This Working Document discusses the transition of labour market skills and occupation towards a shift in climate neutrality. The working paper is structured as follows:
– Section 2 starts with a literature review and an in depth framing of the sectors analysed (Section 2.1) and then focuses on ‘transforming sectors’, digging into sectoral transitions in and out of ‘transforming sectors’ (Section 2.2).
– Section 3: analyses the role of re-skilling and/or up-skilling in the ‘transforming sectors’ and explores whether workers are already engaging in lifelong learning and how this relates to workers’ sector-to-sector mobility
– Section 4: estimations of skills investment needs of the green transition arising from additional job creation and re-training requisites due to enhanced production of solar PV and wind energy.
It defines transforming sectors as those that are essential to achieving climate neutrality, either because they play a key role in implementing climate goals or are expected to undergo major employment changes due to decarbonisation. One of the main findings is that on average across the whole economy, the rate of workers making year-on-year sector-to-sector transition falls between 1.8 – 3.9 in the EU and this is relatively stable over time, following a slightly increasing trend around the year of 2016 in some Member States. From 2018 – 2019, there has been a net inflow of workers into all of the ‘transforming sectors’ except for mining and extraction in the EU.
In all Member States, older workers make less sectoral transitions compared to younger workers, but no significant difference in sectoral transitions can be observed between men and women. Women are still heavily underrepresented in the ‘transforming sectors’. Although the share of female workers in energy industries has risen over the past decade, it amounted to only 26.7% in 2023. The smallest share of women can be found in the mining sector (14%).
In the case of ‘energy-intensive industries’, workers overall make less transitions towards non-employment (inactivity or unemployment) than those working in other sectors. For mining and extraction it is suggested that one of the reasons for the lack of transition may be the higher incidence of trade union density . Another plausible factor may be that these male-dominated sectors see relatively less flows out of employment over time as men make relatively less employment transitions than women (due to their lower participation in care).
Moreover, the document provides estimations on the additional amount of workforce needed and the associated training costs from renewable power generation deployment at Member State level in 2030. Delivering on the EU Green Deal targets on solar panel and wind turbines installation would require about 130 000 to 145 000 additional skilled workers in the EU, with associated investment in skills reaching EUR 1.1 to 1.4 billion by 2030. Job creation nonetheless differs across Member States, and those with relatively higher shares of renewable installed capacity today may present lower re-training costs per worker in 2030. This includes what the report calls the ‘catching up’ effect, it being the increased re-training costs in countries ramping up renewable energy deployment as they strive to match the progress of more advanced Member States.
Lastly, the Working Document calls for a more holistic approach to ensuring that workers are left with good employment outcomes in the economic transition. This should focus on employment in a more well-rounded spirit, including on areas such as active support to quality employment and education (of underrepresented groups too). Policies should also promote hiring incentives in greener parts of the economy, fair and favourable tax-benefit and social protection systems, and better working conditions to attract workforce into professions that are instrumental to a sustainable and resilient society. This includes not only jobs in green sectors, but also in the so-called ‘white’ jobs, such as healthcare, education or hospitality, that have been facing widespread shortages in recent years.