Seventh Carbon Budget sets clear framework for binding limits on UK emissions
The UK government’s climate advisors, the Climate Change Committee, have published their statutory report[1] (the “Report”) recommending the level for the Seventh Carbon Budget, a limit on the UK’s greenhouse gas emissions over the five-year period 2038 to 2042. By 2040, emissions must be reduced by 87% compared to 1990 levels to meet its ambitious but critical target.
The Climate Change Committee, established under the Climate Change Act (2008), is the UK and devolved governments’ independent adviser on tackling climate change. On 26 February 2025, the Climate Change Committee published its pathway to a decarbonised UK, which sets an overall limit on the UK’s greenhouse gas (GHG) emissions of 535 MtCO2e between 2038 and 2042. This figure includes all domestic GHG emissions as well as those from international shipping and aviation.
Key findings
The Report’s key findings in order to meet its target are that:
- Electrification must make up 60% of emissions reductions by 2040 and must double in the UK by 2040.
- Low carbon fuels such as hydrogen and sustainable aviation fuel need to replace traditional fossil fuels in industries which are harder to decarbonise, such as aviation and shipping.
- Nature-based measures, including planting new woodland and restoring peatlands, need to be taken to increase land-based carbon sequestration. There needs to be a significant increase in tree planting and peatland restoration to offset residual emissions from the agriculture and land use sectors.
- Carbon Capture and Storage and direct air removals need to balance residual emissions, again particularly in industries which are harder to decarbonise. The Report definitively states that it “cannot see a route to Net Zero that does not include CCS”.
- Deployment of low-carbon technologies is required as part of a shift away from high-carbon goods and services and must be done in a way which is accessible and affordable for consumers. Among other recommendations, the Report calls for a phase-out of new petrol and diesel vehicles by 2030 and an end to the sale of new gas boilers by 2035.
Next steps
The Report finds that taking the required steps to meet the GHG emissions reduction target of 87% will result in outcomes appealing to both the government and consumers, namely cheaper bills, increased energy security and high levels of private sector investment in infrastructure and new technologies.
Among the Report’s key recommendations are a series of steps the UK government should take to assist households with lowering their carbon use, including incentivising households to switch to low-carbon electric technologies by making electricity cheaper, removing barriers to electrification by investing in electricity infrastructure and reducing planning burdens, and supporting households to install low-carbon heat pumps.
The UK Government will now need to decide whether to formally adopt the recommendations in the Report. It has done so on each of the 13 previous occasions recommendations have been made since the Climate Change Committee was established in 2018.
Comment
The Report provides a clear framework for the UK Government to set legally binding limits on permissible GHG emissions, which have the potential to become a ‘hook’ for climate-based litigation. Recent years have seen rapid developments in this space, with “government framework” cases challenging the scope and scale of government climate policy making headlines. Furthermore, the Supreme Court in Finch held that the downstream, “Scope 3” emissions associated with expanding oil production at a site in Surrey should have been taken into account when considering planning permission for the project. Successful challenges to the legality of multiple fossil fuel projects have since been brought by campaigners on “Finch” grounds, including in respect of the Whitehaven coal mine in Cumbria and the Rosebank Oil Field in the North Sea.
The Report pertains to issues of high importance for the UK Government and consumers, with a focus on financial savings and reliance on technological development over widespread social change, widely considered to be more difficult to address in the short to medium term. There will be critics who point to a failure to address what they say is a need for fundamental behavioural change in order to reduce GHG emissions to acceptable levels, and questions remain as to whether reliance on as-yet unproven technologies such as CCS and sustainable aviation fuel will present challenges with adherence to carbon budgets in the future.
Interestingly, the Report firmly rejects the use of international carbon credits (or ‘carbon units’) to achieve its target. Use of such credits, it is stated, has the potential to undermine the UK’s international climate leadership and reduce clarity on the urgency of domestic measures, particularly if international credit supply proves to be unreliable.
Lastly, the Report recommends the introduction of a non-legally binding benchmark against which emissions from imports can be monitored. The UK’s legally binding Net Zero targets are set on the basis of territorial emissions, but global emissions caused by UK businesses and consumers are a significant part of the UK’s overall contribution.
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