A plan to scrap the UK’s Climate Change Act has triggered warnings over energy costs, investor confidence, and the future of net-zero innovation.
What Is The Climate Change Act?
Introduced in 2008 with near-unanimous cross-party support, the Climate Change Act (CCA) is the foundation of the UK’s statutory approach to reducing greenhouse gas emissions. It essentially created a legally binding framework for setting five-year carbon budgets, introduced a 2050 target for long-term reductions, and established the independent Climate Change Committee (CCC) to advise on progress and hold government to account.
Old Target
In 2019, the original 80 per cent emissions reduction target was amended to require the UK to reach net zero by 2050, a change that also became law. Under the current framework, ministers must now bring forward credible plans for meeting each carbon budget, which are reviewed and assessed by the CCC.
Emissions Have Fallen, Says Government
The CCC’s 2024 progress report states that emissions have now fallen by over 50 per cent compared to 1990 levels. In fact, the government’s own data appears to confirm this, showing that from 1990 to 2022, UK territorial emissions halved while GDP rose by nearly 80 per cent.
The structure created by the Act is widely credited with supporting the growth of offshore wind, driving policy clarity for low-carbon transport, and informing investment decisions across energy, infrastructure, and housing.
What Would Change If The Act Were Repealed?
The recent Conservative Party pledge to repeal the Act would, therefore, remove the legal requirement for the UK to meet its 2050 net zero target and end the system of binding carbon budgets. The CCC’s statutory advisory role would also be removed, taking away a major source of independent oversight.
Without the legal framework in place, ministers would still be able to propose emissions reduction plans, but would no longer be subject to any of the clear targets or formal timelines. The duty to develop cross-government adaptation planning would also fall away, with implications for flood risk management, heat resilience, and long-term infrastructure design.
Repeal would also disrupt the legislative alignment between net zero and other areas of policy, including planning rules, energy regulation, transport decarbonisation plans, and sectoral emissions targets.
What About Energy and Investment?
The UK is already moving towards cleaner energy, e.g. in 2024, low-carbon sources actually generated nearly 74 per cent of Britain’s electricity (up from 68 per cent the previous year). RenewableUK attributed this increase to record solar and wind output, combined with falling demand.
Progress
However, trade groups argue that this progress depends on investor confidence and clear legal and policy structures. Energy UK, for example, has described the Climate Change Act as “the legal bedrock that underpins billions of pounds of international investment,” warning that repealing it would “pull the rug out from under” clean energy growth.
Threat
The UK’s trade association for the solar and energy storage industry, Solar Energy UK, said the Act’s repeal would “threaten the UK’s energy security,” pointing out that solar is now the cheapest form of electricity. The Energy and Climate Intelligence Unit (ECIU) has also warned that weakening the legal framework could delay project approvals and increase financing costs for clean energy infrastructure.
Globally
For some context, at the global level, BloombergNEF reports that low-carbon energy transition investment reached a record $2.1 trillion in 2024. The UK currently attracts significant capital into offshore wind, grid upgrades, and energy storage, but industry sources have stated that future inflows will depend heavily on predictable, long-term policy (all investors like stability).
Trade and Carbon Border Risks
The EU’s ‘Carbon Border Adjustment Mechanism’ (CBAM) is a new policy that puts a charge (tariff) on imports like steel and cement from countries with weaker climate rules. The idea is to stop companies moving production to places with cheaper, high-carbon processes and to encourage cleaner manufacturing globally. The hope is that, as the policy matures, countries with strong domestic carbon governance frameworks can get some preferential treatment, or at least avoid additional charges.
If the UK were to remove its primary legal climate framework, it may, therefore, face difficulties demonstrating continued equivalence with such EU climate regulation. This could expose UK exporters to new administrative burdens or competitiveness risks in carbon-intensive sectors.
Analysts have also highlighted the danger of reputational risks to the UK, i.e. a sudden change in legal commitments may reduce the UK’s leverage in future climate negotiations and make it harder to defend its Paris Agreement targets on the global stage.
Jobs and Regional Growth
The House of Lords Library (drawing on CCC analysis) estimates that between 135,000 and 725,000 net additional jobs could be created by 2030 through the transition to a low-carbon economy. Existing estimates suggest more than 250,000 jobs are already supported by energy transition activities across power, transport, and industrial sectors.
Many of these jobs are concentrated in regional clusters such as Teesside, Humberside, and the East Midlands, where offshore wind, carbon capture, and green hydrogen projects are underway. Trade unions and local authorities have consistently called for long-term certainty to support skills development and investment in supply chains.
Removing the Act would not instantly halt these efforts, but trade bodies argue it would increase uncertainty, potentially deterring future commitments and complicating project timelines.
Impact on Sustainability Tech and Innovation
The Climate Change Act is closely tied to the UK’s net-zero technology ecosystem. For example, it helps create long-term certainty that new low-carbon technologies will be needed and supported, such as green hydrogen, low-carbon heat, battery storage, sustainable fuels, and carbon capture.
Warnings
UK-based renewable energy supplier and tech company, Octopus Energy, has warned that repealing the Act would increase policy risk and make the UK less attractive for future clean tech investment. Also, other firms in areas such as smart grids, EV charging, and electrified logistics have also highlighted the need for legal certainty to support scale-up.
Could Affect Grant Funding Too
The UK’s national funding agency for science and innovation, UK Research and Innovation (UKRI), has structured much of its energy and climate R&D around the 2050 net zero target. Grant funding programmes in areas like floating offshore wind, heat decarbonisation, and energy system digitalisation are aligned with CCA commitments. Repeal could, therefore, seriously affect future eligibility and co-funding models.
Also, the CCC’s 2024 progress report warns that several sectors remain underdeveloped, including low-carbon industrial processes, heat pumps, and agricultural emissions reduction. It notes that greater certainty is needed to unlock both public and private capital for innovation.
Harm Industry
Globally, clean tech markets are growing fast, with $1.7 trillion in technology-driven climate solutions deployed in 2024 alone. Analysts warn, therefore, that if the UK weakens its legal climate framework, it could lose industrial ground to jurisdictions offering more predictable pathways to commercialisation and export growth.
Challenges and Criticisms
The proposal to repeal the Climate Change Act has obviously attracted some criticism from a wide range of experts, commentators and institutions, many of whom have emphasised the potential economic, environmental and strategic implications.
For example, a joint letter signed by 124 parliamentarians from Labour, Liberal Democrat, SNP and Green parties described the move as “reckless” and warned that it would damage the UK’s global credibility and economic resilience. They wrote: “Ripping up the Climate Change Act would create uncertainty, stifle innovation, and risk jobs.”
Former members of government, including previous ministers responsible for climate and energy, have also spoken out. Several have publicly defended the 2019 net zero target as a pragmatic, economically grounded goal supported by evidence and investment trends.
While repeal advocates argue that scrapping the Act would reduce bureaucracy and allow more flexible energy policy, critics have said it would simply remove the legal accountability that gives businesses the clarity to invest in the first place.
Others have also raised concerns that the move could weaken consumer and investor trust, particularly among institutions managing green finance and ESG-aligned portfolios, who rely on national legislation as a marker of climate risk.
Where Things Stand Now
Currently, the Climate Change Act remains in force and the UK’s sixth carbon budget, covering 2033–2037, is still legally binding and commits the country to a massive 78 per cent reduction in emissions by 2035 compared to 1990 levels.
Off Track
However, the CCC’s latest report warns that delivery plans for meeting this target are currently off track, with particular gaps in buildings, transport, and land use. However, it also highlights the growing economic and energy security benefits of continuing the transition at pace.
New Legislation Would Be Needed
It’s also worth noting here that if the Act were to be repealed, Parliament would need to pass new legislation and the outcome would affect not just emissions targets but the entire governance system that has structured UK climate action for more than 15 years.
What Does This Mean For Your Business?
Repealing the Climate Change Act would not simply remove a symbolic commitment, it would dismantle the legal framework that currently shapes and anchors much of the UK’s energy, industrial, and technology policy. The Act has become embedded in the operations of regulators, investment strategies, funding agencies, and long-term infrastructure plans. Taking it away would introduce a level of uncertainty that cuts across sectors.
For UK businesses, the most immediate consequence would be increased risk around investment planning. Sectors such as manufacturing, transport, construction, energy and finance all rely to some degree on the predictability that the Act provides. Without it, firms may delay decisions, reconsider capital allocations, or struggle to justify long-term net zero strategies to shareholders and investors. This is particularly relevant at a time when international capital is flowing into jurisdictions with strong, consistent frameworks.
Beyond business, the impact would also be felt across government departments, local authorities, and academic institutions whose plans and programmes are currently tied to the Act’s targets. A change in the legal foundation would not just affect high-level goals, but could also cut across planning policy, public procurement, grant funding, regulatory enforcement, and reporting standards.
Also, there is a wider concern that removing a well-established and legally binding framework at a time when global clean technology markets are expanding could make it harder for the UK to compete. Whether in securing supply chain investment, commercialising innovation, or exporting clean solutions, confidence in the UK’s direction of travel remains a critical factor.
While debate will certainly continue around the best route to net zero, the core question for many is not whether climate policy should evolve, but whether it should remain anchored in law. The decision to repeal or retain the Climate Change Act is likely to be seen not just as a political choice, but as a signal to markets, partners, and the next generation of innovators about the UK’s long-term direction.