Europe Plans for Full Electrification By 2040

The European Commission unveiled an Electrification Action Plan aiming to transform Europe into the world’s first fully electric-powered continent. The plan seeks to increase electrification of energy demand from 23% to 46% by 2040, reducing reliance on imported fossil fuels and potentially saving €240 billion ($274.5 billion) annually by 2040.

The Commission recognizes barriers to electrification including high electricity prices compared to gas, lengthy grid connection approvals, and insufficient incentives for businesses. To address these, the plan proposes measures like reducing grid charges, lowering taxes on electricity, and accelerating grid expansion through the Grid Package.

The initiative also includes a €100 billion investment via the Bank for Industrial Decarbonization, channeled through the EU ETS Innovation Fund, and reforms to the EU Emissions Trading System to incentivize decarbonization investments. The Commission hopes this strategy will create numerous jobs and bolster energy independence.