Transport remains the largest sector of carbon emissions in the UK economy at 29%. It has consistently failed to meet the anticipated carbon reduction ambition indicated as possible by the Climate Change Committee (CCC). Data released in April 2025 showed that emissions from surface transport today would have been nearly 25% lower and reducing at five times the rate that they currently are had the pathway anticipated in 2016 been followed.
This report has analysed the ambition of the latest indicative surface transport decarbonisation pathway set out by the CCC to 2042 as part of its 7th Carbon Budget report (CB7). The purpose of the report is to match what is expected from the sector with the current delivery commitments, particularly in the light of the Spending Review 2025 which has set the funding envelope out to 2029/30.
The latest pathway, set out in CB7, suggests a 10% softening of emission reduction requirements from the sector between 2025 and 2050, but the pathway which is set out still contains a very steep year on year reduction requirement. This report has explored the key issues around the credibility of such a pathway. The Government needs to address these issues transparently by the time it submits its Net Zero Strategy in the autumn if it wishes to avoid further legal challenge.
There are some reasons for positivity for transport decarbonisation policy under the new Labour administration. There is a clear recognition of the importance of Net Zero across Government. The Spending Review 2025 provides the first three year funding commitment since 2015. Many infrastructure projects which have been announced now have a clearer capital programme to see them built, including for major tram developments in city regions. Sales of new electric cars are also performing well, with a supportive taxation framework for company cars and the zero emission vehicle mandate.
Are the current plans enough? The analysis in this report on surface transport finds that, on modal shift, it is not. The spend on active travel is nowhere near the levels needed for transformation. The funding for buses is more commensurate with treading water. Whilst improvements will be made on more specific local corridors, the funds will not deliver mode shift from the private car on the scale required nationally. If the carbon impacts of mode shift from the car are to be countable in the Net Zero Strategy in September then this credibility gap needs to be closed.
Similarly, the CCC’s anticipation of technology transition to zero emission vehicles exceed what the Government is currently committed to achieve. There is a further urgent need to establish if the £1.4bn funding set aside in the Spending Review to support the transition to electric vehicles across the private car and goods vehicle market is enough to deliver the pace of transition which the CCC anticipates.
The report has explored the political, economic, social and technological barriers and opportunities which exist in the current delivery environment. It finds that substantial global uncertainty, trade wars, a difficult economic environment and the rise in the anti-net zero political narrative all provide additional headwinds to the delivery of the level of ambition identified by the CCC.
The potential for travel demand reduction has been largely ignored. The CCC’s approach suggests that the reduction in car use from the pandemic, some of which has persisted subsequently, was a one-off. In fact, many of the behavioural shifts during Covid, and which persisted afterwards, such as on-line shopping, digitisation of services and working from home were happening anyway but were accelerated. A more serious look at how we travel and how much we travel could open up opportunities to develop a broader approach which delivers the net zero transition at lower cost and with a range of economic, health and social co-benefits. This should not just be seen as a sideline idea if other things do not work, but as a positive strategy opportunity. What could be achieved if the transport sector actively worked with these wider existing trends rather than ignoring them?
As we look to the Net Zero Strategy in September 2025, the Government is tasked with determining how to square the circle of delivering a transport pathway outlined by the CCC that its spending plans are not resourced to achieve. This report concludes that it would be both necessary and beneficial to bring travel demand reduction inside the tent if a credible pathway is to be mapped out. If, however, the Government wants to commit to the policy mix in the pathway suggested by the CCC, then it must provide greater clarity on how this could be delivered in the face of the current headwinds and address the credibility gaps identified here.
