reduction in emissions by 2040 is both feasible and cost-effective but only if the government takes decisive action now.
Electrification, investment in clean energy and stronger policy support will be essential to ensuring the UK stays on course for its legally binding 2050 target.
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