The politics around electrification are beginning to shift in Europe as more people recognize its importance for economic competitiveness and industrial resilience. European Union policymakers should seize this momentum to embed a binding target of at least 50% electrification by 2040 in the bloc’s energy security framework.
PARIS—Ever since Russia’s full-scale invasion of Ukraine in 2022, Europe has felt the strain of energy dependence. Between 2021 and 2025, the European Union spent more than €2.2 trillion ($2.5 trillion) on imported fossil fuels. And the closure of the Strait of Hormuz earlier this year, following the US-Israeli war on Iran, has forced the EU to pay an extra €50 billion for energy imports. Volatile oil and gas markets affect everything from household bills to industrial costs and public finances.
The solution is straightforward: to protect European citizens and businesses, the EU must pursue rapid electrification. The bloc can produce green electricity domestically and at scale. Renewable power, electric vehicles (EVs), heat pumps, industrial electrification, and battery storage are all mature, readily deployable, and increasingly cost-competitive technologies. They offer not only long-term resilience, but also an exit from the current energy crisis.
National governments in some member states, such as France and Sweden, have already launched plans to accelerate this process, but there is a strong case for an EU-level strategy. The European Commission’s new Electrification Action Plan is therefore an important political breakthrough. For the first time, it makes electrification an energy priority and proposes to double the share of electricity in the European economy to reach 46% in 2040. A 46% target is a good first step, but the EU has the potential to secure 50%. And in the EU’s energy independence pathway, every percentage point matters.
Electrifying at least 50% of the European economy by 2040 would reduce fossil-fuel imports by as much as two-thirds, leaving the bloc importing liquefied natural gas only from reliable suppliers such as Norway and the United Kingdom. This would strengthen Europe’s security by shielding it from supply disruptions and geopolitical pressures.
For European firms, electrification is synonymous with modernization and productivity, giving them an edge in a highly competitive global economy. While fossil-fuel volatility raises operating costs and can even force temporary production pauses, electrification offers more stability and affordability. True, it requires upfront investment in new processes and infrastructure, such as industrial heat pumps and electric furnaces. But the returns are worth it. Heat pumps, for example, are 3–4 times more efficient than their fossil-fuel counterparts.
The same logic applies to citizens. Purchasing an EV or a heat pump might be expensive, especially amid a cost-of-living crisis, but the benefits are almost immediate. Notably, the average driver can save almost €900 in fuel costs per year by switching to an EV. Equipping low- and middle-income households with clean-energy technologies can insulate them from the current price hike and future shocks.
The EU has all it needs to accelerate electrification. Europe’s clean-tech sector is scaling up to the point that it can meet the bloc’s needs. More than two-thirds of the bloc’s electricity is decarbonized, and about 85 gigawatts of solar and wind capacity were added last year. Embracing electrification has the added benefit of enhancing the EU’s industrial base, from France’s battery valley and industrial heat-pump makers in Italy and the Czech Republic, to Poland’s burgeoning solar-manufacturing industry and offshore wind champions in Denmark and Spain.
All that is missing is the political commitment to shift spending away from imported fossil fuels toward cleantech. The Commission’s Action Plan confirms a shift in the EU’s energy paradigm away from the diversification of gas and oil supplies and toward electrification. But a plan, however comprehensive, can only succeed if followed by concrete legislative action. Markets respond to clarity, especially in capital-intensive sectors such as grids and electrotechnology manufacturing. And that is precisely why the next step can be to turn this political promise into a binding EU-wide target of at least 50% by 2040. It would provide credible direction for investment, infrastructure planning, and industrial strategy.
Here, the EU’s Energy Security Framework offers a natural vehicle to give the target legal force, resolutely placing electrification as a central pillar of the future European energy security architecture. In doing so, it can allow the EU to adopt a long-term outlook, rather than focusing on short-term crisis management.
But a standalone binding target is not enough. The EU must pair it with enabling policies that can accelerate deployment across the economy and ensure that electricity is abundant and cheap for households and industries. The Electrification Action Plan offers a strong foundation for that. It addresses several barriers, including grid access, storage, industrial investment, the upfront costs faced by households, and the price gap between electricity and gas.
The Action Plan’s accompanying proposal for rebalancing the tax differential between electricity and gas can make the former more abundant and affordable for households and industry. At a time when electricity is taxed more than fossil fuels, it can incentivize the rebalancing of national tax systems. Denmark has already adopted such reforms, lowering inflation and energy costs for consumers.
Equally important is the ability to mobilize public funds to help low- and middle-income households and small and medium-size businesses invest in electrification. Revenue from the EU’s Emissions Trading System could be put toward equipping Europeans with cleantech or decarbonizing the bloc’s industrial base. The EU can build on this foundation by applying an “electrification-first” principle systematically across its funding instruments and emissions-trading revenues. Such policies would translate the Action Plan’s ambition into investment decisions and quick economic gains.
The politics around electrification are beginning to shift in the EU as more people recognize its importance for competitiveness, industrial resilience, and economic security. European policymakers must seize this momentum to embed a target of at least 50% electrification by 2040 in the EU’s energy security framework. This is technically feasible. But more significantly, in a period defined by geopolitical uncertainty and economic fragmentation, such a target is strategically necessary to provide the continent with the stability it desperately needs.
