The State of UK Transport

The crisis in the Middle East has underlined more clearly than ever why the UK must break its dependence on fossil fuels, not only to cut emissions, but to secure our energy sovereignty, stabilise household bills, and protect our economy from global shocks.

Every year, the UK spends £43 billion importing oil -and three-quarters of it is used in transport. Our cars, vans, trucks, shipping and aviation are driving the nation’s reliance on imported fuel, leaving UK drivers, logistics and consumer goods exposed to volatile global prices.

The Climate Change Committee warns this dependence carries a steep price. A single fossil fuel price spike, like in 2022, could cost the UK economy as much as the entire additional expense of reaching net zero by 2050.

In short: staying reliant on fossil fuels costs more than transitioning away from them, and makes the UK economy vulnerable -but for transport it also presents a huge opportunity if we manage the transition well.

So how is the UK doing?

Cars - a ZEV mandate success story

For cars, the UK has been a genuine success story in the transition away from petrol and diesel. The Zero Emission Vehicle (ZEV) mandate has been central to getting battery‑electric vehicles onto the road at scale.

By 2025, EVs accounted for 23.4% of new car registrations for the second year running, making the UK one of Europe’s largest electric car markets by volume and bringing the total electric car fleet close to 2 million.

This momentum shows how clear regulatory targets shape manufacturer behaviour and product planning.

But the UK is not transitioning alone. Markets such as the Netherlands, Belgium and China already see electric cars taking well over 30% of new sales, and policy ambition in those countries is tightening as fleets turn over faster.

Recent market dynamics underline the stakes. In the early 2020s, Chinese brands took advantage of hesitation from European manufacturers to enter the EV mass market by offering a growing range of sub‑£30,000 EVs, rapidly expanding consumer choice in the lower‑cost segments.

Regulations such as the ZEV mandate, alongside European CO₂ standards, are first and foremost a core industrial policy.

It gives manufacturers the confidence and obligation to invest in affordable, mass‑market EV platforms; without it, uptake would be slower, the UK’s oil dependence would remain higher for longer, and domestic industry would be more exposed to faster‑moving competitors.

The ZEV mandate must remain in place as it is, with no further rollbacks.

Trucks: an industrial and economic opportunity

The UK’s zero-emission vehicle (ZEV) mandate has transformed the car market, however the same progress has yet to reach the truck sector. Currently, there is no equivalent mandate for heavy goods vehicles, and the impact is clear.

In 2025, just 587 electric trucks were sold in the UK, a negligible share of total sales. Across the EU, electric trucks already represent around 2% of new registrations, rising to 4% in Germany, the bloc’s largest market compared to just 0.38% in the UK .

The lack of progress is not a question of technology. Zero-emission trucks are now available from every major manufacturer, with models capable of ranges exceeding 430 km, broadly matching the maximum distance drivers can cover between mandatory rest stops. The challenge lies in supply.

Without regulatory requirements, manufacturers allocate vehicles to markets with binding sales targets. That limits availability in the UK and keeps prices high. A clear mandate would provide the long-term visibility manufacturers need to invest in production and bring down costs through scale.

The economics are already shifting. Operators report that electric trucks can be around 20% cheaper to operate than diesel equivalents, even before factoring in the recent 16p per litre increase in diesel prices. As energy price volatility continues, the business case for electrification will only strengthen.

For the UK, establishing a zero-emission truck mandate would deliver multiple benefits: energy security, lower exposure to volatile fossil fuel markets, stronger domestic supply chains, and competitiveness in the global automotive economy.

In short, accelerating the transition to zero-emission trucks is as much an economic and industrial imperative as it is a climate one.

Aviation & shipping - securing the UK’s next industrial opportunity with green fuels

The UK has made an important start in aviation with its Sustainable Aviation Fuel (SAF) mandate, which will gradually increase the share of non-fossil fuels used by airlines. That mandate matters. It sends a long-term demand signal investors need to build UK-based sustainable fuel production.

The maritime sector is even further behind. The UK currently has no policy framework to drive down fossil fuel use in shipping, leaving it reliant on imported oil even though almost all UK trade travels by sea. That reliance exposes businesses and consumers to volatile global prices and risks missing a major opportunity to lead in green maritime fuels.

Fuels produced using UK renewable electricity, green hydrogen, and captured CO₂ could power ships and aircraft that are otherwise hard to decarbonise. Investing in this industry could create tens of thousands of construction jobs as well as in long-term operations, particularly in the UK’s established industrial regions.

Unlocking this potential requires a clear, credible policy framework. Alongside strong mandates that create predictable demand, investors need tools to reduce commercial risk and drive early deployment. Rapid deployment of the Revenue Certainty Mechanism for aviation is crucial for kickstarting UK production while lower industrial electricity prices are critical to ensuring UK projects remain internationally competitive.

The message is clear: if the UK wants to build energy security, protect households and industry from future price shocks, and capture the economic upside of the clean energy transition, it needs to stand firm on the aviation fuel mandate, introduce a sustainable fuel mandate for shipping, and strengthen industrial conditions for investment at home.

Conclusion

Whether it’s electric vehicles or green fuels, the pattern is the same: Strong, stable policy drives investment, investment creates jobs, and that is how the UK secures its energy independence and long-term industrial future.