UK investment in Green and Clean Tech drops by 44% in 2024

Our latest research reveals a shocking 44% decline in UK investment into green and clean tech in 2024, marking the lowest investment levels in the sector since 2020. This reduction in funding for environmentally focused businesses and technologies comes at a time when global environmental concerns are intensifying.

What are the most recent investment trends in the Green Tech sector?

According to data obtained by Price Bailey from market insights platform, Beauhurst, the Green and Clean Tech sector saw an investment peak of £2.4bn in 2022, a 39% increase from 2021. However, after a 20% drop in 2023, investments plummeted by a further 44% in 2024 to just £1.1bn.

Volume and value of capital raises by calendar year in clean and green tech businesses in the UK

A critical moment for the planet…

The decrease in investment comes as news that the 1.5°C global warming threshold has been breached, with 2024 being recorded as the hottest year in human history.

The tax benefits of going green

The UK Government has legislated a net zero emission target by 2050 and has introduced several tax incentives to encourage businesses to adopt environmentally friendly practices.

What are the key environmental taxes and schemes?

Environmental taxes vary by business type and size including:

• Climate Change Levy
• Emissions Trading
• Capital Allowances on Energy-Efficient Items
• Landfill Tax
• Aggregates Levy
• Plastic Packaging Tax

Certain businesses may qualify for tax relief or exemptions based on specific eligibility criteria.

• Climate Change Levy: Businesses that use minimal energy may be exempt from the main tax rate under the Climate Change Levy. Additional reliefs are available for fuel costs (e.g., electricity, gas, and solid fuels) if the business meets certain environmental conditions.For energy-intensive businesses, entering a climate change agreement with the Environment Agency can lead to substantial reductions in the Climate Change Levy, with savings of over 90% on electricity and other significant reductions on traditional fuel sources.
• Plastic Packaging Tax: The Plastic Packaging Tax, which came into effect in 2022, targets finished plastic packaging that contains less than 30% recycled plastic. Companies with packaging that does not meet this threshold are required to pay £217.85 per tonne of packaging from 1 April 2024.
• Enhanced Capital Allowances: Businesses investing in energy-efficient or low-carbon technologies can claim enhanced capital allowances, reducing their tax liabilities. These tax savings can be significant, providing a strong financial incentive to invest in green technologies.

Why does sustainability matter?

It’s clear that green technologies play a critical role in mitigating climate change. Companies that prioritise sustainability not only contribute to environmental goals but also unlock valuable tax incentives, mutually beneficial for both businesses and the planet.

Price Bailey is a top 30 accountancy and advisory practice with over 40 specialist Partners based in offices throughout East Anglia, London and internationally. To find out more on environmental taxes and reliefs available to your business, contact Gemma Thake.

Data sourced from Beauhurst includes UK-based companies in the clean technology, biomass and biofuels, smart energy, and urban farming sectors that have raised funds between January 2016 and January 2025.

Note: Beauhurst does not track all UK companies but instead profiles those meeting specific growth or ambition criteria. As such, this data may not capture every company or fundraising event and should only be viewed as indicative of sector trends.