The future is green: The economic opportunities brought by the UK’s net zero economy
The net zero economy has become a significant driver of growth and innovation in the UK, achieving remarkable growth over recent years.
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The UK’s net zero economy
Between 2023 and 2024, the sector grew 10.1% and now generates £83.1 billion in Gross Value Added (GVA), with £28.8 billion directly from net zero businesses and £54.3 billion from supply chain activities and broader economic contributions.
This robust performance underscores the sector's multiplier effect, with every £1 of value generated by the net zero economy creating an additional £1.89 in the wider economy.
Every £1 of value generated by the net zero economy creating an additional £1.89 in the wider economy: new report from @CBI_Economics + @ECIU_UK https://bit.ly/3ELZmmM
The net zero economy is fostering transformative opportunities across the UK, with local hotspots driving both regional and national progress toward sustainable economic growth. By leveraging natural resources and industrial strengths, regions such as coastal areas for offshore wind farms and resource-rich zones for renewable energy production are creating thriving hubs of innovation. The West Midlands, Yorkshire & the Humber and the South East of England each host significant hotspots of net zero activity which together contribute 16.3% or £4.7bn to the UK’s net zero economy.
The impact of this growth is evident: the net zero economy is advancing environmental goals while also generating significant economic and social benefits throughout the UK. With its impressive productivity, substantial investments, and continuous innovation, the sector plays a crucial role in the UK's journey towards a sustainable future, fostering ongoing prosperity and resilience across all regions.
Key Findings:
The West Midlands, Yorkshire & the Humberside, and South West England are the largest contributors to the UK’s net zero economy, each accounting for 5.5%, 5.4%, and 5.4% of the national total, respectively.
The Tyne and Teesside hotspot stands out with the £1 billion EV36Zero project, integrating electric vehicle production, renewable energy, and a gigafactory for next-gen EV batteries, creating 6,200 jobs.
Nuclear power stations such as Hinkley point C and Sizewell C are likely to increase net zero activity in South West England and East Anglia.
The Yorkshire and Humberside hotspot, hosting 2,161 net zero businesses, attracted £700 million in private investment in 2024 and includes significant companies like Siemens Gamesa, which installed over 2 GW of offshore wind capacity.
As of December 2024, the UK had 22,800 net zero businesses. Of all 22,800 net zero businesses, 3,850 had seen growth of over 10% in the past year. There were 15,600 UK net zero businesses identified as employers (reporting at least one employee). The remaining 7,200 companies had zero reported employees; these could be sole traders, holding companies, or companies that are yet to report their employment figures. Of the 15,600 employers identified within the net zero economy, 94% were SMEs with fewer than 250 employees, while 6% were large employers with over 250 reported employees.
As part of the definition of the net zero economy, businesses can be part of 16 sub-sectors that together form the net zero economy. The renewable energy planning database has remained the largest component of the net zero economy, with 10,625 businesses active in this sector. These are companies that are captured in (or similar to) the Renewable Energy Planning Database (REPD). The REPD tracks the progress of UK renewable electricity projects over 150kW and includes companies that have applied for permission or are currently operating a renewable energy site generating over 150kW. Renewables and Waste Management and Recycling were the next largest sub-sectors, with 7,138 companies and 5,428 companies, respectively.
When considering the value supported across the wider economy, the contributions rose to account for 3.3% of the UK economy in 2024. At a total contribution of £83.1 billion, the net zero economy is 16% larger than the regional economy of the North East. These figures also show that for every £1 in economic value generated by net zero businesses, a further £1.89 is generated throughout the wider economy.
When including these wider contributions, the sector’s employment contributions also rise to 951,000 FTE jobs, which accounts for 2.9% of total UK employment and supports nearly as many jobs as directly employed by the financial and insurance services sector (just over 1 million FTEs) sector and more than double the number of people employed by the food and drink manufacturing sector (470,450 FTEs). These figures mean that for every job supported by net zero businesses, a further 2.5 jobs are supported in the wider economy.
