The United Kingdom is approaching a critical stage in its climate transition, as most of its 2030 energy goals are now slipping out of reach despite decades of steady progress. According to the Wood Mackenzie United Kingdom Energy Transition Outlook 2025, the country has cut emissions by half since 1990, but a significant gap remains between current progress and the government’s 2030 targets. The report shows that the UK must close a 12-percentage-point shortfall by 2030, requiring an additional £75 billion in accelerated investment over the next few years. Looking further ahead, low-carbon spending needs could reach between £1.5 trillion and £2.1 trillion by 2060. At the same time, a ban on new North Sea exploration has increased the UK’s reliance on imported oil and gas, while offshore wind deployment continues to lag 20% behind government plans.
Over the past 35 years, the UK has achieved major emissions reductions, cutting energy-related CO₂ from roughly 600 million tonnes per year in 1990 to about 294 Mtpa in 2025. This 51% drop set a strong foundation for the government’s next goal—reaching a 68% reduction by 2030 under its Nationally Determined Contribution. However, Wood Mackenzie’s projections suggest the UK will reach only 56% by 2030. The report attributes the slowdown to a shifting national focus: economic pressures, defence spending, and cost-of-living concerns are competing directly with climate policy for political and financial prioritization. While climate ambition is losing urgency, domestic low-carbon energy has become more strategically important for national security and economic independence, making the energy transition as much a geopolitical issue as an environmental one.
Much of the challenge is reflected in the power sector. Renewables now supply over half of the UK’s electricity, and wind and solar generation have more than doubled from 2015 to 2025. Coal has been completely phased out. However, the offshore wind market faced significant setbacks in 2025, with delays and cancellations creating at least a 20% gap between current capacity growth and 2030 goals. Recent reforms to the Contract for Difference (CfD) system show promise—Allocation Round 7 awarded a record 8.4 GW of capacity in 2025, and the UK signed an Investment Pact with eight neighbouring North Sea region countries that targets 15 GW of offshore wind annually from 2031 to 2040. This agreement aims to attract £850 billion (€1 trillion) in investment. However, long grid-connection queues and commercial limitations still pose substantial barriers.
Lindsey Entwistle, Principal Research Analyst at Wood Mackenzie, described the UK’s dilemma as a “critical paradox.” She explained that while the UK has achieved remarkable emissions reductions, the next phase will require faster renewable deployment—at the same time that the country must continue managing its ongoing dependence on oil and gas. She noted that CfD reforms have helped revive momentum in offshore wind, but the current shortfall against 2030 targets highlights how much execution risk remains. Strategies that worked in the past will no longer be enough.
Despite falling oil and gas demand—down 24% and 18% respectively by 2035—fossil fuels remain a central part of the UK’s energy landscape. Transport will still make up 72% of oil demand in 2035, while heating and agriculture will account for more than half of gas use. Even with clean energy progress, gas is set to generate 22% of the UK’s electricity in 2030 and 10% in 2035. The North Sea Future Plan, which bans new exploration and extends the Energy Profits Levy to 2030, accelerates the decline of domestic production. By 2035, oil output will fall to 79% of 2025 levels and gas output to just 40%.
Domestic production will cover only 47% of oil demand and 21% of gas demand, increasing the UK’s dependence on imports, particularly from the United States following the ban on Russian LNG. While the exploration ban supports the UK’s climate goals, it also introduces long-term vulnerabilities. Higher import reliance exposes the UK to volatile global markets and reduces its influence over regional energy security. The government will need to strengthen new industries and create skilled employment opportunities in regions tied to the oil and gas sector to maintain public support for a “just transition.”
Wood Mackenzie estimates that the UK will need £1.5-2.1 trillion in cumulative low-carbon investment between 2025 and 2060. More than 60% of this will go toward clean power generation and grid upgrades across all scenarios, from delayed transition pathways to a full net-zero trajectory. Between 2026 and 2030 alone, the UK needs an extra £75 billion to close the gap between current progress and its stated climate pledges. Offshore wind and low-carbon electricity will require most of this additional investment, while sustainable fuels, carbon capture, and modern grid and charging infrastructure will also require significant funding.
Technology priorities are shifting as new solutions begin to take shape. The government has selected Rolls-Royce to develop a small modular reactor pilot, with first power expected in the early 2040s. An AI Growth Zone is also planned to colocate data centres with SMRs, although data centre electricity consumption is expected to remain below 2% of total UK demand by 2030. Nuclear capacity is projected to reach 10.5 GW by 2050, far below the government’s 24 GW target.
Carbon capture and storage is expected to grow, with point-source capture reaching 6 Mtpa by 2030 and expanding to 37 Mtpa by 2050. Much of this will come from power generation and blue hydrogen production. The introduction of a Carbon Border Adjustment Mechanism in 2027 may help encourage domestic carbon capture adoption while addressing competitiveness issues for industries facing imported goods. Low-carbon hydrogen continues to face commercial challenges. Several major projects were cancelled in 2024–2025 as companies shifted their focus back to conventional fuels. Deployment is now concentrating on hard-to-abate sectors such as heavy industry and power where alternatives are still limited.
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