COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL 2022 Strategic Foresight Report Twinning the green and digital transitions in the new geopolitical context
Date: 2022-06-29
Institutions: European Commission, Secretariat-General
Subjects: EU environmental policy, EU policy, Russia, Ukraine, climate change policy, digital transformation, digitisation, energy policy, green economy, territorial dispute

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 29.6.2022  COM(2022) 289 final  COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL 2022 Strategic Foresight Report          Twinning the green and digital transitions in the new geopolitical context  
 
 
I.  Introduction 

The  world  is  experiencing  tectonic  geopolitical  shifts,  reinforcing  the  megatrends 
already  affecting  the  EU. 1 The  long-term  implications  of  Russia’s  military  aggression 
against Ukraine, including for energy, food, economy, security, defence and geopolitics, will 
clearly  affect  Europe’s  path  to  achieving  fair  green  and  digital  transitions.  However,  these 
and other future challenges will not divert the European Union from its long-term objectives. 
With  the  right  set  of  policies,  they  can  serve  as  a  catalyst  to  speed  up  achieving  them. 
Ultimately,  this  could  foster  our  resilience  and  open  strategic  autonomy  in  various  areas, 
from  energy,  food,  security  and  critical  supplies  –  including  raw  materials  needed  for  the 
transitions – to cutting-edge technologies.  

Against  this  new  geopolitical  backdrop,  and  drawing  on  a  fully-fledged  foresight 
exercise2,  the  2022  Strategic  Foresight  Report  presents  a  forward-looking  strategic 
reflection on the interactions between  the green and digital transitions. Both are at the 
top of the EU’s political agenda and their interplay will have massive consequences for the 
future.  Their  success  will  also  be  key  for  achieving  the  United  Nations  Sustainable 
Development Goals. While they are different in nature and each subject to specific dynamics, 
their  twinning  –  i.e.  their  capacity  to  reinforce  each  other  –  deserves  closer  scrutiny.  The 
green  transition  will  not  happen  without  the  targets  and  policies  set  out  in  the  European 
Green  Deal,  a  cross-cutting  strategy  to  reach  climate  neutrality  and  reduce  environmental 
degradation  by  2050.  Until  recently,  the  digital  transition  progressed  with  only  limited 
sustainability  considerations.  To  diminish  adverse  side  effects  and  deliver  its  full  potential 
for enabling environmental, social and economic sustainability, the digital transition requires 
appropriate policy framing and governance, as presented in the Digital Compass and Fit for 
553. 

On the path towards  2050,  twinning will depend on the  ability to deploy  existing and 
new  technologies  at  scale,  as  well  as  on  various  geopolitical,  social,  economic,  and 
regulatory  factors.  Based  on  their  analysis,  this  Communication  identifies  ten  key  areas 
where action will be needed. A comprehensive, future-oriented and strategic approach to the 
twin  transitions,  recognising  their  inherently  geopolitical  nature,  is  necessary  to  further 
reinforce their synergies and address tensions.  

1   The  2021  Strategic  Foresight  Report  identified  climate  change  and  environmental  degradation,  digital 
hyperconnectivity and technological transformation, alongside pressure on democracy and values, as  well 
as  shifts  in  the  global  order  and  demography,  among  the  key  megatrends  that  will  impact  the  EU’s  open 
strategic autonomy in the coming decades. (COM (2021) 750 final).  

future.  Key 

2   This Communication builds on the Joint Research Centre’s Science for Policy report ‘Towards a green and 
the  European  Union’ 
successful 
digital 
[https://publications.jrc.ec.europa.eu/repository/handle/JRC129319].  The  preparation  process 
included 
consultations  with  experts  and  stakeholders,  publication  of  a  call  for  evidence,  discussions  with  partners 
from  the  European  Strategy  and  Policy  Analysis  System,  and  Member  States  in  the  EU-wide  Foresight 
Network. 

requirements 

transitions 

twin 

for 

in 

3   Fit for 55': delivering the EU's 2030 Climate Target on the way to climate neutrality, COM(2021) 550 final. 

1 

 
 
 
                                                           
II.  Synergies and tensions between the green and digital transitions  

Digital  technologies  could  play  a  key  role  in  achieving  climate  neutrality,  reducing 
pollution,  and  restoring  biodiversity.  By  measuring  and  controlling  inputs,  and  with 
increased  automation,  technologies  like  robotics  and  the  internet  of  things  could  improve 
resource efficiency and strengthen the flexibility of systems and networks. Energy efficient 
blockchain-based  data  management  across  the  lifecycle  and  value  chain  of  products  and 
services  could  galvanise  the  progress  towards  a  more  circular  economy  and  competitive 
sustainability.4 Digital technologies could also support monitoring, reporting and verification 
of greenhouse gas emissions for carbon pricing. Digital product passports enable enhanced 
material,  component  and  end-to-end  traceability  and  make  data  more  accessible,  which  is 
essential  for  viable  circular  business  models.  Digital  twins5 could  facilitate  innovation  and 
the  design  of  more  sustainable  processes,  products,  or  buildings.  Quantum  computing  will 
facilitate  simulations  too  complex  for  classical  computers.  Space-based  data  technologies 
providing real-time global information monitor progress towards sustainability. Data sharing 
or gamification can increase public participation in steering the transitions and co-creation of 
innovations. 

Pursuing  the  green  transition  will  also  transform  the  digital  sector.  Renewables, 
renewable  hydrogen,  nuclear  energy  (including  small  modular reactors) and  nuclear  fusion 
technology6 will all be important in the context of growing energy needs in the digital sector. 
Fostering  policies  aiming  at  climate  neutrality  and  energy  efficiency  for  data  centres  and 
cloud  infrastructures  by  2030,  including  by  meeting  their  electricity  demand  with  solar  or 
wind energy, will support the greening of data-based technologies, such as big data analytics, 
blockchain,  and  the  internet  of  things.  However,  delays  in  the  deployment  of  renewable 
generation capacity and infrastructure can pose a challenge. Better location planning and use 
of  suitable  technologies  could  allow  reusing  the  heat  produced  by  data  centres  in  tertiary 
sectors.  Sustainable  finance  will  help  mobilise  climate  neutral  investments  in  the  digital 
sector.  Better design, more circular business models and production patterns can help reduce 
electronic waste. On the demand side, consumption and practices of businesses and citizens 
will be important to reduce energy consumption when using digital technologies. 

Unless  digital  technologies  are  made  more  energy-efficient,  their  widespread  use  will 
increase  energy  consumption.  Information  and  communications  technology  (ICT)  is 
responsible for 5-9% of global electricity use and around 3% of greenhouse gas emissions.7 
The lack of an agreed framework for measuring the environmental impact of digitalisation, 

4   The  ability  of  the  EU’s  economy,  industrial  ecosystems,  and  companies  to  move  towards  a  sustainable, 
productive,  fair,  and  stable  macroeconomic  model,  enabled  by  digital  and  clean  technologies,  making 
Europe a transformational frontrunner and a competitive first-mover at global level. (COM(2019) 650 final). 
5   A digital twin is a virtual representation of an object or system that spans its lifecycle, is updated from real-
time data, and uses simulation, machine learning and reasoning to help decision-making. The development 
of the EU Destination Earth (DestinE) and its digital earth twins is key to predicting the effects and building 
resilience  to  climate  change.  In  addition,  the  Digital  Twin  of  the  Ocean  will  help  to  design  the  most 
effective  ways  to  restore  marine  and  coastal  habitats,  support  a  sustainable  blue  economy,  mitigate,  and 
adapt to climate change. 

6   35 countries are collaborating to build the world's largest magnetic fusion device, to prove the feasibility of 

fusion as a large-scale and carbon-free energy source based on the same principle that powers stars. 

7   Freitag. C, et al (2021). The real climate and transformative impact of ICT: A critique of estimates, trends, 

and regulations, Patterns 2. 

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including possible rebound effects8, lead to marked variations in these estimates. However, 
studies show that ICT power consumption will continue to grow9, driven by increasing use 
and production of consumer devices, demand from networks, data centres, and crypto assets. 
Power  consumption  will  also  rise  due  to  the  increased  use  of  online  platforms,  search 
engines,  virtual  reality  concepts  such  as  the  metaverse10,  and  music  or  video  streaming 
platforms.  On  the  other  hand,  deployment  of  next  generations  of  low-power  chips11 and 
more  efficient  connectivity  technologies  (5G  and  6G,  networks  powered  by  artificial 
intelligence) might reduce the overall footprint of ICT.  

Further  tensions  will  emerge  in  relation  to  electronic  waste  and  environmental 
footprints  of  digital  technologies.  Greater  reliance  on  electronics,  phones  and  computer 
equipment  is  accelerating  the  global  production  of  electronic  waste,  which  could  reach  75 
million  tonnes  by  2030.12 In  the  EU,  currently  only  17.4%  of  this  is  properly  treated  and 
recycled13, while electronic waste production is increasing annually by 2.5 million tonnes.14 
Without  appropriate  policies,  every  switch  to  new  standards  or  technologies  will  require  a 
massive  replacement  of  equipment.  For  example,  5G  and  6G  will  require  users  to  replace 
equipment to fully reap their benefits, as most existing smartphones, tablets, and computers 
would  only  be  backwards  compatible.15 Progress  in  digitalisation  will  also  increase  water 
usage, e.g. for cooling data centres or chip manufacturing. Mining and processing of the raw 
materials  necessary  for  the  transitions  raises  environmental  and  ethical  concerns.  Finally, 
climate  and  environmental  risks  will  affect  the  lifespan  and  functioning  of  critical  digital 
infrastructures.  Over  the  next  30  years,  the  cost  of  damage  from  extreme  weather  events 
across the EU might rise by 60%.16  

Overall,  if  properly  governed,  digital  technologies  can  help  create  a  climate  neutral, 
resource-efficient  economy  and  society,  cutting  the  use  of  energy  and  resources  in  key 
economic sectors and becoming more resource-efficient themselves. 

III. Critical technologies for the twinning  

Energy,  transport,  industry,  buildings,  and  agriculture  are  the  most  greenhouse  gas 
emitting  sectors  in  the  EU.17 Reducing their footprint, as also envisaged by the Fit for 55 
package,  and  strengthening  their  resilience  is  thus  critical  for  a  successful  twinning. 
However,  without  appropriate  technologies and  policies, the adverse  environmental  impact 

8   Behavioural responses to improved efficiency that counterweight potential savings. 
9   E.g.  according  to  Andrae,  A.  (2022),  Net  global  effect  of  digital  -  power  and  carbon,  the  ICT  electricity 

footprint could grow from 1988 terawatt-hours in 2020 to 3200 in 2030.  

10   Council of the European Union (2022). Metaverse- virtual world, real challenges.  
11   With the European Chips Act (COM(2022) 45 final), the EU aims to address semiconductor shortages and 
strengthen  its  technological  leadership,  i.a.  by  increasing  the  production  capacity  to  20%  of  the  global 
market by 2030. 

12   Discarded  products  with  a  battery  or  plug  (United  Nations  Institute  for  Training  and  Research 

https://ewastemonitor.info/gem-2020/). 

13   WEEE Forum (2021): https://weee-forum.org/ws_news/international-e-waste-day-2021/. 
14   ITU (2020). The Global E-waster monitor. 
15   EIT Digital (2022). Digital Technologies and the Green Economy report. 
16   EEA (2022). Economic losses and fatalities from weather- and climate-related events in Europe. 
17   In  2019  they  represented  the  following  part  of  greenhouse  gas  emissions  per  sector  in  the  EU:  energy 
supply  27%;  domestic  transport  23%;  industry  21%;  residential  and  commercial  12%;  agriculture  11%. 
(European Environmental Agency greenhouse gases data viewer 2021). 

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of  these  sectors  might  be  more  difficult  to  abate.  At  the  global  level,  this  is  especially  the 
case,  as  an  anticipated  population  of  9.7  billion  by  2050  with  higher  average  income  will 
require more food, industrial products, energy, housing, mobility, and water. 

Until 2030, most of the reductions in CO2 emissions will come from technologies available 
today. Yet, climate neutrality and circularity by 2050 will be enabled by the development of 
new  technologies,  currently  at  the  experimental,  demonstration  or  prototype  phase.18 This 
includes various digital technologies that might foster twinning across all sectors.  

1.  Digitalising energy  

Russia’s  military  aggression  against  Ukraine  has  increased  the  importance  of  the 
geopolitical aspects of the clean energy transition, highlighting the need to accelerate it 
and to join forces to achieve a more resilient energy system and a true Energy Union.19 
The EU has put forward ambitious options to mitigate the impact of high energy prices on 
consumers  (especially  vulnerable  and  at  risk  of  energy  poverty)  and  industry  and  to 
strengthen  the  security  of  the  EU’s  energy  supply.  In  the  medium  term,  an  integrated  EU 
system  largely  based  on  producing  clean  energy,  diversifying  energy  supplies,  as  well  as 
increasing  energy  savings  and  energy  efficiency  in  all  sectors,  is  the  most  cost-effective 
solution to reduce the EU’s dependence on fossil fuels. For example, full implementation of 
the  Fit  for  55  package  would  lower  the  EU’s  gas  consumption  by  30%  by  2030.20 This  is 
even more relevant as progress of the twin transitions will increase the demand for electricity. 

Digitalisation can strengthen the EU’s energy security. Digital technologies can support 
more efficient flows of energy carriers and increase interconnectivity between markets. They 
can provide the necessary  data to  match supply  and demand at  a more disaggregated level 
and close to real time. The forecasting of energy production and demand can be improved by 
digital  technologies,  novel  sensors,  satellite  data  and  blockchain.  This  would  allow  smart 
grids  to  adjust  consumption  to  weather  conditions  affecting  the  production  of  variable 
renewable energy. That will enable the effective management and distribution of renewable 
energy,  facilitate  cross-border  exchange  and  prevent  interruptions.  Digitalisation  will 
empower people and businesses, allowing them to shift consumption to green energy sources, 
adjust consumption, or even trade energy. 'Energy-as-a-service'21 and data-driven innovative 
energy  services  can  change  the  way  energy  suppliers  and  consumers  interact.  In  addition, 
microgrids  and  self-organised  grids  can  become  a  bottom-up  way  of  managing  the  energy 
system.  To  increase  resilience  against  hybrid  threats,  the  digitalisation  of  energy  systems 
will  require  enhanced  cybersecurity  capacities  and  secure,  autonomous,  and  ubiquitous 
communications systems, such as secure space-based connectivity.  

2.  Enabling greener transport with digital technologies 

Coupled with population growth and higher living standards, the demand for transport 
will  continue  to  grow.  Globally,  passenger  transport  could  increase  nearly  threefold 

18   International Energy Agency (2021). 
19   REPowerEU Plan, COM(2022) 230 final. 
20   COM(2022) 230 final. 
21   Business model where energy service providers do not simply offer a form of energy but rather a ‘turn-key 

energy product’ such as keeping the temperature in a building in a certain target range. 

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between 2015 and 2050. In the EU, road passenger transport is expected to grow by around 
21% and freight  transport by 45% by 2050, notwithstanding efforts to  shift  more traffic to 
other  modes  such  as  rail  or  waterborne. 22  Urbanisation,  growing  consumer  awareness, 
evolving costs of sustainable transport options (still relatively high today), and new business 
models (including when it comes to supply chain management) will also affect the sector. In 
addition,  digitalisation  may  further  accelerate  the  hybridisation  of  the  workplace,  affecting 
workers’ local and cross-border mobility. 

Combined  with  digital  technologies,  broader  applications  for  next-generation 
batteries23 will  enable  a  major  shift  of  mobility  towards  sustainability.  This  applies  to 
various modes of transport, including passenger and freight, heavy-duty trucks, or aviation. 
For  example,  electric  aircraft  could  potentially  connect  small  regional  airports  throughout 
the  EU.  Managing  the  additional  demand  for  electricity  from  transport,  both  for  direct 
electrification  and  for  mass  production  of  renewable  and  low-carbon  fuels  for  hard-to-
decarbonise sectors such as aviation  and waterborne, must  be matched with  improving the 
energy-efficiency of electric vehicles. It also requires a system-level approach for integrating 
sensors, computing power and advanced software. The use of data  from  vehicles and their 
environment  can  optimise  charging.  Bi-directional  charging  could  provide  flexibility  to 
smart  electricity  grids,  supporting  the  integration  of  renewable  energy  and  maximising  its 
use. Moreover, in combination with space-based services, digitalisation can support reliable 
solutions  for  connected  and  automated  (including  autonomous)  vessels  and  vehicles, 
contributing  to  increased  efficiency  of  traffic  management  and  lower  fuel  consumption. 
Experimental designs such as test beds or living labs, which allow testing mobility solutions 
in a real-world environment, can help better understand the needs of end-users. Digital twins 
of vehicles can provide full data about real-time performance, service history, configuration, 
parts  replacement,  or  warranty.  Smart  mobility  will  require  major  investments  to  develop 
new  technologies  and  infrastructures,  and  access  to  various  digital  technologies  such  as 
artificial intelligence, cloud, or semiconductors. Moreover, to reach a critical mass and avoid 
dependence on large dominant actors, players in the sector will need to build partnerships, 
pool  investments,  and  agree  on  common  standards,  infrastructures,  platforms,  and 
governance  frameworks.  Social  acceptance  of  self-driving  vehicles  and  the  cost-related 
accessibility will also be key.  

Digitalisation and artificial intelligence will also boost the emergence of more efficient 
multimodal  mobility  solutions,  by  combining  all  modes  in  a  single,  interoperable 
platform,  such  as  'mobility-as-a-service'  or  'transport-as-a-service'.  This  might  raise 
efficiency,  consumer choice, accessibility, and affordability, notably of public transport.  In 
addition,  digital  platforms  will  boost  other  options  such  as  pooling  and  sharing.  Digital 
technology  is  also  key  to  ensuring  that  connected  multimodal  mobility  services  emerge  in 
cities,  as  well  as  remote  and  rural  regions,  allowing  citizens  and  businesses  to  access  and 
choose between different options for both passenger and freight transport. In addition, new 
low-emission,  digital  and  artificial  intelligence-based  technologies  and  solutions,  such  as 
drones, have the potential to offer a wide spectrum of new applications and services, from 

22   Compared with 2015, based on the Fit for 55 MIX scenario. European Commission (2021), Policy scenarios 

for delivering the European Green Deal. 

23   For example, solid-state, cobalt-free lithium-ion, or those using DRX materials (disordered rock salts with 

excess lithium, which allow battery cathodes to be made without nickel or cobalt). 

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goods’  delivery  to  medical  assistance.  This  will  require  further  interoperability  between 
different  modes,  operators  and  platforms,  and  ubiquitous  connectivity.  In  particular,  better 
and broader access  to  mobility data will help  public authorities monitor and plan transport 
activities,  infrastructure  and  services  and  better  match  supply  and  demand  at  a  lower  cost 
and environmental impact. Access to data is also key to improving traffic management and 
giving customers and businesses a wider choice of sustainable mobility solutions. 

3.  Galvanising the industry’s climate-neutrality through digital technologies 

To  be  on  track  for  climate  neutrality  in  2050,  already  by  2030  the  EU  industry  will 
need  to  decrease  its  CO2  emissions  by  23%  compared  with  2015.24 Industry is globally 
responsible for about 37% of total final energy consumption25 and about 20% of greenhouse 
gas emissions.26 Four energy-intensive industries – steel, cement, chemicals, pulp, and paper 
–  account  for  around  70%  of  its  total  global  CO2 emissions.  They  are  also  the  largest  EU 
industrial energy users.  

Digital  technologies  will  be  important  to  manage  the  supply  and  demand  of  large 
industrial  energy  users  in  a  system  with  diverse  sources  and  feedstock.  Smart  meters, 
including sub-meters,  and sensors could increase energy  efficiency,  by  providing real-time 
information  about  its  consumption  and  feeding  into  the  energy  management  tools. 
Supervisory  control,  big  data  analytics  and  data  acquisition 27  systems  will  improve  the 
efficiency of industrial processes as well as process data to enable smarter decisions. Digital 
twins  will  help  improve system  designs,  test  new  products,  monitor  and  ensure  preventive 
maintenance,  assess  the  product  lifecycle,  and  select  optimal  materials.  Data-driven 
optimisation will help improve existing materials, develop greener alternatives, and prolong 
their  lifetime.  Monitoring  and  tracking  provide  information  on  materials  or  parts  used  in 
products, which could boost circularity through better maintenance and  high quality closed 
loop recycling. Integration of manufacturing, digital and other advanced technologies,  such 
as  robotics  or  3D  and  4D28 printing,  will  also  have  a  major  role  to  play.  Uptake  of  digital 
solutions  by  the  industrial  sector  requires  higher  levels  of  technological  readiness  and 
cybersecurity to protect the data of industrial processes and the integrity of their functioning.  

4.  Greening buildings with digitalisation 

Demographic  trends  and  urbanisation  will  drive  changes  in  demand  for  buildings. 
Growing urban population will double the size of the global building stock by 2060. In the 
EU,  the  number  of  people  living  in  predominantly  urban  and  intermediate  regions  might 
reach  80%  by  2050.29 There  will  also  be  more  small-size  households,  likely  to  consume 
more  energy  per  person  than  those  bigger  in  size.  These  trends,  matched  with  the  use  of 

24   SWD(2021) 601 final. 
25   International Energy Agency (2020). 
26   United States Environmental Protection Agency (2021). 
27   Computerised system gathering and processing data and applying operational controls over long distances. 
28   4D-printed objects can change shape or self-assemble over time if exposed to a stimulus such as heat, light, 

water, magnetic field, or other form of energy that activates the process of change. 

29   Source: Eurostat. The COVID-19 pandemic showed growing interest in moving to rural areas. Whether this 
is a short-lived or could remain a longer-term trend will depend, among other things, on the connectivity of 
rural areas. See more:  A long-term Vision for the EU’s rural areas (COM(2021) 345 final) and Scenarios 
for EU rural areas 2040, https://data.europa.eu/doi/10.2760/29388.  

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digital appliances for remote work, education, smart or independent living, will intensify the 
energy  consumption  of  buildings.  In  the  EU,  this  sector  currently  accounts  for  40%  of 
energy consumption, while 75% of the building stock is energy inefficient.30  

To achieve climate neutrality and significant benefits from a zero-pollution perspective, 
new buildings will need to be zero-emission by 2030 and one fifth of the existing ones 
will  need  to  be  retrofitted. 31  Reaching  climate  neutrality  in  the  sector  would  require 
replacing fossil fuel heating with sustainable alternatives, such as heat pumps, reducing the 
carbon footprint from water use and improving overall energy performance, while ensuring 
that solutions are available to all. This will contribute to the EU’s objective of renovating 35 
million  energy-inefficient  buildings  by  2030. 32  Smart  buildings  and  meters  could  help 
achieve  these  goals  and  tackle  energy  poverty.  By  2030,  building  information  modelling 
could further increase the sector’s energy and water efficiency, providing long-term analysis 
of  design  choices  in  construction  and  use  of  buildings.  Availability  of  anonymised  data, 
smart  appliances,  as  well  as  consumer  behaviour  will  enable  targeted  investments  in 
renovations. Digital logbooks and life-cycle analysis will be necessary to assess, report, store, 
and  track  information  on  whole-life  emissions,  and  will  help  reduce  the  environmental 
impact  of materials  and  help  prevent  the use of toxic ones.  Digital  twins could  change the 
way  urban  spaces  are  planned,  monitored,  and  managed.  This  could  translate  into  reduced 
urban  emissions,  increased  resource  efficiencies  and  quality  of  life,  better  use  of  building 
space, and could make buildings more resilient to hazardous events.  

5.  Smarter and greener agriculture 

Climate and environmental crises, changes in demography and geopolitical instability 
will  challenge  the  resilience  of  the  EU’s  agriculture  and  its  path  to  sustainability. 
Without policy action, global agricultural emissions might increase by 15-20% by 2050. By 
that  time,  10%  of  the  global  area  currently  fit  for  crops  and  livestock  is  projected  to  be 
climatically  unsuitable. 33  Other  threats  will  appear  for  the  biosphere,  water,  soil,  or 
biodiversity.  In  the  new  geopolitical  context,  the  EU  needs  to  reduce  its  dependence  on 
import  of  feed,  fertilisers,  and  other  inputs.  This  has  to  happen  without  undermining 
productivity, food security or the greening of the sector, and while tackling food insecurity 
in low-income partner countries.  

If properly  deployed,  digital  technologies  can enable  smart  and  greener  farming.  The 
increased use of  digital  sensing in-situ (to  adapt treatments to  specific  conditions) and  EU 
space-based services could reduce the use of water, pesticides, fertilisers, and energy, which 
will  also  benefit  human  and  animal  health.  Digital  twins  will  provide  data  to  manage  the 
diversification of products and use functional biodiversity to redesign pest control. Quantum 
computing,  in  combination  with  bioinformatics  and  plant  genomics,  can  enhance  the 
understanding  of  the  biological  and  chemical  processes  needed  to  reduce  pesticides  and 
fertilisers.  Digital  platforms  facilitating  local  distribution  and  avoiding  food  waste  could 
boost local production and shorten consumption circuits. Satellite data, sensors, blockchain, 

30   COM(2021) 802 final. 
31   COM(2021) 558 final; COM(2021) 802 final. 
32   COM(2020) 662 final.  
33   IPCC  (2022).  Impacts,  Adaptation  and  Vulnerability.  Working  Group  II  Contribution 

to 

the 

Intergovernmental Panel on Climate Change Sixth Assessment Report. 

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and  data  from  along  the  value  chain  could  increase  traceability  and  transparency.  Open 
agricultural digital platforms providing a basis for secure and trustworthy data sharing and 
digital  services,  such  as  precision  farming,  could  strengthen  fair  collaboration  in  the  value 
chain  and  create  efficient  marketplaces.  Broader  uptake  of  these  technologies  will  require 
lower  installation  and  maintenance  costs  and  higher  connectivity  in  peripheral  and  rural 
areas. In addition, digital solutions developed for standardised processes will need to support 
more  diversified  farming  models.  Trust,  high  levels  of  security,  and  appropriate  skills  will 
determine the uptake of twinning-related technologies. 

IV. Geopolitical, economic, social, and regulatory factors determining twinning 

The  current  geopolitical  shifts  confirm  the  need  to  accelerate  the  twin  transitions, 
reinforcing  the  EU’s  resilience  and  open  strategic  autonomy.  The  repercussions  of 
Russia’s  military  aggression  against  Ukraine  have  already  changed  geopolitical  and 
economic  realities. This  includes various  factors  relevant  for  twinning:  soaring energy  and 
food prices and related social implications, the potential need to temporarily increase the use 
of  coal,  further  pressure  on  public  finances,  higher  inflation  rates,  increased  cyber  risks, 
issues  with  supply  chains,  and  impaired  access  to  critical  raw  materials  and  technologies. 
The new sense of urgency to speed up the transition away from fossil fuels could prove to be 
a  tipping  point  for  the  green  transition.  The  geopolitical  situation  will  also  galvanise  the 
transformation  of  supply  chains,  resulting  from  changes  in  global  labour  and  production 
costs, as well as the repercussions of the COVID-19 pandemic. It will add pressure to move 
to less vulnerable, more diversified, and more reliable supply chains and, possibly, ‘friend-
shoring’34.  This  could  in  some  cases  also  reduce  the  carbon  footprint  and  foster  circular 
economy.  In  this  context,  EU  partners  such  as  South  Korea,  the  United  States,  and  Japan 
have for instance  also  put  in  place or recently started building up supply chain  monitoring 
systems and domestic capacities. 

Securing  access  to  critical  raw  materials  will  be  paramount  for  the  EU’s  twin 
transitions.  Currently,  the  EU’s  dependence  on  third  countries,  including  China,  for  a 
number  of  critical  raw  materials  is  even  greater  than  that  on  Russia  for  fossil  fuels35.  The 
EU’s  own  production  accounts  for  only  4%  of  the  global  supply  chain  of  critical  raw 
materials  used  in  the  production  of  digital  equipment,  such  as  palladium,  tantalum,  or 
neodymium.36 The EU also lacks an adequately scaled-up mining, processing, and recycling 
industry. Progress in developing domestic deposits, including those of strategic importance 
for the economy, has been insufficient so far, notably as projects continue to face significant 
obstacles. At the same time, reaching our clean energy goals will require increasing amounts 
of various raw materials, e.g. a 3500% increase in the use of lithium, a key component for 
electric mobility. Chile currently holds 40% of lithium deposits, while China hosts 45% of 
its refining facilities worldwide.37 In addition, a 330% increase in the use of cobalt, and a 30-

34   Deliberately sourcing critical materials, goods or services with allies who share the same values. 
35   Strategic  dependencies  and  capacities,  SWD(2021)  352  final;  EU  strategic  dependencies  and  capacities: 

second stage of in-depth reviews, SWD(2022) 41 final.  

36   China alone accounts for 86% of the global supply of neodymium. Palladium is mostly provided by Russia 
(40%),  and  tantalum  by  the  Democratic  Republic  of  the  Congo  (33%).  European  Commission  (2020). 
Critical Raw Materials for Strategic Technologies and Sectors in the EU: a foresight study. 

37   European Commission (2020). Critical Raw Materials for Strategic Technologies and Sectors in the EU: a 

foresight study. 

8 

 
                                                           
35%  increase  in  the  use  of  aluminium  and  copper  are  expected.38 Trade,  cooperation,  and 
partnerships  with  a  diversified  array  of  mineral-rich  and  like-minded  countries  remain  of 
particular importance. The global surge in demand heightens the competition for resources 
and  is  likely  to  worsen  the  production  concentration  thus  creating  additional  geopolitical 
risks  on  the  supply.  Beyond  the  access  to  critical  raw  materials,  the  ability  to  set 
environmental  and  social  standards,  ensuring  the  sustainability  of  mining,  refining,  and 
recycling activities, and production of energy, will be key in the new geopolitical context.39 

Coupled  with  enough  investment,  increased  circularity40 and  precision  in  production 
might  help  reduce  these  strategic  dependencies.  Digitalisation  might  further  accelerate 
circularity,  by  improving  design,  increasing  accuracy  in  production,  and  improving  repair, 
refurbishment, and recycling processes. For instance, after 2040, recycling could be the EU’s 
major  source  of  supply  for  most  transition  metals,  together  with  the  continued  need  for 
primary  metals.41 Recycling  will  be  even  more  important,  as,  for  instance,  production  of 
steel  or  aluminium  from  scrap  is  significantly  less  energy-intensive  than  from  raw 
materials.42 Both  the  quantity  and  quality  of  recycling  are  relevant.  For  instance,  copper 
contamination of steel and aluminium leads to major losses in value and consequent higher 
energy use and emissions. 

The  geopolitics  of  technologies  will  gain  in  importance.  Access  to  critical  technologies 
will provide a competitive advantage and reduce strategic dependencies. The EU’s currently 
limited  capacity  in  some  horizontal  technologies  weakens  its  position. 43  Technological 
competition  could  rapidly  increase,  leading  to  the  fragmentation  of  global  innovation 
ecosystems.  This  can  increase  costs  and  cybersecurity  risks  especially  for  dual-use 
technologies,  e.g.  5G  and  6G  infrastructure  or  digital  technologies  in  agriculture.44 This  is 
even  more  relevant  as  the  amount  of  collected  data,  including  on  consumers’  habits  and 
behavioural  patterns,  and  the  number  of  connected  appliances  will  massively  increase. 
Moreover, rivalries based on values and societal models are also expected to grow. This is 
already  visible  in  different  approaches  to  the  internet.  For  instance,  limiting  access  to 
specific content (e.g. China, Russia), pursuing a value-based approach (e.g. EU focus on data 
privacy and trustworthy artificial intelligence) or promoting specific  models of governance 

38   Metals  for  Clean  Energy:  Pathways  to  solving  Europe’s  raw  materials  challenge,  KU  Leuven  and 

Eurometaux, 2022. 

39   Danino-Perraud  R.  (2021),  Géoéconomie  des  chaînes  de  valeur:  les  matières  premières  minérales  de  la 

filière batterie, Études de l’Ifri, Ifri. 

40   E.g.  the  EU  could  meet  52%  of  lithium  demand,  49%  for  nickel  and  58%  for  cobalt  in  2050  for  electric 
mobility  by  recycling  end-of-life  batteries.  Rizos,  V.,  Righetti,  E.,  (2022)  Low-carbon  technologies  and 
Russian imports: How far can recycling reduce the EU’s raw material dependency?, CEPS Policy Insight. 
41   Metals  for  Clean  Energy:  Pathways  to  solving  Europe’s  raw  materials  challenge,  KU  Leuven  and 

Eurometaux, 2022. 

42   Recycling can vastly reduce energy consumption by a theoretical factor of 27 for steel and a practical factor 
of  30  for  aluminum.  (Komiyama,  H.  (2014), Beyond  the  Limits  to  Growth:  New  Ideas  for  Sustainability 
from Japan, Science for Sustainable Societies). 

43   For example, in quantum computing 50% of the top companies are in the US, 40% in China and none in the 
EU.  In  5G,  China  captures  nearly  60%  of  external  funding,  the  US  27%,  Europe  11%.  In  artificial 
intelligence, the US captured 40%, Europe 12% and Asia (including China) 32%. In biotech in 2018–20, 
the  US  spent  $260  billion,  Europe  $42  billion,  China  $19  billion.  McKinsey  Global  Institute  (2022). 
Securing Europe’s future beyond energy. 

44   Angyalos,  Z.  &  Botos,  S.  &  Szilagyi,  R.  (2021).  The  importance  of  cybersecurity  in  modern  agriculture, 

Journal of Agricultural Informatics. 

9 

 
                                                           
(e.g.  largely  privatised,  like  in  the  US,  or  driven  by  the  state,  as  in  the  Chinese  cyber-
sovereignty).45 There  are  growing  concerns  about  links  between  malicious  cyber  activities 
and  disinformation,  which  threaten  democracy,  aggravate  divisions,  and  hinder  access  to 
accurate information. This is relevant, as the last 30 years of democratic progress has been 
eradicated46:  the  average  level  of  global  democracy  in  2021  is  down  to  its  1989  level.  In 
addition,  the  current  geopolitical  context  might  affect  twin  transitions-related  projects  in 
partner  countries,  which  are  already  facing  financial  and  supply  constraints  due  to  the 
consequences of the COVID-19 pandemic. This challenge is becoming even more vital, as, 
for  the  first  time,  progress  at  global  level  towards  the  United  Nations  Sustainable 
Development Goals has been reversed.47 

Adjusting our policies towards a new economic model will be key to achieving the twin 
transitions.  This  entails  reorienting  the  traditional  view  of  economic  progress  towards  a 
more  qualitative  one  evolving  around  wellbeing,  resource  efficiency,  circularity,  and 
regeneration. Ultimately, reaching climate neutrality, sustainable resource use, zero pollution 
and halting the decline in biodiversity, entails a profound change of the economic and social 
policies,  driven  by  an  appropriate  mix  of  market-based  instruments  (for  example,  carbon 
pricing)  and  investments  into  sustainable  projects,  by  both  the  public  and  private  sectors. 
The growth of social enterprises and investments for impact is also a galvanising factor for 
this shift.  

The  twin  transitions  will  be  fair  or  will  not  be:  inclusiveness  and  affordability  will 
condition  their  success.  People  with  low  and  medium  income  are  more  vulnerable  to  the 
impacts and costs of the twin transitions, e.g. job automation, access to digital solutions and 
digital public services, higher energy and food prices, financing improvements in buildings’ 
energy efficiency, or transport poverty48. There is also a gap between tech-savvy firms and 
those  technologically  lagging  behind.  Regional  disparities  in  the  level  of  economic 
development and social prosperity may further exacerbate these dichotomies. Frictions in the 
labour  and  capital  market  could  make  them  more  lengthy  and  costly.  In  this  context, 
achieving  climate  neutrality  and  environmental  sustainability  will  only  be  possible  if 
accompanied by measures supporting  these  groups in bearing  the  related financial burdens 
and  by  bridging  disparities.49 Reaching  the  objectives  of  the  EU  Digital  Decade  and  the 
European Pillar of Social Rights will be crucial to close these gaps, but more action may be 
needed. This is even more compelling in view of the fact that those for whom the transition 
is most difficult to bear are those who are on the lowest end of emissions. Indeed, currently 
the richest 10% of Europeans emit  per capita more than three times as  much as the rest of 
Europe’s citizens.50 

The twin transitions will result in profound shifts in the EU labour market and related 
skills. Sectors and regions with heavy dependency on coal mining, fossil fuel extraction, and 

45   The Economist Intelligence Unit (2022). Five ways in which the war in Ukraine will change business. 
46   Boese,  V.,  et  all  (2022).  Democracy  Report  2022:  Autrocratization  Changing  Nature?  Varieties  of 

Democracy Institute, V-DEM. 

47   This includes reducing inequality, lowering carbon emissions and tackling hunger, where progress stalled or 
reversed. UN (2021). Progress towards the Sustainable Development Goals: report of the Secretary-General. 

48   Either due to the cost, or because the services do not exist. 
49   This also includes taking into account gender-specific consumption and investment patterns. 
50   https://wir2022.wid.world/chapter-6/  

10 

 
                                                           
related processing and supply chains will see job losses. On the other hand, new jobs will be 
created as a result of the green transition, e.g. in  clean energy, renovation, and the circular 
economy.51 Similarly, the digital transition is likely to create new employment and business 
opportunities, e.g. in advanced technologies, while leading to the loss of other jobs, fully or 
partially  automated.  Further  digitalisation,  accelerated  by  COVID-19,  will  also  affect 
conditions and patterns of work, as well as access to social protection. These processes will 
not  necessarily  be  simultaneous,  and  their  impact  on  different  companies,  sectors  and 
regions  will  be  uneven,  implying  potential  economic  and  labour  market  imbalances.  The 
transformed content of jobs and  the reallocation  of employment  will require different skill 
sets. Overall, the labour market effects of the twin transitions are potentially complementary, 
with amplifying and cancelling effects that merit further research.  

Production and consumption patterns will evolve. Technologies such as cloud computing, 
the  internet  of  things  or  big  data  analytics  will  increasingly  enable  new  business  models, 
including servitisation – selling services, rather than products. For example, manufacturing-
as-a-service will allow smaller companies to use more efficient cutting-edge manufacturing 
facilities. Consumption patterns, also underpinned by demographic change, will be of major 
importance,  as  household  consumption  drives  up  to  72%  of  global  greenhouse  gas 
emissions.52 Consumer choices, such as using an electric vehicle, installing a heat pump, or 
retrofitting  a  house,  could  reduce  cumulative  CO2  emissions  by  around  55%  globally.53 
Behavioural choices, e.g. changing diet, using public transport or cycling, will also be key, 
both for the environment and the overall health of the population. Digital technologies will 
also  affect  consumption  patterns.  With  the  rise  of  e-commerce,  they  will  facilitate 
consumption and shape consumer decisions, increasingly based on digital information. They 
will also galvanise the social, sharing, and circular economies, as well as shifts from owning 
to  producing  and  trading  assets,  e.g.  renewable  energy  or  second-hand  items,  like  fashion. 
Personal monitoring of pollution exposure or contribution and access to environmental data 
through networks of micro-sensors and smart devices will empower people in their choices. 

Standards  will  be  important  for  enabling  the  twinning.  They  can  support  the 
development  of  testing  methods,  management  systems  or  interoperability  solutions 
necessary for the twin transitions. In many cases they are a requirement to access the market 
and  support  the  implementation  of  EU  legislation  and  policy  objectives,  such  as  the  EU’s 
harmonised approach to sustainable products. Data standards will play an important role in 
ensuring that the exponential increase in the volume from different origins and private data54 
can  be  used  efficiently  and  reliably.  While  standardisation  is  vital  for  implementing  our 
policy  objectives,  many  non-EU  countries  increasingly  use  it  assertively,  to  provide  their 
industries with increased market access and technology rollout. In that sense, the role of the 
EU in shaping global standards, and the voice of EU companies in regional standard setting 
bodies, will remain key. 

Public  and  private  investment  will  remain  key  for  the  transitions,  also  supported  by 
‘twinning-friendly’ capital markets. The EU’s 2021-2027 long-term budget, coupled with 

51   European Commission (2021). The Future of Jobs is Green.  
52   United Nations Environment Programme (2020). Emissions Gap Report 2020. 
53   International Energy Agency (2021). Net zero by 2050 - A Roadmap for the Global Energy Sector. 
54   Projected figures estimate that global data  volume will increase 530%, from 33 zettabytes in 2018 to 175 

zettabytes in 2025, (COM(2020) 66 final). 

11 

 
                                                           
NextGenerationEU, totals EUR 2.018 trillion. At least 30% will be spent on fighting climate 
change – the highest share ever, from the largest EU budget ever. In addition, in 2026-2027, 
10% of the annual spending under the long-term budget will support biodiversity. 25 plans 
adopted so far under the Recovery and Resilience Facility dedicate 40% to green and 26% to 
digital  objectives,  though  with  a  somewhat  limited  focus  on  the  potential  use  of  digital 
solutions  to  achieve  the  climate  goals.  Specific  funding  mechanisms,  e.g.  the  Innovation 
Fund 55 or  the  Just  Transition  Fund,  will  also  be  important.  Nevertheless,  the  additional 
private  and  public  investment  needs  for  the  twin  transitions  might  amount  to  nearly  EUR 
650  billion  per  year  up  to  2030.56 In  the  current  geopolitical  situation,  these  estimates  are 
likely  to  be  at  the  lower  end  of  the  actual  needs,  especially  for  the  green  transition. 57 
Additional investments are needed, while taking into account the risks of increasing public 
debt, repositioning public finance priorities and an uncertain economic outlook. For instance, 
a  possible  rise  in  defence  spending  may  affect  public  budgets  earmarked  for  the  twin 
transitions. This increases the importance of prioritising spending, improving the quality and 
composition  of  public  finances  and  of  civil-military  synergies,  especially  in  the  field  of 
technologies  and  space  systems.  Finally,  avoiding  significant  stranded  assets  and  lock-in 
mechanisms  will  require  increased  focus  on  future-proof  investment  decisions  so  that,  e.g. 
buildings, energy or industrial infrastructure do  not  need to  be decommissioned  before the 
end of their lifetime, but can instead be repurposed or retrofitted. This is also important so as 
not to give existing technologies an advantage over new entrants. 

V. Key areas for action 

With a renewed sense of urgency linked to the rapid evolution of the geopolitical situation, 
appropriate  policies  are  needed  to  strengthen  opportunities  and  minimise  potential  risks 
related to the interaction between the green and digital transitions up to 2050. 

1.  In  a  shifting  geopolitical  environment,  the  EU  needs  to  continue  strengthening  its 
resilience  and  open  strategic  autonomy  in  critical  sectors  linked  to  the  transitions.  In 
the  energy  sector,  intensified  efforts  are  needed  on  green  energy  sources,  replacing  our 
reliance on fossil fuels, while diversifying sources during the transition period. Developing 
stockpiling  solutions  and  storage  capacities  for  current  and  future  energy  carriers  like 
renewable hydrogen would also be key. The ‘energy efficiency first’ principle applied across 
society  and  all  sectors  of  the  economy  would  considerably  reduce  energy  consumption. 
Openness  and  international  cooperation  will  be  crucial  as  drivers  for  fostering  innovation 
and technological development, while assuring that reciprocity and a level playing field are 
respected. An enabling environment for the development of EU digital industrial business-
to-business  and  business-to-consumer  platforms  and  facilitating  strategic  collaboration 
across  industrial  ecosystems  will  help  to  strengthen  our  position  in  technological 
competitiveness. It will also support the emergence of EU innovators in new marketplaces in 
crucial  sectors.  The  work  of  the  EU  Observatory  of  Critical  Technologies  and  a  periodic 
review process will be important in the context of current and future risks of (technological) 
strategic  dependencies.  Building  on  ongoing  modernisation  efforts,  the  trade,  customs, 

55   One  of  the  world’s  largest  funding  programmes  for  commercial  demonstration  of  innovative  low-carbon 
technologies. It will provide around EUR 38 billion in support up to 2030, depending on the carbon price. 

56   COM(2021) 662 final. 
57   COM(2022) 600 final. 

12 

 
                                                           
competition58 and State aid policy toolbox will also need to be kept up-to-date to respond to 
challenges  resulting  from  the  twin  transitions  and  other  market  developments,  resulting 
notably  from  the  geopolitical  situation.  This  would  protect  the  EU  against  unsustainable 
products  and  processes  from  third  countries,  while  cushioning  the  effects  of  the  inevitable 
short-term costs both within and outside Europe. Similarly, the contribution of the Common 
Agricultural  Policy  to  food  security,  as  well  as  other  actions  to  reinforce  the  resilience  of 
food  systems,  will  be  considered  more  strategically  with  a  view  to  the  twinning  and  of 
Europe’s open strategic autonomy in the new geopolitical context. 

2. The EU needs to step up efforts to galvanise the twin transitions globally. Rules-based 
multilateralism  and  values-based  international  cooperation  should  be  prioritised.  Global 
cooperation, including through a proactive research and innovation agenda with like-minded 
partners,  will  be  important  to  accelerate  the  development  of  twinning  technologies  and  to 
address  concerns  related  to  digitalisation.  The  costs  and  benefits  of  the  twin  transitions 
should be clearly conveyed to partner countries, especially those likely to be more negatively 
affected. Green and digital diplomacy and outreach, leveraging the power of regulation and 
standardisation  and  promoting  EU  values,  should  be  stepped  up.  The  EU’s  experience  in 
emissions trading by capping them, pricing pollution, and generating revenues to  speed up 
the  decarbonisation  and  support  the  most  vulnerable  could  inspire  other  countries  to  use 
similar schemes. Mutually beneficial  strategic  partnerships, notably  with  neighbouring  and 
African countries, should be pursued. That includes financial support for projects related to 
the  twin  transitions,  based  on  undistorted  trade  and  investment,  also  in  line  with  the  EU’s 
Global  Gateway.  This  will  require  developing  physical  green  and  digital  infrastructure 
(secure  5G  and  6G,  clean  transport  corridors,  alternative  energy  sources,  clean  power 
transmission lines) and providing an enabling environment for projects. Green bonds could 
be an effective tool to finance twin infrastructure projects to ensure benefits for all. 

3. The EU needs to strategically manage its supplies of critical commodities to achieve 
the  twin  transitions,  while  strengthening  its  defence  capabilities  and  preserving  the 
competitiveness  of  its  economy.  Developing domestic capacities and  diversifying sources 
of  supply  along  the  value  chain  will  be  instrumental  to  significantly  reduce  the  existing 
strategic  dependencies  and  avert  the  risk  of  replacing  them  with  new  ones.  This  is  of 
particular  importance  in  the  area  of  critical  raw  materials,  which  requires  a  long-term  and 
systemic  approach.59 The  EU  should  enhance  its  capacity  to  monitor  global  commodities 
markets  to  anticipate  and  mitigate  supply  chain  disruptions  and  equip  itself,  where 
appropriate, with instruments like stockpiling and joint procurement options to be prepared 
for the next supply disruption. Securing their sourcing will require the creation of strategic 
partnerships with mineral-rich partner countries, especially likeminded ones, as well as the 
development  of  domestic  mining  and  processing  projects,  while  ensuring  a  high  level  of 
environmental protection. The EU also needs to support and accelerate the development of 
the  most  valuable  strategic  European  projects,  including  by  streamlining  and  fast-tracking 
permitting  procedures,  in  full  compliance  with  environmental  acquis  and  harmonised 
standards for public engagement. This must be complemented by investments in innovation 
and transition to the circular economy, development of urban mines and creation of a market 

58   In line with the Communication “A competition policy fit for new challenges”, COM(2021) 713 final. 
59   The  RePowerEU  Communication  stresses  that  the  EU  must  urgently  provide,  including  through  a 
legislative proposal, an adequate framework to support Member States’ and industry’s efforts in this area. 

13 

 
                                                           
for  secondary  raw  materials  by  introducing  collection,  recycling  efficiency  and  recycled 
content targets: longer lasting products and higher levels of quality recycling will decrease 
dependencies on the sourcing of primary resources after 2035. Efforts are needed to promote 
the  highest  sustainability  standards  and  innovation,  minimise  the  environmental  and  social 
footprint  of  the  raw  materials  value  chain,  as  well  as  mobilise  the  network  of  trade  and 
investment agreements and the Team Europe financial firepower to attract investment across 
the entire raw materials value chain assets in the EU and third countries.  

4.  The  EU  needs  to  strengthen  social  and  economic  cohesion  along  the  transitions. 
Workers,  companies,  sectors,  and  regions  in  transition  require  tailored  support  and 
incentives  to  adapt.  Social  dialogue,  investments  for  quality  job  creation,  and  timely 
development  of  partnerships  between  public  employment  services,  trade  unions,  industry 
and educational institutions are key. This also calls for reinforcing social protection and the 
welfare state, including mechanisms to prevent or address in a targeted manner the negative 
impacts on low- and medium-income communities and households and fight against poverty, 
as  well  as  employment  rescue  facilities  and  policies  assisting  labour  market  transitions  to 
cope with shocks. Regional development strategies and investments, supported by cohesion 
policy,  should  underpin  the  twin  transitions,  while  reducing  economic,  social  and 
technological  disparities, 
injustice.  Seamless  and  secure 
connectivity,  including  in  rural  and  remote  areas,  in  combination  with  capacity  and  skills 
building, will be key to ensuring all citizens and businesses can benefit from twinning.  

including  environmental 

5. Education and training systems need to be adapted to the new socio-economic reality. 
This entails both learning skills to adapt to a rapidly transforming technological reality and 
labour market, as well as green skills and climate awareness to support value creation in the 
green transition and responsible citizenship. Ensuring that the twin transitions are fair to all 
depends  on  substantially  increasing  twinning-related  social  expenditure,  e.g.  in  education 
and lifelong learning, within a just transition framework. Labour mobility across sectors and 
targeted legal migration need to increase. Supporting sustainable, ‘1.5-degree’ lifestyles, by 
engaging citizens and businesses, ensuring affordability, shaping policies and infrastructures 
animating them, will also be essential. 

6.  Additional  investment  should  be  steered  into  technologies  and  infrastructures 
supporting  twinning.  To strengthen the EU’s  resilience and facilitate the twin  transitions, 
targeted  reforms  and  investments  need  to  tackle  vulnerabilities  at  national  and  EU  levels. 
Relevant  macro-economic  and  sectoral  policies  need  to  be  closely  coordinated.  A  further 
shift in  investments towards long-termism, and  sustainable assets is  required.  The EU will 
need to leverage additional private and public long-term investments in twinning, especially 
in R&I across critical technologies and sectors, uptake and synergies between technologies, 
human  capital,  and  infrastructures.  This  requires  an  enabling  framework.  Completing  the 
Banking  Union  and  Capital  Markets  Union  will  be  essential  to  increase  the  robustness  of 
financial  markets,  mitigate  possible  future  financial  stability  risks,  and  ensure  deep  and 
liquid financial markets. This includes promoting sustainable finance frameworks to increase 
private  investments  in  sustainable  projects.  The  EU  taxonomy  and  the  underlying  ‘do  no 
significant  harm’  principle  are  an  important  step  in  this  direction.  Additional  investments 
will require financing tools combining private and public resources.  Multi-country projects 
could facilitate the pooling of EU, national and private resources. Green public and private 
procurement  should  be  expanded  to  sustainable  digital  technologies.  Subsidies  for 
sustainable production and consumption  should be considered. Social entrepreneurship and 
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impact investment by private players will be important. Fiscal policies and taxation need to 
be  adapted  to  the  twin  transitions,  spare  additional  investment  towards  projects  promoting 
them60, and provide the right price signals and incentives to producers, users, and consumers. 

7.  Steering  the  transitions  requires  robust  and  reliable  monitoring  frameworks.  The 
four  dimensions  of  competitive  sustainability,  i.e.  fairness,  environmental  sustainability, 
economic stability,  and  productivity require an ambitious and integrated  policy design that 
pays  attention  to  both  synergies  and  tensions.  The  needed  shift  towards  a  new  economic 
model calls for an integrated approach to measuring and monitoring wellbeing beyond GDP, 
looking at current and future generations, in the EU and beyond. To guide political decisions 
that  deliver  on  its  full  sustainable  potential  and  to  benefit  from  sustainable  finance,  a  new 
and  sound  EU-level  framework  is  needed  for  measuring  both  the  enabling  effects  of 
digitalisation and its overall footprint in terms of greenhouse gas emissions and energy and 
resource use, including minerals and rare earths.61 Having accurate, reliable information and 
official statistics can help citizens, businesses, and public authorities take informed decisions. 
Ultimately,  data  monitoring  can  help  the  EU  assess  whether  additional  measures  are 
necessary.  

8.  A  future-proof  and  agile  EU  regulatory  framework,  with  the  single  market  at  its 
heart, will be conducive to sustainable business models and consumption patterns. The 
single market and its various dimensions, e.g. on data or energy, need to continuously evolve 
to  accompany  the  twin  transitions.  A  better  regulatory  framework,  with  incentives  for 
innovation,  is  needed  to  promote  circularity,  create  enabling  markets,  strengthen  industrial 
ecosystems  and  ensure  diversity  of  market  players.  Administrative  obstacles  should  be 
systematically removed, to facilitate twinning-related projects and infrastructure. The rising 
role  of  intangible  assets  will  require  a  fit-for-purpose  intellectual  property  framework.  EU 
policymaking  should  further  exploit  the  use  of  digital  solutions,  such  as  digital  twins, 
artificial  intelligence  for  forecasting,  or  modelling  in  impact  assessments.  The  twinning 
could  be  better  analysed  in  evaluations  of  existing  legislation,  by  looking  at  combined 
effects.62 Consumers should be protected against deceptive practices, such as greenwashing 
or planned obsolescence. Benefits and challenges of the transitions need to be discussed with 
the public. Participation in decision-making could be enhanced with digital technologies or 
living labs. The use of artificial intelligence to support citizens’ engagement in policymaking, 
as has been the case for the digital platform developed for the Conference on the Future of 
Europe, should be further explored. 

9.  Setting  standards  will  be  key  for  twinning  and  ensuring  the  EU’s  first-mover 
advantage  for  competitive  sustainability.  Product  design,  based  on  the  ‘reduce,  repair, 
reuse  and  recycle’  principle  should  become  mainstream.  Current  action  to  ensure  the 
sustainability of physical goods in the EU needs to be matched with standards for all sectors, 
to reverse overconsumption and planned obsolescence. The recent Commission proposals63 
to oblige traders to provide consumers with information on the durability and reparability of 

60   The recent proposal to introduce a debt-equity reduction allowance and to limit the deductibility of interest 
for corporate tax purposes (COM(2022) 216), will have an important role in fostering the twin transitions. 

61   Some efforts in this direction are being made under the European Green Digital Coalition. 
62   Recommendation of the Fit for Future Platform draft opinion on “How to favour interconnectivity between 

the digital and green transition, including through simplification”. 

63   COM(2022) 143 final. 

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products could provide a solid basis for this. The EU must develop a more strategic approach 
to  international  standardisation  activities  in  relevant  global  formats. 64  To  ensure  their 
implementation,  international  standards  need  to  be  matched  with  tracking  and  traceability. 
For instance, establishing a  global  standard  for  batteries  could  require  a digital  passport  to 
track the ethical and environmental footprint of their components. Using standards to ensure 
that  twinning  technologies  and  infrastructures  are  interoperable  will  also  enable  the 
integration of EU partners in the implementation process. 

10. A stronger cybersecurity and data sharing framework will be needed to unlock the 
potential  of  twinning  technologies.  Improved  interoperability  between  different  owners, 
generators, and data users in the EU, including national and subnational information systems, 
will  facilitate  data  sharing  by  different  actors:  public  authorities,  businesses,  civil  society, 
and  researchers.  A  strengthened  and  more  secure  data  sharing  framework  that  clarifies 
ambiguity  on  liability  and  ownership  when  transferring  data  will  protect  people  and 
businesses;  it  will  also  help  build  trust  and  acceptance  in  twinning  technologies.  Common 
approaches to cybersecurity benchmarks for products and services, including comprehensive 
sets of rules, technical requirements, standards, and procedures will be important. Moreover, 
the  resilience  of  critical  entities  and  infrastructures  needs  to  be  strengthened  with  an  all-
hazards EU framework to help Member States ensure that critical entities can prevent, resist, 
and recover from disruptions. Affordability of cybersecurity technologies will also be key. 

64   In line with the “EU Strategy on Standardisation”, COM(2022) 31 final. 

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VI. Conclusions 

Better  understanding  the  interactions  between  the  green  and  digital  transitions  is  key  for 
successful twinning, amidst various future megatrends and unforeseen events. The areas of 
action presented in this Communication (see above) respond to the need of maximising the 
synergies  and  addressing  tensions  between  the  twin  transitions.  This  requires  a  dynamic 
approach to anticipating change and adapting policy responses, while firmly maintaining the 
course towards long-term objectives. In this way, by 2050 a successful twinning will support 
a new, regenerative,  and climate-neutral economy,  cutting the levels of pollution, restoring 
biodiversity and natural capital, enabled by sustainable digital and other technologies. It will 
help  to  position  the  EU  as  a  champion  of  competitive  sustainability  and  strengthen  its 
resilience  and  open  strategic  autonomy.  This  will  go  hand  in  hand  with  a  just  transition 
benefitting all people, communities, and territories, in Europe and beyond.  

The next annual Strategic Foresight Report will focus on the key upcoming challenges and 
opportunities  that  Europe  will  face  in  the  decades  to  come,  providing  strategic  insights 
relevant for strengthening the global role of the EU. 

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