Progress in reducing emissions 2025 report to Parliament

Hello, I'm Professor Pier Per, the climate change committee's interim chair. Welcome to our explain of video for our progress report to parliament for 2025. Each year since the climate change act became law in 2008, we have assessed the UK progress towards its Eagle and missions targets. I am on the committee because I'm a climate scientist. Until the world reaches net zero carbon dioxide emissions with deep reductions in other greenhouse gases, it will keep getting warmer. Today I want to leave you with the with the message that getting to net zero is critical and it it is also possible. Change is already happening. But until we reach net zero, we are making our planet less safe. Not just for our children but for ourselves. We have reduced emissions by over 50% in this country. The pace of reduction has more than doubled since the introduction of the UK's climate change act in 2008. previous UK government in in in tested in low carbon technologies in their early relatively expensive stages. Now we have the opportunity to realize the benefits of foring costs. We are starting to see the impact of two decades worth of cold decision making as renewables become main stream and electric vehicles follow quickly behind. The UK should be proud of it. place among a leading group of economies demonstrating consistent and sustained decarbonization. In the date of the committee can see real progress. The country is starting starting to see the change changes that the he did, but there's still a lot more to do. Our number one recommendation in last year's report was to make electricity cheaper. At the at the moment when people and businesses switch to clean electric technology, they are paying more than the actual cost of supplying the extra electricity they needed because of policy decisions taken many years ago. code. Removing policy cost from electricity would enrolure the underlying cost savings of switching to efficient electric technologies are captured by households and businesses. in causing take up and private sector in a in aation. The government has made no clear progress on removing policy costs since the election. Making electricity cheaper remains our first recommendation. To explore our report in more detail, I'm handing you over to my colleague, Dr. Emily Nurse. Thanks, Pier. My name is Dr. Emily Nurse and I'm the head of net zero at the climate change committee. I'll now talk you through the analysis that underpins our progress report. I'll start with a look at the UK's greenhouse gas emissions. Emissions are continuing to fall. In 2024, they were half the levels seen three and a half decades ago in 1990. All three of the UK's past carbon budgets, which are legally binding caps on greenhouse gas emissions over 5-year periods, have been achieved. These are the orange blocks. The average annual reported emissions for each budget period are shown as gray horizontal lines. Importantly, each is below the top of the corresponding orange block. This means the budget was achieved. We're now around halfway through the fourth carbon budget and emissions are on track to achieve this too. The carbon budget delivery plan shown by this orange line is the government's policies and plans for achieving the UK's next emission targets. This is the carbon budgets up to and including the sixth carbon budget and the UK's first target that was set in line with achieving net zero emissions by 2050, the 2030 nationally determined contribution or NDC. This is an international commitment to reduce emissions by 68% compared to 1990 levels and it's shown by the black line here. That's equivalent to reducing emissions by almost a third by 2030 from levels last year. Recently, the country put into place another NDC for 2035. This is a reduction of 81% compared to 1990 levels, which you can see in the sixth carbon budget column. Also shown in purple is our recently recommended level of the seventh carbon budget. Government and Parliament will consider this recommendation and set the budget in law next year. In the UK, progress so far has been dominated by emissions from electricity supply falling. The UK has now phased out coal generation with the last coal powered power station, Rackcliffe on closing last year. It's a truly remarkable achievement that next year that line on this graph will reach zero. But it's not just the phase out of coal generation that has reduced emissions. Emissions from the gas generation of electricity have more than halved since the introduction of the climate change act. Total wind and solar capacity has grown significantly, displacing coal and increasingly gas. The cost of renewables has fallen significantly. When signals from governments are strong, the market can deliver incredible reductions in cost. Emissions in 2024 were 413.7 megat tons of carbon dioxide equivalent, a decrease of 2.5% on the year before. This was driven by reductions in both the gas and coal generation of electricity shown by the yellow bar and in industry shown by the light blue bar. There were smaller reductions from surface transport shown in bright purple in part from an increase in the proportion of electric vehicles on the road and in fuel supply shown in green. The decreases in these sectors were partially offset by an increase in emissions from residential buildings shown in red. As gas prices fell, there was an increase in energy demand. We've also seen emissions growth in aviation shown in purple. As flying levels continue to increase, if emissions from flying keep increasing, the UK's future targets could be at risk. In 2024, surface transport was the UK's highest emitting sector, responsible for around a quarter of emissions. This is mostly emissions from the exhaust pipes of petrol and diesel cars and vans. There were also significant emissions in residential buildings, industry, and agriculture shown in red, blue, and green. It's striking that emissions in agriculture have remained quite flat over the past few decades. As I mentioned, emissions from aviation are growing. In fact, they surpassed those from electricity supply for the first time last year. To achieve the UK's upcoming targets, emissions reductions need to broaden to more sectors. Since 2008, the beginning of the first carbon budget, more than half the emissions reductions have come from the energy supply sectors shown in yellow. But for the emission savings required from now to meet the 2030 NDC, over 80% needs to come from other sectors. The majority of the reductions are expected to come from the electrification of key technologies, especially in surface transport, shown in bright purple. That's electric vehicles, buildings shown in orange, mostly electric heat pumps, and in industry shown in the darker blue. This must be supported by the continued decarbonization and expansion of electricity supply. Beyond 2030, to achieve the sixth carbon budget, these sectors continue to make major contributions. There's also an increasing contribution to emission savings that needs to come from aviation, agriculture, and land use, as well as an important contribution from engineered removals. These are measures that remove carbon dioxide from the atmosphere and permanently store it, offsetting emissions in sectors that are difficult to completely decarbonize, most notably aviation. As well as broadening to more sectors, the pace of emissions reduction needs to increase. In sectors outside energy supply, the average annual reduction in emissions in the carbon budget delivery plan up to the end of the fourth carbon budget period remains similar to the pace we've seen since the carbon budgets began in 2008. But after this, this pace shown by the colored bit of the bars needs to more than double towards the end of the decade to meet the 2030 NDC. This pace will need to be maintained over the sixth carbon budget period. In contrast, the white sections of the bars show what will be left to do on energy supply. While emission savings gets smaller, the expansion of the electricity supply system is key to supporting electrification across the economy. This required acceleration in reducing emissions is possible. The adoption of new technologies often goes faster than people expect, starting slowly, then accelerating rapidly, especially as they become cheaper than the older incumbent technology. We've seen transitions like this before and we'll see them again. My children can't imagine a world without mobile phones, but I remember life before them and how at the start it was only a few people that had them. The key driver to deliver this increase in the pace of emissions reduction will be the uptake of electric vehicles. This transition is already having a measurable and rapidly growing effect on overall emission savings. Roughly half the emission savings from electric vehicles in 2024 were due to new vehicles registered in the previous two years. If the growth rate seen over the past few years continues, the emission savings from electric vehicles will increase significantly by 2030. We don't just look at emissions data when assessing progress. Our monitoring framework sets out our key indicators, a wealth of data that allows us to analyze progress on the ground even before we see it in emissions data. We compare reported data to what should be happening to be on track to reach future targets. We use both government milestones and our own balanced pathway from our seventh carbon budget advice to do this. Each year we analyze amongst other things the changes in rollout rates of lowcarbon technologies, tree planting and petland restoration. What we've seen this year is glimpses of promising progress in the data in a number of vital areas. Let's start with the transition from petrol and diesel to electric vehicles which is absolutely key to achieving the 2030 target. In 2024, the market share of new electric vehicles grew to 19.6% 6% from 16.1% the year before with further promising growth seen in the first half of this year. Although the sales figures in 2024 were slightly below the headline target in the zero emission vehicle mandate, the resumption in growth following a stagnation the year before is promising. This growth will need to accelerate over the rest of this decade. Vitally, the relative purchase price of electric to petrol and diesel cars is continuing to fall. Increasingly, we're seeing manufacturers bring new, lowercost model electric vehicles onto the market. This continuing trend will be key to ensuring a rapid uptake of electric vehicles in coming years. Also key is the expansion of electric vehicle charging infrastructure. Installations of new public charge points increased significantly by 40% last year. Continued growth will be needed for the rest of the decade to support the rapid increase in electric vehicles. The market share of new electric van sales did not grow last year. And while data from the first half of this year is more promising, sales remain significantly below the zero emission vehicle mandate. Significant growth in the market share of electric vans is needed over the rest of this decade. The physics of fully electric vehicles makes them a fundamentally better, more efficient technology, cheaper to both run and maintain. The transition to these vehicles is happening with the global market share growing to around 1 in7 in 2024. Let's move now to how we heat our homes. We also have a proven efficient technology to replace polluting fossil fuel boilers, electric heat pumps. Only around 1% of the UK's homes are heated with heat pumps, amongst the lowest in Europe. However, there was promising growth in installations last year with a substantial increase of 56% compared to the year before. There was a significant contribution to this increase from the success of government funded schemes, in particular the boiler upgrade scheme. This is positive progress, but it needs to continue. A significant scaleup is needed over the rest of the decade. While some of these heat pumps were in new homes, 71% of new homes last year were constructed with fossil fuel heating. Every single new home built with polluting heating systems will need to be retrofitted at a later date. This will be considerably more expensive than installing them with lowcarbon heating in the first place. While the government is proposing to revise building regulations to address this issue, there continue to be delays. This change must be implemented as soon as possible to prevent unnecessary costs and emissions. The transition to electric vehicles and heat pumps must be supported by the rapid expansion and decarbonization of electricity supply. The government has an ambitious aim to reach clean power by 2030 with stretching goals for renewable generation that will require at least a tripling in annual installation rates for both offshore and onshore wind and a four times increase for solar. We've seen some progress this year. The total increase in wind and solar capacity in 2024 is the largest annual increase seen for six years. With significant capacity in the pipeline for both onshore and offshore wind, these are judged to be on track. However, more is needed in the pipeline for solar generation to get on track to achieving the government's ambition. Average annual rates for solar generation will need to reach the peak seen 10 years ago in 2015. The next two to three contracts for difference allocation rounds will be crucial for delivering the levels of renewables set out in the clean power 2030 action plan. As well as the roll out of lowcarbon technologies, tree planting and petland restoration are also important for achieving the UK's targets. Tree planting rates increased by 59% last year, the first substantial increase in 5 years. This was driven by an almost doubling of planting rates in Scotland with a significant increase seen in England, too. Planting rates last year were the highest they've been for three and a half decades since 1990. Rates will need to continue to increase over the rest of this decade and beyond, reaching the levels seen in the early 1970s by the early 2030s. But we have concerns that the recent reductions in funding for tree planting in Scotland could slow this significant progress. It's vitally important that this recent momentum doesn't stall. Due to the time it takes for trees to grow and start absorbing optimum amounts of carbon dioxide, delays in this area could put the UK's net zero target at risk. We've also seen another year of improved rates of petland restoration, although a significant ramp up is also needed there. So, we've seen some positive progress in emissions and other indicators over the last year. Let's turn now to our assessment of the government's policies and plans for achieving the UK's upcoming targets. The progress I've described gives us confidence that we'll achieve the emissions reduction needed over the fourth carbon budget period. We judge that 75% of that is covered by credible policies and plans shown in green in this chart. Including the yellow where there are only some risks attached, this rises to 90%. But more action is needed in a number of key areas for achieving the 2030 NDC and the sixth carbon budget. For the 2030 NDC, shown as the solid purple line at the bottom of this middle block of colors, 38% of the required emission savings are covered by credible plans. This is a slight increase on the 32% seen in our assessment last year. A further 23% carry only some risk, bringing the total of green and yellow to around three-fifths of the required emission savings. Credible plans are mostly in the surface transport and electricity supply sectors and in parts of the iron and steel sector of industry. The committee has however already highlighted their concern about the handling of industrial transition plans and we continue to recommend government to work with communities, workers and local businesses. There are some risks around planning, consenting and grid connections and ensuring the successful implementation of the next few contracts for difference rounds required for the government's clean power by 2030 target. There are also some risks around the ability of the clean heat market mechanism to deliver its required rollout of heat pumps in particular because the current payments required for failing to meet the targets are significantly lower than originally proposed. This mechanism was designed by the previous government to place an obligation on manufacturers to install a certain proportion of heat pumps each year but must have stronger financial teeth to work as effectively as envisaged. There are significant risks attached to 20% of the required emission savings shown in orange. This includes a proportion of buildings decarbonization. In particular, the lack of clear p plans for supporting households to install lowcarbon heating systems beyond the next couple of years. There are also risks around policies to drive uptake of industrial electrification and carbon capture and storage and longerterm certainty in agriculture, tree planting and petland restoration. A further 18% of required emission savings have either completely insufficient plans, the red bit, or are missing from the quantified policies in the carbon budget delivery plan, the gray bit. Insufficient plans are mostly for a proportion of buildings to carbonization. In some areas of industry and for engineered removals for the sixth carbon budget shown on the right, the key factors in our assessment are similar. Let's now look at what has changed in our scores since the since last year's assessment in key sectors. In surface transport, there's been a small improvement over the last year following the reinstatement of the 2030 phase out date for new petrol and diesel cars and progress in electric vehicle rollout. However, the recently announced changes to the zero emission vehicle mandate have limited the improvement in our assessment this year. In buildings, there's been some improvements from the implementation of the clean heat market mechanism, which had been delayed from the year before, the extension of the boiler upgrade scheme, and the removal of restrictions for heat pumps within 1 meter of a property boundary, as well as the significant increase in heat pump installations in the past year. However, these improvements have been balanced by a downgrade in our assessment leading to an increase in the proportion with insufficient plans for buildings. This is due to the lack of clarity about the required timeline for the roll out of heat pumps. The government has also still not taken steps to reduce electricity bills by removing policy costs from them, which is slowing down the transition to electric technologies, in particular heat pumps. In industry, our assessment has been downgraded with no industrial projects yet funded to connect to carbon capture and storage infrastructure under track one and a lack of clarity on timing and detail for track 2. The largest area of improvement over the past year has been in electricity supply due to the clean power 2030 mission and associated delivery plans along with progress in removing barriers to delivery and an increase in wind and solar generation capacity last year as well as in the pipeline for future deployment. There have been some improvements in the agriculture and land sectors mostly the improvement seen in tree planting and petland restoration rates. A significant scale up in the use of sustainable aviation fuel has improved our assessment in the aviation sector. Although significant risks remain for a proportion assumed in the SAF mandate. As I mentioned earlier, emissions from aviation are continuing to rise and if this continues, it could put the UK's future targets at risk. We've downgraded our assessment in the engineered removal sector due to delays in progressing business models. While risks and insufficient plans remain for both the 2030 NDC and the sixth carbon budget, the targets are within reach, provided the government stays the course. We have seen some improvements over the past year, but the dial needs to move faster to get on track. We've set out 43 priority recommendations to government, the same as the ones we gave in February when we published our advice on the seventh carbon budget. There are 10 priority areas for our recommendations. Our number one recommendation remains to make electricity cheaper by removing policy costs from electricity bills. This will help incentivize electrification across the economy and ensure the true low running costs of electric technologies are reflected in the bills of households and businesses. Number two, provide confidence and certainty to scale up heat pump deployment. Three, implement regulations to ensure that new homes are built with lowcarbon heating. Four, introduce a comprehensive program to decarbonize public sector buildings. Five, accelerate the electrification of industrial heat. Six, support this transition to electrification by delivering a rapid expansion of a lowcarbon electricity system. Seven, put policies in place to ensure a rapid ramp up in tree planting and petland restoration. Eight, develop policy that ensures that the aviation industry takes responsibility for its own emissions. Nine, finalize business models for engineered removals. And finally, 10, publish a strategy to support the skills and jobs needed for the transition and to ensure that affected communities are not left behind. If the government acts on these key areas, we expect to see much more green in our charts next year. I'll hand over now to our CEO, Emma Pinchbeck, to wrap things up. In the seventh carbon budget, the committee warned that the lack of clear communication on changes necessary to deliver the carbon budgets would harm progress. So today, I want to give you the best evidence we have on some issues that have arisen since the last progress report to inform the public conversation. Let's start on the topic of gas and electricity prices and the role of renewables. Households and businesses in Great Britain have recently been struggling with extremely high gas and electricity prices. The wholesale price of electricity forms a significant part of electricity bills. This reflects the cost of producing electricity which is generally the cost of the last unit of electricity generation required to meet the demand. In Great Britain, this last unit is typically gas generation as our electricity supply system is still too dependent on gas. For this reason, the wholesale price of electricity shown in light purple very closely tracks the wholesale price of gas shown in dark purple. Wholesale gas prices and consequently electricity prices in Britain are set by international gas prices. Following Russia's invasion of Ukraine, gas prices shot up. At the peak of the energy crisis in 2022, wholesale prices increased by up to 600% compared to prices in 2015. The impact of increasingly unstable geopolitics is once again being seen in energy and commodity prices this year. The UK is an oil and gas producer, but the size of our reserves and economically viable extraction even without factoring in emissions means that we are unlikely to impact prices in global markets by increasing supplies. So to stabilize energy prices and build wider energy security, we need to reduce our dependence on and demand for gas. in turn reducing our dependence on foreign imports and exposure to global prices. In the seventh carbon budget, we talked about two ways that we need to do that. Firstly, by switching from fossil fuel technologies to electric technologies and energy efficiency. And secondly, by replacing gas electricity generation with renewable electricity generation. More renewables will also eventually help break the link between gas prices and electricity prices. This will help give people lower bills than if we stay dependent on fossil fuels for our energy needs. But there is also an immediate action the UK government could take. It would both reduce electricity bills and help incentivize the shift to electric technologies. The wholesale price of electricity is not the only contribution to electricity bills. There are also contributions from other costs including cost of electricity network and supplier costs. And in Great Britain, policy costs are added to electricity bills much more so than gas bills. This is disincentivizing the shift to electric technologies despite the efficiency of these technologies and the true lower running costs. Removing these policy costs from electricity bills remains our number one recommendation to the UK government. And I hope this description helps explain why we think that's so important. We also know that reducing electricity prices is particularly important to get on track for the transition to lowcarbon home heating where progress in the UK has so far been limited. Our pathway sees a major adoption of heat pumps over the next 15 years. Why? Because they are an efficient lowcarbon technology that will get us off using gas to heat our homes. Residential buildings are currently the second biggest source of emissions in the UK economy. So, it's important to stop using gas as a heating source if we want to clean up our emissions. But doing this will have other benefits for households. Modern electric heat pumps are more efficient than gas boilers. They use far less energy to make heat, which can save households on running costs. We'll also be free from the harmful indoor pollutants that gas boilers release into the air that we are all breathing at home. However, as Emily has said, the UK currently only has around 1% of homes heated with a heat pump, amongst the lowest in Europe. This is partly because the UK has one of the highest ratios of electricity to gas prices in Europe. If the government were to make electricity cheaper by removing policy costs, it would mean running a heat pump was immediately cheaper than running a gas boiler. As you can see from this chart, there is a clear correlation between a low ratio of electricity to gas prices along the bottom and a high market share of heat pump installations along the vertical. What you can also see on the top left quadrant of the chart, the bit that has the highest market share of heat pumps, are plenty of countries with weather like ours, or with even more extreme heat and cold. Some people tell us that heat pumps only work in particular climates or particular types of building. The latest scientific evidence is that these efficient, modern, electric technologies are suitable for the vast majority of UK homes. It is also important to understand that the UK is not acting alone on climate change. Most other countries are moving in the same direction, driven by falling costs of lowcarbon technology, energy security concerns, and a realization of the need to respond to rising climate change impacts. Prior to the Paris Agreement in 2015, emissions were already falling in many countries, those where the orange bars are to the left of the center line, with the UK amongst the group leading the way. But emissions were still rising at a significant rate in some countries, those where the orange bars are on the right, including some of the world's biggest emitters. This situation is now changing. Since 2015, the pace of reduction has accelerated in countries whose emissions were already reducing with the notable exception of Russia. Some countries whose emissions have been increasing are now seeing reductions. And in almost all others, including China, the rate of increase is significantly reduced. While overall global emissions do continue to increase, this rate of increase is also slowing. On a per capita basis, global emissions have likely peaked and are starting to reduce. Globally, things are increasingly moving in the right direction. The UK is not way out ahead of the pack. It remains in a cohort of major economies leading the way in the transition to lowcarbon technologies with most of the rest of the world rapidly catching up. Our progress to date on tackling climate change is something that Parliament should be proud to champion, but we still need to speed up action if we're going to deliver against the climate target set in law. This progress report shows parliament where the UK needs to go much faster to tackle our contribution to climate change and to keep up with the rest of the world. I'd like to thank Professor Pierce Fster and the committee for their brilliant guidance on this report. They have produced a mammoth amount of evidence for all the UK governments over the last six months. Thanks to Dr. Emily Nurse who along with Dr. James Richardson, Dr. Owen Devan and the rest of the secretariat have delivered on the committee's vision. It's an honor and a privilege to do this job and we stand ready to support Parliament in any way we can to hold government to account on behalf of us all. Thank you.