A recent report by Eurofound, the European Union’s research agency to improve living and working conditions, includes a comprehensive impact analysis of the economic impact of the EU’s ‘Fit for 55’ plan, which aims to lead to a 55% reduction in emissions by 2030. Achieving this goal will require substantial changes in economic activity and a stride forward in energy efficiency and generation.
Despite this challenge, European experts conclude that, by 2030, ‘Fit for 55’ could increase employment by around 204,000. This means an increase of around 3% on the anticipated increase in employment if ‘Fit for 55’ were not implemented.
While on average ‘Fit for 55’ should increase employment, the experts predict that, in 12 countries, the environmental transformation will reduce jobs. This is because some countries depend on sectors such as mining, refineries, and construction, which will have to be reduced in scope. The biggest expected loss is in Latvia, where there will be a net loss in employment equivalent to 0.5% of all jobs. In countries like Poland around three quarters of all jobs in the mining sector will be lost.
In the case of Malta, employment is projected to increase by 0.25%. It is only in Italy and in Spain that, the Eurofound research believes, there will be a larger relative increase in employment than in Malta. The expected increase in our country is projected to be mainly in services, but there will be positive impacts also in manufacturing, energy, and construction. Most of the increase in jobs will be of highly skilled careers, especially at tertiary education level.
The Eurofound experts indicate that Malta needs to increase investment by around 20% of GDP to meet the environmental targets of ‘Fit for 55’. This is well below the nearly 35% increase that is expected in the EU. The biggest rise that will be needed is in Lithuania, where investment will need to be boosted by more than 90% of GDP. Malta has the sixth lowest need to boost investment. This reflects the fact that major changes have already been made – such as the switch to gas and the ship-to-shore projects.
In fact, the intensity of emissions per €1 million in GDP in our country is very contained. Malta has, relatively speaking, the sixth lowest level of emissions among European countries. The country with the highest relative level of emissions per million euros of economic activity is Bulgaria, with a level five times that of Malta.
Eurofound’s report notes that Malta will be the country with the largest increase in employment by 2030, an increase of some 2.8%. This is a rate almost ten times that forecast for the rest of the Union. In about eight countries, even without the changes of ‘Fit for 55’, employment is expected to decline, with the biggest decrease being of around 1.1% in Latvia. Even in Germany, employment is expected to fall by 0.2%.
Even when it comes to economic growth, Malta is projected to be the country with the greatest expansion, with real growth projected to average 3.9% per annum. This is about four times the predicted growth for the EU. It is this solid economic foundation that will facilitate Malta’s environmental transformation and turn ‘Fit for 55’ from a challenge into an opportunity.
Photo: Efrem Efre