The UK could still meet its 2050 net zero target and interim carbon budgets set for 2030 and beyond, according to the Climate Change Committee (CCC) in its latest annual progress report to parliament.
The committee said that while the pathway remains viable, key policy changes will be required – particularly around energy pricing.
The report highlighted the need for reforming the taxation of energy. Under the current system, electricity remains significantly more expensive than gas, largely due to a combination of global gas price volatility and domestic levies used to fund renewable energy and low-carbon initiatives.
Piers Forster (pictured above), chair of the CCC, said the findings offer a positive outlook but rely on further policy action.
“It is possible to meet our carbon budgets for 2030 and 2050, provided we take steps forward [on policy]. It’s very important that our country steps up to deliver our commitments,” he said.
He also rejected the idea that net zero targets would negatively impact the economy. The CCC expects that by the time of the seventh carbon budget, beginning in 2038, the UK economy will begin seeing material benefits, with gains projected to continue through to 2050.
The committee also pointed to an increase in tree planting activity, particularly in Scotland. Levels have now reached figures not seen since the 1990s. While this falls short of the pace required to meet long-term goals, it marks a shift from previous years.
Responding to the report, Neil Kempston, head of incubation underwriting at Beazley, said insurance plays a key role in the UK’s journey to net zero. He said the sector helps enable innovation, support investment, and strengthen resilience across the energy transition.
“Progress has already been made to transition towards a low-carbon economy, with technologies such as carbon capture and storage (CCS) and nuclear fusion being thrust firmly into the spotlight. For example, insurance solutions for CCS activities are under investigation. These could protect against physical damage and liabilities associated with the capture, transport, and storage of CO2,” Kempston said.
He also said the industry is developing insurance solutions for the risks associated with nuclear fusion, such as equipment failure and safety obligations.
According to Kempston, the insurance sector can help businesses manage financial risks and give investors greater confidence in supporting transition efforts.
“By developing innovative insurance solutions and by supporting sustainable business practices, the insurance industry can help to mitigate financial liabilities for businesses and reassure investors, in turn enabling and accelerating a smooth transition. For most industries and businesses, the path to net zero is complex. It requires wide-scale operational changes,” Kempston said.
Further highlighting the sector’s strategic role, a study from 2024 projected that insurance will be key in mobilising up to $10 trillion in climate transition investments globally.
It also found that insurance premiums related to climate resilience and natural catastrophe protection may rise by as much as 50% by 2030, potentially reaching $200–250 billion annually, due to mounting climate-related losses.
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