Carbon Budgets, Net Zero Targets and the Climate Change Committee

A carbon budget is a statutory cap on the total greenhouse gas emissions the UK can emit in a five-year period¹. The budgets are set under the Climate Change Act 2008, which requires a new budget every five years, following the advice of the Climate Change Committee, and they apply to the whole of the UK economy and society². The first three budgets, covering 2008 to 2012, 2013 to 2017 and 2018 to 2022, have all been met, and the UK has approximately halved its emissions since 1990⁴.

The framework now runs well ahead of the present. The Fourth Carbon Budget covers 2023 to 2027 at 1,950 MtCO2e, the Fifth covers 2028 to 2032 at 1,725 MtCO2e, and the Sixth covers 2033 to 2037 at 965 MtCO2e, the first UK target to include international aviation and shipping⁵. The Seventh Carbon Budget, passed into law in 2026, requires an 87% reduction in emissions by 2040 compared with 1990 levels, or 90% excluding international aviation and shipping⁵.

For a household, the budgets matter because they are the legal spine behind policy on home heating, buildings and electricity. The Climate Change Committee's position is that the lower-cost, energy-secure future is electric, and that electrification makes up 60% of emissions reductions by 2040⁷. What follows sets out the figures, the rules, how the four nations differ, and what remains outside a household's control.

The figures: caps, outcomes and the shape of the path

The completed budgets give the clearest picture of how the framework has performed. The First Carbon Budget ran from 2008 to 2012 with an emissions cap of 3,018 MtCO2e, the Second covered 2013 to 2017 at 2,782 MtCO2e, and the Third covered 2018 to 2022 at 2,544 MtCO2e¹. The UK outperformed these first three budgets by 36 MtCO2e, 384 MtCO2e and 391 MtCO2e respectively⁵.

The Third Carbon Budget is the best documented. Its net carbon account for the period was 2,153 MtCO2e excluding international aviation and shipping, against a cap of 2,544 MtCO2e, an overachievement of 391 MtCO2e, or 15% of the budget, based on final 2022 emissions¹⁰. That surplus is not a permanent gift: it reflects emissions falling faster than the cap required over those five years, not a change to the cap itself.

The direction of travel is steep. The Fifth Carbon Budget, at 1,725 MtCO2e for 2028 to 2032, excludes international aviation and shipping, while the Sixth, at 965 MtCO2e, is the first to include them⁵. The Seventh Carbon Budget requires an 87% reduction in emissions levels by 2040 compared with 1990, or 90% from 1990 excluding international aviation and shipping⁵. The Committee models that this is feasible and estimates the net costs of delivering it at 0.2% of GDP per year on average⁸.

What sets the level of each budget

Three forces shape the level of each budget: the science of the remaining global carbon budget, the pace of available technology, and the cost of delivery. The Committee's advice has consistently framed the budgets as a balanced path rather than a maximum. When it advised on the Fifth Carbon Budget, it described the budget as setting the cap on UK emissions for the period 2028 to 2032, building on a 36% reduction already achieved by 2014 and a 52% reduction already committed to under existing policies¹¹.

The Sixth Carbon Budget was the first budget since the UK set its new 2050 target, and the Committee said it would put the UK on the pathway to net zero emissions, in effect bringing forward the UK's previous 80% target by nearly 15 years¹². That is the hinge point in the framework: the budgets before it were consistent with an 80% cut by 2050, and the budgets after it are consistent with net zero.

Delivery depends on policy, and the Committee has been blunt where policy has lagged. Its independent assessment of the Clean Growth Strategy found that gaps to meeting the fourth and fifth carbon budgets remained and that these gaps must be closed¹⁴. In 2024 it reported that only a third of the emissions reductions required to achieve the country's 2030 target were covered by credible plans, and it published a priority list of ten recommendations¹⁵. The government's Carbon Budget Delivery Plan, published in 2023, sets out its proposals and policies to enable carbon budgets to be met, covering 2008 to 2037, and the Carbon Budget and Growth Delivery Plan sets out policies to meet statutory targets up to Carbon Budget 6².

Scotland, Wales and Northern Ireland: four frameworks, not one

Climate change is devolved, and the four nations do not share a single set of targets. The UK carbon budgets apply to the whole of the UK economy and society, but Scotland, Wales and Northern Ireland each have their own advisory arrangements and, in Scotland's case, its own statutory budgets².

Scotland has the most developed separate framework. Carbon budgets are legally binding caps on greenhouse gas emissions in Scotland over five-year periods, and the Climate Change (Emissions Reduction Targets) (Scotland) Act 2024 introduced a carbon budget-based approach for setting emissions reduction targets⁴. The Scottish Government must lay a draft Climate Change Plan before the Scottish Parliament within two months of the regulations setting the carbon budgets coming into force, and the Committee advises that the reductions should be delivered through domestic effort rather than by planning to use international credits, referred to as carbon units in the Act⁴. The Committee provides regular advice to Scotland, including an annual Scottish progress report on reducing emissions¹⁷. When it last assessed Scotland's performance, it said the Government needed to set out clear detail of how policies will work together to deliver the required levels of emissions reduction, and it will assess the merits of the current plan in its progress report¹⁸.

Wales has committed to net zero by 2050 and set out ambitions to get there sooner¹⁹. The Committee's assessment for Wales was that net zero emissions, previously thought unachievable and unaffordable by experts, was now possible with ambitious policy and a Team Wales effort, that greater reductions within the industrial sector would help achieve the goal, and that more than half of its recommendations were partly or fully driven by societal or behavioural changes¹⁹. It also assessed that the pathway would mean Wales meets its commitments under the Paris Agreement¹⁹.

Northern Ireland's arrangements sit within the UK framework, with the Committee publishing advice on a fourth carbon budget for Northern Ireland²⁰. The practical effect for a household is that the target dates and the supporting policy levers, from building standards to heating rules, can differ depending on where in the UK the home sits, even though the headline UK budgets are set at Westminster.

The rules: twelve years' notice and a high bar for change

The legal machinery is deliberately slow, and that is the point. The government must set in law the level of each carbon budget no later than 30 June in the twelfth year before the beginning of the period in question⁵. Put plainly, carbon budgets must be set in law by the Government 12 years before that period of time starts⁸. That long lead time gives investors and households notice, and it makes the budgets hard to move once set.

The Act also requires the Government to set a new Carbon Budget every five years, following the advice of the Climate Change Committee³. The Committee has advised on the levels of the first six carbon budgets, and the government has chosen to follow that advice in each instance⁵. The budgets are legislated in sequence: the Fourth, Fifth and Sixth Carbon Budgets, covering 2023 to 2027, 2028 to 2032 and 2033 to 2037, have been set in law²⁰.

Amendment is possible but tightly constrained. Carbon budgets can only be altered if there is a significant change in circumstances upon which the budget was set, demonstrated through evidence and analysis²¹. That is a high bar, and it is why the framework is described as legally binding rather than indicative.

The Committee's own role is defined in the same Act. It is an independent statutory body established under the Climate Change Act 2008, providing expert advice as part of the approach to climate change¹. Its functions include advising on emissions reduction targets, publishing annual progress reports to Parliament, and carrying out regular independent assessments of adaptation programmes¹⁷. It also holds the Government to account for how it delivers against its targets⁷.

What the budgets mean for a household's energy independence

The budgets are the clearest statement of the direction the UK's energy system is required to travel, and they bear directly on the choices available to a household. The Committee's policy position is that the lower-cost, energy-secure future is electric, and that the Government should plan to accelerate electrification, in particular by making electricity cheaper⁷. Its number one recommendation remains to make electricity cheaper by taking policy costs off electricity bills, which it describes as vital for ensuring the required scale-up of heat pump installations in the plan²².

That is the independence argument in one line: a home that runs on electricity produced domestically is less exposed to imported gas than one that burns it. The scale of the change is large. The Committee has said that to meet the commitment to reach net zero by 2050, 19 million heat pumps will need to be installed, and that hybrid heat pumps should be widely used by 2035²³. It has also said that a significant increase in roll-out rates is needed in many areas in the next few years, while noting some encouraging signs of progress in its delivery indicators²².

The dependence that remains is real. Carbon budgets are national accounting frameworks, not household entitlements: meeting them does not by itself give a home its own generation, storage or resilience. A household connected to the grid still relies on a supplier, on network infrastructure and on the pace of grid decarbonisation, and the UK Government has committed to fully decarbonising the electricity grid by 2035²⁴. The Committee's own assessment is that the UK is on track to meet the fourth and fifth carbon budgets, which is a statement about national totals rather than about any individual property²⁵.

Where the budgets meet the home

The budgets cover the whole economy, so the buildings sector carries a share of the total. The government's heat and buildings factsheet sits under the Carbon Budget and Growth Delivery Plan, which sets out policies and proposals to meet statutory emissions reductions targets up to Carbon Budget 6, covering 2033 to 2037¹⁶. The Committee's expectation is that the upcoming Warm Homes Plan will address the cost of electricity, which it links directly to the required scale-up of heat pump installations²².

The Committee's modelling puts electrification at the centre: it makes up 60% of emissions reductions by 2040⁸. That has consequences for how homes are heated, how they are wired and what they draw from the grid. It also explains why the Committee's recommendations are not confined to power stations. More than half of its recommendations for Wales were partly or fully driven by societal or behavioural changes, which is a recognition that meeting a carbon budget depends on what households and businesses actually do¹⁹.

For a householder trying to read the direction of travel, the useful signals are the dates. The Fourth Carbon Budget is already running and 1,124 MtCO2e of its 1,950 MtCO2e had been used up in 2023 to 2025⁹. The Fifth and Sixth follow, and the Seventh requires an 87% cut by 2040⁵. Each of those dates sits behind the building standards, heating rules and electricity pricing decisions that reach a home, and the rules that govern those decisions are set out across the UK home energy regulation and policy framework.