New report highlights Midlands net zero economy strengths

New research showcases Midlands strengths in the net zero economy with 3 of the UK’s 20 net zero economy hotspots and the sector 1.3x more productive than other regions.

The report – Mapping the Net Zero Economy – published by the Energy & Climate Intelligence Unit, measures the scale of the UK’s net zero economy and its geographic highlights. It finds that the UK’s net zero economy boasts almost 20,000 companies across the country contributing £71bn (3.7%) GVA to the national economy.

The net zero economy provides 840,000 jobs with an average wage of £42,600 (nearly 30% higher than the national average) – this is higher than other industries like manufacturing and construction. Investment into the net zero economy is also increasing tremendously with venture funding growing at a constant annual growth rate of 30%+ between 2016 and 2021.

The net zero economy is also highly connected to the wider UK supply chain, leading to a multiplier effect across the economy as goods and services are purchased from other industries. This supply chain contribution represents £29.5bn in GVA, contributing 1.5% to the UK economy.

The Midlands net zero economy profile boasts several strengths:

• GVA per employee of £148,400 (compared to the £112,300 net zero economy national average). This is also 2.5x more productive than the Midlands’ average sector GVA
• The Energy sectors drives over 20% of the Midlands net zero economy GVA. This is followed by Manufacturing (12%), Construction (10%), and Water and Waste Management (10%). One of the contributors to this high productivity is the strong presence of the energy sector which is highly capital-intensive.
• 3 of 20 UK net zero economy hotspots:
  • Leicestershire & Warwickshire – the sector here contributes £1.02bn GVA and comes top in the country in terms of % of area GVA from net zero economy (7%). Waste management and the recycling sub-sector is most dominant within this location’s net zero economy.
  • South Yorkshire & North Derbyshire – this location (which includes substantial parts of Nottinghamshire too) has a net zero economy contributing £1.25bn in GVA, representing 5.9% of the location’s economy (4^th highest location share in the UK). The renewables sub-sector is particularly prominent here.
  • The Humber – contributing £0.5bn in GVA, the net zero economy represents 4.1% of the location’s economy. The Humber Industrial Cluster aims to become the world’s first net zero industrial cluster by 2040 with a decarbonisation programme including scaling offshore wind farms, carbon capture and storage (CCS) and green hydrogen production.

Scotland, Wales and the Northern Powerhouse also demonstrate net zero economy strengths, highlighting the important link between green growth and the levelling up agenda.

Indeed, the economic impacts of the net zero economy are stronger within each of the regional economies and outperform London, where only 3.1% of its economy is made up by the net zero economy.