The European Commission has published its Electrification Action Plan, a strategic document outlining the measures and targets required to accelerate the electrification of the European economy. At the same time, the Commission proposed a review of the EU Emissions Trading System Directive.
The Electrification Action Plan is intended to reduce the European Union’s dependence on imported fossil fuels, which threatens both energy security and the competitiveness of European industry. According to the Commission, achieving the plan’s objectives could reduce the EU’s annual fossil fuel import bill by €260 billion.
The document also highlights the role of electric vehicles as mobile energy storage units capable of increasing the flexibility of the electricity system. According to the Polish New Mobility Association, or PSNM, this confirms that electrification is no longer merely an element of climate policy, but is becoming a foundation of Europe’s economic resilience.
Europe aims to become the first predominantly electrified continent
On 17 July, the European Commission presented the Electrification Action Plan, under which Europe is intended to become the world’s first continent to rely primarily on electricity.
The strategy is a response to the negative consequences of fossil fuel imports and the EU’s exposure to geopolitical crises. Recent developments, particularly the war with Iran and the blockade of the Strait of Hormuz, demonstrated that increases in oil and gas prices translate directly into higher inflation, greater operating costs for businesses and additional pressure on the public finances of member states.
The plan establishes a target for electricity to account for 46% of final energy consumption by 2040. According to the Commission, meeting this objective would reduce the EU’s annual spending on fossil fuel imports by €260 billion.
“The publication of the European Electrification Action Plan is one of the most important political signals sent by the European Commission in recent years,” said Aleksander Rajch, Management Board Member at PSNM.
“The document confirms that electrification is no longer merely an element of climate policy. It is becoming a foundation of energy security, industrial competitiveness and Europe’s economic resilience.
“The Commission clearly states that reducing dependence on imported fossil fuels requires faster electrification of transport, buildings and industry.”
Available technologies could replace 60% of industrial fuel consumption
Industry currently accounts for approximately one-quarter of total energy consumption in the European Union, while also offering considerable potential for further electrification.
According to available estimates, 60% of the fuels currently consumed by European industry could be replaced with electricity using technologies that are already available.
The Commission identifies the food, paper, textile, construction materials, chemical and steel industries as sectors in which electrification should be particularly prioritised.
Implementing the plan is expected to significantly reduce gas and oil consumption, lower energy import costs and improve the competitiveness of European companies.
The measures proposed in the document include reducing the cost of electricity. The Commission recommends reforming the fees and taxes included in electricity bills, gradually phasing out fossil fuel subsidies, redesigning network tariffs and providing greater incentives to consumers who use electricity flexibly.
As a result, electricity is expected to become considerably more competitive with fossil fuels for both businesses and households.
Transport is a key part of the electrification strategy
Transport is one of the main sectors covered by the plan.
The Commission stresses that replacing combustion-engine vehicles with electric vehicles is one of the most important ways to reduce the EU’s energy dependence and limit crude oil imports.
“The Electrification Action Plan recognises electromobility as an integral part of the energy system,” Rajch said.
“The Commission is moving away from viewing electric vehicles exclusively as a means of transport. It highlights their role as mobile energy storage units capable of providing flexibility services through smart charging and Vehicle-to-Grid technologies.
“This approach will benefit both vehicle users and electricity system operators. At the same time, it will accelerate the integration of renewable energy sources and increase their role in national energy mixes.”
Vehicle-to-Grid services could generate €44 billion in annual savings
According to the Commission’s analysis, smart charging and Vehicle-to-Grid services could generate more than €44 billion in annual savings for electric vehicle users by 2040.
They could also reduce the scale of investment required in electricity networks.
By mid-2027, the Commission intends to assess the current implementation of Vehicle-to-Grid technology across the EU. It will then propose a method for introducing smart charging as a standard option in electricity supply contracts for electric vehicle users.
The next stage, scheduled for completion by the end of 2027, would introduce a requirement for new electric vehicles to be compatible with Vehicle-to-Grid technology, enabling electricity to flow in both directions between vehicles and the power grid.
EU considers stricter public procurement rules for zero-emission vehicles
The Commission identifies several measures that could accelerate the electrification of transport.
These include a review of the Clean Vehicles Directive by the fourth quarter of 2027, potentially leading to stricter requirements regarding the proportion of zero-emission vehicles included in public procurement.
The Commission also recommends maintaining existing incentives and introducing new fiscal and non-fiscal measures dedicated to electric vehicles.
The need to accelerate the expansion of charging infrastructure will be addressed during a review of the Alternative Fuels Infrastructure Regulation, or AFIR, which is expected to take place in 2026.
To stimulate the development of zero-emission heavy-duty transport, the Commission also intends to extend the e-HDV Clean Transport Corridors initiative to additional routes within the Trans-European Transport Network.
Energy storage capacity to reach approximately 200 GW
Energy storage is another priority area covered by the Electrification Action Plan.
It is considered strategically important as the share of renewable energy increases and electricity generated during periods of high production must be stored for use when demand rises.
The recommendations include expanding battery storage and long-duration storage capacity, integrating energy storage facilities with the electricity grid and developing flexible demand management.
These measures are intended to increase total EU energy storage capacity to approximately 200 GW by 2030.
This would be almost four times the current level of around 55 GW.
Low-carbon energy linked to lower electricity prices
“The Commission clearly emphasises that the lowest electricity prices are found in countries whose energy mix is based to a significant extent on low-carbon sources, particularly renewable and nuclear energy,” said Marek Popiołek, Business Development Director at PSNM.
“These sources are essential to achieving the plan’s objectives.
“To accelerate the development of renewable energy and nuclear power, the Commission is calling for measures including the full implementation of the RED III Directive, faster permitting procedures for renewable energy projects, support for new nuclear investments, cooperation between member states on reactor licensing and better planning of energy investments.
“The objective is to add 100 GW of new renewable energy capacity every year until 2030.”
Electricity grids remain the greatest barrier
The Commission argues that the greatest obstacle to the energy transition is not the availability of technology, but the condition of Europe’s electricity infrastructure.
The principal barriers include insufficient grid capacity, limited connection availability, long queues for network connections and inadequate investment in electricity networks.
The Electrification Action Plan therefore places considerable emphasis on improving each of these areas.
Commission proposes changes to the EU ETS
Separately from the publication of the Electrification Action Plan, the European Commission also presented a proposal to amend Directive 2003/87/EC governing the EU Emissions Trading System.
According to the Commission, the proposed changes are intended to provide “relief for industry” while preserving the central role of the ETS in Europe’s climate and energy transition.
The revised system is expected to focus strongly on investment.
For example, the Industrial Decarbonisation Bank is expected to provide €100 billion for industrial decarbonisation projects across Europe.
