Committee publication · Special Report · 11 June 2026 · HC 25
1st Special Report - The Seventh Carbon Budget: Government Response
From: Environmental Audit Committee
Inquiry: The Seventh Carbon Budget
Summary
This is the UK Government's formal response to the Environmental Audit Committee's March 2026 report on the Seventh Carbon Budget (2038–2042). The government accepts the Committee's recommendation to legislate for the Climate Change Committee's recommended level of 535 MtCO₂e (87% emissions reduction by 2040) and commits to strengthened parliamentary scrutiny, sectoral delivery plans, and cross-government coordination. It rejects or defers several recommendations on detailed delivery planning, citing statutory constraints under the Climate Change Act 2008.
Key findings
- Government proposes to set CB7 at 535 MtCO₂e, accepting the Committee's recommendation, and commits to full affirmative parliamentary procedure debate on the Floor of the House, not in a Delegated Legislation Committee.
- Government will publish CB7 delivery plan after Parliament approves the budget level (12 years before the budget period begins), allowing time for policy development but declining to publish detailed sectoral pathways and contingency registers before the budget is set.
- Accepts three-month parliamentary scrutiny period and annual ministerial oral statements on progress, aligned with Climate Change Committee statutory reports.
- Rejects premise of detailed sector delivery plans before budget approval; commits to cross-government coordination backed by PM and Chancellor, but reserves final policy detail for post-approval delivery plan.
- Confirms government action on carbon leakage mitigation (UK ETS free allocations, UK CBAM, British Industrial Competitiveness Scheme, Clean Industry Bonus), electricity cost reduction via Renewables Obligation transfer to Exchequer, and co-benefits focus in Warm Homes Plan (£15bn), EV campaigns, and Net Zero Council engagement.
Government position
Partially accepts. Accepts CB7 level, parliamentary procedure reforms (Floor debate, three-month scrutiny, annual oral statements), and broad principles of co-benefits, behaviour change, and cross-government coordination. Partially accepts on sectoral delivery planning and contingency frameworks—agrees to consider the Committee's detailed suggestions but frames these as elements to develop *after* budget approval, not before, citing the statutory constraints of the Climate Change Act 2008 and the 12-year lead time before CB7 begins. Defers full responses on GGRs (Greenhouse Gas Removals) pending October 2025 GGR Independent Review response, and on detailed carbon leakage mitigation interactions pending delivery plan publication.
Tone
FactualTopics
Key actors
Environmental Audit Committee, UK Government (DESNZ—Department for Energy Security and Net Zero), Climate Change Committee, Secretary of State for DESNZ, Prime Minister, Chancellor of the Exchequer, Parliament (House of Commons and House of Lords), Devolved Administrations
Notable line
“The government will propose to Parliament that the seventh carbon budget is set in line with the Climate Change Committee's recommended level of 535 MtCO₂e, equivalent to an 87% reduction in emissions in 2040 from a 1990 baseline.”
Key Quotes
“Net zero is the economic and industrial opportunity of the 21st century, and carbon budgets provide a framework for governments to protect us from the long-term threat of climate change while realising that opportunity.”
“The government will propose to Parliament that the seventh carbon budget is set in line with the Climate Change Committee's recommended level of 535 MtCO₂e, equivalent to an 87% reduction in emissions in 2040 from a 1990 baseline.”
“The government accepts the EAC's recommendation that the draft Order is not to be referred to a Delegated Legislation Committee in the House of Commons, but instead debated on the Floor of the House, and will work with Business Managers to ensure this happens.”
“DESNZ's coordinating role in delivering CB7 and net zero is supported at the centre of government. The Prime Minister and the Chancellor of the Exchequer are committed to ensuring that departments work together to meet carbon budgets.”
“So far, the UK has halved its emissions, having cut them by 54% between 1990 and 2025, while growing the economy by over 85% in the same period.”
“We recognise that our Clean Energy Mission will only succeed if we take people with us and ensure that everyone can feel the benefits of a more sustainable, more prosperous society.”
“The government recognises the importance of this, and has already taken action to reduce electricity costs, including moving legacy costs such as the Renewables Obligation to the Exchequer and cancelling the Energy Company Obligation and removing the associated VAT.”
Source · parliament.uk record ↗