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Employment and Social Developments in Europe 2023 50 3. THE TWIN TRANSITION AND CHANGING SKILLS NEEDS For the twin transition to happen, education and training systems must ensure sufficient numbers of specialists equipped with the right skills to develop and implement new technologies and infrastructure. ( 139 ) The green transition is expected to have an overall positive effect on employment, but there are considerable differences in expected impacts across sectors, regions, and skill groups. As the green and digital transitions are strongly interlinked and entail an economy-wide transformation, investments in adult learning, upskilling and reskilling will be needed in most sectors to implement green-digital solutions. ( 140 ) More specifically, the twin transition will increase the need for the digital skills already in strong demand today. ( 141 ) This is likely to exacerbate labour shortages and skill gaps, especially in the short term. Given the priority to meet green and digital objectives and their significant impact on future skills needs, this section provides a separate analysis of how each of the transitions is expected to change skills and affect labour shortages. 3.1. Impact of green transition on labour and skills shortages Policies under the scope of the European Green Deal are expected to have positive effects on employment. There is a wide range of estimates of the expected employment effects, depending on the underlying assumptions (Box 2.3). According to some forecasts, if supported by the right employment and education policies, ( 142 ) net-zero policies could create between 1 million and 2.5 million jobs by 2030 in sectors with enhanced economic activity due to greening, as well as in other sectors indirectly affected (Box 2.2, Box 2.3). ( 143 ) The commitment to reach climate neutrality in the EU by 2050 and to shift to cleaner production modes was enshrined for the first time in the European Climate Law adopted in July 2021 ( 144 ) and is binding at national level. This commitment is accelerated by the European Green Deal Industrial Plan ( 145 ) and the Net Zero Industrial Act, ( 146 ) which are expected to significantly boost the demand for workforce in many industries (Box 2.4). Job losses are also projected, particularly in carbon-intensive industries, such as mining, manufacturing of steel and iron, or fuels. ( 147 ) Despite this, the transformation towards climate neutrality is predicted to generate net employment gains across all broad economic sectors by 2030, according to the impact assessment of the European Green Deal. ( 148 ) Nevertheless, labour shortages could hinder these employment gains. Almost all occupational categories are expected to benefit from the implementation of the European Green Deal. Cedefop's European Green Deal scenario forecasts significant additional employment increases for science and engineering associate professionals (3.0%), science and engineering professionals (2.4%), administrative and commercial managers (2.1%), chief executives, senior officials and legislators (1.7%), ICT professionals (1.5%), and business and administration professionals (1.2%). ( 149 ) However, those jobs may prove difficult to fill, given that skills in those areas are already scarce and the labour demand for these occupations is expected to grow. Among medium-skilled occupations, the highest impact is expected for refuse workers, building and related trades workers, electrical and electronic trades workers, and drivers, most of which are already experiencing persistent labour shortages. Although scientists, R&D researchers, specialised engineers and associate professionals may face only small changes in their employment share, they are indispensable to the development, design and implementation of green technologies, including the relevant infrastructure. ( 150 ) ( 139 ) (Muench et al., 2022). ( 140 ) For example, see (Cedefop, 2021a), (Cedefop, 2022c), (Cedefop, 2022f), (Cedefop, 2023a). ( 141 ) Technological advancement, including in sectors that are key to the green transition, increase the requirements for digital skills across the economy. For example, ICT and advanced electronic machinery are increasingly used to perform tasks in the building sector, including in the development of smart buildings, while improvements in fisheries and forestry sectors are increasing the demand for technological skills (Asikainen et al., 2021). ( 142 ) Policies increasing labour market and skills matching and labour market participation will play a key role in realising employment gains. For example, estimations in (European Commission, 2020f) show that using carbon revenue to reduce labour taxation for lower-skilled workers could increase employment by 0.45% in 2030 by stimulating low-skilled labour supply. ( 143 ) (Cedefop, 2021a); (Asikainen et al., 2021). ( 144 ) More information available here. ( 145 ) (European Commission, 2023b). ( 146 ) (European Commission, 2023h). ( 147 ) For example, up to 286 000 workers in the energy sector were predicted to experience job loss due to subdued economic activity in their sectors (Cedefop, 2021a). ( 148 ) (European Commission, 2020f). ( 149 ) (Cedefop, 2021a). ( 150 ) (Cedefop, 2022a).