Key insights

The green transition’s overall job impact will be modest but uneven. Job growth is expected in the electrical goods and construction sectors due to electrification and the retrofitting of buildings.

Rising demand for green jobs does not guarantee better job quality. While new and emerging green jobs tend to offer good working conditions, existing jobs for which there is an increased demand, such as construction jobs, often involve high levels of physical risk and work intensity.

Social partner involvement is crucial. Despite requirements for social partner involvement in just transition plans, the role of the social partners is often limited to information sharing rather than true partnership.

Economic concerns, particularly in rural areas, may dampen support for the green transition. There are also concerns that Europe’s competitiveness could be affected compared to regions with less stringent environmental policies.

In 2024, the EU experienced some of its most devastating climate-related disasters in recent times. Greece recorded its warmest summer on record, sparking numerous wildfires across the country and causing multiple fatalities. In Spain, torrential rains brought over a year’s worth of precipitation to several areas in eastern Spain, particularly in the province of Valencia. The flash flooding led to over 220 deaths and caused widespread destruction to homes and infrastructure. Storm Boris brought record-breaking rainfall to central Europe in September, causing around 30 fatalities and billions of euro worth of damage.

Member States are taking action, and Eurofound’s EU PolicyWatch database has recorded 67 measures, mostly financial support or early warning systems, in the short space of time between May 2023 and September 2024 to support workers, businesses and citizens hit by these extreme weather events.

These extreme weather events vindicate the EU’s commitment to cut greenhouse gas emissions by at least 55% by 2030. Importantly, the majority of EU citizens seem to be onboard. Not only do 88% of them agree that the EU should be climate-neutral by 2050, over half (58%) are now saying that this transition needs to speed up. However, economic pressures, social inequalities and labour shortages pose growing risks to achieving these goals.

'Extreme weather events have turned what was once a distant threat of climate change into an immediate crisis'.

Flooding in city centre, three cars immersed in water

Is the green transition in jeopardy?

Flooding in street with cars immersed in water

©Corona Borealis/Adobe Stock

The EU has taken unprecedented policy steps to lay the groundwork to become a climate-neutral economy by 2050. The European Green Deal has set targets that are legally binding under the European Climate Law and in line with global climate action under the Paris Agreement.

However, challenges are emerging to Europe’s commitment to climate neutrality. Increases in the cost of living in Europe, along with a growing perception – particularly in rural communities – that some green policies are compromising people’s ability to make ends meet, are fuelling concerns about the green transition. There is also some unease that Europe could lose its competitive advantage to other regions and countries less concerned by environmental policies and legislation.

Furthermore, as mentioned in previous chapters, labour and skills shortages present a substantial risk to achieving the ambitious targets of the European Green Deal. A skilled workforce is an essential pillar of a successful and inclusive transition.

While the European Parliament and Commission remain committed to the 2050 target, the broader challenge is one of fairness: how can the transition to a green economy be achieved without deepening existing social and economic inequalities?

Two workers on a construction site with digger

Just transition – Is it that simple?

The EU’s commitment to a just transition ensures that no one is left behind as policy measures are rolled out. The goal is not only to prevent EU citizens from being badly affected but to ensure they actually benefit from the move to a climate-neutral economy.

This matters because the green transition will not affect everyone equally; it will have an uneven impact on regions, countries, jobs and certain sections of society. It risks deepening existing inequalities within EU societies.

From a general employment perspective, the overall effect on employment is expected to be minor. Most studies estimate changes ranging from a slightly negative impact to a 2% increase by 2030. In fact, the transition is likely to create more jobs than it eliminates.

But the effects will be uneven. Job losses will be concentrated in regions reliant on mining, extraction and energy-intensive industries – underscoring the need for place-based policies and support through mechanisms like the Territorial Just Transition Fund.

Conversely, job growth is expected in sectors like construction – driven by retrofitting demand – and electrical goods, as economies electrify. These gains will be more evenly spread across regions.

Two men installing solar panels on a roof

What is a green job?

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Overall, 40% of workers in the EU are in occupations that will be directly impacted by the green transition. According to the EWCTS, in 2021, about 9% of workers were in new or emerging jobs that had not existed previously, such as renewable energy engineers.

Some 14% were in jobs that required enhanced skills due to greening, such as motor vehicle technicians. The biggest effect will be the increase in demand for certain existing occupations that are needed to ‘make and build’ the transition, such as electrical and mechanical engineers, affecting 15% of workers (Table 1).

Table 1: Impact of the greening of the economy on occupational groups

The demand for workers with the right skills to support the green transition cannot always be matched with the supply of workers in ‘green’ jobs. One of the most pressing examples of labour market pressure from skills shortages is the heat pump sector, which sits at the intersection of climate targets, energy efficiency goals and skilled labour supply.

Europe's heat pump challenge

©Tomasz Zajda/Adobe Stock

The transition to heat pumps is essential for the decarbonisation of residential heating in the EU, which is a critical component of the EU’s strategy to achieve carbon neutrality by 2050. One of the aims of the RePowerEU initiative, designed to reduce the EU’s reliance on Russian energy imports, is to double the number of new heat pump installations over the period 2022 to 2026, equivalent to 50–60 million new installations by 2030.

Buildings account for over one-third of greenhouse gas emissions in the EU (36%). Improving energy efficiency will reduce the need for fossil fuels, the main source of thermal heating and cooling in most homes. Heat pumps, using renewable energy sources, are between three and five times more energy efficient than gas boilers and run on electricity, increasingly sourced from renewables.

Europe was the fastest-growing market for heat pump sales globally in 2022, up nearly 40% year on year. However, recent indications show a marked decline in the rate of growth in 2023.

Figure 11 shows heat pump sales and stocks of heat pumps for a selection of EU countries based on data from the European Heat Pump Association (EHPA). The Nordic countries are clear leaders in this regard – both sales and existing stocks of heat pumps are much higher, particularly in Finland, Sweden and Norway.

Shortages in the skilled labour necessary for the installation and maintenance of heat pumps is one of the main reasons why their rollout has stalled. An estimated 70,000 more installers are needed, but low enrolment in training and an ageing workforce remain key barriers.

Figure 11: Heat pump stock and heat pump annual sales, selected EU Member States and Norway, 2023

Faster rollout of heat pumps

Accelerating heat pump deployment by 2030 will signal the EU’s commitment to decarbonising its building stock. Recommendations based on Eurofound analyses include:

expanding and integrating heat pump training into existing electrician, plumbing and HVAC certification programmes
offering financial incentives for vocational training and apprenticeships, including tuition support and stipends
launching awareness campaigns to promote career opportunities in heat pump installation and boost interest in the sector
improving working conditions through fair wages, safer environments and better work practices to make roles more attractive

Two people looking at a house being built, wearing helmets and high visibility jackets

Are all green jobs good jobs?

©Andy Dean/Adobe Stock

New jobs emerging as a result of the green transition are usually good-quality jobs. However, jobs that already exist but for which demand will increase (‘increased demand occupations’) are more likely to have below-average job quality.

Table 2 shows how the different types of occupational groups compare in relation to workers’ access to job resources. Workers in increased demand occupations appear to be particularly disadvantaged. They fare worse in terms of social support (provided by co-workers and managers), task discretion and autonomy, organisational participation and workplace voice, and intrinsic rewards.

Table 2: Job quality resources across occupational types affected by the green transition, 2021

Figure 12 shows the distribution of strained and resourced jobs across the occupational groups affected by the green transition.

What is striking is that a much lower share of workers in new and emerging occupations are in strained jobs compared with the other occupations, while those in increased demand occupations fare the worst. This pattern reflects that new and emerging jobs tend to fare better than average in terms of job quality, whereas occupations with rising demand often experience higher job strain and fewer resources.

Figure 12: Job quality index, by greening occupational group, EU27 (%)

Climate change endangers workers

Climate change is increasingly shaping job quality, especially in sectors like agriculture, construction and tourism. Rising temperatures, air pollution and extreme weather are making work harder, less safe and less sustainable – particularly for outdoor workers and those using heat-generating machinery.

Without targeted protection measures, workers critical to the green transition may face worsening health, safety and well-being. Emergency responders are also directly impacted by wildfires, floods and other climate-related events.

These environmental hazards lower job quality and reduce productivity, compounding risks in already demanding roles.

Psychosocial risks: Hidden danger of climate change

Beyond physical threats, climate change is fuelling psychosocial risks – job insecurity, financial strain and workplace stress – especially in sectors like agriculture, forestry and fossil fuels. Workers in these industries face growing uncertainty about their future employment as environmental degradation and climate policies impact on their way of working.

Financial insecurity is another growing concern, particularly for those working in sectors highly exposed to climate-related disruption. Income loss due to lower yields or industry shutdowns increases the risk of in-work poverty, making it harder for affected workers to adapt or transition to new careers. Additionally, climate-related job restructuring can intensify stress, as rapid changes force workers to adapt to new roles, often without sufficient training or support.

Vulnerable groups at risk

Jobs most affected by the green transition are disproportionately held by men (75%) (with half the male workforce working in such jobs), but only 20% of female employment. Migrant and low-income workers are also overrepresented in high-risk roles that are subject to climate change, for example in agriculture, construction, transport and emergency services.

Migrant workers are particularly exposed as they often do seasonal work. Such work is characterised by poor working conditions, limited decision-making power and reduced access to food, healthcare and financial resources – factors that increase workers’ vulnerability and reduce their ability to manage work-related risks.

Unlocking the benefits of the green transition

While the risks and inequalities associated with the green transition are considerable, there are also significant opportunities to improve living standards, public health and energy efficiency – if the transition is managed inclusively.

The green transition could improve the lives of people living and working in the EU. The recent sharp increases in energy prices have affected different groups of the population unevenly, with households at the middle and lower ends of the income scale having more difficulty making ends meet (Figure 13). Making homes more energy efficient will help to reduce households’ energy consumption and spending on heating and cooling.

Figure 13: Proportion of respondents with cost-of-living difficulties, EU, 2022–2024 (%)

Some 84% of Europeans believe tackling climate change should be a priority to improve public health (European Commission, no date). Environmental policies have already contributed to a drop in pollution-related health risks and gone hand in hand with a reduction in people reporting pollution, grime or other environmental problems.

Retrofitting housing and investing in alternative modes of transport could improve the living conditions of all EU citizens by decreasing environmental hazards such as pollution, especially in cities; reducing energy dependency and, hence, energy bills; and improving access to public transport. In essence, there is an opportunity to achieve a ‘triple dividend’.

Real social partner involvement for socially just transition

The EU has introduced mechanisms to support the green transition, including the Just Transition Mechanism, launched in 2020 as part of the 2021–2027 budget. Its €19.2 billion fund aims to ease the socioeconomic impact of the transition in affected regions, mobilising over €25 billion in investments.

To access funding, Member States must submit territorial just transition plans (TJTPs). While the input of the social partners is crucial to the development of these plans, they are often involved only at an information-sharing level. Yet, meaningful social dialogue is critical to ensure policies protect workers’ rights and well-being.

In 2024, Eurofound co-hosted the Tripartite Exchange Seminar with the European Environment Agency (EEA), the European Centre for the Development of Vocational Training (Cedefop) and the European Training Foundation (ETF), bringing together governments and the social partners. Participants raised concerns about inconsistent engagement, lack of early involvement, and weak integration of their input into final strategies.

Trade unions also raised concerns about the lack of binding commitments on job quality within TJTPs. While reskilling is emphasised, few plans guarantee that new jobs in green industries will adhere to collective agreements or offer decent working conditions.

A stronger social contract is needed to ensure that the green transition is not only environmentally and economically fair but also socially just. Without meaningful social partner involvement, the promise of a just transition remains incomplete.