We live in a time of changes, so it is very difficult to predict how our lives will move on, both from the perspective of businesses and our humanity in general. Within the last 10 years, the industrial sector saw a lot of rapid changes, technological transformations, digitalization.
Difficulties pushed us to change
During the pandemic, a lot of businesses understood how large of an impact digitalization has. This is a still unused opportunity. The pandemic became a huge challenge for enterprise, but there’s also a bright side to this. Suddenly we can see that every company is trying to digitalize. Lockdown and other restrictions made companies change their ways of selling, distributing, and working, everyone started investing in technology and innovation. For the first time, industrial companies understood that physical selling points are not so important.
Despite the difficulties related to pandemic, companies have challenges as well as opportunities ahead to think and implement the digital and green transformation. Lithuania’s economy is not that large, therefore flexible enough to be smoothly transformed. We understand that the green deal is an economic course. Without resources in Lithuania, we may create added value in our country producing green heat and green cold from green electricity. So, it would be very wrong to assume that the Green Deal is just a burden on businesses. In fact, it is an opportunity for all European businesses, including Lithuanian, to transform, to change the direction so that we can create jobs and well-being in green and healthy environment.
At the same time, we understand that setting European and national emission reduction targets must consider the ability of certain energy-intensive industries (‘technological thresholds’) to achieve them (e.g., fertilizers, cement).
Also, we understand that emission reduction targets must be pursued by countries around the world. Unfortunately, they do not have such ambitions today, so it is vital that European industry continues to be protected from unfair international competition to avoid investment and CO2 leakage to third countries (measures – active international negotiations, sustainability criteria in free trade agreements, introduction of border adjustment mechanism etc.).
The potential is much bigger
2020 France was the 12th largest export market for Lithuanian products, 2020 France was the 10th largest supplier of Lithuanian imports. France was the 3rd largest export market for Lithuanian services while France was the 14th largest supplier of service imports.
The French invest mainly in wholesale and retail trade, logistics, manufacturing; professional, scientific, technical activities, meanwhile, Lithuanians are investing mainly in wholesale and retail trade.
But the potential is much bigger. In the World Bank’s Doing Business 2020 survey assessing business conditions, Lithuania stands in 11th place out of 190 countries of the world. Therefore France, with its tremendous economic, scientific, and technical potential, has an excellent opportunity to exploit Lithuania’s geographical, infrastructural, energy, human capital, professional preparedness, and scientific readiness for future cooperation.
Lithuania has one of the fastest internet speeds in the world. We’re one of the leading countries by the upload speeds, and we are in front of countries such as Japan or Sweden. We have free public internet in most of our public spaces of Vilnius, so we can browse the internet anywhere. Lithuania is a digital country.
The Lithuanian Confederation of Industrialists (LPK) has a long-standing relationship with our counterpart in France – g. Over the years, we have had exchanges with delegations, and participated in various joint projects.
I’m glad we have close cooperation between the countries in the EU. For example, we’re cooperating with France in ‘BusinessEurope’, which connects business organizations of 34 European countries. Our goal is to reduce regulatory due to which subsidies, which we’re getting from the 3rd party countries are non-controlled, even though subsidies from EU countries are controlled very aggressively. In the EU we need tools to control the subsidies that are coming from countries that are out of the EU, and that distorts the EU market.
Lithuania is watching France closely
Lithuania is also closely watching how France is acting upon the green policies. Five years after the Paris Agreement, Governments, and companies, driven by the urgency of decarbonizing economic and industrial activities massively, are increasingly relying on renewable and low-carbon hydrogen. The rise of this clean and sustainable energy vector calls for proactive public policies and the full mobilization of all players of the hydrogen sector. In several States, a dedicated plan to accelerate the domestic development of renewable and low-carbon hydrogen has been launched. The development of hydrogen is therefore a global, European, and national move.
France, for its part, presented in 2020 a national strategy for the development of low-carbon hydrogen, the ecological, technological, and economic challenge of which is to create and to structure a cutting-edge French industrial sector competitive at an international level.
We think that we don’t pay enough attention to the hydrogen strategy of the EU which aims to integrate recyclable hydrogen. Developing hydrogen technologies would help Lithuania to reduce its energetic dependency on fossil fuels.
This July the European Commission published its Fit-for-55 package. Its aim is to align the European legislative arsenal with the new European ambition to reduce greenhouse gas emissions by 55% by 2030. The package contains numerous legislative proposals, such as the reform of the EU emissions trading system, the Carbon Border Adjustment Mechanism (CBAM) or the renewable energy directive. We’re sure that this tool is a must-have if we want to have fine competition between companies in the EU countries.
Looking forward to the future
Europe and France are now actively considering proposals to strengthen the industrial base and competitiveness of the EU and its Member States. The EU needs an ambitious European industrial policy, and its manufacturers, suppliers and other parties in the supply chain needs measures to strengthen the EU’s economy. No one other than the Europeans themselves has an interest in a strong and united Europe, because in that case, it will become a strong competitive force.
We are happy with the decision of the European Commission to renew the Industrial strategy. This step by the EC is based on the need for industry’s ambitions to be fully in line with the new realities of the post-COVID-19 crisis and to foster the transition to a more sustainable, digitalized, resilient, and globally competitive economy.
The developments in global markets in recent years show that the European Union needs an ambitious industrial strategy to compete with other regions of the world, such as China, the United States, and India, which have made their industries a priority on the political agenda. There is a need to think about how to strengthen the competitiveness of European industry, and how to protect the EU’s strategic infrastructure and technologies, which often give the EU industry a competitive advantage.
Author: Vidmantas Janulevičius, President of Lithuanian Confederation of Industrialists