The Seventh Carbon Budget: A Turning Point for Real Climate Accountability?
By Rachel Ardiff & Mirte Boot
The Climate Change Committee's Seventh Carbon Budget is a pivotal moment for UK climate policy. It doesn't just set targets – it sets out a framework for who takes responsibility for emissions and removals. Today's letter from the CCC, advising against nature-based removals in the ETS, confirms this shift to real climate accountability.
In February 2025, the UK Climate Change Committee (CCC) published its Seventh Carbon Budget (CB7), recommending to the government the amount of greenhouse gas emissions the UK can emit for the period 2038–2042, whilst updating its modelling for the UK's 2050 national net zero target. While previous budgets focused on setting targets, this budget places a clear focus on delivery, enforcement, and the long-term architecture of climate accountability. The budget gives real weight to crucial principles we champion at Carbon Balance: polluter pays, sector-specific responsibility, and like-for-like balancing of emissions and removals.
This principled approach was reinforced today (10 June 2025) when the UK CCC published a letter advising against including nature-based removals in the UK Emission Trading Scheme, arguing that “long-lived CO2 emissions that cannot be mitigated would then be offset with engineered removals, that can store CO2 over geological time periods”.
What are we highlighting from CB7?
A 'like-for-like' principle matching emissions with appropriate removals
A mandate for domestic action on removals – without relying on international offsets
Strict limits on fossil fuel use with clear phase-out timelines
Sector-specific responsibilities, especially for aviation and heavy industry
Clear expectations on who pays for the transition
This blog will explore what this means for the UK's path to net zero. All page numbers refer to the Climate Change Committee Seventh Carbon Budget report.
From Offsets to Integrity: The 'Like-for-Like' Principle
CB7 modelling aligns with the logic of the ‘like-for-like’ principle. This means permanent emissions (from burning fossil fuels or other industrial processes) must be balanced by permanent removals – not temporary or short-lived removals. This echoes the Oxford Principles for Net Zero Aligned Offsetting that underpin much of our work at Carbon Balance.
This can be seen in the graph demonstrating that all land based removal capacity will be required for the compensation of land based sinks (p. 77):
Figure 1: Greenhouse Gas emissions and Removals in 2050 under the CCC's Balanced Pathway, showing land-based removals fully utilised for land-based emissions, while fossil/industrial emissions require engineered removals. Based on aviation and industry includes 'waste' and 'other' in the Seventh Carbon Budget (2025) Climate Change Committee.
This principle was also reaffirmed today by the CCC, which strongly advised against including nature-based removals in the UK ETS. The CCC argued that engineered removals - capable of storing over geological timeframes - are needed to balance any remaining fossil and industrial CO2 emissions. This also implies that land-based removals should only be used for shorter-lived emissions such as from land-use change in agriculture.
A Domestic Net Zero, Built on Permanent Removals
One of the most consequential messages in CB7 is that the UK should plan to meet its carbon budgets entirely through domestic action. International offsets, particularly those representing avoided emissions or land-use, cannot yet be seen as viable for balancing domestic emissions (p. 361).
This confirms what climate science and frontline communities have long argued – you cannot equate short-term sequestration or avoided emissions with the permanent damage caused by fossil fuel emissions.
This validates the push for integrity in carbon accounting. It also sets the stage for a more robust role for carbon removal mandates in hard-to-abate sectors like aviation and heavy industry.
Fossil Fuels: Strict Limits, Clear Responsibilities
The CCC doesn't call for an immediate end to UK fossil fuel use, but it does set very clear boundaries for what is permissible:
84% reduction in oil use and 77% reduction in gas use by 2050 (p.380)
No new unabated fossil fuel projects: CCS should not be used to allow for further oil and gas extraction projects, but should be applied to chemical, lime, and cement sectors as well as some gas-fired power plants to provide low-carbon dispatchable power, stabilising the electricity grid (p. 14)
Mandatory carbon capture for any remaining fossil use: For electricity generation, unabated gas power must be phased out or retrofitted by CCS by 2035, with unabated gas representing moving from 30% to 3% of the electricity mix by 2035 and 0% in 2050 (p. 208)
A just transition for fossil fuel workers and regions (p. 340)
The message is clear: UK fossil fuel production must shrink and it must start now. This requires confronting fossil fuel producers claiming a role in the energy transition, while continuing to expand exploration and production. It also highlights the need for science-based, phase-out policy tools like a Carbon Takeback Obligation. By legally requiring fossil fuel companies to permanently store a rising share of the CO₂ their products, we create direct accountability. Without this kind of producer responsibility, we risk a two-tier climate system where consumers pay the price of the energy transition while fossil fuel companies continue to profit.
Aviation and the true cost of flying: Who pays for Net Zero?
By 2040, the CCC expects engineered removals to account for 21 megatonnes per year, starting in 2028 and contributing to 6% of emissions reductions by 2040 (p. 296). Engineered removals will be essential for hard-to-abate sectors, especially aviation, chemicals, cement and lime.
But engineered removals are costly. The main engineered removal methods in the modelling, DACCS and BECCS, never fall below £300/tCO2 in CB7's modelling, even by 2050 (p.270)
So who pays? The Balanced Pathway set out by the CCC assumes a 'Polluter Pays' approach (p. 77 & 277), discussing the full responsibility of the aviation sector for its emission through:
Direct reductions via sustainable aviation fuels and efficiency improvements
Payment for permanent removals (BECCS/DACCS) for unavoidable emissions
The recommendations open the door for legally binding policies that enforce polluter pays principles, such as kerosene taxes, removal mandates, or frequent flyer levies. The CCC suggests this could ensure that those who fly the most contribute more to carbon removals, rather than shifting the burden to government subsidies levied more widely on consumers. These removals aren't a silver bullet, but they are a necessary fail-safe. The CCC's framing helps ensure they're used wisely, and paid for fairly.
Decarbonising Heavy Industry: From Uncertainty to Action
The future of clean heavy industry in the UK is a source of great uncertainty. CB7 marks an ambitious pathway in the treatment of heavy industry with clear expectations:
78% emissions cut from manufacturing and construction by 2040 (p. 73)
Full decarbonisation of most industrial clusters by 2035
Strategic deployment of CCS, electrification, and hydrogen
Clear transition plans for dispersed industrial sites
In partnership with Clean Air Task Force, we're designing regulatory mandates, such as carbon product standards, clean procurement policies, and upstream obligations, that can drive real change in hard-to-abate sectors like chemicals and cement. Our research focuses on identifying key emission bottlenecks in the sector with a focus on measures to drive key domestic demand for clean industry, shifting the entire value chain toward low-carbon alternatives.
The CCC recognises that time is short. Industrial decarbonisation must now be guided by policy certainty, not just incentives, all while supporting industrial competitiveness and a just transition.
Who Pays for Net Zero? The Private Sector, Mostly
The CCC estimates that between 40% and 90% of net zero investment will come from the private sector - equalling up to £50 billion per year, mostly for infrastructure, industrial transformation, and clean energy deployment. (p. 99)
But private finance won't flow without the appropriate signals. Investors need regulatory certainty, clear market signals, and enforceable obligations.
This is why we support approaches that might provide the required certainty, such as:
Mandates on fossil fuel producers to finance carbon removals
Minimum removal obligations for sectors like aviation and cement
Public-private partnerships for building CO₂ transport and storage networks
Public subsidies must be used where they make the biggest impact on decarbonisation, while ensuring meaningful accountability. The private sector can and should play a leading role, but not on its own terms.
What Comes Next?
Today’s letter from CCC and CB7 marks a decisive shift: from theoretical pathways to real implementation and guardrails. It outlines a path to net zero in 2050 built on like-for-like emissions and removals, domestic action, , and sectoral responsibility – not international offsets or creative carbon accounting.
We see this as a major step forward. It gives policy-makers the tools and legitimacy to:
Hold polluters accountable
Build permanent carbon removal infrastructure
Drive industrial transformation with regulation, not just subsidies
Ensure a fair transition for workers and communities
But a strong budget is only the beginning. Success requires backing this vision with regulation, investment, and political will that match the scale of the challenge. Industry must lead the clean-up, not just the conversation.
At Carbon Balance, we'll continue pushing for policies that reflect the urgency, integrity and justice this moment demands. CB7 aligns with our mission and we'll work to turn their principles into action. Now comes the hard part: making it happen.