Twin Transformation: Integration of Green and Digital Transformation

Kaan Vatansever 13 July 2024

 

Twin Transformation and Its Historical Development

Twin transformation is a strategy that proposes using the power of technology and innovation for sustainable steps. In this period where many global environmental issues, especially climate change, are being tackled, it is crucial to take rapid steps for sustainability. At this stage, twin transformation, which points to supporting sustainable growth through digitalization, plays a significant role. To better understand the twin transformation that arises from the intersection of digital transformation and green transformation concepts, let's examine each transformation separately:

Digital Transformation: This is a comprehensive process that aims to make the work done in all sectors more efficient, cleaner, less energy-consuming, and more environmentally friendly by supporting and changing these works with digital technologies. This transformation is realized with the integration of advanced technologies such as artificial intelligence, big data analytics, and augmented reality.

Green Transformation: This process aims to minimize the environmental damage caused by activities in all sectors and to consume natural resources as little as possible. This transformation involves businesses developing sustainable business models, prioritizing energy efficiency, and trying to minimize their carbon emissions and other wastes. Green transformation aims to support both economic growth and environmental sustainability by adopting technologies and methods that minimize environmental impacts.

Looking at the historical development of the twin transformation concept, it is seen that it started to become widespread with the European Union's (EU) European Green Deal published in 2019 and became more prominent in 2020 with the COVID-19 pandemic accelerating the forced digitalization process. The concept of Industry 4.0, which was brought to the agenda at the Hannover Fair in Germany in 2011, played a significant role in the development of digital transformation, one of the components of the twin transformation. The other component, green transformation, became an agenda item with the acceptance of the Paris Agreement in 2015, as climate change and global warming issues came to the forefront, increasing the need for green transformation. By 2020, to mitigate the economic and social impacts of the pandemic, many recovery packages were announced by states. During this process, in which the EU was also involved, the EU set a remarkable condition for its 750 billion Euro recovery package: only financing projects that serve green and digital transformation. With this condition, the necessity of transitioning from a linear economy model to a circular economy model was emphasized along with the reinforcement of the twin transformation concept. During this period, smart technologies and Industry 4.0 applications became critical for reducing carbon footprints and ensuring environmental sustainability. All these developments ensured the adoption of the twin transformation strategy, as it was understood that a more sustainable and efficient future could be achieved by mutually supporting both digital and green transformation processes.

The Importance of Twin Transformation for Businesses

The integration of digital and green transformation processes, leading to comprehensive change, is of great importance for businesses. Digital transformation supports business processes in all sectors with digital technologies, making them more efficient, cleaner, and more environmentally friendly, while green transformation aims to minimize environmental damage and conserve natural resources. When considered together, twin transformation provides businesses with a strong advantage in terms of sustainability and competitiveness. Digital technologies enable businesses to measure their carbon footprints, increase energy efficiency, and optimize resource usage. For example, sensors and AI-supported systems can provide the necessary data to save energy in production processes and reduce carbon emissions. Additionally, by adopting circular economy models, products are made long-lasting and reusable. This transformation not only enhances environmental sustainability but also creates cost savings and new market opportunities. The EU's condition for financing only digital and green projects in its 750 billion Euro recovery package also demonstrates how critical twin transformation is for economic recovery and growth. Businesses can fulfill their environmental responsibilities and gain a competitive advantage in future markets by adopting this transformation process.

The various positive impacts of twin transformation on businesses can be itemized as follows:

Economic Impacts

Economic impacts are among the most significant effects of twin transformation. Through twin transformation, businesses can gain a competitive advantage, achieve cost savings, and capture new market opportunities.

  • Competitive Advantage: Businesses increase their competitive power with more efficient and sustainable processes brought by twin transformation.
  • Cost Savings: Operational costs are reduced through energy efficiency and resource optimization.
  • New Market Opportunities: Sustainable and digital innovations create new business models and market opportunities.

Environmental Impacts

The environmental impacts of twin transformation, which supports sustainability when applied, are undeniable for businesses.

  • Reduction of Carbon Emissions: Carbon footprints are reduced thanks to digital technologies and green transformation strategies.
  • Conservation of Natural Resources: The consumption of natural resources is reduced through more efficient use and circular economy models.
  • Waste Reduction: Waste amounts are minimized through recycling and reuse processes.

Social Impacts

Supporting not only environmental but also social sustainability, twin transformation can create many positive social impacts in businesses.

  • Employment Opportunities: New business models based on new technologies and sustainable projects create new job opportunities and employment.
  • Employee Education and Development: Training programs for digital and green skills enhance the competencies of employees.
  • Improvement of Quality of Life: A cleaner and more sustainable environment increases the overall quality of life in society.

Political and Legal Impacts

Twin transformation facilitates businesses' legal compliance processes and plays a significant role in achieving global sustainability goals.

  • Meeting Regulations: Twin transformation contributes to businesses' environmental and digital compliance processes, helping them meet legal requirements.
  • Increase in International Cooperation: International collaborations and projects increase to achieve global sustainability goals.

Sectoral Applications of Twin Transformation

Twin transformation applications have been integrated into many different sectors. Although different applications are seen in each sector, the purpose is the same for each sector: supporting sustainability with digitalization. Sectors where twin transformation is intensely applied include energy, transportation, agriculture and livestock, waste management, manufacturing, and finance. Each sector is examined in order below.

Energy Sector

The energy sector can significantly reduce its carbon footprint by optimizing the use of renewable energy sources with digital technologies. Smart grids, leveraging digital control and data analytics models, can increase energy storage capacities and reduce CO2 emissions. The term "smart grid" here refers to the addition of smart meters and monitoring systems to electricity grids to provide mutual electronic communication between the supplier and the consumer, ensuring continuous reliable, high-quality distribution while maintaining user safety. Moreover, the integration of clean energy sources like solar and wind energy can increase energy efficiency when supported by digital technologies. For example, the sensors on wind farms can increase efficiency in energy production. This application is also found in Turkey. The "Digital Wind Farm" established in Afyon Dinar meets the electricity needs of 72,000 families in the region, and the turbines work more efficiently by reporting wind conditions and potential malfunctions to their digital twins. Thanks to the integration of such applications into the energy sector, large amounts of CO2 emissions can be prevented.

Transportation Sector

The rapid development of digital technologies has opened the door to a significant transformation in the transportation sector. These technologies not only make transportation safer and more efficient but also minimize environmental impacts, contributing to a sustainable future. Innovative solutions such as electric vehicles, autonomous driving systems, smart traffic management, and digital ticketing play a crucial role in reducing energy consumption and carbon emissions. At the same time, active transportation options like bike lanes and bike-sharing systems reduce the carbon footprint of cities, and the use of digital twin technology in public transport systems increases resource efficiency.

Agriculture and Livestock Sector

The use of digital technologies in agriculture and livestock sectors can increase efficiency and reduce environmental impacts. Monitoring animal health and growth with advanced methods, optimizing fertilizers and food supplements, and properly managing irrigation are practices that reduce water waste and pollution. For instance, soil moisture sensors can be used for irrigation optimization. The working principle of these sensors involves interacting with the soil through a prop system buried and in contact with the soil, and transmitting measured values at specific intervals to the server. Thus, soil moisture levels can be monitored, and necessary irrigation operations can be planned.

Waste Management Sector

Digital technologies can provide a significant transformation in waste management. AI-supported waste classification systems allow for more effective separation of recyclable materials. Smart trash cans, sensors, and digital imaging techniques optimize waste management processes. Additionally, with digital product passport projects covering all stages of a product's production to its end-user, including information on materials used, production processes, waste management, and environmental footprint, a sustainable waste management system is created by bringing transparency to the recycled material chain.

Manufacturing Sector

Digital twin technology plays a crucial role in the manufacturing sector. This technology, when combined with deep learning, Internet of Things (IoT), and cyber-physical systems (CPS), offers significant opportunities for businesses by enabling end-to-end integration of manufacturing systems. The manufacturing sector can transition to green production processes through digital transformation, increasing energy efficiency and reducing waste amounts. Smart factories optimize production processes using automation and robotic technologies. Energy-saving production equipment and process improvements minimize resource usage and environmental impacts.

Financial Sector

The financial sector contributes to twin transformation by developing digital banking services and financing sustainable projects. AI and robotic technologies automate banking processes, increasing operational efficiency. Financial solutions for sustainable projects encourage investments that support green transformation. Social responsibility projects and environmentally sustainable financing policies contribute to the green transformation of the sector.

Food Sector

In the food sector, twin transformation creates significant changes by improving both production and consumption habits. The enormous population growth and changing shopping and consumption habits over the past century have constantly posed challenges for the food industry. Addressing population explosions, ensuring supply security, and reducing the use of various preservatives, sugars, plastics, and chemicals in production, preservation, and packaging processes require continuous technological innovations. Moreover, the need for more efficient waste management is increasing. Modern food technology and digital solutions take significant steps toward solving these problems. Digital twin technology allows the creation of a digital copy of production processes in the food sector, providing significant improvements in efficiency, traceability, and sustainability. As a result, all stakeholders from farmers to retailers can make more informed decisions, reduce food waste, and offer healthier, safer, and more sustainable products to consumers. Digital twin applications play a critical role in overcoming the challenges faced by the food industry by revolutionizing food production and consumption.

Twin transformation applications bring significant developments in various sectors by combining digitalization and sustainability. While sectoral efficiency increases, the goal is to minimize environmental impacts through these applications. In this context, the use of smart technologies and data analytics provides sustainable solutions in a wide range from energy savings to waste management, from production processes to financial services. As a result, twin transformation helps sectors achieve their digitalization and sustainability goals, ensuring a cleaner and more efficient transition to the future. The market size of this technology, which provides many benefits in the industry, is expected to reach $48.2 billion by 2026.

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