End the fossil fuel age for a secure and prosperous future: Climate Change Committee's Seventh Carbon Budget

Download the embargoed report.

Today the country's climate advisors, the Climate Change Committee (CCC), present a new pathway to a decarbonised UK. The CCC sets out how to achieve this by 2050, and what decisions need to be made in coming years to ensure success. We model that we must reduce emissions by 87% (compared to 1990 levels) by 2040 – and show how this is feasible.

Our findings are:

• Electrification makes up 60% of emissions reductions by 2040. This includes decarbonising the grid and replacing fossil fuelled cars and heating systems with electric alternatives (EVs and heat pumps). Globally, the world now invests almost twice as much in clean energy as it does in fossil fuels, with clean energy investment expected to reach $2 trillion in 2024.
• The roll out of the technologies required is similar to what has happened in comparable countries (Netherlands and Ireland) and previous technology roll outs in the UK (mobiles, fridges and internet connection).
• Investment this decade creates savings over time. These savings are realised on a cross-economy basis during the Seventh Carbon Budget period (2038 – 2042) and grow to 2050 and beyond. We also estimate the net costs of delivering this are 0.2% of GDP per year on average.

Delivering against this pathway will result in:

• Cheaper bills. By 2050, if our pathway is delivered against, annual household energy bills are predicted to be ~£700 cheaper than today, and household driving bills are predicted to be ~£700 cheaper than today*. The pathway includes investment and additional support for certain households.
• Energy security. Energy shocks have been responsible for over half of recessions since the 1970s. If the country decarbonises against our Balanced Pathway and there was a spike in gas prices like the one we had following Russia's illegal invasion of Ukraine, average household energy bills in 2040 would be 15 times less sensitive.
• Private sector investment in infrastructure and new technologies. We estimate that the private sector funds on average 65-90% of the financing requirement from 2025 to 2050. Public spend per year in our estimates never exceeds 2% of total managed public expenditure.

Professor Piers Forster, Interim Chair of the Climate Change Committee, said:

“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.”

Sector by sector breakdown of emissions reduction

27% of the emissions reduction by 2040 comes from surface transport

We are already beginning to see EV sales have a measurable effect in reducing emissions. This will speed up over the coming years as prices fall and sales grow, with fully electric options accounting for nearly all new car and van sales by 2030 and making up over three-quarters of the fleet on the road by 2040.

14% of the emissions reduction by 2040 comes from homes (residential buildings)

Supply chains and the workforce of trained installers for low-carbon heating should scale up through the 2020s so that all new and replacement home heating installations are low carbon (mainly heat pumps) by the middle of the next decade.

12% of emissions reductions by 2040 comes from electricity supply

Demand for electricity will increase, especially during the 2030s, driven by the switch to EVs and heat pumps. To meet this growth and decarbonise the system, low-carbon generation is rolled out quickly. Offshore wind forms the backbone of the future system.

11% of the emissions reduction by 2040 comes from industry

The largest share of emissions reduction comes from electrification of industrial heat processes. CCS is important for tackling process emissions and should be targeted at industrial subsectors with limited alternatives. Hydrogen will play a small but important role in subsectors which may find it hard to electrify.

7% of the emissions reduction by 2040 comes from agriculture and land use

Low-carbon farming practices and technologies, including livestock measures and decarbonising machinery, can achieve a substantial reduction in agricultural emissions. Reaching Net Zero across the agriculture and land use sectors also requires a reduction in livestock numbers, most notably to free up land to plant trees.

5% of the emissions reduction by 2040 comes from aviation

Growth in aviation demand is managed through ensuring that the cost of decarbonising aviation is reflected in the price of flying. The share of sustainable aviation fuel used increases gradually, with a growing portion of this coming from synthetic fuels in the 2040s.

24% of emissions reduction by 2040 comes from other sectors

Emissions reduce across fuel supply, F-gases, non-residential buildings, shipping and waste. Engineered removals also ramp up gradually from 2030 to reach required levels by 2050.

Notes to editors

• The Climate Change Committee (CCC) is an independent, statutory body established under the Climate Change Act 2008. Our purpose is to advise the UK and devolved governments on emissions targets and to report to Parliament on progress made in reducing greenhouse gas emissions and preparing for and adapting to the impacts of climate change.
• The recommended level of the Seventh Carbon Budget is 535 MtCO2e, including emissions from international aviation and shipping. This is 87% below 1990 levels.
• Carbon budgets are produced by the Committee every five years. Carbon budgets must be set in law by the Government 12 years before that period of time starts. Further details on the legal process around the Carbon Budgets can be found in the Climate Change Act.
• The Government recently updated the UK's international targets (NDC) and has committed to a reduction in emissions of 81% by 2035. The CCC advised on this target and aligned the trajectory to deliver it with the advice we are now offering for 2038-2042.
• Download the embargoed report.
• Download the data set behind the charts and graphs.
• There are seven key recommendations in the report:

1) Making electricity cheaper. The largest share of emissions reductions in our pathway comes from switching to low-carbon electric technologies across sectors including transport, buildings, and industry. Households and businesses need to be better incentivised to make these choices through the impacts they will see on their bills. This can be done through rebalancing prices to remove policy levies from electricity bills.

2) Removing barriers. People need to be able to install charge points in their homes and businesses. Industries require timely grid connections to allow them to move to electrified production processes. Grid infrastructure is essential to enable everyone to make use of domestically produced low-carbon electricity, reduce household bills, and improve our energy security. Key processes and rules, including in planning, consenting, and regulatory funding, need to enable rapid deployment of low-carbon technologies.

3) Providing certainty. In many key areas, the best way forward to decarbonise is now clear. Once the market has locked into a solution, we need to deliver it. Government should support markets to do this by setting out clear, timely decisions on support for new technology choices, and dates for phasing out old technology. Certainty will provide confidence to consumers and investors. This should include confirming that there will be no role for hydrogen in home heating.

4) Supporting households to install low-carbon heating. While the Net Zero transition should lead to lower energy bills for consumers, support is needed to address barriers in upfront costs, especially for low-income households. Addressing barriers such as the price of electricity, lack of awareness, and misconceptions about heat pumps will be crucial.

5) Setting out how Government will support businesses. Businesses need clarity on the balance between government support and market mechanisms such as the UK ETS and carbon border adjustment mechanisms, so that they can make the transition to low-carbon operations. With the right support, UK businesses could decarbonise early and take advantage of growing global demand for low-carbon goods and services. Farmers and land managers need support to diversify land use into woodland creation, peatland restoration, bioenergy crops, and renewable energy.

6) Enabling the growth of skilled workforces and supporting workers in the transition. Growing workforces will be a critical enabler of some of the system-wide changes that are needed (for example, switching from gas to electric heating, building out the electricity grid). We need a plan for how to do this. A small number of industries will change substantially, which could adversely impact communities if not managed well. Government, business, workers, and communities should proactively plan for how to address this and ensure that new opportunities are available in affected areas.

7) Implementing an engagement strategy. Government should provide clear information to households and businesses. It should focus on what actions are most impactful in reducing emissions, the benefits of low-carbon choices, and providing trusted information.

* Actual stats are £716 cheaper for energy and £699 cheaper for driving. Driving includes fuel, insurance, maintenance.