In order to be successful, the energy transition must be an inclusive process, in which policies and investment plans are designed to oversee the creation of decent employment, social justice, the competitiveness of industry and economic development in Spain and in the European Union (EU). This is one of the main conclusions to be drawn from the session “EU Industry and the Energy Transition”, organised by EsadeGeo in collaboration with Fundación Repsol, which took place today on the Esade campus in Madrid. Javier Solana, President of EsadeGeo, and António Calçada, Vice Chairman of Fundación Repsol, participated in this event, among other business, trade union and political leaders.

In his address, Solana emphasised the global dimension of the challenges raised by the energy transition when seeking to mitigate climate change. In his opinion, “there will be an imperative need for coordinated action on the part of the international community and all the actors involved in this complex and multifaceted challenge,” in which the leadership of the EU will play a fundamental role. For his part, Calçada observed that the energy transition “has to be tackled in an orderly manner, and it must be accompanied by a technological and industrial development plan that does not endanger progress and competitiveness.” The climate and energy measures that are adopted “must be supported by an analysis of the impact on the economy and the competitiveness of Spain and Europe,” he added.

The energy transition of industry

The General Director of AEGE (Association of Energy-Intensive Industries), Fernando Soto, stated that “the electro-intensive industry in Spain is one of the drivers of the country’s development and social welfare, generating a total of 186,000 jobs, of which 66,000 are direct jobs”: the association is composed of 27 business groups, which have a total of 78 industrial plants on Spanish soil and consume 10% of the national demand for electricity. “The electro-intensive industry is preparing for decarbonisation through technological innovation and process improvement projects, which require a coherent European policy on energy and industry, with financial support and incentives for the use of carbon-neutral energies,” Soto declared. Furthermore, “the reduction of energy costs in Spain (where the average cost of electricity is 27% higher than in Germany and 21% higher than in France) would contribute to a reduction of the competitive gap and to the sustainability of the industry,” he observed.

With relation to Europe’s steel industry, Bartosz Nienałtowski, Public Affairs Manager of EUROFER (the European Steel Association), said that “this industry provides 330,000 direct jobs in 22 of the EU Member States; Spain lies in sixth position with 17,400 jobs in this industry, while Germany leads the field with 84,200 jobs.” In his opinion, one of the principal challenges faced by the European steel industry is the fall in European production and the increase in imports: “in 2018, the EU’s raw steel production fell by 14%, while the market share of finished and unfinished steel imports increased by 80% and more than 40% respectively.” According to the expert, not only do these indicators reflect a “loss of jobs and competitiveness,” but they also go against the decarbonisation objectives: “on average, steel imports into the EU have a higher carbon footprint than steel made in the EU.” Through the European Green Deal, the Commission “supports the advancement of projects whose objective is to cut the industry's carbon dioxide emissions by 30% by the year 2030 and 80-95% by the year 2050,” he declared. He added that in order to achieve this, “affordable access to a low carbon energy is essential, in addition to the creation of markets for low carbon steel and the creation of better conditions for competitiveness.”

Transition of employment and social justice

Bert de Wel, Senior Advisor of the Just Transition Centre of the International Trade Union Confederation, said that the policies for a just energy transition must “create mechanisms for an inclusive social dialogue–between governments, employers, workers, trade unions and other interested parties–while developing measures that generate trust, promote the creation of decent jobs and drive an effective transformation; these policies must also evaluate the social and economic impacts of ecological transition; implement a plan for the training and development of skills that will facilitate the transition of the workforce in the employment market; design social protection policies; increase the transfer of technology, innovation and know-how to developing countries; and finally, they must boost responsible investment.”

The European Green Deal

With regard to the European Green Deal, Antonio López-Nicolás, Deputy Head of Unit Renewables and CCS Policy at the European Commission, underlined that this is a roadmap for energy transition in Europe that will promote “economic development, the generation of employment and the technological and industrial leadership of the region.” It is a question of “transforming the EU's economy for a sustainable future, without leaving anyone behind,” he added. The objectives of the Deal also include “the ambition of reducing pollution levels to zero; preserving and restoring ecosystems and biodiversity; promoting a healthy and environmentally friendly food industry; accelerating the shift to sustainable and smart mobility; creating the conditions for efficient consumption of energy resources, the circular economy and the adoption of renewable energies in industry by means of safe and accessible supply; and ultimately, increasing the EU's climate ambition for 2030 and 2050,” López-Nicolás declared.

Bringing the event to a close, Marta Camacho, Repsol's Director of Institutional Affairs for Spain and Europe, highlighted the key role played by industry in the energy transition process in Europe: “due to the particular importance of industry in economic and social terms, it is vital that it should maintain certain levels of productivity and efficiency that will guarantee quality employment, while progress is made on the fronts of gradual decarbonisation and the reduction of CO2 emissions.” According to Camacho, “total technological neutrality, sustainable growth, appropriate legislation that will drive these factors and avoiding the relocation of industry” will be the levers to ensure that a satisfactory energy transition takes place.

Iván Martén, Senior Fellow at EsadeGeo, also participated in this event.