Rebalancing EU industrial policy to guarantee a socially just transition

DISCLAIMER: All opinions in this column reflect the views of the author(s), not of EURACTIV Media network.

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IndustriAll Europe presents its demands in anticipation of next month’s publication of the revitalised European industrial strategy. Accelerating climate action and digitalisation need concrete answers now. Inequalities within and between countries must be tackled so ‘no one will be left behind’. We cannot afford further delays of the new strategy.

The canaries in the mine

Representing seven million manufacturing, mining and energy sector workers across Europe, industriAll European Trade Union’s members are not only contributing actively to the green and digital transitions with their daily work, but they are also at a very high risk if the transition is badly managed. They are the canaries in the mine for political commitments to a Just Transition alongside the European Green Deal and digital agenda.

It is the basic demand of these working men and women to be active partners in shaping this enormous systematic transition. IndustriAll Europe fully supports the EU’s climate neutrality target by 2050, and the need to increase 2030 climate targets to bring the EU realistically in line with achieving its long-term target. Not acting now would increase the costs in the future.

An industrial revolution that is clean, fair and decent

As trade unions, we have been more concerned with the ‘how’ rather than targets: we need clear policy and financing pathways to achieve climate neutrality with greater digitalisation and deliver the promised just transition for industrial workers without increasing social and regional inequalities.

This demands the mobilisation of resources to deliver this industrial revolution fairly, based on a social guarantee to the millions of European working people for quality jobs and decent living conditions. Moreover, our response must recognise that the current COVID-19 crisis has not hit everyone evenly and we are not all starting from the same point, sectorally or geographically.

Without an ambitious, clean industrial strategy as a cornerstone of the Green Deal, the EU will never succeed in its journey towards a completely new economic paradigm within one generation. IndustriAll Europe shares the vision of the Commission that industrial policy should support the transition to a digital, climate-neutral and competitive economy – these are twin transitions that have multiple impacts on each other.

Updated Industrial Strategy must deliver!

We welcomed the clear strategic approach of the Industrial Strategy published last Spring. We are eagerly awaiting the updated strategy due on 27 April. We sincerely hope that the update will correct the shortcomings of the 2020 strategy and make it a truly comprehensive strategy that is able to deliver: to build back, better and fairer.

The Green Deal will define and shape industrial policymaking, not only in the coming mandate period of the Commission but also far beyond. The investment choices made this decade will be decisive. Market measures and multinational corporate strategies alone will not and cannot deliver.

The combination of the COVID-19 crisis and the Green Deal objectives, and especially the revision of the 2030 climate targets, threaten to significantly deepen the investment gap that needs to be bridged to reach the climate targets. A ’target and market‘ approach will not deliver. Over-reliance on the ETS and other ‘one size fits all’ policies will inevitably increase regional inequalities within and between countries.

Why trade unions must be involved

Therefore, a coherent and coordinated EU policy framework, addressing different national and regional contexts, is essential. We need in-depth sectoral and regional impact assessments as part of the Fit 2 55% package, alongside the sectoral 2050 ’climate neutrality‘ roadmaps that will identify what industry concretely needs to cope with the revised targets, in terms of technology development, infrastructures and skills.

Involving trade unions in the preparation of the review of the EU climate policy and to promote workers’ participation to deal with its consequences for workers is vital at the national, regional, sectoral and company level.

EU action must embed public policy in a strategy of the ’Entrepreneurial State‘, using all means available to speed up the rollout of clean technologies and implement ‘open strategic autonomy’. Governments will have to support investments in low-carbon and smart technologies, support the creation of new value chains, shape the demand side by price mechanisms and a supportive regulatory framework.

Public authorities must steer investment-led growth across many different sectors and instead of picking the winners, governments should rather support the ’willing‘. There is industrial appetite – the first call for the new ETS Innovation Fund brought €21.7bn worth of proposals for €1bn funds. The alternative is over-dependence on others – the pandemic and strategic supply-chain shortages (e.g. semiconductors) have shown the dangers of this route.

National recovery and resilience plans have a crucial role in channelling investment, but there is no transparency in the process of developing these national plans, or a clear link with other funds. Social partners have not been systematically consulted in all regions and countries – industrial transition is currently inadequately covered in many draft national plans.

We call on the European Commission to publish the national recovery plans submitted to allow scrutiny and ensure support and effective coordination.

Transforming industries will need continued protection

We must recognise that change will come from within existing industries, as well as new sectors/activities.  Blacklisting entire sectors within rigid EU taxonomy rules will undermine the rolling out of low-carbon technologies and processes needed. We need a realistic approach, supporting the transition in our industrial fabric.

Moreover, without the creation of added value, industry will simply not be able to invest in the transition. Continued protection of industry against carbon and investment leakage will be crucial. EU state aid rules need to ensure public authorities can better support the transformation of the industries.

Decarbonising Europe – the impact on workers and employment

Decarbonising Europe must not mean deindustrialisation in practice. Relocating production to places with less stringent environmental regulations will deliver a triple blow to the EU’s ambitions: a negative impact on global emissions, job losses and increased inequalities, and lost tax revenue.

A level playing field is crucial and the carbon border adjustment mechanism (CBAM) has a role to play but is not a silver bullet or an alternative to other carbon leakage measures.

Workers cannot be forgotten in the design of the transition. Technological disruption, automation and digitalisation, divesting from high-carbon activities, decarbonising transport and new business models, will have a deep impact on the quantity and quality of employment in most sectors, and worker participation in industrial policymaking is a must in finding fair and practical solutions.

The COVID-19 crisis is dramatically increasing inequalities within and between European countries, while it accelerates deep structural changes in our economies and industries. We demand a strong social dimension of the EU’s industrial strategy and workers’ participation. IndustriAll Europe is ready to play an active role!

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