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European Commission - Speech - [Check Against Delivery]

Vice-President Šefčovič - "The European workforce and the energy transition"

Brussels, 5 October 2016

Speech of Vice-President Šefčovič at the European Trade Union Confederation (ETUC) conference “Industrial Regions and Climate Policies: Trade Unions Perspectives”

Ladies and Gentlemen,

Thank you very much for the invitation to speak at this conference and the opportunity to share my thoughts with you.

Today, the urgent need for the transition to a low-carbon economy and society is recognised everywhere.

The Paris Agreement that the European Union has just ratified this week is the most obvious proof.

It has been said many times that the global fight against climate change is not only a necessity but also an opportunity.

Besides necessity and opportunity, it is obviously an economic and social challenge. It is important to discuss this challenge and how we can deal with it. This is what we should discuss today.

But still, before addressing the challenges, let me repeat why it is an opportunity because it is important to recall why it is worth to address the challenge.

First of all, the energy transition will protect our climate, keep global warming within bearable limits and help to reduce its negative consequences.

This is a benefit that we must not forget in our daily discussions and negotiations: the cost and the consequences of not acting are much worse than any consequence of the energy transition.

Second, we have all the instruments to achieve our reduction targets for Greenhouse Gas emissions. We have the technologies and the innovations which will help us to make this happen. Technology and innovation are key to manage this transition.

You might have heard the figure before, but I want to repeat it: in Europe, we have managed to decouple growth and GHG emissions: our economy grew by 46% since 1990 while we reduced our greenhouse gas emissions by 24%. This is the proof that growth and energy transition are not conflicting objectives, but can go hand in hand!

Just think of renewable energy sources; wind and solar energy were barely present a decade ago; today they account for at least 300,000 direct and indirect jobs in the wind sector and 250,000 jobs in the photo voltaic sector in our 28 Member States.

Take new technologies in the area of storage: European and American companies start to sell home batteries which store energy from solar panels on the roof or when energy prices are low. We will achieve industrial solutions for large-scale storage, be it more powerful batteries, hydrogen, power to gas or maybe other technologies.

Digitisation can make our energy and transport systems more efficient and comfortable;

The electrification of transport makes enormous progress;

Technologies break the boundaries between the sectors of energy, transport, buildings and industry;

And we have technologies which make our industry one of the least less carbon and resource intensive in the world.

Moreover, the global trend after Paris offers new global opportunities for innovative products and ideas from Europe, and consequently for our workforce in Europe.

Another truth is that this transformation creates jobs. In 2014, around 9 million jobs were already linked to the transition to a low carbon economy. A Commission study concluded that by 2030, this number could double to about 18 million jobs.

These are the opportunities that I mentioned. They mean better living conditions on our planet, in our regions and cities, and they mean jobs.

But, as I said before, there is also a challenge.

This transition will not happen by itself, and it will not happen everywhere at the same time.

This means that we have to manage and accompany this transition.

When we adopted the European Energy Union Strategy in February 2015, we made this already clear: change means disruption and a need to adjust. Many sectors of our economy, business models or job profiles will need to adjust, and new business models will emerge with new technologies. Our workforce will need the right skills for the transition. And sometimes, social measures will be required.

I think the two most important elements for managing this transition succesfully are clarity about the goals and time.

The Paris Agreement gives us clarity and a timeframe at the global level.

At European Union level, we have set ourselves clear targets for 2030 and a scenario for 2050.

The Energy Union Strategy that we adopted last year integrates the various dimensions of this transition, and tries to address them through a policy mix which includes energy, climate, transport, industry, research, employment, financial, social and economic policies.

Let me just recall that we have already made a number of legislative proposals and other initiatives, notably the proposal for reforming the Emission Trading System and the proposal for reducing GHG emissions in each Member State in sectors which are not covered by the Emission Trading System.

Most of the remaining initiatives will follow by the end of this year, notably the ones concerning energy efficiency policies in Europe, policies for energy from renewable energy sources and a new design for the electricity market.

All in all, we should have all major proposals on the table by the end of this year; a few others concerning the transport sector will follow next year.

Once the European Parliament and the Council – which means the governments of each Member State – have discussed and agreed on them, we will have clarity for the energy transition at European level.

But of course, this is not enough. The Energy Union and the energy transition will not happen in Paris or Brussels alone. They must happen in the Member States, in the regions, cities and counties in Europe.

Public authorities, companies, workers and citizens will need clarity on the way forward in their respective Member State and their region.

Therefore, we will also make a proposal on the so-called “governance”. This means a European framework which will allow us to ensure that Europe as a whole – all 28 Member States – deliver on our goals and will provide clarity at national level. Our proposal is therefore that Member States should adopt National Energy and Climate Plans.

These plans should cover the period from 2021 to 2030 and include a perspective until 2050. This would mean a long term vision and predictability for all stakeholders.

We will propose an inclusive process in each Member States but also between a Member States and its neighbours.

The Social Partners in each Member State should play an active and constructive role in the elaboration of these national plans.

Since I took office in November 2014, I paid great attention to involve the European Social Partners. We have met twice last year, shortly after the presentation of the Strategy and before the 1st State of the Energy Union Report.

I want to inverse the sequence this time and meet the European Social Partners this time before the State of the Energy Union Report to have their views on the state of play. Invitations for the meeting are under preparation.

I know that, in many Member States, the resources of trade unions are limited, and therefore it will not be easy for them to be fully engaged in the discussions about governance and National Energy and Climate Plans. ETUC has mentioned this as a problem, and I know that ETUC is ready to work on this topic with its national members.

Therefore, I am particularly pleased to tell you that your project “Involving Trade Unions into the emerging governance to tackle climate change and energy transition” that you submitted to a call for tender by the Commission was selected by DG Employment.

Once we have the frameworks at global, EU and national level, the regions will have clarity.

Industrial regions need this clarity more than others.

I can only encourage them to start the discussion about the impact of the energy transition as soon as possible.

I can only agree with the first recommendation of your study: Regions have the policy levers to manage the transition: from education to transport and infrastructure to urban and country planning. Moreover, they have the power to convene stakeholders at regional level: the local authorities, the regional trade unions and business associations, education and training institutions. If they manage to bring them together and integrate all dimensions into a regional long-term strategy, they have all ingredients to manage the transition.

But they have to start as early as possible. If you start only when companies close and thousands of jobs are at risk, the atmosphere does not allow for strategic planning. It has to be done early to anticipate and prepare for change in time.

I have already mentioned the importance of the Social Partners: employers and trade unions have the knowledge and experience on the ground directly from the workplaces in the companies. They have the trust of the workers and the companies and therefore play a crucial role for the success of the transition.

We have seen in Europe that change can be managed successfully. There are great examples of structural change in regions in Europe. We have regions which moved from agriculture to high-tech, from dockyards to hubs for renewables. We must learn from these examples and help other regions to find similar ways which correspond to their needs.

I am currently thinking how the Commission could help to start such processes in industrial regions affected by the energy transition and how we could support the exchange of best practices and experiences between regions in a similar situation.

Once regions have identified a way forward and have a concept, there is a great number of funding instruments from the EU which they can use.

I can't list them all, but I want to mention a few of them to give some examples.

Let me start by President Juncker's Investment Plan for Europe which can be used also for regional projects. We have good examples of regions which use the Fund as well as public and private investment to boost the transformation of their region.

The EU's Cohesion Policy provides EUR 69 billion for investments related to all dimensions of the Energy Union between 2014 and 2020:

  • EUR 29 billion for energy efficiency, renewables, co-generation, smart energy infrastructure and low-carbon research and innovation.
  • EUR 40 billion for sustainable urban mobility and other low-carbon transport, e.g. rail, seaports and inland waterways.

Equally important are technical assistance and capacity building. For example, we offer, since last year, support for short-term exchanges of know-how among government staff directly involved in managing cohesion policy energy projects.

The European Regional Development Fund is investing in education infrastructure, in order to enhance access to lifelong learning, strengthen vocational education and training systems, and improve the labour market relevance of education.

At least EUR 1.1 billion from the European Social Fund will be dedicated to improving education and training systems necessary for the adaptation of skills and qualifications and for the creation of new jobs in sectors related to energy and the environment.

The European Regional Development Fund is supporting cooperation between industry, business and researchers in the context of Smart Specialisation Strategies. A large number of Member States and regions have prioritised support to research and innovation in sustainable energy and low-carbon in their strategies.

Smart specialisation focuses EU financial support on specific topics with high growth potential. We have launched a specific Smart Specialisation Platform on Energy, to make sure that regions and Member States have access to the latest knowledge. Its activities include, for example, work with regions and industry on sustainable construction or on smart grids value chains.

The matching of skills with future needs, supporting the transformation of regions, could be based on anticipation of these needs in the context of Smart Specialisation Strategies. Therefore, the policy mix for the implementation of the regional Smart Specialisation Strategies for economic transformation in regions will also include education and training.

With regard to Skills, I would like to mention the New Skills Agenda for Europe which the Commission adopted in June.

The "Blueprint" for cooperation on skills in specific economic sectors will encourage stakeholders to work together to identify skills needs and practical solutions.

Under the Blueprint, sectoral partnerships in industry and services will implement a sectoral skill strategy, supported for four years through Erasmus+ and then to be rolled out at national or even regional level.

The automotive and maritime technology sectors are among the first pilot sectors both of which are in the process of developing greener and more sustainable technologies. If successful, the Blueprint could also be expanded to other sectors with a strong focus on green growth and renewable energy.

A key thread across the Agenda is the need to stimulate strong business-education partnerships as promoted through the Alliance for Apprenticeships or the European Pact for Youth. These partnerships can stimulate cooperation between partners in the green and renewable sectors and education and training providers.

You see that there are lot of tools that regions can use to manage the transition and change their economic structure for the sake of keeping and attracting jobs in the region.

The key element is however to start this process early, involve all stakeholders in the regions and notably the social partners.

I am convinced that clarity and timely preparation at all levels will make it possible to ensure prosperity in this energy transition.

I hope that we can contribute to it together and look forward to our debate.

Thank you very much!

SPEECH/16/3327

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