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  • Ceemet comments on the European Commission 2022 Strategic Foresight Report

On 29 June, the European Commission launched the latest edition of their Strategic Foresight Report. The 2022 version entitled “Twinning the green and digital transitions in the new geopolitical context” deals with the current geopolitical situation and examines it in the context of two major issues for industry. The report identifies 10 areas of action related to the interaction between the green and digital transitions up to 2050.

While acknowledging their differences, the Commission argues that closer scrutiny must be given to the possibility of both of these transitions to reinforce each other. The Commission suggests that this is essential within the current geopolitical context in order to ultimately strengthen the EU’s resilience and open strategic autonomy.

Greening

The paper claims that the green transition will not happen without the targets and policies set out in the European Green Deal. While Ceemet is conscious of the need to realise the green transition, it must be recognised by policy makers that a transformation of this magnitude takes time for industry to implement. It must be done while safeguarding our global competitiveness and ensuring that we at least preserve, and ideally increase, our market share in a globalised world.

Invasion of Ukraine by Russia

Furthermore, the invasion of Ukraine by Russia will undoubtedly affect the green transition not least in relation to the possible gas shortages and broader energy challenges. This invasion has brought about unforeseen economic consequences ranging from increasing energy costs and high inflation to supply chain problems as well as numerous other drags on economic growth.

Digitalisation

MET companies have been at the forefront of the digitalisation of industry for many years and it continues its remarkable evolution throughout our sector. Digital manufacturing technologies continue to transform every link in the manufacturing value chain. 

The Commission suggests that gamification can increase public participation in steering the digital  transition. From a Ceemet perspective, we agree that the perception of digitalisation must be addressed. We must improve public acceptance and decrease workplace scepticism, ensuring employees are kept fully informed, with the aim of demystifying this evolution. Furthermore, we must ensure that a well-informed broader societal discourse can take place to address this issue appropriately.

Employment

According to the Commission, the twin transitions will change profoundly labour markets and skills. The Commission also argues that the labour market effects of the twin transitions are potentially complementary, with amplifying and cancelling effects that merit further research. Ceemet fully shares this view and stands ready to engage in this research, as the social partner for our sector we have a unique insight into the labour market and skills requirements for the twin transitions.

The Commission also suggests that the European Pillar of Social Rights will be crucial to reaching their objectives of making the twin transitions fair, inclusive and affordable. However, the best way to ensure a fair and sustainable society is with a competitive industry at its heart.

Skills

The Commission suggests that education and training systems need to be adapted to the new socio-economic reality entailed by the twin transitions. Ceemet fully supports this idea and calls on training providers and education systems to work closely with industry to ensure that training provided corresponds to the rapidly changing needs of the companies and the labour market. This is the only way the massive upskilling and reskilling of the workforce which will be necessary to adapt to the green transition will be beneficial to all.  

Investment

The Commission has estimated, at lower ends, that the twin transitions might need around 650 billion euro annually by 2030. Ceemet is mindful of the required investment to implement the green transition. Within industry, it will require a complete transformation of energy generation systems, and in parallel, massive reductions in industrial processes, transport and buildings. MET companies are conscious that a certain portion of the required investment will be private. However, this must be bolstered by EU funding; if not, it will leave a gap in the required investment.

Supply chains

The Commission also speaks about the need to secure access to critical raw materials, needed to feed the twin transitions and for which the EU is still highly dependent on third countries. From an industry perspective, we see that the Green Deal threatens to have a negative net impact on the MET industries due to these increasing supply dependencies on Asia. Put simply, price volatility due to supply chain issues leads to an increase in the cost for companies of transitioning to a greener industry.

Commenting on the report, Ceemet Director General Delphine Rudelli said “While MET companies have been leading the digital transition for many years, they are now faced with the reality of the green transition. This will require changing of business models and mindsets within organisations. MET companies are moving towards more sustainable production. However, this must be a fair transition, while ensuring that we do not overburden companies in certain sectors. We must deliver a cleaner and more digitalised, but at the same time more competitive, European industry.”