The budget sets out plans to ramp up heat pump installation, with other measures geared towards decarbonising homes
The Climate Change Committee’s (CCC) seventh carbon budget demonstrates its recommended routes to decarbonisation.
The Balanced Pathway predicts that half of homes in the UK will be heated by a heat pump by 2040.
Only 1% of UK homes were heated by heat pump in 2023
The budget, therefore, calls for the annual rate of heat pump installations (within existing residential properties) to rise to 450,000 per year by 2030. In 2023, this number was at 60,000.
This number will then have to rise to 1.5m by 2035.
This takes into account the natural replacement cycle of current heating systems, meaning that systems that are still functional do not need to be replaced before they cease to function.
If achieved, these numbers could contribute to a fully decarbonised housing stock by 2050.
The seventh carbon budget also calls for better home insulation
Also mentioned in the budget is an increase in home insulation, including insulating hot water tanks, draught-proofing, additional loft insulation, and cavity wall insulation. Loft insulation will be installed in 9% of homes with lofts, and cavity wall insulation will be installed in 16% of homes with cavity walls, meaning that all homes with lofts and 87% of homes with cavity walls will have insulation by the mid-2030’s.
Other aspects include using Carbon Capture and Storage (CCS) technologies to decarbonise the cement and lime industry, up to 62% of abatement by 2050, and non-road mobile machinery, including construction machinery, switching to electric and hydrogen power as opposed to fossil fuel, bringing 52% carbon abatement in 2050.
Roger Mortlock, CPRE chief executive, said: “Changes in how we use land are an inevitable part of the net zero journey. Land use change is a critical factor in many of the recommendations from the Climate Change Committee, from land take for energy generation to shifts in the way we farm and use our landscapes to store carbon.
“On our small island, land supply is finite. Joining up different plans for how we use it is critical. Too many land-use shifts in the name of net zero are currently bargain-basement options that don’t take the public on the journey and have led to infrastructure being delivered in the wrong places.
“Involving people much earlier in process, avoiding some of the divisive language that pitches the road to net zero and the public against each other, and taking a more joined-up approach to land use will be vital in implementing the Climate Change Committee’s important recommendations.”
Will Walker, UK policy lead at climate solutions charity Ashden, said: “The Committee on Climate Change’s report today provides welcome clarity: half of UK homes will be heated by heat pumps by 2040, with no role for hydrogen gas in home heating. This shift will cut emissions, strengthen energy security, and reduce household bills by £700 annually by 2050— offering crucial relief for those in fuel poverty and struggling to pay rising energy bills again.
“Retrofitting homes must be a national priority with long-term investment, local delivery, and job creation. Fuel poverty, affecting 3.2m households, can be addressed by securing Labour’s £13.2bn Warm Homes commitment in the Spending Review. This will further boost the green economy, already growing three times faster than the regular economy according to recent analysis by the CBI.
“Net Zero neighbourhoods—combining retrofit, community energy, and nature-based solutions—are key to fair climate action, ensuring local engagement and benefits. The Government’s forthcoming Public Participation Strategy, which Ashden and partners are helping to shape, will be vital. Likewise, we eagerly await the Government’s Local Power Plan to unlock investment and build capacity in community energy to help speed the transition while building resilient local economies.
“It’s encouraging that the CCC recommends the Government lead by example with a public building decarbonisation programme, aligning with Ashden’s Let’s Go Zero campaign to decarbonise schools and create healthier, safer spaces. A focus on community-led nature-based solutions, including doubling tree planting by 2030, is also crucial to cut emissions, improve health, and build resilience.
“The UK has a chance to drive fair, lasting climate action. We now need an ambitious Spending Review and Carbon Budget plan aligned with CCC advice, securing Labour’s £13.2bn Warm Homes commitment and £3.3bn Local Power Plan for long-term investment in retrofit, community energy, and local action—delivering lower bills, healthier homes, and stronger economies.”
Asif Ghafoor, CEO of the national EV charging network, said: “The CCC Carbon Budget is yet another example of the UK leading the charge when it comes to EVs. We’re the biggest EV market in Europe, so the CCC is quite right that the market is at parity with internal combustion engine vehicles.
“We also support yesterday’s announcement to grant an extra £120m funding to extend the plug-in van grant and give additional support for other electric vehicles. The Government is clearly committed to keeping its foot on the EV transition accelerator, and it gives everyone in the sector great confidence.
“Where the Government should pivot is on EV charging – it should stop giving money to councils to install chargers under the LEVI fund, as we’re ending up with all the wrong types of chargers in all the wrong places. No one can blame them, they’re not the specialists in this emerging technology.
“Instead, the private EV charging sector has committed £6bn to install public chargers, and we have the expertise to put them in the places they’ll be used the most. The Government should stop funding this themselves and instead focus on giving private charge point operators access to land at key junctions on motorway trunk routes. If they handle this, the private sector can make sure we have the very best charging infrastructure to support drivers and facilitate the CCC’s electric vehicle targets.”
Thomas Farquhar, chief operating officer of Heatio, said: “The Climate Committee’s latest carbon budget has highlighted the huge gap between the UK’s home decarbonisation and the rest of Europe. We are being left behind by European countries who are improving energy security for consumers whilst decarbonising, whilst the UK remains dangerously reliant on fossil fuel imports.
“This was highlighted yesterday when yet another increase in the energy price cap was announced, with consumers being hit again by further energy cost increases right in the middle of a cost of living crisis. We have had decades of misinformation across low-carbon technologies like Heat Pumps and EVs. and whilst countries like Norway have already switched 66% of their homes to a Heat Pump, we are still fitting 1.7m of our homes every year with a boiler.
“Our Energy Security has never been worse, and energy prices for consumers keep on rising. We have to stop treating NetZero like a political football, that can be kicked down the road for someone else to deal with. It’s not just about protecting the planet, it’s now about more homes than ever being in fuel poverty, people unable to afford their own heating and energy prices only going one way.”
The full seventh carbon budget can be read in full here.
