South West and West Midlands could be biggest beneficiaries from rapid transition to Net Zero

An ambitious path to net zero could have large benefits in those areas and communities of the country that are most in need of an economic boost, according to a new report.

Community Capital is the latest report in Energy UK’s Clean Growth Gap series, produced in partnership with Oxford Economics.

The report looks at how different regions of the UK could benefit from the energy transition by building on existing strengths in industry and manufacturing, as well as leveraging geographic advantages.

For example, Oxford Economics’ modelling shows that the South-West and West Midlands – both areas that currently have a Gross Domestic Product (GDP) per head below the national average – could be the biggest beneficiaries from the most rapid transition to Net Zero, thanks to the specialism of their manufacturing sectors. Under the most ambitious scenario, the GDP of each area of the UK would be 5.4 per cent -7.5 per cent greater in 2050 than under the current trajectory – which would amount to a boost of £141 billion for regions outside London and the South-East, the report says.

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Areas with concentrations of carbon-intensive industries and proximity to depleted oil and gas fields, such as the North-East of England and Scotland as well as South Wales, are well placed to lead the way in carbon capture and hydrogen projects.  

The West Midlands could build on existing strengths in car manufacturing to produce electric vehicles (EVs) and related battery technology while Tata is set to build a battery plant in Somerset. Cornwall could in turn benefit from supplying lithium, a vital element in low-carbon vehicle production.             

Dhara Vyas, Energy UK’s Deputy Chief Executive said: “We’ve already seen how investment in clean energy can bring economic growth to areas away from London and the South-East. Those benefits can reach all corners of the country if we commit fully to the energy transition – especially areas whose traditional industrial and manufacturing bases have declined but also make them well-equipped to lead the way in this next clean industrial revolution.

“Previous reports in this series have shown how an ambitious approach to Net Zero will benefit the whole country and importantly, those areas which could gain the most are the ones most in need of the economic boost. 

“It again underlines why our country is best served by wholeheartedly seizing the opportunities that the transition to Net Zero offers and making it the focus of our efforts to deliver economic growth, job opportunities and greater prosperity over the coming years and decades.”