The green economy

The green economy usually refers to economic activities or industries that protect or restore the environment, help mitigate or adapt to climate change, or support a transition away from fossil fuels or towards renewable sources of energy and materials.

However, it can be difficult to analyse the green economy using standard economic data. One of the main challenges is how it is defined.

Many datasets focus on activities that are directly or exclusively “green”, but this can miss a wider group of jobs and businesses that contribute in part. For example, an energy company may produce both renewable and fossil fuel energy, or a manufacturer may supply components used in renewable technologies without operating solely in the green sector.

While official statistics classify businesses by economic activity using a set of Standard Industrial Classification (SIC) codes, there is no code or set of codes that fully captures all green activities.

Data on the green economy

The main source of data on the green economy is the Office for National Statistics (ONS), in particular the Low Carbon and Renewable Energy Economy (LCREE) survey and their wider green jobs estimates. This data provides information on turnover and employment, but it does not include a direct measure of economic output, such as gross value added (GVA).

Jobs Green jobs

The ONS estimates that there were 652,100 green jobs in 2024. This is equivalent to around 2% of all UK jobs.

The ONS defines a green job as employment in an activity that contributes to protecting or restoring the environment, including those that mitigate or adapt to climate change.

The green jobs figure is based on several data sources. These include the LCREE survey, the environmental goods and services sector dataset, and the employees in Great Britain by industry bulletin and accompanying datasets.

LCREE jobs

The ONS estimates that there were 304,000 LCREE jobs in 2024. This is equivalent to around 1% of all UK jobs.

The ONS define LCREE as economic activities that deliver goods and services that are likely to help the UK generate lower emissions of greenhouse gases.

The table below shows the estimated number of LCREE jobs.

Source: ONS, Low carbon and renewable energy economy, 2024
Note: The percentages are calculated by dividing LCREE full-time equivalent (FTE) employment by data on total jobs from the ONS. The measures are not directly comparable.

Businesses

There were 118,000 LCREE business in 2024, equivalent to around 4% of all jobs.

The table below shows the estimated number of LCREE businesses by countries in the UK.

Source: ONS, Low carbon and renewable energy economy, 2024

The government’s industrial strategy and clean energy industries sector plan

‘Clean energy industries’ is one of eight priority growth sectors in the government’s 2025 industrial strategy, which sets out a 10-year plan to increase investment, improve productivity and strengthen economic resilience in the UK. As part of strategy, each sector has a dedicated plan.

Further detail is available in the Library briefing on the UK industrial strategy.

Clean energy sector plan

The clean energy industries sector plan has policies to improve existing systems and to support the development of newer industries. It focuses on clean energy industries where the UK is seen to have the strongest growth potential, such as wind power.

Building on existing strengths

Overall, the government aims to build on the UK’s existing strengths to accelerate growth in the clean energy industries.

This includes making the most of the UK’s position as a coastal country by continuing to invest in offshore wind, as well as supporting further growth in onshore wind now that previous restrictions have been lifted.

There is also a focus on maintaining the UK’s role in nuclear energy through new projects and using digital technology to improve how the electricity system works, making it more flexible, reliable and cost effective.

The plans also draw on existing skills and industries. This includes using the experience of workers in the oil and gas sector to support newer areas such as carbon capture and hydrogen, particularly in industrial areas.

There is also an aim to expand the production and installation of heat pumps, building on existing expertise in heating, and to improve electricity network supply chains so clean energy projects can connect to the grid more quickly.

Other technologies such as solar, bioenergy and energy storage remain important but are not the main priority within this plan.

Private investment

The government expects investment in clean energy industries to increase, with a target of at least doubling current levels to more than £30 billion a year by 2035. Plans to decarbonise the power system by 2030 are also expected to attract around £10 billion a year in private investment into electricity networks, particularly transmission infrastructure, which refers to the systems that carry electricity over long distances from where it is generated to where it is used.

To encourage this, the government aims to provide more certainty for investors by setting out long term plans for key technologies and updating regulations. It also plans to reduce barriers to investment by lowering electricity costs for some industries, making changes to the planning system to speed up decisions, and improving infrastructure such as the electricity grid, ports and transport networks.

Public funding

The government also plans to use public funding to support growth in the sector and attract further investment. This includes a £1 billion Clean Energy Supply Chain Fund, as well as support through the National Wealth Fund and the British Business Bank.

The government has also launched a clean energy map, which highlights active clean energy projects supported since July 2024.

Jobs and skills

The plan also highlights the importance of skills and workforce development. The clean energy jobs plan aims to support the creation of high-quality jobs, with fair pay and good working conditions, alongside trade union engagement.