The UK enjoys a competitive advantage in a third of green products and services, positioning itself ahead in the global race to achieve net zero, according to a new report by the Institute for Public Policy Research (IPPR), a progressive thinktank.

Despite experiencing four decades of industrial decline, the IPPR highlighted that UK firms are well-placed to manufacture essential green products, such as electric trains and heat pump components. The UK excels in producing products and components used for monitoring, measuring, and analysing industrial processes critical for decarbonising the economy, including the electricity grid and renewable energy generation.

To further expand its green manufacturing capabilities, the IPPR suggests that the UK government must create mechanisms to support businesses aiming to diversify and enhance their production. The report advocates for “greening” ageing industrial plants with state subsidies, enabling the UK to produce less carbon-intensive steel and reduce dependency on long-distance imports.

Onshoring the production of vital components would also shorten supply lines, making the UK more resilient to future shocks and stimulating economic rejuvenation.

George Dibb, head of IPPR’s Centre for Economic Justice, emphasized the opportunity for regional development: “Over the past 30 years we have slipped sharply behind our global competitors in the quantity and kinds of things we actually make. That’s bad for jobs, for living standards, for our security – and for our long-term economic strength as a country. Yet UK manufacturers still have a competitive edge in making some of the products vital for a net zero economy, and with the right government support we have the potential to be world-leading in many more.”

The IPPR report identified 143 products directly linked to net zero technologies and found that the UK had a comparative advantage in a third of them. The report serves as a guide for ministers to identify areas needing support through subsidies.

However, a separate report by the all-party public accounts committee (PAC) raised concerns about the UK’s preparedness to build climate-resilient infrastructure without substantial investment in workforce skills. The PAC report pointed to significant skills gaps in project management and design, exacerbated by competition from major global development projects.

The PAC found that only 1,000 out of the required 16,000 project professionals have received accreditation from the government’s project leadership academy. The MPs highlighted the lack of oversight and evaluation in major projects, with only 8% of the £432 billion spent on major projects in 2019 having robust impact evaluation plans.

The PAC concluded, “Decisions are being made in the absence of evidence, putting value for money at unnecessary risk.”

While the IPPR report paints an optimistic picture of the UK’s potential in green manufacturing, the PAC’s findings underscore the urgent need for strategic investment in skills and project oversight to ensure the UK can fully capitalize on its competitive advantages in the green economy.