Explainer: What does the latest CCC report say about heat pumps, buildings & net zero?

The Climate Change Committee’s (CCC) 2025 Progress Report to Parliament highlights the growing role that buildings, and especially heating systems, must play in the UK’s journey to net zero.

A key finding is that the emission reduction target for buildings must rise significantly; from 8% during 2008–2024 to 20% from 2025–2030, and 21% from 2031–2037. The CCC’s report explores where progress has been made and recommends where urgent action is still needed.

What is the Climate Change Committee?

The CCC is an independent statutory body established under the Climate Change Act 2008. It advises the UK Government on emissions targets and reports annually to Parliament on progress toward reducing emissions and adapting to climate change.

Why the focus on heat pumps?

There is wide Government and industry consensus that heat pumps are central to decarbonising buildings. Compared with gas boilers, they can reduce a building’s operational carbon emissions by at least 20%, and up to 80% when powered by clean, renewable electricity.

Unlike gas boilers, heat pumps transfer heat rather than generate it, which cuts reliance on fossil fuels and lowers greenhouse gas emissions. Crucially, they can run on renewable electricity, further shrinking their carbon footprint.

What progress has the UK made?

The CCC has welcomed a 56% uptick in heat pump installations in 2024, driven in part by schemes like the Boiler Upgrade Scheme (BUS) and the Energy Company Obligation (ECO). However, only 1% of UK homes currently have a heat pump, leaving the UK far behind other European nations.

To meet the Sixth Carbon Budget and the Government’s own 2030 climate targets, all new and replacement heating systems in homes must be low-carbon by 2035. That means ramping up supply chains and giving households and manufacturers the confidence to switch.

The Warm Homes Plan

The Warm Homes Plan is the Government’s initiative to upgrade five million homes (by 2030) and reduce energy bills for homeowners by up to £600 annually through investment in insulation, solar panels, battery storage, and low-carbon heating technologies. With the plan now expected to be rolled out later this autumn, the Committee has made several recommendations:

• Reduce electricity costs to make heat pumps cheaper to run.
• Create financial incentives for households to install low-carbon heating.
• Provide long-term funding for low-income and social housing decarbonisation.
• Set up a national retrofit advice service to support householders in making informed choices.

The CCC argues that these actions are needed to instil providers working within the heat pump space the long-term confidence to scale supply chains and build their installer workforce.

New homes have been a missed opportunity

The CCC highlights that 71% of new homes are still being built with fossil fuel boilers, representing a significant missed opportunity in recent years. However, the 2025 Future Homes and Buildings Standards is set to effectively end the installation of fossil fuel heating systems in new homes and buildings.

Under the new standard, homes must use low-carbon heating systems, such as heat pumps or heat networks, and achiever high levels of energy efficiency. The Government’s consultation on the standard closed in March 2024, and it is due to come into force this year, though an exact date is yet to be announced.

Public and commercial buildings are lagging behind…

The CCC is urging Government to ensure the public estate leads by example. One of the report’s recommended priority actions is for the government to introduce a comprehensive programme to decarbonise public sector buildings. It states, “This would also provide an opportunity to grow heat pump supply chains and, with action on electricity prices, enable operational cost savings”.

The Public Sector Decarbonisation Scheme (PSDS) was quietly axed this month, and while it continues to support the completion of approved projects until 2028, the application window will not reopen for new ones.

Policies to decarbonise commercial buildings remain thin on the ground, although rented buildings are likely to need an EPC rating of B before 2035, under the Minimum Energy Efficiency Standards (we’ll know more later this year).

Why action is needed now

High energy bills, volatile gas prices and growing energy insecurity are all clear incentives to accelerate the clean energy transition. The CCC argues that strong action on low-carbon heating can deliver cleaner air, warmer homes, lower bills and energy resilience. But only if the government is prepared to make bold decisions – and act right now.

Key Findings from the 2025 CCC Progress Report

• UK emissions have halved since 1990, largely thanks to cleaner electricity
• EV ownership has doubled in two years; cost parity with petrol is expected by 2028
• Over 80% of emissions cuts needed by 2030 must come from buildings, transport, and industry
• Heat pump installations grew 56% in 2024, but the UK still lags behind Europe
• Wind and solar capacity grew faster in 2024 than in the previous six years – but will need to more than double to hit 2030 targets

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