The UK green bonds market size was valued at USD 36.9 Billion in 2024 and is expected to reach USD 127.8 Billion by 2033, growing at a CAGR of 11.97% during the forecast period 2025-2033. This growth is propelled by rising corporate and governmental participation, funding renewable energy, energy efficiency, and sustainable transport projects. Investor demand for ESG-focused investments combined with government green finance initiatives, such as green gilts, continue to expand the market across the UK.
Study Assumption Years
Base Year: 2024
Historical Years: 2019-2024
Forecast Period: 2025-2033
UK Green Bonds Market Key Takeaways
The UK green bonds market size reached USD 36.9 Billion in 2024.
The market is forecast to reach USD 127.8 Billion by 2033.
The market is expected to grow at a CAGR of 11.97% during 2025-2033.
Rising issuance is driven by increasing public and private sector involvement to finance sustainable projects aligning with the UK’s net-zero commitments.
Green bonds are used to fund renewable energy, energy efficiency upgrades, and sustainable transportation such as electric vehicles.
Corporate participation is growing, with financial institutions and large corporations financing renewable and low carbon projects using green bonds.
The UK's net zero emissions target by 2050 is a significant driver of market growth.
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Market Growth Factors
Green bonds issuance in the UK has grown steadily as the public and private sector seek to support government and corporate climate and net-zero goals. Green bonds are used to finance renewable energy projects, energy efficiency improvements, electric vehicles, and other low-carbon transport systems. In 2023, $576 billion of green bonds were issued, 23% of total green bond issuance was from the public sector. Green bonds provide dedicated green finance and cheaper financing for public sector issuers.
Corporate engagement continues to grow as corporations incorporate sustainability into their finance. Financial institutions are issuing green bonds to finance renewable energy, sustainable infrastructure, and carbon-minimizing projects. Green bonds are also used by major corporates in the energy, automotive and manufacturers' sectors to finance clean technologies, and reduce their footprint. In October 2023, Irish multinational Allied Irish Banks issued its fifth green bond, raising €750m and bringing its total funds to over €4bn in three years to be used on low-carbon projects in the UK and Ireland.
Government policy also supports the market, such as the United Kingdom's net zero by 2050 commitment. In November 2023 the UK government committed 4 billion pounds to green technologies and clean energy, including £960 million to further develop green industries, increasing supply chains, and £2 billion for zero emission vehicles and their components. A further £975m goes to the aerospace sector for zero-carbon aircraft technologies.
Market Segmentation
Type:
Corporate Bond: Bonds issued by corporations to fund environmentally sustainable projects.
Project Bond: Debt securities used to finance specific green projects.
Asset-backed Security (ABS): Securities backed by pools of environmentally positive assets.
Supranational: Bonds issued by supranational organizations for green initiatives.
Sub Sovereign and Agency (SSA) Bond: Bonds issued by sub-sovereign entities and agencies with green objectives.
Municipal Bond: Bonds issued by local governments or municipalities to finance green projects.
Financial Sector Bond: Green bonds issued by financial institutions to support sustainable financing.
End Use:
Energy/Utility Sector: Green bonds funding energy generation, utilities, and related sustainable infrastructure.
Financial Sector and Other Corporates: Bonds financing financial institutions and corporate sustainability projects.
Government/Agency/Local: Bonds issued by government bodies or agencies for local or national green initiatives.
Regional Insights
The UK green bonds market covers major regional markets including London, South East, North West, East of England, South West, Scotland, West Midlands, Yorkshire and The Humber, East Midlands, and Others. No exact market share or CAGR by region is provided, but the comprehensive regional analysis indicates these areas as significant contributors to the market growth.
Recent Developments & News
In July 2024, NatWest Group issued the first Electric Vehicle Green bond, raising €750 million to finance and refinance electric vehicles, supporting the net zero transition. Previously, NatWest had issued green and social bonds totaling £3.9 billion, aiding in avoiding nearly 0.121 million tons of CO2e emissions. In November 2023, the UK government announced a £4bn investment to advance green technologies and clean energy, featuring £960m for the Green Industries Growth Accelerator fund for supply chain strengthening, over £2bn for zero emission vehicle development, and £975m dedicated to aerospace energy-efficient and zero-carbon aircraft technology.
Key Players
Allied Irish Banks (AIB)
NatWest Group
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