UK's low carbon economy now generates over £120bn-a-year

by Search Gate staff. Published Wed 25 Mar 2016 21:08, Last updated: 2016-03-25
UK's low carbon industry now valued more than aerospace and pharmaceutical sectors
UK's low carbon industry now valued more than aerospace and pharmaceutical sectors

The UK’s booming low carbon sector has raced ahead of the aerospace and pharmaceutical industries to now be worth over £120 billion to the nation’s economy.

According to a new report published by the Department for Business, Innovation and Skills, the low carbon economy is now made up of 11,550 businesses, directly employing nearly 270,000 people and responsible for a further 190,000 jobs in the supply chain.

The analysis, compiled by leading economic research consultancy TBR, provides a more focused and transparent assessment of the size and performance of the low carbon economy than any previous research has achieved.

The study focuses only on economic activity that relates to low carbon products and services.

It found the UK’s low carbon economy generated £70.8bn in turnover in 2013 for those businesses operating directly in the sector, which grows to £121.7bn when the supply chain is included.

The direct low carbon economy generated £26.2bn in GVA in 2013, which suggests it is about five times larger than aerospace, two and a half times the size of pharmaceuticals, almost twice as big as chemicals and approximately equivalent to food and drink in GVA terms. GVA generated by the low carbon sector increases to £44.9bn when the supply chain is included.

Other highlights of today's in-depth 99-page report include:

* Businesses operating in the low carbon economy tend to participate in more than one low carbon sector. On average, each business operates in about two sectors out of the 24 within the low carbon economy

* The low carbon economy has shown significant, year on year, growth over the period 2010 to 2013: employment 3.8%, turnover 7.6% and GVA 8.7%.

* Waste processing, energy from waste and biomass is the largest of the sector groupings across all measures. It is represented by 4,230 firms (37%) and with its supply chain, accounts for 146,900 employees (32%). It generates turnover to the value of £54.6bn (45%) and GVA of £21.9bn (49%).

The report split the low carbon economy into six groups to include low carbon electricity, low carbon heat, energy efficiency products, low carbon services, waste processing, energy from waste and biomass and low emission vehicles.

The report revealed strengths around the regions as the North West has, by far, the largest involvement in electricity generation reflecting the presence of nuclear (generation, decommissioning and fuel re-processing.

The concentration of manufacturing in the West Midlands is reflected by the area’s strengths in low emission vehicles and energy efficiency products. The South East also scores highly as a result of vehicle production.

London show strengths in services as well as waste and biomass, the latter possibly being a reflection of headquarters’ activities.

The second highest concentration of activity relating to low carbon electricity is in the South West. This is due to the number of nuclear power stations (operating, in decommissioning and planned) within the region.

Michael Rea, Chief Operating Officer at the Carbon Trust, said: “This report demonstrates that the low carbon economy is a reality and that innovation in areas such as offshore wind and the greater deployment of cost effective technologies such as energy efficiency have contributed to this UK success story.

"The analysis shows that the low carbon economy is experiencing strong year on year growth from both an employment and economic perspective and gives a clear signal that the UK is reaping significant rewards from our successful development and support of low carbon technologies.

"However, we must not take our foot off the pedal as there is a huge untapped potential across a range of technologies from CSS to low carbon heat. We need to continue to prioritise and comprehensively back the technologies that offer the best chance of securing long term carbon savings and jobs at the lowest cost to the consumer.”

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