Scalable decarbonisation for the invisible majority - a data-driven framework to support a just transition for UK manufacturing SMEs

Abstract

Decarbonisation of the UK manufacturing sector is essential to achieving net zero, yet current industrial strategies focused on clusters overlook dispersed sites, which account for nearly half of manufacturing emissions. These sites are largely composed of small and medium-sized enterprises (SMEs), constrained by limited capacity, capability, and capital. Despite accounting for over 99% of UK manufacturing businesses, SMEs remain underrepresented in decarbonisation policy and emissions frameworks. This study addresses that gap by developing a hybrid modelling approach, combining two composite indicators, adapting the Bloomberg industry-implied carbon intensity model and an employment-based estimate from The Data City. By integrating these proxies in a 50:50 weighting and stress-testing through Monte Carlo simulations across the 19,130 manufacturing SMEs in the East of England, this research generates the first probabilistic baseline of SME emissions at regional, sectoral, and organisational scales. Results show that medium-sized firms contribute nearly 60% of regional SME emissions, while a small number of subsectors account for over 80%, underscoring concentration and volatility. High relative standard deviations highlight structural uncertainty yet also offer actionable insights by pinpointing where interventions can be targeted. By demonstrating that robust regional baselines can be built from imperfect secondary data, the research challenges the notion that SMEs are too fragmented to integrate systematically into decarbonisation policy. The thesis concludes that a just transition requires embedding SMEs into industrial frameworks through tiered fiscal instruments, interoperable digital tools, and place-sensitive strategies, reframing them as active agents of industrial transformation rather than peripheral actors.