Brussels – On July 17, 2026, the EU Commission unveiled its electrification plan for industry, buildings, and transport. Electricity is set to cover 46 percent of total final energy consumption by 2040, up from the current 23 percent. Consequently, Brussels aims to cut gas imports by more than 70 percent and crude oil imports by over 40 percent. The move is driven by fresh price shocks affecting fossil fuels and Europe’s high dependence on imports. However, implementation is hampered by high electricity prices, long lead times for grid connections, and enormous financing requirements. Households, motorists, and businesses would all be affected, as they would need to retrofit heating systems, vehicles, industrial equipment, and grid connections.
EU doubles target for share of electricity
The Commission has already cited a reference figure of 32 percent for 2030. However, the target for 2040 remains non-binding for the time being. An impact assessment is scheduled to review the figure in the fourth quarter of 2026. Brussels will then decide on the legal framework as part of the energy package for the post-2030 period.
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The electrification plan aims to reduce the annual bill for fossil fuel imports by up to €260 billion by 2040. The Commission also anticipates electricity generation costs falling by around 20 percent. To achieve this, vehicles, heating systems, and production facilities would need to increasingly run on electricity. Brussels is therefore focusing on electric cars, heat pumps, electric industrial furnaces, storage systems, and long-term power purchase agreements.
Electrification plan faces high electricity prices
On average, electricity costs European companies nearly three times as much as gas. According to the Commission, households pay about two and a half times as much. Consequently, switching is not worthwhile in every instance, despite the higher efficiency involved. Furthermore, grid connections can take several years to complete.
The Commission therefore intends to restructure grid fees, taxes, and levies. Electricity should not face a heavier tax burden than gas. In addition, member states are encouraged to apply lower VAT rates to heat pumps, solar installations, and home storage systems. The European Investment Bank plans to provide more than €75 billion in financing for this purpose over a three-year period.
Industry and households require significantly more grid capacity
From a technical standpoint, 60 percent of the industrial sector’s fuel-based energy demand could already be electrified. However, the steel industry’s electricity consumption alone would rise to 165 terawatt-hours by 2030—more than double current levels. According to Reuters, the Commission estimates that investment needs for Europe’s electricity grids will total around €1.2 trillion by 2040.
Consequently, the electrification plan affects more than just power plants and grids; households would need to replace heating systems, drivers would require more charging points, and businesses would need higher-capacity grid connections. While the Commission promises lower operating costs thanks to more efficient technology, high upfront costs and Europe’s high electricity prices could further delay investment. The strategy has the potential to significantly reduce Europe’s dependence on imports, provided the expansion of generation, storage, and grid infrastructure succeeds. However, it also shifts a massive amount of energy demand onto a system known to have bottlenecks. Therefore, the 46 percent target is not the sole determinant of success; affordable electricity, rapid grid connections, and guaranteed power supply during periods of high demand remain crucial.
Author: Blackout News
Sources: Reuters (22.07.26) – European Commission (Stand: 22.07.26) – Welt (17.07.26) – Montel News (17.07.26)