[EMBARGOED] The Welsh Net Zero Economy in 2025
Scale and industrial transformation
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Wales enters the net zero transition with a distinctive economic profile. Compared to many parts of the UK, the Welsh economy retains a relatively strong industrial base, with deep capabilities in energy generation, environmental infrastructure, advanced manufacturing, engineering and port activity.
Net zero activity is already a significant and high-value component of the Welsh economy.
It contributes a total £4.0 billion in gross value added (GVA), equivalent to 4.3% of total Welsh economic output, and supports over 41,300 full-time equivalent (FTE) jobs, representing around 3.1% of Welsh employment across all channels of impact.
Productivity within net zero companies stands at £117,500 per worker, approximately 72% above the Welsh average, underlining the technical intensity and high value-added nature of this activity.
Wales’s net zero economy is underpinned by a commercially active business base of approximately 1,342 employers, of which 87% are small or medium-sized enterprises (SMEs). This includes around 53% micro-enterprises, 22% small firms and 12% medium-sized businesses. The dominance of SMEs highlights that net zero activity in Wales is not concentrated among a handful of large infrastructure developers but is instead embedded across a wide base of independent firms.
Net zero activity in Wales is strongly concentrated in infrastructure-intensive and industrial sectors. Electricity generation form the largest direct contributor, supported by substantial activity in waste and water services, construction, engineering and manufacturing supply chains.
This sectoral profile reflects Wales’ established strengths in energy generation, heavy industry and port infrastructure. Indirect and induced impacts extend into professional services, wholesale trade and financial services, demonstrating how industrial decarbonisation and energy investment diffuse value across the wider economy.
Wales plays a central role in the UK’s future net zero infrastructure build-out. The country has an estimated £13.1 billion renewable energy generation infrastructure pipeline, representing 10.9 GW of capacity and approximately 4.0% of the UK’s total GW pipeline. Nearly half of this capacity sits within the active development pipeline, with over £1.3 billion already under construction.
Large-scale offshore wind, grid and storage projects underpin this forward-looking opportunity, positioning Wales as a strategically important geography in the UK’s energy transition and presenting a defining opportunity to anchor supply chains, particularly in coastal and industrial communities.
At a local level, net zero activity is embedded across Welsh authorities, with several areas recording particularly high shares of local economic output and employment. The scale of local exposure is closely tied to the presence of energy assets, industrial capability and supply chain depth:
