Overview
- In mid-July the European Commission circulated a draft Electrification Action Plan that proposes a binding target of about 46% of energy supplied by electricity by 2040 and a package of measures to drive heat pumps, electric vehicles and demand electrification.
- The draft ties the push to energy security and costs, citing roughly €50 billion in extra fossil‑fuel import costs from the recent Iran conflict and projecting up to €200–260 billion in import savings and about 2 billion tonnes of CO2 avoided by 2040.
- To supply the extra electricity the plan sets concrete supply targets, including about 100 GW more renewables by 2030 and expanding storage toward roughly 200 GW, which will require major grid upgrades and faster manufacturing of heat pumps and EV components.
- The proposal would use fiscal and market levers to make electricity relatively cheaper than gas, for example by lowering taxes on power, reforming grid charges and phasing out fossil subsidies, measures that could change energy prices and industry costs for households and firms.
- The draft is not law yet and must pass the European Parliament and Council before any national rules change, but it has already triggered strong debate in Germany over practical feasibility, social costs and conflicts with the recent national heating law.