Speech of Vice-President Šefčovič at FEPS event “The new social contract: A fair transition” – Launch of the report and discussion

Ladies and Gentlemen,

Dear colleagues,

I would like to thank the Foundation for European Progressive Studies and Change Partnership for the report they present today and for today's event.

Both are very timely. They help putting on the political agenda a topic which is crucial for the success of the Energy Union and the transition to a low-carbon economy at large.

By now we all know that climate change poses a threat to humanity and for our planet. We therefore have no choice. We urgently need an energy transition to a low-carbon economy and society.

This is a necessity but we should also see it as an opportunity.

Technology and innovations are an important tool we have towards reaching our climate targets. For example:

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  Energy from renewable energy sources and new storage solutions;
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  more intelligent energy and transport systems;
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  new business models and smart cities that break the boundaries between energy, transport, buildings and industry;
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  and technologies which make our industry less carbon and resource intensive.

The fact that the energy transition offers new opportunities is evidenced in the fact that we have managed to decouple our growth and GHG emissions: our economy grew by 46% since 1990 while we reduced our greenhouse gas emissions by 24%. This is good news!

The other good news is that this transformation creates a high number of high-quality jobs. In 2014, some 9 million jobs were linked to the transition to a low carbon economy. The same Commission study concluded that by 2030, the number would double to about 18 million jobs.

But this will not happen automatically and it will not automatically be an inclusive process. It obliges all of us, politicians, managers, trade unions, workers, researchers, teachers, all citizens have to roll-up our sleeves and manage this transition - at European, national, regional and local level - to make it fair and acceptable for everyone.

When we adopted the Energy Union Strategy in February 2015, we stated already that change means a disruption, a need to adjust. Many sectors of our economy, business models or job profiles will need to adjust.

New business models will emerge with new technologies. People will need the right skills for this transition. And where this is not enough, social measures will be required.

The challenge is to organise this transition, and to provide clarity and orientation for everyone affected by this transformation. This will allow us to anticipate, prepare and manage the changes.

The Paris Agreement provides us for the first time with a global framework which includes all countries. The drive to a low-carbon economy is now global.

At European Union level, we have set our 2030 targets and a framework with the Energy Union Strategy which integrates the various dimensions of this transition.

The idea of the Energy Union is to have a holistic approach and to create a policy mix which includes energy, climate, transport, industry, research, employment, financial, social and economic policies.

We will implement this strategy by the various initiatives outlined in the strategy.

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  We have already made a proposal for reforming the Emission Trading System, notably for the energy sector and industry;
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  we have made a proposal for reducing GHG emissions in the sectors which are not covered by the Emission Trading System;
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  we have put forward a strategy for low-emission mobility which will lead to legislation in 2017 and 2018;
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  we have made proposals for increased security of supply; for better interconnections; for a better energy labelling system;
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  we have made the links between the Energy Union and the Investment Plan and the Skills Agenda;

And there are several legislative proposals which we will still present this year:

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  we will propose a reform of our European energy efficiency policies to create jobs, growth and facilitate investment,
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  we will make proposals for a reform of the renewables legislation and for adjusting the electricity market design to the new technologies and needs of an energy system in transition.

A different but equally important proposal will be on governance: how do we ensure that Europe as a whole delivers and makes this energy transition a success. We want the Member States to adopt National Energy and Climate Plans.

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

Regions, cities, industry, social partners, investors and researchers should discuss and anticipate how they can seize the opportunities of the transition and how they can avoid abrupt changes.

Some people are already preparing and thinking of the technologies, businesses and skills of the future. We must encourage them and support them. The role of Social Partners is crucial in this regard. They have the insight, the experience on the ground and can help to build trust in this transition.

Others will try to defend the status quo and work harder on avoidance strategies rather than on ways of preparing for the future. This is a risk for our economy and our general welfare in Europe. We must ensure that this transition is fair and inclusive, that it is for the benefit of our citizens and our future. Only this way, will we be able to convince the masses to embrace this change.

We can see political backlashes around the world, and more often than not they are inspired by fear of change and a feeling of injustice. We cannot deny that change can have negative consequences for some, and we cannot deny that there are injustices today. We must address these concerns and offer solutions which offer a perspective to everyone.

There are great examples of successful transformations here in Europe. We have regions which moved from agriculture to high-tech. We have regions which were centres of traditional industries and are today centres of the digital economy or the media. We must learn from these examples and help other regions to find similar ways which correspond to their needs.

Let me say a few words about what the EU is already doing to support the transition beyond the initiatives that I mentioned before.

We have EU funding instruments which are important drivers for the transition in regions.

President Juncker’s Investment Plan for Europe, the European Structural and Investment Funds, Horizon 2020, the future Innovation and Modernisation Funds linked to the ETS reform, the Connecting Europe Facilities for energy, transport and telecommunication are key instruments for the low-carbon transition.

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

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

Equally important are technical assistance, capacity building, territorial cooperation, spending pre-conditions, integrated territorial solutions, for example through cross-border cooperation.

The Smart specialisation concept for regions also helps in this respect: National managing authorities have to use EU support for specific sectors with high growth potential and by aligning their innovation efforts.

With regard to the Juncker's Investment Plan, the Commission has just announced it would expand its investment power to trigger total investments of EUR 500bn by 2020. We would like to double the amount of investments in the longer run as well as its duration. We want to ensure that at least 40% of the Infrastructure and Innovation Window of EFSI are related to the low-carbon transition.

The combination of EFSI and other EU funds has been made simpler and can be particularly useful in Member States with less developed financial markets or for riskier projects.

I also want to mention that at least EUR 1.1 billion from the ESF will be dedicated to improving education and training systems necessary for the adaptation of skills and for the creation of new jobs in sectors related to energy and the environment.

A number of actions within the New Skills Agenda for Europe adopted in June will seek to support the transition.

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

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, where relevant, even regional level.

There is also a need and possibility 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. The Commission will therefore in the autumn launch a new call for proposals under Erasmus+ on VET-Business partnerships.

Let me conclude with two topics for which I consider today’s report to offer a particularly important contribution.

First, we must have a holistic approach to support research, innovation and competitiveness for a successful low-carbon transition. We have to examine where we can improve our funding programmes for low-carbon research, innovation and competitiveness including deployment of technologies, jobs, skills, growth and investment. Our tools must be fit to support the low-carbon challenge in the energy, transport and buildings sector, in the industry, but also and notably in the regions. This is the idea behind the plan for a Strategy for Research, Innovation and Competitiveness under the Energy Union umbrella. I would mention here as well the question if the framework for our financial markets sufficiently drives investment in low-carbon innovations. We see here some very interesting global developments, be it under the Paris Agreement, in the G20 or the OECD.

Finally, a word on the MFF: Already today, the EU budget is an important tool to achieve our climate objectives: 20 % of it is committed to climate-related action. When we will discuss the next MFF, we have to see how we can use the MFF to achieve not only our 2030 targets, but beyond them a successful, inclusive and fair transition to a low-carbon economy. Everyone who has followed MFF discussions in the past knows what a difficult and sensitive discussion and negotiation this is. The report today makes a strong statement in this debate, and therefore I am looking forward to our discussion today.

Thank you very much.

SPEECH/16/3241