The government has formally committed to a legally binding target to cut the UK’s greenhouse gas emissions by 87 per cent by 2040, a step that will reshape household choices on heating, driving and diet, ministers have confirmed.
Announcing the seventh carbon budget, which covers the period 2038 to 2042, the Energy Secretary, Ed Miliband, said the target followed the advice of the independent Climate Change Committee (CCC). The framework, established under the Climate Change Act 2008, requires the government to legislate for the budget by the end of June, with the ultimate goal of net-zero emissions by 2050.
“As Britain faces the second fossil fuel shock of the decade, the only way to protect family and business finances is to drive for clean homegrown power that we control,” Miliband said. “Some people want to stick their heads in the sand and let our children face the consequences of climate breakdown — but this government believes in the timeless British value of protecting our country for generations to come.”
Heat pumps, solar panels and the cost of going green
Electrification is the cornerstone of the plan, meaning millions of households will be expected to switch from fossil fuel-dependent technologies to cleaner alternatives. The two most visible changes for most people will be heat pumps and solar panels, but the upfront cost remains the biggest barrier.
The government’s Warm Homes Plan promises £15 billion of public investment to upgrade up to five million homes and lift as many as one million families out of fuel poverty by 2030. Support includes grants of up to £7,500 for heat pumps under the Boiler Upgrade Scheme in England and Wales, with the amount rising to £9,000 from July 2026 for households using oil or LPG. Scotland runs its own scheme offering similar grants and interest-free loans; Northern Ireland does not currently have a comparable programme.
Homeowners can also benefit from a 0 per cent VAT rate on solar panels until March 2027, and the Smart Export Guarantee allows households to earn money for electricity they send back to the grid. For businesses, the Annual Investment Allowance and the 50 per cent First Year Allowance significantly reduce the cost of solar installations. The Warm Homes Plan also covers home batteries and insulation, while zero-interest loans will be available to homeowners who do not qualify for free upgrades. A new Warm Homes Agency is being set up to help consumers navigate the various retrofit schemes.
Tazu Walden, a researcher at the IPPR, said the biggest obstacle for many families is the initial expense. “I think the biggest barrier to a lot of that clean tech is upfront cost. It is more modern, and they are in a lot of cases more cost effective in the long term, but obviously until your boiler breaks or until your car needs to go to the scrap, you’re not thinking about making that upgrade and it’s a huge upfront investment.” She added that the Warm Homes Plan represented “more money than we originally thought is going to go into getting people that tech … making that as fair as possible.”
The CCC estimates that meeting the target could see average household energy bills fall by £700 by 2050, with similar savings in motoring costs. Households that combine solar panels, a home battery and a heat pump could save more than £1,000 a year compared with running a gas boiler. The shift is already under way: the highest monthly deployment of solar panels in more than a decade was recorded in March, while heat pump sales hit a record 125,000 units in 2025, up 27 per cent on the previous year.
Electric vehicles: from purchase to savings
The transition to electric vehicles is equally central to the plan. The sale of new petrol and diesel cars will be banned from 2030, with hybrids to follow from 2035. By 2040, the CCC projects that 80 per cent of cars and 74 per cent of vans on the road will be electric. Falling battery costs are expected to make EVs competitive with petrol and diesel cars on purchase price by 2026 to 2028.
The government offers grants of up to £3,750 on eligible new EVs priced under £37,000, and additional support is available for charge points, particularly for renters and flat owners. Electric cars can save drivers as much as £1,400 a year to run and are already estimated to be cheaper to buy than petrol alternatives. Second-hand internal combustion engine vehicles will still be available for purchase after the ban.
Dietary change: the government’s cautious line on meat and dairy
The CCC has recommended a significant reduction in meat and dairy consumption to curb agricultural emissions and free up land. Its advice calls for a 25 per cent cut in average meat consumption by 2040 — rising to 35 per cent by 2050, with a 40 per cent reduction in red meat specifically — and a 20 per cent cut in dairy by 2035. This would mean a reduction of around 27 per cent in the UK’s cattle and sheep herds by 2040.
The government has said it will not tell people what to eat. Vegetarian and flexitarian diets are already becoming more common, with roughly 23 per cent of the population estimated to be actively reducing their meat consumption. National trends show a 14 per cent decline in meat consumption since 2012, though the rate of change would need to accelerate to meet the CCC’s recommended path. Studies indicate that reducing portion sizes has a bigger impact on overall consumption than cutting the number of days people eat meat.
Energy security and the fossil fuel rollercoaster
The push for clean, homegrown power is also an effort to insulate the UK from volatile international energy markets. The Department for Energy Security and Net Zero (DESNZ) says the move to net zero will deliver “greater energy security” at a time when global conflicts are driving prices higher.
The seventh carbon budget was announced against the backdrop of the US-Iran war, triggered by President Donald Trump’s decision to invade Iran in February. The conflict led to the effective closure of the Strait of Hormuz, through which around 20 per cent of the world’s oil and gas supply is shipped. Although the strait is thousands of miles away, gas prices have soared as a result, affecting the cost of energy, fuel and food in the UK.
According to DESNZ, half of all UK recessions since 1970 have been caused by fossil fuel price shocks. Investing in domestic renewable generation, the department argues, will “get the UK off the rollercoaster” and better protect consumers. By 2050, the UK could cut its reliance on fossil fuels from around three-quarters of its energy today to roughly 15 per cent.
Walden pointed to the Russia-Ukraine war as evidence that renewable generation already offers some protection. “When Russia invaded Ukraine, you saw that electricity prices were already lower and less exposed to just the gas price itself. There’s one degree of separation, and that’s because not all of our electricity comes from gas. The more that we have that comes from renewable sources, the more that insulates us from the gas price.” She cautioned, however, that the government must watch for excessive profits by private contractors upgrading the grid. “The government needs to be hawk-eyed about all the different places in which consumers could be saving money.”
Green jobs: productivity and wages above the average
The net-zero transition also brings concentrated economic benefits for workers who move into the sector. A recent report from the Confederation of British Industry’s economics consultancy found that around 1.1 million workers are already supported by the UK’s net-zero economy, delivering an estimated £105 billion in economic value last year. These roles include solar panel installers and electric car engineers.
The government aims to support more than 400,000 additional clean energy jobs by 2030. According to the CBI, net-zero roles are 48 per cent more economically productive than the UK average, generating £119,300 in economic value per full-time job and paying an average wage of £43,142. “These statistics demonstrate that climate and climate action and net zero is good for growth,” Walden said.
