The Climate Change Committee gave its advice on the UK's Seventh Carbon Budget to the Government in February 2025, setting out a Balanced Pathway to Net Zero1. The independent, statutory body modelled the pathway in line with the government's Green Book guidance1. The advice covers emissions reductions across the economy to 2050, including a 66% fall in emissions from residential buildings between 2023 and 2040 and near-complete decarbonisation of that sector by 20502.
Residential buildings emitted 52.2 MtCO2e in 2023, with gas accounting for 80% of those emissions, according to the Chartered Institution of Building Services Engineers2. The pathway assumes 68% of existing homes will have heat pumps by 2040, and that from 2026 all new homes must be built with low-carbon heating systems and no connection to the gas grid2. Energy efficiency measures named in the advice include insulation, draught-proofing and glazing upgrades2. The non-residential building sector emitted 20.8 MtCO2e in 2023, with a target to cut emissions by 87% by 2040 and to nearly zero by 20502.
The CCC's later cost-benefit report, published in March 2026, found that for every pound spent on Net Zero the benefits outweigh the cost by 2.2 to 4.1 times, and that the total additional cost of a single fossil fuel price spike of 2022 magnitude is likely to be as large as the total net additional cost of meeting the pathway to Net Zero across every year to 20501. It valued losses in a Net Zero system at £30 billion per year, compared with £60 billion a year in today's energy system1.
"In light of current world events, it's more important than ever for the UK to move away from being reliant on volatile foreign fossil fuels, to clean, domestic, less wasteful energy."
The CCC's 2025 progress report to Parliament, laid before Parliament on 25 June 2025, recorded a 56% increase in heat pump installations in 2024, driven by increased support from government schemes, but noted that only around 1% of UK homes are heated with a heat pump4. It also found residential buildings emissions rose by 1.5 MtCO2e in 2024, likely due to increased heating demand following reductions in gas prices4. The report said the ratio of electricity to gas prices remains significantly off track, describing making electricity cheaper as its first recommendation4.
| Measure | Figure |
|---|---|
| Residential building emissions, 2023 | 52.2 MtCO2e2 |
| Share of those emissions from gas | 80%2 |
| Assumed share of existing homes with heat pumps by 2040 | 68%2 |
| Heat pump installation growth, 2024 | 56%4 |
| Share of UK homes heated by heat pump | around 1%4 |
Why it matters for households
The advice treats home heating as central to meeting the UK's carbon targets, which means the fabric of homes and the equipment that heats them are both in scope. For a household, the pathway implies a shift away from gas heating towards electric alternatives, alongside insulation and other efficiency measures that reduce how much heat a home needs in the first place2. The CCC's finding that energy losses in a Net Zero system would be valued at £30 billion per year against £60 billion today points to less waste in the system overall1. Its assessment that the electricity-to-gas price ratio is off track identifies a cost relationship that bears directly on whether running an electric heating system is cheaper than running a gas boiler4. The CCC's own framing is that electrification could halve the waste in today's energy system and reduce household bills, though it also records that residential emissions rose in 2024 as gas prices fell4.
What happens next
The Scottish Government outlined revised plans for a Heat in Buildings Bill in April 2025, expected to be introduced later that year, retaining the 2045 target for decarbonising home heating with a greater focus on affordability3. Consumer Scotland reported that the Scottish Government previously estimated the total cost of converting all of Scotland's building stock to zero emissions by 2045 at around £33 billion, with an average cost per home to convert to a heat pump of around £14,0003. From January 2026, Ofgem becomes the regulator for heat networks across Great Britain3. The CCC's 2025 progress report said the Government's forthcoming Warm Homes Plan and Industrial Strategy, both due in 2025, would need to address the biggest risks, including the scale-up of heat pump roll-out4.
Sources4 cited
- Cost of Net Zero by 2050 less than a single fossil fuel price shock – CCC - Climate Change Committee, theccc.org.uk
- The road to Net Zero: Building services' role in the Seventh Carbon Budget, cibse.org
- Converting Scotland's home heating - HTML | Consumer Scotland, consumer.scot
- Progress in reducing emissions - 2025 report to Parliament - Climate Change Committee, theccc.org.uk