The Net Zero Losers and Winners
Understanding the Economic Impact of UK Net Zero Policies
The UK's ambitious commitment to reach net zero emissions by 2050 is reshaping the British economy. But who really benefits financially from these sweeping changes, and who bears the costs? This analysis breaks down the economic winners and losers in the UK's transition to a low-carbon economy.
Winners
EV Manufacturers (Arrival, JLR)
Offshore Wind Developers (Ørsted, SSE)
Solar Energy Companies (Octopus)
London-based ESG Funds
How They Benefit
- Contracts for Difference (CfD) schemes
- Green Investment tax reliefs
- Regulatory advantages from UK Net Zero Strategy
- Renewable Obligation Certificates (ROCs)
- Premium pricing on "green" products
Losers
UK Farmers
UK Households
Commuters & Motorists
Small British Businesses
How They Pay
- Higher energy levies on bills
- ULEZ and Clean Air Zone charges
- UK ETS (Emissions Trading Scheme) costs
- Increased council tax for green initiatives
- Gas boiler replacement costs
The Numbers: UK Profits vs. Costs
Green Industry Growth in the UK (FY 2021-2023)
| Industry Sector | Revenue Growth (YoY) | Government Support (£) | Market Growth (CAGR) | Return on Investment |
|---|---|---|---|---|
| Electric Vehicles | +87% | £1.37B | +124% | 3.21x |
| Offshore Wind | +58% | £3.24B | +72% | 2.83x |
| Heat Pumps | +46% | £0.92B | +39% | 1.66x |
| Carbon Trading | +113% | £0.78B | +95% | 4.37x |
| Smart Grid Technology | +76% | £1.15B | +67% | 2.94x |
Source: Department for Energy Security and Net Zero (DESNZ), Q4 2023 Report
Government support comes primarily through the UK's Clean Growth Strategy, which has committed over £2.5 billion to low carbon innovation from 2015 to 2021. The data presented reflects the most recent fiscal year with independently verified figures from the Office for National Statistics. Return on Investment is calculated as revenue generated per pound of government investment over a 3-year period. CAGR (Compound Annual Growth Rate) represents the annualized market growth rate for each sector.
UK Household Cost Increases (2018-2023)
| Expense Category | 5-Year Increase (%) | Annual Cost (2023) | Annual Increase (£) | Trend Analysis |
|---|---|---|---|---|
| Home Energy Bills | +54.2% | £1,853 | +£651 | Accelerating |
| Motoring Costs | +33.7% | £2,978 | +£750 | Sustained |
| Food & Groceries | +23.5% | £6,243 | +£1,187 | Accelerating |
| Home Heating Upgrades | +67.8% | £8,290 | +£3,347 | Critical |
| Transport/Commuting | +42.3% | £3,647 | +£1,083 | Accelerating |
Source: Office for National Statistics (ONS), UK Household Costs Index, December 2023
Extended Green Industry Sectors Analysis (2020-2023)
| Industry Sector | Revenue Growth (YoY) | Jobs Created | Key Companies | Primary Support Mechanism | Policy Origin |
|---|---|---|---|---|---|
| Tidal Energy | +32.4% | 1,853 | Orbital Marine, Nova Innovation | Innovation Grants (£0.42B) | Energy Act 2023 |
| Battery Storage | +142.7% | 4,276 | Zenobe Energy, Gresham House | Capacity Market (£1.17B) | Net Zero Strategy |
| Carbon Capture | +91.3% | 2,184 | Drax, Carbon Clean | Industrial Decarbonisation Fund (£0.86B) | CCUS Cluster Sequencing |
| Green Hydrogen | +167.5% | 1,342 | ITM Power, Ceres Power | Hydrogen Strategy Funding (£0.75B) | UK Hydrogen Strategy |
| Insulation & Retrofitting | +43.8% | 12,657 | Kingspan, SIG | Energy Company Obligation (£1.34B) | ECO4 Legislation |
| Smart Grid Technology | +76.2% | 3,825 | Siemens UK, Schneider Electric | Smart Systems & Flexibility Plan (£0.93B) | Smart Meters Act |
| Sustainable Aviation Fuels | +28.6% | 723 | Velocys, LanzaTech | Jet Zero Strategy (£0.53B) | Transport Decarbonisation Plan |
| Green Fintech | +118.3% | 5,247 | Clim8 Invest, Ecology Building Society | Green Finance Strategy (£0.62B) | FCA ESG Disclosure Rules |
Source: Climate Change Committee (CCC), Annual Progress Report; UK Green Building Council, 2023
UK Businesses Most Impacted by Net Zero
While green industries benefit from the transition to net zero, many traditional sectors of the British economy face substantial challenges. These businesses are grappling with increased regulatory costs, higher energy prices, and significant capital expenditure requirements to meet new environmental standards.
Steel Industry
British steel producers face significantly higher energy costs than EU competitors, with the UK industry paying up to 61% more for electricity. Tata Steel UK and British Steel have both announced potential plant closures, citing net zero transition costs as a primary factor. Port Talbot works faces a £1.25B investment requirement for electric arc furnaces.
Source: UK Steel (Industry Trade Body), Annual UK Steel Statistical Review, Q1 2023; Make UK Manufacturing Outlook Report
Fishing Industry
Coastal fishing communities face existential threats from net zero maritime regulations requiring expensive vessel upgrades. Most small-scale operators (62% of the UK fleet) lack capital for compliance. The Marine Management Organisation has identified 27 ports where fishing activity has declined by over 40% since 2019.
Source: Marine Management Organisation, UK Sea Fisheries Annual Statistics Report 2023; National Federation of Fishermen's Organisations (NFFO)
Hospitality Sector
UK pubs, restaurants, and hotels are struggling with the double impact of rising energy costs and requirements to replace gas cooking equipment with electric alternatives. The requirement for EPC rating C by 2027 affects 76% of hospitality venues, many in historic buildings where insulation upgrades are prohibitively expensive or restricted by heritage protections.
Source: UK Hospitality, Quarterly Tracker Report Q4 2023; CGA by NIQ Market Recovery Report
Ceramics Industry
The traditional Stoke-on-Trent pottery industry faces existential challenges as kiln firing requires temperatures of 1200-1400°C that are difficult and costly to achieve with electric power. Foreign competitors without strict emissions controls gain significant market advantage, with UK manufacturers citing a 37% cost disadvantage versus non-EU imports.
Source: British Ceramic Confederation, UK Ceramics Industry Market Report 2023; UK Trade Policy Observatory
Road Haulage
Small and medium-sized UK haulage companies face substantial costs as diesel HGVs are phased out by 2040. A typical electric HGV costs £250,000-£320,000 versus £90,000-£120,000 for diesel equivalents, with infrastructure costs adding £45,000-£75,000 per vehicle. Limited range remains problematic for long-haul operations.
Source: Road Haulage Association, Annual Transport Industry Report 2023; Logistics UK
Construction Industry
New building standards require substantial investment in both skills and equipment from construction companies. SMEs report struggling with the Future Homes Standard compliance costs. Low-carbon concrete costs 25-33% more than traditional mixes, while embodied carbon calculations add significant complexity to project planning.
Source: Construction Industry Training Board, Net Zero Construction Skills Report; Federation of Master Builders SME Survey 2023
Data compilation: UK Net Zero Business Impact Assessment 2023, conducted by Oxford Economics and Make UK
