The Seventh Carbon Budget: what it means for the built environment

1 Balancing the pathway
2 Residential buildings
3 Non-residential buildings
4 Industry
5 Land use
6 Surface transport
7 The role of Chartered Architectural Technologists
8 Related articles on Designing Buildings

[edit] Balancing the pathway

In February 2025, the Climate Change Committee, which advises government on achieving the UK’s emissions reduction targets (including net zero by 2050), published its Seventh Carbon Budget (Climate Change Committee, Seventh Carbon Budget (February 2025). See also See also Sixth carbon budget.

The Seventh Carbon Budget recommends a 75% reduction in emissions by 2038-42, and sets out a “balanced pathway” to achieve these emissions reductions over the next 15 years. Built environment professionals will play a key role in the success or failure of the balanced pathway.

The balanced pathway breaks down emissions by sectors, laying out the interventions which the Committee believes will be most achievable and cost-effective to deliver the necessary reductions. Key sectors for the built environment include:

Electricity supply.
Residential buildings. *
Non-residential buildings. *
Industry (including construction, raw materials and products).
Land use (including timber and biofuel).
Surface transport. Electricity supply

NOTE* The residential and non-residential buildings sectors focus on “in-use” emissions. Embodied emissions (i.e., emissions resulting from the construction or retrofit of a building are counted in other sectors.

Decarbonising the UK’s electricity supply is a key enabler of achieving emissions reductions elsewhere. Currently, electricity supply accounts for around 9% of emissions. By 2040, electricity supply emissions should fall by 88% (and 97% by 2050). The pathway sees this driven primarily by growth in offshore wind (from 17GW capacity today, to 88GW by 2040) and solar (from 20GW to 82GW). While most growth will be through large scale strategic projects, smaller deployments (such as rooftop solar arrays) will help ease this process, and reduce the amount of land required.

The Committee also highlights the importance of battery storage and smart demand flexibility, to mitigate the variability of renewable energy. Introducing small-scale battery storage and smart energy use measures should therefore increasingly be seen as a standard part of building retrofits.

[edit] Residential buildings

Residential buildings account for 12% of current UK emissions (not including embodied carbon or electricity supply emissions). These emissions fall by two thirds in the balanced pathway, through rapid deployment of low-carbon heating and energy efficiency measures. The share of homes with low-carbon heating rises from 8% in 2023, to 68% in 2040, primarily through the deployment of air source heat pumps (with ground source and hybrid heat pumps, communal heat pumps, heat networks and direct electric heating playing a smaller role). By scaling up deployment rapidly, from 60,000 deployments in 2023, to 450,000 in 2030 and 1.5 million by 2035, it will be possible to replace all existing heating systems with low carbon heating by 2050, without requiring early scrappage of functional systems. (The pathway assumes no new homes are built with fossil fuel heating systems or gas grid connections. This will clearly not be met, but it is vital that government rapidly implements the future building standard.)

Energy efficiency also plays an important, albeit smaller, role. These measures are front-loaded in the pathway; by the mid-2030s, additional loft insulation is installed in 9% of homes with lofts, completing coverage of all these homes, while cavity wall insulation is installed in 16% of homes with cavity walls, such that 87% of these homes have insulation. Additional low-cost measures such as draught-proofing and hot water tank insulation are widely rolled out. Notably, the pathway does not foresee a major role for more costly measures such as solid wall insulation. The reason for this is that these measures are deemed less cost effective on a national level than simply increasing heating. However, this approach has significant drawbacks in terms of addressing the health and comfort of homes, as well as requiring higher levels of electricity generation capacity and higher running costs for buildings. These factors fall outside the Committee’s remit.

Finally, in the pathway, 9% of reductions in emissions from residential buildings are driven by energy-saving practices and behaviour changes (such as lowering boiler flow temperatures or thermostats).

[edit] Non-residential buildings

The pathway for non-residential buildings is very similar to that of residential buildings, with the electrification of heating delivering 49% of the sector’s reductions by 2040. But there is a greater role for energy efficiency measures in this sector, including improved energy management (such as zone and timing controls), fabric measures such as insulation, and behaviour changes.

In the pathway, this transition is led by the public sector, strengthening supply chains for subsequent private sector decarbonisation.

[edit] Industry

Industry (including construction) currently accounts for 12% of emissions, and in the pathway, emissions fall 78% by 2040. Key measures here include electrification of heating processes (such as electric ovens and furnaces, including using electric arc furnaces for steel and iron production) and of machinery. Carbon Capture and Storage (CCS) also plays an important role in decarbonising more complex sectors, including cement production.

Hydrogen will also play a role in replacing gas-fired industrial processes in high-volume ceramics, glass, iron and steel production. Given the limitations of hydrogen and CCS, it is also important that industry seek to reduce use of hard-to-decarbonise materials such as steel and especially cement.

[edit] Land use

Land use has the potential to act as a carbon sink for the UK. This means that it is important to use land sensitively, including supporting the restoration and expansion of woodland (creating more sustainable timber supply) and peatland, and limiting the geographic spread of urbanisation (through densification of development).

[edit] Surface transport

Surface transport is currently the highest emitting sector in the economy, accounting for 24% of all emissions. Cars contribute 59% of these emissions, while HGVs contribute 19% and vans 18%. By 2040, these emissions need to fall by 86% in the balanced pathway. By 2040, 80% of cars, 74% of vans and 63% of HGVs will be electrified (a small share of HGVs may be hydrogen powered). This will require user choices and infrastructure development, most notably the significant expansion of EV charging facilities in domestic and public settings.

[edit] The role of Chartered Architectural Technologists

Though it will be up to government to set policy to deliver the balanced pathway, as leaders in the built environment, Chartered Architectural Technologists can help drive forward many of these shifts through their choices and their recommendations to clients. Here are some tips to get you started.

Make sustainability a priority in your design, even when it is not explicitly part of the brief.
Ask yourself questions like “can I reduce the amount of cement or steel in this design?” or “can I incorporate more sustainable timber and bio-based materials?” alongside more common questions like “how can I improve the energy efficiency of this design?”
Ensure that you are aware of what government support there is for energy efficiency measures, so you can advise clients on how they can affordably implement these measures.
If you think a client won’t favour a lower-carbon but higher-cost design, provide different options and talk them through the costs and benefits. Even if they don’t go for the design, you can play a role in tackling misinformation about low-carbon technologies.
Consider opportunities to ‘add-on’ energy efficiency or low-carbon measures as part of wider projects.
Designing a kitchen extension? That’s a great time to switch to a heat pump and induction hob. Building a new garage? Why not add EV charging at the same time.
When specifying a design, consider what low carbon options may be available, especially for high-volume materials.
Review your business emissions – your studio’s energy use, your transport to site, et cetera, and do the same for your supply chains and contractors.

Achieving net zero will require huge shifts across the whole economy, but it will also deliver better, more comfortable homes and environments and stimulate economic growth across the UK. By leading from the front, Chartered Architectural Technologists can reap the benefits of this trend.

This article appears in the AT Journal issue 154 Summer 2025 as "The Seventh Carbon Budget: what it means for the built environment" and was written by Jack Fleming, Policy & Public Affairs Executive.

--CIAT