Labour and skills development

Preparing the labour force to meet future requirements requires long-term planning, involving close coordination between different government ministries and departments, as well as cooperation between the public and private sectors. As renewable energy deployment accelerates, targeted workforce planning can help address skills shortages and smooth the transition for workers from declining sectors. Embedding labour and employment considerations into renewable energy planning helps inform training and strengthen institutional readiness to respond to changing labour-market needs.

Key requirements to ease the labour transition include:

• Policy coherence: Policymaking is key to coordinate skills development, energy plans, and employment policies. Effective communication is vital to maximise impact and avoid duplication between government ministries and different levels of government. Local government involvement is key to effectively assess sub-national needs and impacts.
• More and better data: Investing in comprehensive data collection and analysis helps governments and the education sector anticipate skills demand and guide targeted interventions, such as adapting school and university programmes and continually updating training programmes.
• Partnerships with the private sector: Public-private partnerships enable collaborative planning, facilitate investment mobilisation, and support more efficient, targeted delivery of transition policies. Industries are best placed to assess their skills needs, while policymakers steer labour-market adjustments – including for groups with traditionally limited employment access, such as women.
• Social dialogue: Continuous dialogue among governments, employers, workers, civil society, and training institutions ensures that transition strategies align with social and economic realities, helping make key government decisions more effective.

Identifying skills gaps and assessing future skills needs helps anticipate how the energy transition will reshape labour markets, reduce employment shocks, and minimise skill mismatches as fossil-fuel industries decline. Gaps at high skill levels constitute a fundamental challenge for low-income countries. By aligning workforce capabilities with emerging renewable energy opportunities, such assessments ensure a smoother, more inclusive, more economically resilient transition.

Effective skills assessments involve:

• Mapping existing skills and qualifications: Skills mapping establishes a baseline of workforce capacities across sectors, clarifying where current competencies could already support renewable energy deployment.
• Estimating future workforce demand: Demand projections can link employment to long-term energy and climate scenarios, helping anticipate essential qualifications and occupations and thereby supporting targeted training as technologies and national energy priorities evolve.
• Analysing skills gaps: Skills-gap analyses can reveal mismatches between current and future needs, providing evidence for the design of education and labour-market responses.
• National stakeholder engagement: Government, industry, labour, and training providers can work together to strengthen labour-market monitoring and coordination.
• Accounting for gender and inclusion: Integrating gender and inclusion perspectives helps identify and address barriers that prevent women, youth, and under represented groups from obtaining green jobs.
• Regular reviews: Skills assessments require regular reviews to allow for adaptive planning as technologies, markets, and policies continue to evolve.

Skills from fossil-fuel industries can be transferred to emerging green sectors, helping retain experienced workers and reduce job losses during the energy transition. By identifying transferable competencies and supporting targeted reskilling, policymakers can ensure a smoother and more inclusive transition to a low-carbon economy while maintaining industrial productivity.

Key considerations for skills-transfer initiatives include:

• Prioritising clean energy technologies: Skills-transfer plans can focus on skills for solar PV, wind, green hydrogen, or bioenergy, depending on each country’s planned energy mix, industrial strategy, and comparative advantages.
• Mapping transferable skills and occupations: Key skills from the oil and gas sector (e.g. mechanical, electrical, and safety competencies) can transfer smoothly, particularly to offshore wind or hydrogen projects, with mapping exercises helping identify specific overlaps in technical and managerial capabilities.
• Conducting targeted sectoral assessments: Transition planning requires an understanding of which fossil-fuel job roles can continue with renewables and where skills gaps remain that require additional training or certification.
• Learning and labour-transition measures: Integrating lifelong learning and active labour-market measures – including career guidance, job matching, and social protection – can help affected workers move smoothly into green industries.
• Reskilling and upskilling: Skills programmes can build on people’s existing technical expertise, particularly through short, modular training programmes linked to newly introduced renewable energy technologies.
• Industry co-investment in training: Public-private partnerships, fiscal incentives, and project requirements can mandate local skills development and content plans.
• Alignment with just-transition frameworks: Skills transfer initiatives can ensure that communities dependent on fossil-fuel industries benefit from alternative employment options and economic diversification.
• Monitoring labour-market outcomes: Data on employment transitions, wages, and local impacts can help refine and continually update training and policy interventions.

As countries pursue net-zero emissions, the decline of fossil-fuels will inevitably result in job losses and economic disruptions, particularly in communities that rely directly on coal, oil and gas extraction or processing. Governments can respond with reskilling and transition programmes to help affected workers shift into clean energy and electric vehicle industries, helping ensure a just and sustainable transition.

Key training and re-skilling components include:

• Just-transition training strategies: Governments, unions, and companies must coordinate to ensure fair retraining and support for displaced fossil-fuel workers, with national and sub-national frameworks in place to channel funds where needed.
• Skills assessments: Mapping existing worker skills and training needs is critical to design targeted vocational programmes for renewable energy jobs. Local authorities can provide critical support to national governments in this regard.
• Regional training centres: Dedicated academies in coal, oil and gas regions can provide hands-on training and certification for green energy employment.
• Financial and employment support: Social safety nets, income aid, relocation assistance, and policies encouraging companies to hire locally – both for fossil-fuel decommissioning and renewables-based projects – can help communities find a secure place in the transition.
• Economic diversification: Green energy presents opportunities in new industries, entrepreneurship, and digital infrastructure, which government investment and incentive schemes can promote to create alternative jobs, particularly in coal-dependent regions.
• Oversight and monitoring bodies: Reskilling initiatives need dedicated institutions to oversee worker retraining, track outcomes, and maintain ongoing dialogue with investors, local governments, civil-society groups and affected workers.

Procurement policies that advance specific job-creation objectives can help offset job losses in the fossil-fuel sector and ensure that new clean energy projects create local employment opportunities. This approach allows governments to directly link public investment in renewables with workforce transition goals, fostering economic stability and social acceptance of the energy transition.

Policies to offset local job losses include:

• Local content requirements: Renewable energy projects can be required to source a percentage of their components and services locally to stimulate domestic job creation.
• Employment-linked bidding criteria: Job creation and workforce transition plans can be requested in renewable energy tender evaluations to reward companies that invest in local hiring and training.
• Retraining incentives: Tax credits or subsidies can be offered to renewable energy firms that hire and retrain displaced fossil-fuel workers.
• Community-benefit agreements: Developers can be required to collaborate with local authorities and labour unions in establishing job guarantees and apprenticeship programmes for affected communities.
• Public procurement targets: Government procurement quotas for clean energy projects can also prioritise inclusive employment, gender equity, and fair wages.
• Monitoring and reporting mechanisms: Systems can be established to track job creation outcomes for renewable energy projects, strengthening compliance and supporting continuous improvement in labour standards.