CCC: UK progress to Net Zero will falter without clear policy for built environment

The 2025 CCC Progress Report to Parliament says that while the UK has achieved its fourth carbon budget, this has largely been delivered through decarbonisation of the electricity grid.

To continue this progress, the government must set clear strategies for buildings including the use of heat pumps in homes, and energy use in commercial buildings.

The CCC states that If decarbonisation in buildings falls behind, it will have severe implications for longer-term decarbonisation efforts, even if shortfalls can be met by other sectors in the current decade.

In 2024, UK emissions were 50.4% lower than in 1990, making it the first major economy to halve its emissions. There have been ten consecutive years of emissions reductions (not including the pandemic years).

But looking forward, the CCC says that further reductions are at risk due to insufficient or ‘unqualified’ plans. For the Sixth Carbon Budget which runs 2033 to 2037, 39% of plans are either insufficient or with significant risks.

One key hurdle is the roll-out of domestic heat pumps. Despite recent increases in installations, they are still short of targets. A lack of plans on how to boost the adoption of heat pumps in homes is a risk, says the CCC. Funding of the Boiler Upgrade Scheme is uncertain beyond 2028. The Future Homes Standard may introduce a requirement for heat pumps in new homes but details will not be introduced until later in 2025.

In addition, the CCC pointed to a lack of clarity around commercial buildings, particularly in terms of decarbonisation and energy efficiency requirements. With delays to Minimum Energy Efficiency Standards (MEES) adjustments to EPC targets highlighted as a critical gap in government strategy.

The closing of the Salix funding scheme for public sector buildings is also problematic, with no alternative mechanism currently in sight.

The UK government is expected to respond to the CCC Report through the publication of an updated plan for meeting its Nationally Determined Contributions (NDCs). The current Carbon Budget Delivery Plan was published in March 2023, under the previous government, so it is expected to be updated in October 2025 to reflect the current government’s approach.