Britain’s net zero sector is outpacing the overall economy, growing at three times the national rate, according to new analysis. The sector, which includes industries ranging from renewable energy to green finance, is not only driving down emissions but is also boosting high-wage jobs and enhancing the UK’s energy security.
In 2024, the net zero economy grew by 10%, contributing £83 billion in gross value added (GVA) — a metric that measures the value generated by companies through goods and services. This surge in growth is seen as a key driver of the UK’s transition to a low-carbon future.
The report, compiled by leading industry bodies, reveals that 22,000 businesses are now operating in the net zero space, employing nearly a million people in full-time roles. The average annual wage in the net zero sector stands at £43,000, which is £5,600 higher than the national average wage.
The findings highlight that economic growth and climate action can go hand in hand, leading to tangible benefits for both the environment and workers. This stands in contrast to recent claims made by critics of net zero policies, including figures from the Reform UK party, who argue that net zero is damaging to the economy. The government’s own stance has also shifted, with new Conservative leader Kemi Badenoch describing the net zero target as a “mistake,” despite the fact it was enshrined in law in 2019.
CBI Chief Economist Louise Hellem responded to these critiques, stating, “You can’t have growth without green. By 2025, the costs of inaction will far outweigh the costs of action.” She emphasized that energy security and emissions reductions are critical areas where the UK cannot afford to fall behind.
Energy Secretary Ed Miliband echoed these sentiments, saying, “Net zero is essential to growth, a strong economy, and improving the financial wellbeing of working people. Our ambition to make Britain a clean energy superpower is key to securing energy security and creating good jobs and investment for communities across the UK.”
The report, commissioned by a leading climate organization, examined sectors such as renewable energy, electric vehicles, heat pumps, energy storage, green finance, and recycling. Together, these businesses represent 1.1% of the UK’s total GVA, surpassing industries like farming and advertising. The net zero sector has expanded rapidly, with a 10% growth in 2024 following a 9% increase the year prior.
While the UK economy has faced criticism for its focus on London and the South-East, the net zero sector’s growth has been more evenly distributed. Key hubs of activity have been identified in the West Midlands, Yorkshire and Humber, and the South West of England, with net zero jobs in Scotland increasing by 20% since 2022. Moreover, the productivity of net zero jobs is 38% higher than the UK average, indicating the sector’s growing importance and economic contribution.
The report concluded, “The net zero economy is not only fostering environmental progress but is also creating widespread economic and social benefits throughout the UK.”
The rising energy costs caused by the conflict in Ukraine have underscored the need for energy security, and the push for more clean energy solutions is seen as vital to reducing future volatility in energy prices. Labour MP Luke Murphy, who chairs the all-party parliamentary group on climate change, warned against continuing to rely on fossil fuels, stating, “We don’t want to risk volatile energy bills or remain at the mercy of energy suppliers who can hike prices at will.”
Murphy also pointed out that the net zero transition in the UK is trailing behind other regions. In the European Union, the net zero sector is contributing 50% more to economic growth, while clean energy in China accounted for a record 10% of the country’s GDP in 2024.
As the UK looks ahead, the report stresses the need for continued investment and ambition to fully capitalize on the economic opportunities that the green transition presents. Failing to do so, it warns, could result in the country missing out on a vital and growing economic sector.
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