What will 2025 mean for climate policy and politics? – Inside track

This looks set to be a big year for climate policy and politics.  

Spending and policy decisions taken by the government this year will set a path for the country’s greenhouse gas emissions reductions over the next decade, determining whether the UK will meet its international and domestic climate targets.  

Look out for the storm on the horizon
Stormy times lie ahead for climate politics, with a potential breakdown in the political consensus on climate action in the UK and the return of a volatile, anti-science, pro-fossil fuel President Trump. By pulling out of the Paris Agreement – or worse its parent treaty the United Nations Framework Convention on Climate Change – the incoming president will hold back international progress at a crucial time. Trump may also spark a destabilising global trade war with the introduction of tariffs.  

The government’s going fast for clean power
The good news is that the government is delivering a step change in the pace and ambition of climate policy at home.  It ended 2024 on a high note with the publication of the clean power plan. An ambitious plan to move to an electricity grid almost entirely supplied with clean power by 2030 with a small amount of gas back up.  

This promises to unblock bureaucratic delays for grid connections, speed up planning decisions for energy projects, reform the capacity market and further increase the budget for clean power projects. But Labour’s ‘moonshot’ mission to rewire Britain could become a political flashpoint in 2025 if local opposition mounts to the rollout of pylons and other transmission infrastructure necessary for the clean power transition.  

Labour’s flagship publicly owned Great British Energy will also begin operations in 2025 after the legislation is passed by parliament.  

Other major announcements are expected
The first half of the year will see several other big government announcements with consequences for the climate.  

In February, the Climate Change Committee will publish its advice to ministers on the seventh carbon budget to run from 2038 to 2042. For the first time, parliament will undertake lengthier scrutiny of this budget and MPs will eventually be asked to approve the government’s decision. This will present the first major test of the fragile cross-party consensus since self-declared ‘net zero sceptic’ Kemi Badenoch was elected leader of the Conservatives which could see the party contest the targets.  

By May, we’ll have an updated Net Zero Strategy and Carbon Budget Delivery Plan (CBDP). These are an opportunity for the new government to flesh out its vision for accelerating to net zero, with a comprehensive cross-government set of quantified policies to meet the Paris Agreement 2030 target. This will put us on the path to reach net zero by mid-century. The two biggest emitting sectors, transport and buildings, are priority areas where progress needs to speed up to make this possible.  

Action has to ramp up on transport
The plan to phase-out sales of new petrol and diesel cars in 2030 and the accompanying zero emission vehicle (ZEV) mandate, requiring a growing proportion of electric vehicles (EVs) to be sold, will result in significant carbon savings. The government is right to maintain ambition on these policies in its current consultation. But, without further action to reduce traffic, boost public transport use and decarbonise the freight sector we can’t meet carbon budgets in the 2030s. We will be publishing a report soon on how to close the gap between current transport policies and where ambitions need to be, to put the UK on the right track for 2050.  

Plans on warm homes are still falling short
Much more also needs to be done on buildings and clean heat. The chancellor pledged an initial £3.4 billion in the 2024 budget towards household energy efficiency and heat decarbonisation between 2025-26 and 2027-28.  But the current Warm Homes Plan falls short of the pace and scale needed to retrofit homes and install heat pumps. A strong Future Homes Standard needs to be introduced this year, mandating technologies like solar PV and heat pumps in all new homes built. This is vital as Labour delivers planning reform and begins paving the way to build 1.5 million new homes with its new Planning and Infrastructure Bill.  

Key departments will need support in the spending review
In June, the government is due to deliver phase two of its spending review. The Department for Energy Security and Net Zero did well out of the previous spending review, reflecting the importance of the government’s clean energy mission, but other departments essential to delivering emissions reductions haven’t fared so well.  

In the first phase of the spending review, the Department for Transport received a real terms decrease in its spending limits between 2023-24 and 2025-26 of 0.7 per cent. To deliver on the government’s positive public transport agenda, support the growth mission and reduce emissions from what is now the highest emitting sector, a real terms increase in capital spending on transport infrastructure is crucial over the remainder of this parliament. The chancellor must also provide the full £13.2 billion Labour promised in its manifesto for the Warm Homes Plan.   

With the US set to pull out of the Paris Agreement, COP30, hosted by Brazil in November, will be a significant moment. Countries must submit updated national action plans – known as Nationally Determined Contributions (NDCs) – before the summit.  

Look for UK leadership at COP30
Keir Starmer set a high bar with his pledge at COP29 to reduce emissions by 81 per cent by 2035 in the UK’s updated NDC. But the UK is off track on its 2030 Paris Agreement target of a 68 per cent reduction. With the international process now facing a testing period of US intransigence, the UK must show leadership by closing the implementation gap between its targets and what it is actual doing.  

Big policy moments – in the Carbon Budget Delivery Plan, infrastructure and industrial strategies, and the spending review – are a chance for the government to use this year to drive forward a transformative climate and clean energy agenda.