The Climate Change Committee (CCC) has today published its Seventh Carbon Budget which calls for the UK to reduce emissions by 87% and emit just 13% compared to 1990 levels by 2040.

The Government's climate advisors say 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). 

The report, which presents a new pathway to a decarbonised UK, says 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.

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.

According to the CCC, delivering against this pathway will result in:

• Cheaper bills. By 2050, if the pathway is delivered against, annual household energy bills are predicted to be around £716 cheaper than today, and household driving bills are predicted to be and £699 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 the CCC’s Balanced Pathway and there was a spike in gas prices like the one 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. The CCC estimate that the private sector funds on average 65-90% of the financing requirement from 2025 to 2050. Public spend per year in the CCC estimates never exceeds 2% of total managed public expenditure.

Interim Chair, Professor Piers Forster, 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.”

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 the Committee is now offering for 2038-2042.

The report sets out the following seven key recommendations:

Making electricity cheaper. The largest share of emissions reductions in the 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.

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 energy security. Key processes and rules, including in planning, consenting, and regulatory funding, need to enable rapid deployment of low-carbon technologies.

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.

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.

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. Farmers and land managers need support to diversify land use into woodland creation, peatland restoration, bioenergy crops, and renewable energy.

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). A small number of industries will change substantially, which could adversely impact communities if not managed well.

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.

Updating wastewater treatment pathways for the Seventh Carbon Budget 

To inform its advice on the Seventh Carbon Budget, the CCC commissioned Arup to model emissions and potential decarbonisation pathways for the UK wastewater sector. The pathways were informed by a detailed review of wastewater decarbonisation technologies, wastewater treatment company plans and stakeholder engagement with industry experts covering both municipal and industrial wastewater.

The CCC points out that report reflects the views of Arup and does not represent the views of the CCC.

The technical report provides an overview of the methodology and results of a modelling exercise to update the assumptions on UK wastewater emissions modelling to 2050, to inform the CCC’s advice to government on the seventh Carbon Budget.

The central aim of the project was to develop three emissions pathways with associated costs and energy demands for municipal and industrial wastewater treatment emissions, broken down by devolved nation.

Arup developed a do-nothing ‘Baseline Projections’ pathway, a ‘Balanced Pathway’ and an ‘Additional Action Pathway’, in line with the CCC’s core seventh Carbon Budget scenarios.

The pathways were informed by a detailed review of wastewater decarbonisation technologies, wastewater treatment company plans and stakeholder engagement with industry experts covering both municipal and industrial wastewater.

The Arup study considered baseline emissions for the wastewater sector, as well as alternate decarbonisation pathways. It also provided estimates for costs and feasible deployment profiles for potential mitigation measures.

The report sets out key limitations and uncertainties relating to emissions factors, costs and decarbonisation potential.

Click here to download the CCC’s Seventh Carbon Budget February 2025

Click here to download Arup's Technical Report  Updating wastewater treatment pathways for the Seventh Carbon Budget