Carbon Budget Order 2026

Lord Ashcombe Excerpts

Tuesday 23rd June 2026 Lords Chamber

[Lord Ashcombe (Con)]

My Lords, I wish to express my regret at these statutory instruments. Let me begin by recognising that carbon budgets are a vital part of the UK’s approach to tackling climate change. They provide long-term clarity on the pathway to net zero at some future date, set a direction of travel for policy and investment, and signal the seriousness of our ambition. My concern lies not only in the pace, the manner and the potential consequences of the course now proposed but on the realism of the pathway itself and the practical deliverability of the measures that underpin it.

The Carbon Budget Order sets an exceedingly ambitious and legally binding cap to reduce emissions to little more than a quarter of their current level for the period 2038 to 2042—a period still far removed from present realities. In doing so, it risks committing the United Kingdom to a trajectory of decarbonisation so steep as to be impracticable. It is one thing to aspire, quite another to legislate, for a future shaped by uncertainties in technology, economics and geopolitics.

Today in this country, oil and gas account for roughly three-quarters of our own energy demand, and they will remain a significant part of our energy mix for decades to come. This very evening, about 50% of our power is generated from gas. We already use roughly 10% fewer hydrocarbons than the global average consumption by country, and make no use of coal, which remains a substantial contributor to energy consumption worldwide.

Domestically, we already face some of the highest electricity costs in the G7, placing a heavy burden on households, business and industry alike. There is every indication that these pressures will intensify. The latest round of offshore wind licences has been awarded at a strike price of about £90 per megawatt—almost twice that of AR6—and yet the Climate Change Committee suggests that there needs to be a sixfold increase in offshore wind, a doubling of onshore wind and quadrupling of solar power. I wonder what the next round of auctions will actually cost. This is without mentioning the necessary grid expansion required to cope with the transmission of this power to the end-user, which my noble friend Lord Redwood mentioned. The CCC also suggests further enormous demands on the heavily troubled agricultural sector, as has already been noted.

Carbon dioxide emissions may fall sharply under this framework, but at what economic price, and who pays? We are already seeing signs of industrial migration. Companies are reconsidering their presence here, with some relocating production overseas. The implications for jobs, investment and the long-term resilience of our industrial base are deeply concerning. One must ask how long heavy industry can be sustained under such conditions.

I would also hate to disappoint the noble Lord, Lord Hunt of Kings Heath, but the situation in the North Sea provides a cautionary illustration. Our offshore sector, developed over many decades, supports not only oil and gas but also technologies of the future: carbon capture and storage, hydrogen and offshore electrification. These capabilities are deeply interconnected. They depend on a skilled workforce, a resilient supply chain and an active industrial base, as we saw from the electorate in Aberdeen South. That system cannot be maintained or scaled if the investment environment becomes unstable or uncompetitive and the resources left unexploited. The sanctioning of Jackdaw, Rosebank and renewed drilling would assist this immeasurably, as opposed to relying ever more on more polluting imports.

As to the means of achieving these targets, much rests on technologies that are not yet proven at scale. Renewable energy, as suggested by the CCC, will play a vital role, but alone it cannot meet the demands of electricity, heating and transport. Nuclear capacity takes time to deliver, while large-scale carbon capture, hydrogen and long-term storage remain in development. To anchor binding commitments upon their rapid deployment is, I fear, a considerable gamble.

We have often reflected in this noble House on the United Kingdom’s relatively small share of global emissions: 0.8% of world emissions. The top three emitters account for over 50%. There is a real danger that, in acting unilaterally, we merely displace emissions abroad while inflicting further disproportionate harm on our economy. That would serve neither our national interest nor the global emissions cause.