Decarbonisation in & beyond the Northern Growth Corridor

The net zero transition is often framed as a future ambition. New analysis from the Northern Powerhouse Partnership shows that it is already a significant and economically important part of the North of England’s economy, supporting jobs, productivity and investment today.

The work on decarbonisation in the North assesses the scale, structure and productivity of the net zero economy, drawing on company-level data from The Data City, alongside official employment and GVA statistics. Together, the findings show that net zero activity contributes a larger share of economic output in the North than it does nationally, underlining the region’s central role in delivering the UK’s energy transition.

Across the North as a whole, the net zero economy already supports around 140,000 jobs and generates more than £13 billion in gross value added (GVA), accounting for just over a fifth of Great Britain’s total net zero output. While net zero employment intensity in the North is broadly in line with the national average, the sector contributes a higher share of regional output, reflecting the region’s concentration of capital-intensive activity linked to energy generation, industrial decarbonisation and strategic infrastructure.

However, the analysis also shows that net zero activity is unevenly distributed across the region. In a relatively small number of places, clean energy and industrial decarbonisation already account for a substantial share of local employment and economic output. In others, net zero activity is present but plays a more marginal role within larger and more diversified economies. This uneven geography matters for growth strategy, because different parts of the North occupy different economic roles within the net zero economy, from large-scale energy assets and industrial decarbonisation to employment-intensive supply chains and services.

The North East: an embedded net zero economy

In the North East, net zero activity is already deeply embedded in the regional economy. Of all cities and towns in the North, Sunderland has the highest proportion of its economy driven by net zero-related activity, reflecting the scale of clean energy, advanced manufacturing and industrial decarbonisation underway in the region.

Baroness Elliott of Whitburn Bay, Chair of the Northern Powerhouse Partnership, said:

“Business is gearing up to make sure that the growth strategy for the North is as ambitious as the Chancellor has set out it will be. The highest priority, as shown previously by Northern Powerhouse Partnership and Durham University Business School, is innovation, which could add at least £72 billion within a decade.

In addition, the energy transition is already making a major economic impact, including in the North East where Sunderland has the highest proportion of its economy driven by net zero activity of any place in the North. If making the North a leader in the energy transition isn’t front and centre in growth strategy, how can we expect the National Wealth Fund or GB Energy to deploy more of their investment in the North if the Treasury hasn’t clearly instructed them to do so as the evidence shows they should.”

Cllr Michael Mordey, Leader of Sunderland City Council, said:

“To be crowned the net zero capital of the North is a reflection of the longstanding work of Sunderland City Council and all our partners.

From electric vehicle and battery production to retrofitting buildings to cut fuel costs, we have been creating jobs in Sunderland, not just reducing carbon emissions.

Reform is campaigning in local elections across the country, including here in the North East. I worry that if they’re elected they will introduce Trump-like climate change denial policies that will harm our local economy. We will only continue to attract these well-paid jobs if we keep a Labour council in Sunderland in May.”

Kim McGuinness, Mayor of the North East, said:

“This analysis makes one thing absolutely clear: the North East is not just part of the UK’s green energy future, we are leading it.

With unrivalled access to the North Sea, world-class innovation and a brilliant workforce, we’re already racing ahead with plans to double the number of green energy jobs in the North East.

I want kids across our region to know that green energy means a good job for them, and we’ll make sure they have the skills to get it.”

The Humber and the east coast energy system

The analysis highlights the Humber as one of the most economically significant net zero economies in the North. Net zero activity in the Humber accounts for around 4–5 per cent of total economic output, well above the national average, reflecting the concentration of energy generation, industrial decarbonisation, ports and strategic infrastructure along the east coast.

Andrew McPhillips, Chief Economist at the Northern Powerhouse Partnership, said:

“The data shows that net zero is already playing a significant role in parts of Yorkshire and Lincolnshire’s economy, particularly in the Humber where clean energy and industrial decarbonisation account for a much larger share of output than nationally. Far from being about speculative future growth, it reflects activity that is already economically embedded. The challenge now is ensuring that with proper coordination across the Humber, investment, infrastructure and skills keep pace so that these places can continue to deliver productivity and growth as the transition accelerates.”

Richard Gwilliam, Director at Drax, said:

“This report underlines that the net zero transition is already an important part of the North’s economy, supporting investment, productivity and high-value jobs. Large, capital-intensive energy assets play a critical role in regions like Yorkshire and the Humber, but realising their full economic potential depends on long-term certainty and coordinated investment. Getting this right can help anchor growth in the North while delivering the emissions reductions the UK needs.”

Zac Richardson, Offshore Delivery Director for National Grid, said:

“Electricity networks are playing a critical role in supporting growth across Yorkshire and the Humber, where energy-intensive industry and cleaner energy are central to the regional economy. Through the Great Grid Upgrade, National Grid is investing to increase network capacity and connect more clean power, including through major projects such as Eastern Green Link 2 and Yorkshire GREEN, while supporting jobs, skills and the UK supply chain needed to deliver this vital infrastructure.”

Across the Pennines: supply chains, services and delivery

Across the Pennines, spanning North and West Yorkshire and into the North West, net zero activity is embedded within larger and more diversified economies. While the sector represents a smaller share of output than in more energy-intensive regions, its scale and breadth make these areas central to delivery. Employment-intensive supply chains, manufacturing, construction, professional services and innovation across Greater Manchester, Merseyside, Lancashire and North Yorkshire underpin net zero investment across the North, supporting projects from industrial decarbonisation to renewable energy deployment.

Paul Swinney, Chief Economist at The Data City, said:

“Across the North there are a whole host of companies innovating to help the UK meet its net zero targets. Using our data, the Northern Powerhouse Partnership are able to show both the scale of this, and what this means for jobs and pay.

It is the performance of cutting-edge sectors like net zero that is so important if the North is going to become more prosperous, and our data and classifications now mean we can start to measure the impact of them on the northern and UK economy as a whole.”

Taken together, the findings reinforce a clear conclusion: net zero is already an economic reality for the North of England, not simply a future policy objective. But its benefits are unevenly distributed, and without a place-based approach to investment and delivery, the region risks under-realising the growth opportunity.

The report provides an evidence base to support more effective decision-making, aligning national frameworks with devolved leadership, local economic roles and long-term investment priorities as the net zero transition accelerates.

Read the full Decarbonisation in & beyond the Northern Growth Corridor report here: