Key facts
- The European Commission plans to propose a 2040 electrification target for final energy consumption.
- The goal is to reduce fossil fuel imports, potentially saving €200 billion annually.
- Measures include promoting heat pumps, electric vehicles, and industrial electrification.
- The plan involves reforming electricity bills, phasing out fossil fuel subsidies, and setting electricity-to-gas price ratios.
- Financial support for industry will come from the Emissions Trading System and a proposed 'Industrial Decarbonisation Bank'.
The European Commission is preparing to propose a significant electrification target for 2040, aiming to reduce the European Union's reliance on imported fossil fuels and cut greenhouse gas emissions. An internal document seen by Euronews suggests this move could save approximately €200 billion annually in fossil fuel imports.
The proposal, part of the bloc's Energy Union package, aims to enshrine a specific percentage of final energy consumption to be met by electricity by 2040. This includes transitioning to electric vehicles, heat pumps for heating and cooling, and electric industrial equipment.
The Commission is also considering mandating heat pumps in public buildings and promoting geothermal energy as an underutilized resource. Geothermal could potentially meet at least 1% of Europe's electricity needs and 25% of its heating and cooling demand.
Despite the EU generating around 70% of its electricity from domestic clean sources, demand has lagged due to barriers such as higher electricity prices compared to gas and significant upfront costs for consumers. Grid constraints and connection delays further slow investment in clean technologies.
To address these challenges, the Commission plans to reform electricity bills, reduce taxes and levies on electricity, and gradually phase out fossil fuel subsidies. It will also set indicative national targets to make electricity more economically attractive than gas for households and industries.
Financial support for industrial electrification is planned through revenues from an expanded Emissions Trading System and a proposed €100 billion from an 'Industrial Decarbonisation Bank'. The transport sector will see accelerated electric vehicle adoption, while buildings will receive support for heat pumps through various financial schemes and procurement reforms.
Environmental groups have largely applauded the proposal to phase out fossil fuel subsidies but suggest the plan could be even stronger with more ambitious renewable energy and energy efficiency targets. Concerns remain about ensuring fairness and addressing energy poverty for vulnerable households.