How the climate transition will impact the EU’s labour market: re-skilling and training needed

A new study, commissioned by the Directorate-General for Climate Action (DG CLIMA) assesses the impact of the transition to climate neutrality on the labour market, focusing on skills and occupations and their impact on the economy.

Providing the skills for the transition

The transition to climate neutrality calls for significant transformations in the economy, including shifting to renewable forms of power generation and smart grids, renovating buildings, installing heat pumps, and shifting to electric vehicles (EVs). These transformations will require a significant investment drive and the re-skilling of the EU's labour force. The study used two macro-economic models to evaluate the re-skilling and re-training needs linked to the transition to climate neutrality. Using macro-economic models ensures a comprehensive view of the labour market and of potential macro-economic impacts.

The study finds that, from now to 2050, between 150 000 and 500 000 EU workers will need to be re-trained or re-skilled each year. The largest share of re-training and re-skilling needs is linked to the expansion of EVs and wind and solar power technologies, with other technologies making up a smaller share. While significant at first glance, these figures represent less than 1% of the working age population.

Occupations mostly required for the climate transition include highly qualified managers, and professionals in: business, IT services, science and engineering, as well as more medium-skilled jobs, like electricians and machinery workers. Other roles include assemblers, plant operators, and low-skilled construction and manufacturing workers.

The estimated costs resulting from re-training and re-skilling amount to somewhere between €350 million and €1.4 billion per year. Such costs are likely to weigh mainly on employers, though their economic impacts are projected to be marginal as they are small compared to total wage costs.

Key messages and recommendations

The study assumes that re-training and re-skilling will be effective in providing the necessary skills for the transition to climate neutrality, and it does not model the impacts of possible shortages in the medium-term. Ensuring that skills are indeed available is essential for the transition.

Collaboration between relevant stakeholders is paramount to understand evolving skills needs and to ensure alignment of educational curricula with technological and market developments. Education and training providers should be encouraged and supported to adapt regularly their programmes to emerging needs, especially in terms of digital and technical skills.

Participation in job-related education and training remains low in sectors that are key for the climate transition. Policies under the Union of Skills should, therefore, also aim to increase awareness of training opportunities, reduce barriers to participation, and incentivise both employers and workers to invest in lifelong up-and re-skilling. Supporting smooth transitions for workers moving between sectors and occupations, particularly towards those in high demand for the climate transition, is vital. Addressing both current and future skills needs will be critical to ensure that the transition is inclusive, economically viable, and socially just.

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