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The press release issued by the Department for Energy Security and Net Zero on 2 June 2026.

Families and businesses will continue to reap the benefits of the clean energy transition in the coming decades.

• Government sets next achievable and pragmatic target for long-term emissions reduction, building on the framework that has secured billions of private  investment and economic growth since 2008, a “great British success story”
• Moving at pace to electrify Britain and deliver clean, homegrown energy will unlock greater energy security, lower bills for good, cleaner air, thousands of good jobs and action on the climate crisis following record British heatwaves

Families and businesses across the UK will continue to reap the benefits of the clean energy transition, as the government sets a new emissions target to further protect family finances, grow the economy and tackle the climate crisis.    

As Britain faces its second fossil fuel price shock in 5 years due to the war in Iran, the government is pursuing policies which deliver tangible improvements to the lives of working people – centred on getting Britain off the rollercoaster of fossil fuel markets and onto clean homegrown power. 

Today (Tuesday 2 June) the government has set out its proposed level for the seventh Carbon Budget, which sets a science-led target of ~87% emissions reduction in the period 2038 to 2042 – endorsed by the Environmental Audit Committee and the Climate Change Committee.

It comes as an independent report from the Energy and Climate Intelligence Unit, supported by analysis from the Confederation of British Industries Economics, today shows that the net zero economy supports over one million jobs in the UK, adding £105 billion in gross value added (GVA)  to the UK economy in 2025 alone, as it continues to thrive as one of the UK’s fastest- growing economic sectors.

The new target is based on evidence-based assumptions about how the country will take a consumer choice-led approach to the adoption of technologies such as solar, batteries and EVs that will cut bills for families.

The level for the Seventh Carbon Budget has been chosen because:

• moving at pace to clean energy and net zero emissions is the best choice to reduce the exposure of UK families and businesses to more fossil fuel shocks, as the UK has seen following Russia’s invasion of Ukraine and the Iran War
• it maximises the benefits of the clean energy and net zero transition, including to the economy, health and nature
• it is consistent with the Paris Agreement aim to keep global warming to 1.5 degrees, to avoid climate disaster for future generations

This builds on the UK’s pioneering Climate Change Act 2008 – backed by British businesses, scientists, trade unions and civil society – which has provided a framework for combining economic growth and climate action, attracting billions of private sector investment and seen the UK become a global leader in clean energy industries. Since July 2024, the UK has seen over £90 billion of private investment announced in clean energy, including carbon capture projects in Teesside and nuclear at Sizewell C off the Suffolk coast.

The government’s clean energy and climate plans include:

• Cutting bills and costs: March saw the highest monthly solar deployment in over a decade and a record month for EV sales. Families installing solar could save up to £500 a year, electric cars can save drivers up to £1,400 annually to run and external estimates show new electric cars are now on average, cheaper to buy than petrol equivalents. Alongside this, the £15 billion Warm Homes Plan will deliver the biggest home upgrade programme in British history, cutting bills and lifting millions out of fuel poverty
• Delivering energy security: Half of the UK’s recessions since 1970 have been caused by fossil fuel shocks. The government is investing in renewable and nuclear energy to get the UK off the rollercoaster of fossil fuel prices, delivering a record-breaking renewables auction that secured enough clean energy to power the equivalent of 23 million homes. By 2050, the UK could cut its reliance on fossil fuels from around three quarters of our energy today to around 15%, while avoiding around £445 billion in fossil fuel spending over the next 25 years
• Jobs and investment: The government is driving a major clean energy jobs push, supporting over 400,000 additional jobs by 2030 across the UK. According to the CBI Economics report, in 2025, jobs supported by net zero businesses were 48%, or 1.5 times more productive than the UK average, generating £119,300 in economic value per full-time job. This led to higher-than-average wages, with these jobs generating an average of £43,142 to a full-time worker
• Cleaner air and nature recovery: Clean energy will help make the air cleaner across the country, leading to better health and a higher quality of life for people now and in the future. Cleaner air from the transition is estimated to deliver around 8,000 fewer hospital admissions each year by 2050, easing pressure on the NHS. Restoring peatlands and planting new woodland will deliver around £50 billion in nature benefits over the period to 2050, improving biodiversity, water quality, flood protection and access to nature

Without action, climate change continues to endanger the UK’s food and water security, exacerbate global population displacement and pose national security risks, including to critical infrastructure, in a context of increased global instability and households already suffering from the price volatility of fossil fuels. The Office for Budget Responsibility (OBR) is also clear that the costs of climate damage are getting higher, while the cost of the net zero transition is getting lower. This is about protecting the UK’s way of life and the natural world from significant dangers.

Energy Secretary Ed Miliband said:

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.  

What has been achieved so far by businesses and communities across the country is a great British success story – cutting costs by upgrading homes, backing British businesses, supporting one million good jobs according to new analysis from CBI Economics, and protecting our beautiful countryside.  

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.

Climate Minister Katie White said:

The record-breaking May heatwave is another reminder that climate change is no longer a distant prospect. Increased heatwaves, flooding and nature loss are becoming the new norm for our country.

That’s why we’re continuing to set a clear investment framework which will electrify Britain, maximising the benefits of clean power with cleaner air, warmer homes, energy security, investment into Britain and thousands of jobs in the industries of the future.

A delivery plan setting out how Carbon Budget 7 will be met will be published as soon as is reasonably practical after Parliament has approved the budget.  

Legislating the carbon budget level for 2038 to 2042 now sends an economy-wide signal to investors and businesses, providing long-term certainty which will encourage investment and growth.

Stakeholder reactions

Dhara Vyas, Chief Executive at Energy UK said:    

The events of recent weeks have once again underlined the importance of pressing ahead with the move to clean energy to reduce our vulnerability to global fossil fuel price shocks and strengthen our energy independence in an uncertain world. The quicker we increase the amount of energy we get from our own clean sources, the less exposed our homes, businesses and economy will be in future.   

The fact that we now get over half of our electricity from low carbon sources is because the certainty and direction provided by the Climate Change Act and carbon budgets have given investors, developers and businesses the confidence to put billions of pounds into long-term projects in this country. As today’s CBIE report shows, the net zero economy is thriving and delivering above average economic benefits right across the country – continuing to support it will be key to delivering greater growth and prosperity for our country over the coming years and decades.

Ben Martin, Policy Manager at the British Chambers of Commerce, said:   

The energy transition presents significant economic opportunities across the UK, driving innovation and economic growth, as well as supporting jobs and skills.    

There are already so many innovative businesses that are developing low carbon technology solutions critical to supporting net zero. The Seventh Carbon Budget provides greater certainty for these firms and builds on progress already made.   

Businesses, alongside Chambers of Commerce, are playing a leading role in supporting the transition in areas such as nuclear power, offshore wind, solar, and carbon capture.    

Firms stand ready to work with government to strengthen energy security, drive investment, and support growth.

Verity Davidge, Director of Policy and Public Affairs at Make UK, said:  

With government beginning to harness the sector plans laid out in the industrial strategy and taking the first steps towards reducing electricity costs for manufacturers, we can see that the Seventh Carbon Budget underlines the unique opportunity that the clean energy economy offers for sustained industrial growth across Britain. A sustained growth in UK electrification supply chains could help modernise industrial processes and ensure that UK manufacturing can compete on an increasingly carbon free international stage in the years ahead.

Rt Hon Lord Alok Sharma, Chair of the UK Transition Finance Council and former Business and Energy Secretary, said:   

I welcome the government endorsing the independent Climate Change Committee’s overall emission reduction target out to 2042. It is vital this is backed by credible delivery plans which unlock economic growth, jobs and private sector finance, particularly to assist high-emitting sectors decarbonise in a timely manner.   

I therefore hope the government will act on the policy recommendations made by the Transition Finance Council, which will help to deliver finance to assist hard-to-abate sectors transition from grey to green.

Rachel Solomon Williams, Executive Director at Aldersgate Group, said:   

Today’s publication of Carbon Budget 7 is a major step forward in the UK’s plans to meet its net zero commitments. It is good to see the government is setting a target that should drive urgent action to drive down carbon emissions.  

As today’s new report by the CBI and ECIU also shows, net zero is delivering benefits right across the UK economy. The sector encompasses 23,000 firms, of which over 96% are small or medium size; it also supports over 1 million jobs, with wages at 11% higher than average.  

We look forward to the publication of a delivery plan to accompany this new carbon budget, providing the certainty businesses need and placing the UK’s net zero plans at the heart of our economic future. The plan must set out clearly what action will be taken across different sectors, especially on meeting growing demand for electricity across heating, transport and industry, as well as bringing costs down.

James Alexander, CEO of the UK Sustainable Investment and Finance Association (UKSIF), said:  

The government’s strategy for reducing emissions is a vital element of our economic positioning for the years ahead.   

Investors need certainty to allocate billions of pounds of capital to major low-carbon industries, and the carbon budget is an important demonstration of the UK’s ongoing commitment to decarbonisation.  

The benefits of this private financing are being felt among thousands of small and medium-sized companies, which are playing their part in supply chains up and down the country. The government must continue to match these emissions benchmarks with policies that make it even more attractive to invest in the UK.

Chris Norbury, CEO of E.ON UK, said:  

Every step forward on the energy transition is welcome but the prize is bigger than emissions alone. It’s the chance to transform a system built for a different century into one that works for customers where flexibility is rewarded, demand is dynamic and pounds end up back in people’s pockets. Action now means lower bills and energy security all moving in the same direction.

Tara Singh, Chief Executive as RenewableUK, said:  

Setting clear goals helps us to attract billions in private investment in the UK’s world-class clean tech industries, creating well-paid jobs throughout the country in wind, solar, energy storage and green hydrogen – our new powerhouses of economic growth. The clean power we generate cuts bills by pushing the most expensive gas generators off the system. Low-cost electricity from renewables protects billpayers from price shocks on volatile global fossil fuel markets which we can’t control, strengthening the UK’s energy security as we move closer towards energy independence.

David Hawkes, Head of Policy at the Institution of Civil Engineers (ICE) said:  

The ICE has long been clear that the UK doesn’t need to choose between its environmental and economic goals. The road to net zero is paved with opportunities to create jobs, strengthen energy security, and deliver better outcomes for people and nature.  

It’s encouraging to see the government maintain focus on these benefits, even in uncertain times, and to have confirmation that decarbonisation is already supporting economic growth. Infrastructure and the professionals who deliver it are central to this transition.   

The priority now is pace: the sector needs clear direction and consistent policy signals to keep up momentum. Clear priorities and stable, long-term investment will be essential to deliver at the speed and scale required.

Prof Miranda Barker OBE DL, CEO at East Lancashire Chamber of Commerce, said:  

The progress of the UK trajectory going forward in Carbon Budget 7 shows a true triple bottom line of benefit for the UK. Safeguarding our people with real energy security, bringing significant economic benefit for the UK from maximising our growth in the global low carbon tech sector, to continuing our progress in reducing the UK’s environmental impact.

The benefits of this private financing are being felt among thousands of small and medium-sized companies, which are playing their part in supply chains up and down the country. 

The government must continue to match these emissions benchmarks with policies that make it even more attractive to invest in the UK.

Nigel Topping CMG, Chair of the Climate Change Committee, said:  

The Committee is delighted that the government have accepted the CCC’s advised level for the Seventh Carbon Budget. The lower-cost, energy-secure future is electric – so we hope to see the government plan to accelerate electrification, in particular by making electricity cheaper.   

The government must make its own pathway; but investors, businesses, and trade unions can have confidence in the work that we have done to show this is a feasible yet ambitious approach to a more secure world. We will continue to hold the government to account for how it delivers against its targets and celebrate the successes the country has achieved.

Professor Lord Stern of Brentford, Chair of the Grantham Research Institute on Climate Change and the Environment and the Global School of Sustainability at the London School of Economics and Political Science, said:   

This carbon budget is in line with the expert independent advice of the Climate Change Committee, and is an important indicator that the UK will continue on the path to ending the UK’s contribution to climate change by reaching net zero emissions by 2050. The evidence is now clearer than ever that the investments required to make the transition away from fossil fuels are far smaller than the potential costs of climate change impacts. These investments in the clean technologies and businesses of the future will lower costs, drive growth and ensure that the UK remains competitive. Any slippage now on net zero by the UK, in light of its past leadership on climate change, would have serious and adverse knock-on effects on the commitments by other countries to decarbonise their economies.

Kevin Austin, Director of Policy and Advocacy at the RSPB, said:    

Moving away from our reliance on fossil fuels is critical to restoring nature in the UK. Our security, prosperity and wellbeing all rely on having a healthy natural world, and the good news is that nature can play a significant role in helping us to meet carbon targets. Restoring peatland, planting native trees, speeding up the rollout of renewable energy and decarbonising the economy are all key to delivering the healthy ecosystems people and wildlife depend on.

Holly Brazier Tope, Director of Politics at Green Alliance, said:    

The UK’s Climate Change Act has set the standard for climate legislation worldwide, and Carbon Budget 7 is a crucial part of delivering on that ambition. It’s an opportunity to cut emissions, secure our energy supply, lower bills and build a stronger, fairer economy, all while giving businesses and investors the long term certainty they need. With a clean energy workforce set to reach hundreds of thousands by 2030, the moment is there to be seized to deliver lasting prosperity for communities across the UK.

Nick Mabey Chief Executive of E3G, said: 

The British people, reeling from yet another oil and gas crisis, support ambitious action to transition to clean power, bring their energy bills back under control and tackle rising climate risks. Providing a predictable, long term forward policy is the best way to ensure the UK continues to benefit from the record amounts of investment in clean energy it is attracting. The alternative of ripping up twenty years of climate policy is a threat to British security and competitiveness.

Mike Childs, Head of Science, Policy and Research at Friends of the Earth, said:    

Extreme heat and record-breaking temperatures in May, more frequent and severe flooding, wildfires and drought – this is already the reality of the climate crisis in the UK.   

Cutting carbon emissions is vital to help avert the worst impacts of climate change, but it’s also our best opportunity to grow the economy, create jobs, deliver cheap homegrown energy and improve lives with warmer homes, better bus services and cleaner air.   

The alternative approach will leave the UK hooked on expensive gas, exacerbate the cost-of-living crisis, harm nature and commit future generations to climate chaos.

Rick Parfett, Head of Climate Policy at WWF, said:   

Another spike in gas prices shows the real cost of staying tied to fossil fuels. Reaching net zero won’t just protect the climate, it’ll help protect households, strengthen the economy, and safeguard the natural world we all rely on – and it will cost us less than one fossil fuel shock per decade. Our green economy is already a real success story, delivering growth in every part of the UK and supporting over a million jobs.    

Today’s announcement should give businesses confidence to invest in a fair transition, backed by independent advice and the Climate Change Act, but we need clear, credible and ambitious policies to make that happen. That means using the National Wealth Fund and GB Energy to help more people power their homes with clean energy, cut bills, and support nature’s recovery.

Maria Mendiluce, CEO at We Mean Business Coalition said:  

An 87% reduction in emissions by 2040 is a significant demonstration of UK leadership at a time of growing geopolitical uncertainty and continued fossil fuel price volatility. The Climate Change Committee’s pathway provides a credible route to a more competitive, secure and resilient economy. Electrification and clean electricity sit at the heart of that pathway, delivering the majority of emissions reductions while reducing exposure to volatile fossil fuel markets. This decision by the UK will give businesses greater confidence to invest in the infrastructure, technologies and industries that will underpin future growth.

Bev Cornaby, Director at Corporate Leaders Group UK (CLG UK), said:   

Acting on climate change is both necessary for managing the real risks to the economy and widely supported by a large majority of British people. Recent events have underlined how tightly energy security, economic stability and market confidence are linked. And how global conflict can impact affordability.   

But as we act, we need a clear, evidence-based plan. The UK’s climate budget system gives us as a country the forward-looking clarity to make pragmatic plans about the future and ensure business and finance can invest with certainty in a green and growing economy. A much-needed focus toward homegrown clean power and electrification to provide energy security, protecting the UK economy from future fossil fuel price shocks, while creating jobs, is welcomed.

Rachael Orr, CEO of Climate Outreach said:   

We’ve made real progress in addressing climate change. Clean energy now powers more than 50% of Britain’s electricity. In our homes and communities, people are installing solar panels or switching to electric vehicles. Most Brits feel a sense of pride in this progress and want to see more of it. The seventh Carbon Budget charts a clear path to a better future for British people – cleaner air, warmer homes, and secure homegrown energy. The Government’s pace at putting these plans into practice – and ensuring real local benefits are seen and felt by all communities – will be vital.

Sofie Jenkinson, Co-Director of Round Our Way, said:  

Across the country we are seeing families and communities struggling with the cost and reliability of energy alongside being impacted by increasing extreme weather like floods and heatwaves. Everyone from footballers, farmers and fishers to parents, teachers, GPs, nurses and midwives are dealing with the impacts of climate change and the rising cost of energy in the UK, and we need a plan to tackle this, both now and in the future.   

The action the government is taking to move at pace on clean energy and electrification will not only insulate people from fuel price shocks by ensuring that we all have access to cheaper and more reliable home-grown energy, but will also mean that we are protecting the future of our homes, public services communities and favourite places – from football pitches and local pubs, to kid’s classrooms and hospital wards – from worsening climate impacts. Today’s plan from the government takes the issues we are facing today head-on and also ensures that we are protecting the future – of those we love, our favourite clubs and places and our communities.

Emily Morrison, Director Sustainability and Just Transition at The Young Foundation, said:  

Today’s Seventh Carbon Budget (CB7) proposes ambitious and practical pathways for action to lower energy bills, reduce price shocks, and create reliable food and fuel supplies for UK communities. At its heart, it recognises that a clean, green energy transition can help assure our safety, restore prosperity, and build renewed pride in the UK. This is starting to take effect. At The Young Foundation, we see appetite on a local level for the creation of green jobs, and for greater public uptake of green home energy, solar, retrofit and electric vehicles – as well as a passionate and growing community energy sector. Britain is making huge progress and we hope CB7 can support people – in every household and UK community – with balanced and scientifically robust next steps.

Catherine Pettengell, Executive Director of Climate Action Network UK (CAN-UK), said:  

Taking action to address climate change is about better lives for everyone, and today’s seventh carbon budget ensures the UK is on the right path to achieve this. It is the right choice for UK families as well as for nature and our climate, and the only viable route to lowering fuel and food prices long-term and preventing the most costly impacts of climate change on our lives.  

By following the Climate Change Committee’s independent expert advice, the UK has set a target that is evidence-based and achievable, and setting these long-range carbon budgets has led to a thriving net zero economy in the UK with more than a million jobs.  

The UK could and should go further and faster. Countries and communities least responsible for the climate crisis and most marginalised are suffering its worst impacts. Surpassing this target would bring a better and fairer future not just for the UK but for communities around the world.

Kyle Lischak, Head of UK at ClientEarth, said:   

For too long, the people of the UK have been held hostage by the volatility of fossil fuel energy markets, and we’re pleased to see the government taking seriously the fact that the security and prosperity of the UK depends in part on investment in domestic renewables.  

We eagerly await the details of how this carbon budget will be achieved and hope the government can match the ambition of the target with credible, well-planned and sustainable delivery.

Helen Meech, Executive Director of The Climate Coalition, said:   

Setting an ambitious Seventh Carbon Budget is exactly what the country needs right now, when energy security, food resilience and the cost of living all depend on accelerating our transition away from fossil fuels. This weekend, Great Big Green Week kicks off across the UK, bringing together two million people from farmers and faith groups to schools and sports clubs, who are already playing their part for climate and nature and want to see their government match their ambition.

Helen Clarkson, CEO at the Climate Group, said:  

We welcome the government’s latest commitment to drive electrification and the transition to homegrown clean energy in the UK. Last week’s record-breaking heat has shown that we are already living in a rapidly changing climate and that if we don’t act decisively, it’ll only be a small taste of what is yet to come. This clear roadmap for the transition until 2042 gives the businesses we work with confidence to invest for the mid-to-long term at the speed and scale so urgently needed.

Mat Hunter, CEO of the Design Council, said:  

The Seventh Carbon Budget reinforces that the clean energy transition is one of the UK’s biggest economic opportunities driving investment, strengthening energy security and supporting growth across the country.  

But it also sharpens the choice: act with pace and capture the benefits of a fast-growing global market, or delay and bear the rising costs of volatile fossil fuels and climate impacts. 

At the Design Council, we see this as a moment to ensure that the transition delivers for people and places as well as the economy to create better outcomes in how we live, work and move, and ensuring the benefits are felt right across the country.

Chris Taylor, Net Zero Programme Director at the Broadway Initiative, said:  

The publication of Carbon Budget 7 provides a clearer long-term pathway than ever before. This is vital for investors and businesses to plan investments in clean and securer sources of energy. It also provides a stronger basis for sectors to collaborate with the Government under the Net Zero Council to develop Sector Transition Plans. These plans will turn this long-term direction into practical pathways for decarbonisation,  innovation and jobs in some of the fasting growing sectors of the future.