The Seventh Carbon Budget, covering the period 2030 to 2042, recommends a limit of 535mn tCO₂e, including emissions from aviation and shipping. This follows the government’s recent commitment at COP29 to reduce emissions by 81% by 2035, a figure on which the CCC advised and says aligns with its latest carbon budget advisory.

The CCC’s report highlights three key findings. Firstly, electrification is projected to account for 60% of the emissions reductions by 2040 under the proposed ‘balanced pathway’. This includes decarbonising the grid and replacing fossil fuelled cars and heating systems with electric alternatives, such as electric vehicles (EVs) and heat pumps.  

Secondly, the rollout of necessary technologies mirrors developments in comparable countries like the Netherlands and Ireland.

Thirdly, the report emphasises that investment made this decade will yield savings over time (but will still be expensive). It estimates that the net costs of decarbonisation in line with the CCC pathway will be around 0.2% of the UK’s GDP annually.

The CCC’s report sets forth seven key recommendations:

• Making electricity cheaper: The largest share of emissions reductions is expected from switching to low-carbon electric technologies across transport, buildings and industry. Households and businesses should be incentivised to make these choices through adjustments to electricity bill pricing.
• Removing barriers: People need accessible options for installing charge points in homes and businesses, while industries require timely grid connections for electrified production processes. Improvements in grid infrastructure and regulatory processes are essential for the deployment of low-carbon technologies.
• Providing certainty: The government should support industries by setting clear decisions on new technology support and phasing out old technology. It should also clarify that there will be no role for hydrogen in home heating.
• Supporting households: Barriers in upfront costs need to be addressed, especially for low-income households, as well as the price of electricity, and misconceptions about heat pumps.
• Supporting businesses: Businesses need clarity on government support versus market mechanisms like the UK Emissions Trading Scheme and carbon border adjustment mechanism. The right support could enable UK businesses to decarbonise early and tap into the growing demand for low-carbon goods and services. Farmers also need support to diversify land use into woodland creation, peatland restoration, bioenergy crops and renewable energy.
• Growing skilled workforces: A skilled workforce is crucial for system-wide changes such as switching to electric heating and building out the electricity grid.
• Implementing an engagement strategy: An effective strategy to inform households and businesses about the benefits of low-carbon choices needs to be rolled out.

Sector-by-sector breakdown

The CCC also provides a detailed sector-by-sector breakdown of emissions reduction targets.

Surface transport is expected to contribute 27% of emissions reductions by 2040, driven by the increasing impact of EV sales. By 2030, nearly all new car and van sales are projected to be fully electric, with these vehicles making up over three-quarters of the fleet by 2040.

Residential buildings are set to account for 14% of emissions reductions. The CCC advocates scaling up supply chains and workforce training for low-carbon heating solutions, ensuring that all new and replacement home heating installations are low-carbon by the mid-2030s.

Electricity supply is expected to provide 12% of emissions reductions, with increased demand due to the switch to EVs and heat pumps. The future system will rely heavily on low-carbon generation, particularly offshore wind.

Industry is slated to contribute 11% of reductions, primarily through the electrification of industrial heat processes and the adoption of carbon capture and storage technologies.

Agriculture and land use will contribute 7%, focusing on low-carbon farming practices, reducing livestock numbers and increasing tree planting.

Aviation will account for 5% of reductions, achieved by managing demand growth and increasing the use of sustainable aviation fuels.

The remaining 24% of emissions reductions by 2040 are forecast to come from other sectors, including fuel supply, fluorinated GHGs (F-gases), non-residential buildings, shipping and waste.

Speaking at the Energy Institute’s International Energy Week in London, Emma Pinchbeck, Chief Executive of the CCC, said there were two simple messages: ‘If you can electrify it, we’re going to electrify it. This doesn’t mean there are no [fossil] fuels. There are fuels in the energy mix across the economy, with carbon capture for power and flexible, dispatchable generation, for example. We’ve got fuels in industrial processes that are hard to decarbonise by other routes. But we are only using fuels where you can’t electrify... along with engineered removals to remove carbon from bits of the economy we can’t decarbonise.’

Commenting on the Seventh Carbon Budget, Professor Piers Forster, Interim Chair of the CCC, said: ‘Decarbonisation in this country has traditionally focused on the power sector, but now we need to see action on transport, buildings, industry and farming. This will create economic opportunities, tackle climate change and lower household bills.’

Reactions

The CCC’s recommendations elicited responses from across a wide range of stakeholders.  

Environmental Audit Committee Chair Toby Perkins MP said: ‘Our transition to a cleaner future isn’t a quick or easy fix. Some technological advances in development now will aid in the transition, but we cannot rely on mythical “silver bullets” which allow us to put off the hard choices we need to make to mitigate and adapt to the changing climate.’  

Caroline Bragg, CEO of the Association for Decentralised Energy, called for ‘clear and modern rules’ from the government to ensure the effective use of renewable energy and industrial heat, which would ‘lower bills, protect jobs and fuel economic growth’.

Energy UK’s Chief Executive Dhara Vyas noted that the CCC’s analysis ‘clearly shows that reducing emissions will lead to more affordable and secure energy’. She emphasised the need for investment in clean, home-grown energy.

Meanwhile, Greenpeace UK Policy Director Doug Parr said the report ‘demonstrates that a future with cheap energy, lower bills, economic stability, energy security and a safe and habitable planet is not some pie-in-the sky utopia that will cost us the earth, but an affordable future that is well within our grasp’.