How the UK's Net Zero Economy Reached Over £100bn in Value

The shift towards net zero is driving a significant economic transformation that is reshaping energy production, industrial operations and investment priorities across the UK.

According to The Race for Net Zero: The UK Net Zero Economy and the Transition to a Competitive Future by the Energy & Climate Intelligence Unit, the net zero economy now contributes approximately £105bn (US$141bn) in Gross Value Added and supports more than one million jobs across the country.

The report highlights that net zero activity is embedded throughout energy, manufacturing, construction, infrastructure and professional services, demonstrating that sustainability could increasingly become central to the UK's long-term competitiveness, productivity and regional growth.

Economic impact of net zero

The report suggests that sustainability and net zero are becoming defining features of the UK's future economy.

The net zero economy supports approximately 1.1 million full-time equivalent jobs, with employees generating around £119,300 (US$160,550) in economic value per worker, 48% above the UK average.

These higher-productivity roles span engineering, renewable energy, manufacturing, consultancy, finance, infrastructure delivery and environmental services.

According to the report, wages within the net zero economy are on average 11% higher than the national average, highlighting the growing importance of green jobs in supporting economic prosperity.

Developing the workforce needed to deliver the transition requires continued investment into green skills, closing the green skills gap.

The report also emphasises the need for execution, supply chain development and the capacity to deliver large-scale infrastructure projects.

As countries compete globally for clean energy investment, access to skilled workers and technical expertise could become increasingly important.

"British scientists first distilled the concept of net zero – simply put, you need to stop adding more emissions to the atmosphere than are sucked back out, otherwise temperatures won't stabilise; you have to stop adding to the problem or you won't stop climate change," says Pete Chalkley, Director, Energy and Climate Intelligence Unit, in the report.

"This British science, that scientific fact, has spawned a global race to cut emissions.

"When countries and US States committed to net zero are combined, 84% of global GDP is covered.

"2025 will mark five years since the Glasgow COP climate conference when the UK helped kick-start the global drive to net zero.

"Now more than 1,200 of the world's largest 2,000 companies have a net zero commitment."

Beyond economic benefits, the report also links the net zero transition directly to addressing climate change, highlighting that achieving net zero emissions could be necessary to stabilise global temperatures and reduce climate-related risks.

The UK's progress towards net zero has already contributed to lower emissions, increased energy independence and the growth of new industries.

As the report states, the transition could offer an opportunity to support sustainable growth, strengthen competitiveness and create economic opportunities across every region of the UK.

Manufacturing and supply chain opportunities

One of the report's most significant findings is the strength of the net zero economy's supply chains.

For every £1 (US$1.35) generated directly by net zero businesses, an additional £1.85 (US$2.49) is created throughout the wider economy, demonstrating extensive linkages between industries.

According to the report, £51.2bn (US$68.9bn) of the sector's total economic contribution comes through supply chain activity, supporting more than 520,000 jobs across the UK.

This highlights the importance of manufacturers, engineering firms, technology providers and specialist service companies in supporting the transition.

Manufacturing is particularly important in industrial regions such as the Midlands, Yorkshire and the Humber and Wales.

The Birmingham-Coventry Corridor has emerged as a significant centre for low-carbon propulsion systems and battery innovation, supported by facilities such as the UK Battery Industrialisation Centre.

Meanwhile, projects such as the Agratas gigafactory in Somerset could strengthen domestic battery production and create thousands of jobs.

"The domestic and international political landscape has shifted significantly since we last partnered with the Energy & Climate Intelligence Unit to assess the contributions of the net zero economy," says Louise Hellem Chief Economist, Confederation of British Industry, in the report.

"But while the politics may have evolved, the economic story has remained consistent and is now stronger than ever.

"The UK's net zero economy is now a major part of the national industrial base.

"It supports more than a million jobs and generates more than £100bn in economic value, with activity embedded across energy, manufacturing, construction and high-value services."

The report emphasises that strong domestic supply chains could improve resilience, reduce delivery risks and allow the UK to capture a greater share of the economic value generated by global clean energy investment.

With more than 96% of net zero firms classified as SMEs, smaller businesses are also playing a critical role in driving innovation, supporting local economies and expanding manufacturing capacity.

Infrastructure and energy development

The report demonstrates that construction and infrastructure development are fundamental to delivering the UK's net zero ambitions.

Net zero activity extends beyond renewable energy generation, supporting major investments in industrial decarbonisation, energy infrastructure and building technologies.

Construction-related sectors play a significant role in developing renewable energy projects, transmission networks, battery storage facilities and low-carbon industrial sites.

According to the report, there is a £455bn (US$612bn) renewable energy infrastructure pipeline across 262 GW of capacity, requiring extensive construction activity throughout the UK.

This substantial pipeline includes approximately 130 GW of battery storage capacity, 48 GW of offshore wind, 45 GW of solar photovoltaics and 23 GW of onshore wind, demonstrating the scale and diversity of planned renewable energy infrastructure across the country.

The report states that Hinkley Point C in Somerset will provide 3.2 GW of low-carbon electricity for up to 60 years, while large-scale pumped storage hydroelectric projects such as Glen Earrach and Coire Glas in Scotland require multi-billion-pound investments.

Beyond Hinkley Point C, nuclear projects such as Sizewell C represent further significant investments in low-carbon baseload electricity generation, contributing to the UK's energy security and emissions reduction targets.

The report also notes significant battery energy storage developments in Yorkshire, North Scotland and Aberdeenshire, alongside hydrogen infrastructure projects that support industrial decarbonisation.

Electricity transmission infrastructure is receiving substantial investment, with approximately £56bn allocated to upgrading and expanding the grid network to accommodate increased renewable generation capacity and support the electrification of transport and heating.

This investment in transmission infrastructure is essential for connecting new renewable energy projects to demand centres and ensuring grid stability as the energy system transitions away from fossil fuels.

Energy drives investment

Energy remains at the heart of the UK's net zero economy and is one of the largest drivers of investment and economic activity identified in the report.

Renewable energy generation represents the largest net zero sub-sector, comprising more than 8,000 businesses across the UK.

The report states that the transition towards domestically generated, low-carbon energy is increasingly viewed not only as an environmental objective but also as a means of improving energy security and reducing exposure to international fossil fuel market volatility.

By developing substantial domestic renewable energy capacity and supporting infrastructure, the UK aims to reduce its reliance on imported fossil fuels, which have been subject to significant price fluctuations and supply disruptions in recent years.

This enhanced energy security represents a strategic economic benefit alongside the environmental advantages of reduced emissions, providing greater stability for businesses and households while supporting the UK's climate commitments.