Market Overview
The UK green bonds market size reached USD 36.9 Billion in 2024 and is expected to grow to USD 127.8 Billion by 2033, reflecting a CAGR of 11.97% during the forecast period of 2025-2033. This growth is driven by increasing corporate and government participation, as funds are raised for renewable energy, energy efficiency, and sustainable transport projects. Investor demand for ESG investments and governmental green finance initiatives such as green gilts are further accelerating the market expansion across the UK. For more details, see the UK Green Bonds Market.
Study Assumption Years
Base Year: 2024
Historical Year/Period: 2019-2024
Forecast Year/Period: 2025-2033
UK Green Bonds Market Key Takeaways
The UK green bonds market size was USD 36.9 Billion in 2024.
The market is projected to grow at a CAGR of 11.97% from 2025 to 2033.
The forecast period for growth is 2025–2033.
The market growth is supported by increasing issuance driven by public and private sector financing of sustainable projects.
Green bonds fund renewable energy, energy efficiency upgrades, and sustainable transportation solutions like electric vehicles and low-carbon infrastructure.
Corporate participation is rising with financial institutions and large corporations issuing green bonds aligned with ESG principles and net-zero commitments.
Issuers like Allied Irish Banks have successfully raised multi-billion euros through green bond issuances to finance energy-efficient projects.
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Market Growth Factors
The green bond market in the United Kingdom is growing as the government and the private sector seek to finance the green transition and meet climate commitments set out as part of the UK's net-zero strategy. Green bonds have been used to finance renewable energy, energy efficiency, electric, hybrid and low or zero emissions mass transit infrastructure. Green bond issuance data show a total of $576 billion was issued in 2023, with the public sector making up 23% of the green bond market, highlighting the need for public engagement.
Another contributor to rapid growth is corporate participation. Corporations, who see sustainability as part of their financial strategy, raise money by issuing green bonds through financial intermediaries, such as banks, to fund renewable energy and other carbon mitigation projects. Large issuers in the energy, automotive and infrastructure sectors have used green bonds to fund decarbonisation, because the bonds meet demand from investors for environmental, social and governance (ESG) investment, and comply with regulations to encourage net-zero emission commitments.
Government spending also supports the market, with the UK government having pledged £4 billion for green technology and clean energy development in its Autumn Statement of November 2023. For example, it includes a £960 million Green Industries Growth Accelerator fund to strengthen supply chains and global growth, more than £2 billion for the production of zero emission vehicles and their batteries, and £975m for energy-efficient and zero-carbon aircraft technologies in the aerospace sector, alongside wide-ranging policy support for green bonds.
Market Segmentation
Type Insights:
Corporate Bond: Includes bonds issued by corporations to raise funds for low-carbon and sustainable projects.
Project Bond: Bonds issued specifically to finance individual sustainable projects like renewable energy installations.
Asset-backed Security (ABS): Securities backed by renewable energy or other green assets.
Supranational: Bonds issued by international organizations to support environmental projects.
Sub Sovereign and Agency (SSA) Bond: Bonds issued by regional/local authorities and agencies.
Municipal Bond: Bonds issued by local governments to finance environmental and infrastructure projects.
Financial Sector Bond: Bonds issued by financial institutions funding green infrastructure and technologies.
End Use Insights:
Energy/Utility Sector: Bonds used to finance projects in renewable energy, energy efficiency, and sustainable utility infrastructure.
Financial Sector and Other Corporates: Includes financial institutions and other corporate issuers integrating sustainability in funding.
Government/Agency/Local: Bonds issued by government entities or local authorities for environmental and sustainability projects.
Regional Insights
London is identified as a key regional market among others including the South East, North West, East of England, South West, Scotland, West Midlands, Yorkshire and The Humber, East Midlands, and Others. The report highlights comprehensive regional market analysis but does not provide specific statistical values by region.
Recent Developments & News
In October 2023, Allied Irish Banks (AIB) raised €750 million from its fifth green bond issuance, totaling over €4 billion in the last three years. This issuance attracted interest exceeding €1.5 billion from 109 investors across 19 countries, targeting low-carbon and energy-efficient projects in the UK and Ireland.
In July 2024, NatWest Group issued the first Electric Vehicle Green bond worth €750 million to finance and refinance electric vehicles, supporting the transition to net zero. NatWest's green and social bonds have cumulatively contributed to avoiding nearly 0.121 million tons of CO2e emissions.
In November 2023, the UK government announced a £4 billion investment boost for green technologies and clean energy as part of the Autumn Statement, including funding for zero-emission vehicle manufacturing, supply chains, and aerospace energy-efficient technologies.
Key Players
Allied Irish Banks (AIB)
NatWest Group
