Building the economic case for net zero transport

Jonathan Murray, Acting Managing Director at Zemo Partnership, explores how accelerating the shift to zero-emission vehicles can drive growth, boost jobs and strengthen UK industry, while outlining the policy action needed 

Earlier this year, in its advice on the Seventh Carbon Budget, the Climate Change Committee (CCC) reminded us that the road transport sector can – and must – make a big contribution to reducing the UK’s greenhouse gas emissions. Surface transport accounts for nearly a quarter of UK emissions and has been the highest-emitting sector since 2015, with almost all coming from road transport. The CCC said that a shift to electric cars and vans, along with other zero-emission vehicles, greater use of public transport, walking and cycling, plus more efficient driving and improvements in conventional vehicles, could cut surface transport emissions by up to 86% by 2040 (compared to 2023 levels).

The “emissions” case for decarbonising road transport is well-documented, but progress is too slow and there are big gaps in the policy framework. In June, Zemo published our Map of Missing Policies report, outlining what is needed to speed up the UK’s transition to net zero transport.

There is also an “economic” case: the opportunity to drive growth, prosperity and jobs in manufacturing, infrastructure and services. We at Zemo are turning our attention to building this case for our policy proposals. Getting the economy growing is, after all, the Government’s top priority.

Boosting the market for zero carbon vehicles with improved policies to increase supply and uptake, would have big economic benefits. A CBI Economics study for the ECIU found that if the UK moves quickly to manufacturing electric vehicles (EVs), the automotive sector’s GVA contribution could rise by 35% (£16.1 billion). But under a much slower transition scenario, it could fall by 73% (£34.1 billion).

Similarly, decarbonising commercial vehicles could generate economic gains. Chris Skidmore’s Net Zero Review argues that the UK could seize a first mover advantage by pioneering freight decarbonisation – a sector set for rapid innovation and investment globally. Being a first mover holds benefits such as boosting green jobs, fostering domestic manufacturing and supply chains, lowering operational costs with new technologies, and exporting expertise and solutions.

New policies to expand investment in public transport could benefit the economy. UK manufacturers are winning a growing share of the expanding zero emission bus market, and a stable increase in demand could push domestic production higher. Increased use of zero emission buses could also improve living standards for large numbers of people through improved access to transport.

In addition, congestion is a major financial burden on all of us. Switching from private cars to public transport and active travel, alleviates road congestion, which costs the economy an estimated £11 billion a year.

Finally, transport and energy policy need to be more joined up, ensuring local electricity grids can meet increased demand from EVs. The required network build-out could create jobs and boost skills for people across the UK.

Over the coming months, Zemo will explore the “economic case” in more detail: the opportunities and how to quantify them, the barriers, and policies needed. The next Quarterly Briefing of the Council for Net Zero Transport will start this discussion on Thursday 11 September 2025, 9:30–12:30 at One Birdcage Walk, Westminster, and online via Teams. You are welcome to join us. For more details, contact Lois.Loxley@Zemo.org.uk.