techUK take on the Seventh Carbon Budget

On Wednesday, the Climate Change Committee (the CCC) released its Seventh Carbon Budget, offering advice to government and a pathway to reach net-zero-by-2050. This budget, covering the years 2038-2042, calls for UK-wide emissions to be cut 87% by 2040 vs. 1990 levels. You can read the full report here.

techUK is pleased to see a new pathway that looks at demand signals and levers for government to pull, but is also keen to remind the CCC that it needs to formally recognise the role of digitalisation to mitigate emissions and reduce the risks for government as it decides what policy measures to introduce.

To deliver on these steep cuts, the CCC has offered government a host of policy actions it should consider to continue to bend the emissions curve. In many sectors, the decarbonisation pathway over the next decade is relatively clear, though still a significant challenge, especially as electricity will be largely decarbonised by the 2030s.

Unsurprisingly, the largest projected cuts come from the continued transition to a low-carbon electrical grid. Here, the CCC estimates significant growth in renewables generation is needed: a six-fold increase in offshore wind capacity, the doubling of onshore wind capacity, and the continued growth of solar, nuclear, and hydrogen. Alongside the transition of the nation’s power sector, the UK must electrify its cars, homes and industrial sectors. More specifically, 80% of cars should be electric and half of all homes should have a heat pump by 2040 (only 1% of homes in the UK had a heat pump in 2023). This would amount to a transformation of much of the UK's infrastructure, and meeting any one of these targets will require a step-change in the pace at which clean energy is getting built in most of the UK.

This part of the net-zero story is relatively straightforward, and has been for some time: phase out fossil fuels from the grid, and electrify as many cars and homes as quickly as possible. Other parts of the decarbonisation agenda prove more complicated. By 2040, the CCC estimates the highest emitting sectors will be aviation and agriculture, and admits neither have a credible pathway to completely decarbonise. For aviation, while sustainable fuels will meet an estimated 17% of aviation fuel demand, more significant emissions cuts post-2040 will require advancements in technology and expansion of carbon capture and storage. Similarly, while the agricultural sector will see some emissions cuts via low-carbon farming practices, the CCC estimates the 40% emissions reductions in the sector by 2040 will in part be driven by shifting land-use away from livestock and toward reforestation. This is a more uncertain assumption at best.

The CCC sets out 43 recommendations and seven key themes for policymakers to consider to steer the UK toward its 2040 decarbonisation goals. Many are cross-cutting, and will require a joined up approach from government to deliver, including making electricity cheaper, speeding up grid connections, and setting out low-carbon transition plans for businesses. But the CCC has moved away from prescriptive policy recommendations—the 2020 Budget had an accompanying 200+ page policy report—and toward a more general advisor role to government.

Here, government should be bold in areas like digital adoption where CCC advice seems to be lacking. While the report makes note of the use-cases for some technology—like the improved monitoring of emissions—it doesn’t recognise the fundamental role digital tech can play in decarbonisation efforts. Deploying and adopting digital technologies at scale can cut emissions an estimated 20% across all industries, and will have a significant role to play in achieving efficiency gains in hard to abate sectors like aviation and agriculture. More broadly, tech adoption has a critical role to play in helping government deliver on its clean growth mandate.

Now that the CCC has set out its recommendations, government must propose a level for the Seventh Carbon Budget, which Parliament must approve or reject by 30 June 2026. To date, government has followed the advice of the CCC.

“This Carbon Budget clearly shows the sheer amount of decarbonisation needed in cities, agriculture and transport, but does not sufficiently recognise that digital tech can cut emissions by 20% across all industries. This needs to be factored in to the Climate Change Committee modelling as climate tech is a UK success story and will play a massive role in delivering growth and net zero."

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