Policy deep dive: The UK’s NDC and Seventh Carbon Budget 

30 Apr 2025

Researchers at CCE wrote a deep dive report on the UK’s NDC and the Seventh Carbon Budget, published by Chapter Zero to enable their network of non-executive directors to assess impact on ongoing business planning and strategy. 

Overview: 

Our latest UK Policy Briefing for Chapter Zero explores two key developments shaping the UK’s climate policy landscape in early 2025: the updated 2035 Nationally Determined Contribution (NDC) and the Climate Change Committee’s (CCC) advice on the Seventh Carbon Budget (CB7).  
Nationally Determined Contributions (NDCs) are central to delivering the Paris Agreement, the global treaty adopted in 2015 to limit temperature rise to 1.5°C and achieve net zero emissions by 2050.  
The CCC’s Seventh Carbon Budget: Advice to the UK Government, published in February 2025, outlines a legally binding limit on UK emissions for the period 2038–2042. Required under the Climate Change Act 2008, these five-yearly carbon budgets act as important markers of the UK’s progress on emissions reductions, and outline the necessary direction of travel to achieve long-term climate goals.  
Together, the updated NDC and CB7 advice signal a tightening of national policy on emissions reduction. They also highlight the need for strategic, long-term planning from businesses and boards.  

Deep dive highlights: 

Ambitious Emissions Reduction Target: The UK’s updated NDC commits to an 81% reduction in greenhouse gas emissions by 2035, compared to 1990 levels. This target reflects the Climate Change Committee’s (CCC) advice and reaffirms the UK’s commitment to the Paris Agreement and its goal of limiting global warming to 1.5°C. Private Investment is Key: Achieving net zero will require significant upfront capital, with 65–90% of funding expected to come from the private sector between 2025 and 2050. Businesses are therefore central to the delivery of climate action, not only in terms of finance but also innovation and leadership. 
Alignment with Global Climate Commitments: The UK’s updated NDC echoes pledges made at COP28, including tripling global renewable energy capacity and doubling energy efficiency improvements by 2030. Role of Business in Policy Delivery: The UK Government is calling on businesses to help lead the net zero transition. This includes committing to transparent emissions reporting, advocating for ambitious policy, and aligning investment and strategy with a more long-term view of climate objectives.
Comprehensive Sector Coverage: The NDC covers all major sectors—energy, transport, industry, agriculture, land use, and waste. However, it does not set specific sectoral targets for energy, farming or aviation, which some stakeholders believe are essential to ensure clear accountability and effective implementation. Importance of Nature-Based Solutions: Nature-based solutions are considered essential for balancing out residual emissions. The CCC recommends increasing peatland restoration from 26% in 2023 to 55% by 2040 and more than doubling tree planting rates by 2030 to support carbon sequestration efforts.
Seventh Carbon Budget Sets New Legal Limits: The CCC’s CB7 sets a legally binding cap on UK emissions for the period 2038–2042. It recommends an 87% emissions reduction by 2040 relative to 1990 levels. For the first time, emissions from international aviation and shipping are included in the overall target, broadening the scope of the UK’s climate commitments. Critical Role of Local Delivery: The NDC and CB7 recognise that local authorities are key to cutting emissions from buildings, transport, and waste—sectors that make up around half of the UK’s emissions reductions. Support is set to grow through initiatives like the Great British Energy Local Power Plan and the English Devolution White Paper, which aim to empower local communities and ensure a fair, joined-up approach to reaching net zero. 
Focus on Electrification and Proven Technologies: According to the CCC’s “Balanced Pathway”, around 60% of emissions reductions will come from electrification and a decarbonised power system. The emphasis is on scaling up existing, proven technologies—such as electric vehicles and heat pumps—rather than directing significant focus towards less developed future solutions. 
Read the full report (external link) 

About Chapter Zero:  

The full deep dive report was published by Chapter Zero, a network for non-executive directors and chairs who are integrating climate action into business strategy. Chapter Zero is the UK chapter of the Climate Governance Initiative, developed with the World Economic Forum. 

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