Energy Insight: UK carbon budgets

“A carbon budget places a restriction on the total amount of greenhouse gases the UK can emit over a 5-year period. The UK is the first country to set legally binding carbon budgets.” Department for Business, Energy & Industrial Strategy (BEIS), 2019

Carbon Budgets - guidance. Link to gov.uk, formerly Department of Energy and Climate Change (DECC) website.

The Climate Change Act (2008) established a framework to develop an economically credible emissions reduction path. It also strengthened the UK’s leadership internationally by highlighting the role it would take in contributing to urgent collective action to tackle climate change under the Kyoto Protocol. An overview of the Act and its administration can be found on the Climate Change Committee's (CCC) website.

Under a system of carbon budgets, every tonne of greenhouse gas (GHG) emitted since the start of the first budget in 2008 counts towards total emissions. If and when emissions rise in one sector, the UK will have to achieve corresponding falls in another.

The CCC is a non-departmental public body, set up under the Climate Change Act (2008) to advise the Government on emissions targets, and report to Parliament on progress made in reducing GHG emissions. Carbon budgets are set by the UK Parliament for periods of 5 years, and the Climate Change Act (2008) is amended, by Statutory Instrument, to reflect the changes.

The first carbon budget for the 2008–2012 budgetary period was 3018 Mega-tonnes (Mt) of carbon dioxide equivalent (CO₂e). 

The second carbon budget for the 2013–2017 budgetary period was 2782 Mt CO₂e. 

The third carbon budget for the 2018–2022 budgetary period is 2544 Mt CO₂e. (SI 2009 No. 1259)

To work out how much carbon is emitted over a certain period, the government must look at emissions of GHG in the UK, removal of GHG from the atmosphere and the use of carbon units, which can be brought in from overseas to offset UK emissions. Removal of GHG from the atmosphere is currently achieved through afforestation, but the government has stressed the need to deploy carbon capture usage and storage (CCUS) technology at scale during the 2030s to speed the removal of atmospheric CO₂. Emissions statistics are compiled using aggregate gross emissions from sources in the UK, including emissions from land use, land use change and forestry (LULUCF). The Intergovernmental Panel on Climate Change (IPCC) produces clear guidelines on methodologies and best practice for measuring and monitoring CO₂ estimates at the national level.

The Climate Change Act 2008 (Credit Limit) Order 2011 set a limit on the number of carbon credits that could be credited to the net UK carbon account for the 2013–2017 budgetary period.

The Carbon Budget Order 2011 (SI 2011 No. 1603)

The carbon budget for the 2023–2027 budgetary period is 1950 Mt CO₂e.

The Carbon Budget Order 2016 (SI 2016 No. 785)

The carbon budget for the 2028–2032 budgetary period is 1725 Mt CO₂e.

The data behind the CCC’s fifth carbon budget - link to CCC website

This is likely to occur in the summer of 2021. The carbon budget for the 2033–2037 budgetary period is 965Mt CO₂e.

The UK outperformed the first and second carbon budgets, and is on track to outperform the third. However, it is not on track to meet the fourth (2023 to 2027).

In the 2020 edition of the Energy Barometer, 52% of energy professionals surveyed predicted that the UK will fail to meet the fifth carbon budget. This is reflected in the official 2019 BEIS energy and emissions projections, which show that the UK is set to fail to meet the fourth carbon budget by 158Mt CO₂e and is set to fail to meet the fifth carbon budget by 173 Mt CO₂e. 

The Climate Change Act (2008) created the initial framework for the UK to begin reducing GHG emissions. In the decade that has followed, the majority of UN members adopted the 2015 Paris agreement, committing to limit global temperature rise to ‘well below 2°C’. In May 2019, the CCC released “Net Zero – The UK’s contribution to stopping global warming”, which incorporated the latest scientific evidence on climate change, including the landmark IPCC SR1.5 report. This report updated the Climate Change Act goal of 80% reduction in GHG emissions (on 1990 levels) to a new recommended target of net-zero emissions by 2050, which was subsequently adopted by the UK Government.

The report also recommends that Scotland should pursue a more ambitious goal of net-zero emissions by 2045. Within the UK, Scotland is uniquely well placed to reduce carbon emissions. This is thanks to sufficient space for afforestation (creating new forests or woodlands) and peatland restoration, as well as significant potential CO2 storage sites in the North Sea. Conversely, the report sets a more modest goal for Wales of 95% reduction in GHG emissions on 1990 levels by 2050, owing to higher Welsh agriculture emissions and limited potential in the country for CO2 storage.

The CCC cites falling costs in key technologies such as batteries and offshore wind as a means to achieve net-zero emissions for roughly the same cost as the original 80% reduction target (estimated at 1-2% of GDP in 2050). In December 2020, the CCC revised the estimate down further, predicting that net costs for meeting the sixth carbon budget will be equivalent to less than 1% of GDP over the next 30 years. However, meeting these new, more ambitious targets requires greater urgency and a ramp-up in policy regarding domestic heating, CCUS development, hydrogen, heat pumps and afforestation.

In-depth analysis of CCC Net-Zero report – Carbon Brief, 2nd May 2019

Achieving net-zero emissions is a realistic goal for Britain – Financial Times, 2nd May 2019

2nd Climate Change Risk Assessment (CCRA2) – Committee on Climate Change, 18th January 2017. 

CCRA3 will be released in 2022.

Updated energy and emissions projections: 2019 – Dept. for Business, Energy & Industrial Strategy, October 2020

Special Report: Global Warming of 1.5°C – Intergovernmental Panel on Climate Change, 8th October 2018