The EU’s Twin Transition: Turning Ambition into Action

The European Union has placed the twin transition, the simultaneous shift toward a greener and more digital economy, at the heart of its growth strategy. The idea is straightforward: digital technologies such as AI, big data, and the Internet of Things can accelerate Europe’s path to climate neutrality, while the green transition creates new markets for digital solutions. Together, they are meant to drive competitiveness, innovation, and sustainability.

But the twin transition is not without its challenges. A Joint Research Centre report’ shows that digital tools can significantly cut emissions in energy, industry, and transport. At the same time, the rapid growth of digital infrastructure, from data centres to AI computing, brings its own carbon footprint, raising the question of whether “more digital” always means “more green.”

Businesses that succeed in combining the two transitions tend to perform better. Evidence from the European Investment Bank’s EIB Investment Survey shows that firms advanced in digitalisation are more resilient and more likely to invest in climate action, and EIB research links green and digital investments to improved investment efficiency and performance indicators. See : Digitalisation in Europe 2022-2023 and EIB Working Paper 2024/04 for details.

For companies active in logistics, energy, and manufacturing, this has immediate relevance. Smart logistics platforms powered by AI can reduce idle time and fuel use. In the energy sector, digital twins are increasingly used to model supply and demand, helping to integrate renewables more effectively. And for industrial producers, automated emissions tracking and optimisation tools can support compliance with EU climate targets while cutting costs.

There is, however, a risk of leaving smaller companies behind. Many lack the resources or digital maturity to pursue both transitions at once. Policy support will be critical to ensure that sustainability and digitalisation reinforce each other, rather than create parallel pressures.

For our members, the takeaway is clear: investing in digital solutions is no longer just about efficiency, it is becoming a key driver of climate performance as well. Aligning strategies with the EU’s twin transition can help businesses stay competitive, resilient, and ahead of regulatory change.