POINT Review of Industrial Transition of Greece

Countries and regions around the world are gearing up to make the industrial transitions that will be necessary to move towards sustainable production and consumption patterns. This report documents the findings of a review of industrial transition of Greece launched in 2019 in partnership with the Greek Ministry of Development and Investments, which follows the POINT (Projecting Opportunities for INdustrial Transitions) methodology of the JRC. The review explores some of the policy pathways that Greece might take as it moves from a dependence on fossil fuels to an economy that makes greater use of renewable sources of energy and exploits many of the opportunities that are arising in the production and use of batteries in the realms of transport and mobility, agriculture, shipping and defence. Sustainable energy and mobility will have a central role to play in maintaining (and restoring) Greece's exceptional endowment in natural capital, which is the foundation for tourism and agro-food – two pillars of a still fragile Greek economy. Greece has at least some of the prerequisites to develop relevant industrial capabilities, namely large investments in human capital that have been sustained over many years; an internationally outstanding science base; pockets of relevant production capabilities; a positive momentum in foreign direct investment in recent years (albeit starting from a very low level), alignment of consumer demand with the direction of the transition and unprecedented EU financial support for the transition. Greece has innovation and production strengths in small, but dynamic production niches (notably parts of the value chains of renewables, batteries, small-scale shipbuilding and maintenance) operating within their respective internationally weak sectors. These strengths have high potential complementarities with sectors underpinning the deep transformation of the global energy system towards renewables and the looming transition towards electrification of mobility, including in shipping. The review shows that some Greek firms are active in developing applications in areas of major economic importance (on account the considerable size of the domestic market), including, among others, renewable energy generation and distribution, ICT and energy solutions for non-interconnected islands, and shipping. In the absence of advance planning, however, there is no guarantee that a transition will lead to a diversified, knowledge-based and therefore tradable-intensive Greek economy, or that the benefits from the transition will be widely felt. Advance preparation, government leadership and wide stakeholder coordination, especially with the local communities that stand to gain or lose the most, are vital prerequisites. In view of the magnitude of the coordination challenge for national, regional and municipal policies and the narrowing window of opportunity, possible governance solutions may include a time-bound national mission ("a Greek Green Deal for Sustainable Industry and Quality Employment") coupled with regional or local "shared agendas" for transformation. Drawing from international practice, the review examines possible policies and candidate tools that could potentially link these currently disparate sectors into a vibrant industrial ecosystem, including market creation measures (e.g. legislation incl. measures for its enforcement, land use regulation, provision of public infrastructures); support for innovation; vocational skills, public private partnerships for investment; public transport, energy and defence procurement among many others.