Committee publication · Report · 4 March 2026 · HC 1327
8th Report - The Seventh Carbon Budget
From: Environmental Audit Committee
Inquiry: The Seventh Carbon Budget
Government response deadline: 4 May 2026
Summary
The Environmental Audit Committee's eighth report assesses the Climate Change Committee's advice to set the Seventh Carbon Budget (CB7) at 535 MtCO₂e for 2038–2042. The committee agrees the target is technically credible but warns delivery requires strengthened governance, cross-government coordination, credible delivery plans, and sustained public engagement. CB7 marks a transition from centrally-delivered decarbonisation (prior budgets) to complex system changes across heating, transport, and behaviour, where public fairness and confidence are critical.
Key findings
- The CCC's recommended level of 535 MtCO₂e for CB7 is technically credible and necessary to maintain the UK's trajectory to net zero by 2050, but delivery differs fundamentally from earlier budgets: it depends on coordinated action across infrastructure, markets, and everyday behaviour rather than centralised electricity sector reform.
- Low-hanging fruit of decarbonisation has been exhausted; CB7 delivery will be more complex, capital-intensive, and exposed to risks in infrastructure readiness, skills capacity, and system constraints in sectors with long asset lifetimes (heating, transport, buildings).
- Current cross-government coordination is insufficient; multiple departments drive policies misaligned with carbon objectives (e.g. airport expansion, mixed transport signals, Treasury underweighting climate action), creating delivery risk and conflicting incentives.
- Public fairness and affordability are core delivery requirements: current electricity-to-gas price ratios and uneven cost distribution risk weakening incentives to switch to low-carbon options and undermining public trust, particularly for lower-income households.
- Parliament's scrutiny role is more critical than for earlier budgets: CB7 is debated in fragmented political consensus, making robust parliamentary oversight of headline targets and delivery credibility essential for democratic accountability and public confidence.
Recommendations
- The Government should legislate for the Climate Change Committee's recommended level of 535 MtCO₂e for the Seventh Carbon Budget, but legislation must be accompanied by strengthened action to address delivery risks identified in the report.
- The Government should consider additional measures that offer resilience and headroom against delivery risk without damaging public consent.
- The Government should set out clearly in the impact assessment accompanying the draft Carbon Budget Order how the proposed level aligns with the UK's legally binding Paris Agreement obligations and its status as an Annex I Party with heightened responsibilities.
- The Government must strengthen cross-departmental arrangements to offer clarity, authority and consistency required to deliver CB7, with strong central leadership and clear mechanisms for collective responsibility to prevent departmental priorities diverging from carbon objectives.
- The Government should ensure that fairness is central to policies securing public support, mitigating inequalities where costs fall early and unevenly and benefits are delayed or less visible.
- Local authorities and community organisations should lead place-based delivery engagement with long-term funding, clear roles, and policy alignment from central Government to build public confidence.
- The Government should provide clear information, practical support, and instil confidence that change is being delivered fairly and competently as the transition becomes more visible in everyday life.
Tone
CriticalTopics
climate-policycarbon-budgetsnet-zeropublic-engagementsectoral-decarbonisation
Key actors
Climate Change Committee, Department for Energy Security and Net Zero, Environmental Audit Committee, Department for Transport, Treasury, Friends of the Earth, Professor Joeri Rogelj (Imperial College London), Mike Childs (Friends of the Earth)
Notable line
“Delivery of CB7 cannot be achieved by Government action alone. The transition to net zero will increasingly be experienced in everyday life …”
Key Quotes
“CB7 comes at a pivotal point in the transition: the "low-hanging fruit" of decarbonisation has largely been exhausted, and delivery will now depend far more on complex system change across homes, transport, industry and everyday behaviour.”
“Delivery of CB7 cannot be achieved by Government action alone. The transition to net zero will increasingly be experienced in everyday life, through changes in how homes are heated, how people travel, and how energy is used.”
“The current electricity to gas price ratio, shaped in part by how climate policies are reflected in energy bills, risks placing disproportionate burdens on those 2 with the fewest options and weakening incentives to switch to low-carbon heating and transport.”
“… weakening ambition or delaying emissions reductions would defer action into later periods, increasing reliance on higher-cost or less mature options, raising overall costs and delivery risks, and narrowing the flexibility available as the UK enters the phase of the transition in which emissions reductions become harder to achieve.”
“… the Department for Transport as an example of a department "going rogue" when decisions are taken without adequate regard to carbon impacts, and told us that the Treasury "does not hold climate action … close to its heart".”
“In legislating for the Seventh Carbon Budget, the Government should consider the United Kingdom's contribution to global efforts to limit warming, alongside its domestic statutory framework.”
Source · parliament.uk record ↗