Europe’s electrification race: Five ways the EU can avoid the next energy crisis

In the wake of the 2022 gas and oil shock, the EU set a course to “get rid of Russian fossil fuels”. Today, out of the chaos of the new gas and oil crisis, a new lodestar is emerging for EU energy policy: the electrification rate.

This metric tracks the share of electricity in final energy consumption—energy used by the end user. (It counts the energy coming out of a wall socket, but not the energy lost as waste heat when fuel was burned in a power plant, nor the energy lost on the journey along a power line.)

In 2024 in the EU, the electrification rate stood at 23.4%. The bloc’s aim, first set out in the Clean Industrial Deal of 2025, is to raise the rate to at least 32% by 2030. But the EU has now placed a real spotlight on this aim: last month European Council leaders issued a call for electrification, and European Commission president Ursula von der Leyen praised the “ambitious new target” in crisis speech on April 12th, promising a full electrification strategy before the summer.  

Time to end the stagnation

This is the right target at the right time. European scholars, including at ECFR, have identified the cards Europe holds against geopolitical powers, whether America or China. But energy dependence is a cross-cutting weakness that frightens Europe off playing its cards. Europe’s excessive reliance on fossil fuels undermines its leverage in talks with President Donald Trump’s United States, Europe’s main supplier of crude oil and liquefied natural gas. When Europe faces both a high energy import bill, and justifiably strong climate targets incompatible with maintaining a fossil-dependent industrial base, it is difficult for its manufacturers to compete with the “China Shock 2.0”.

Electrification is a good goal for any country because electricity is clean, quiet and efficient. It is an especially good goal when oil and gas is in short supply. Rapidly electrifying China set such a target in its five-year plan from 2016. And, while it was logical enough for Europeans to prioritise diversifying fossil fuel supply in the 2022 crisis, non-Russian gas is not cheap either. The €24bn rise in the cost of EU fossil fuel imports (as of April 22nd) since the Strait of Hormuz was closed is sharpening minds.

The problem is that the EU’s target is likely unachievable. Indeed, meeting it requires the bloc to end nearly two decades of stagnation: the 2024 rate of 23.4% was barely higher than the 2007 rate of 22.2%. To hit the 32% target in 2030, the EU would need to raise the rate by 6.6% in six years. That is about what China pulled off between 2015 and 2021 on the back of a massive state-backed push to produce and deploy the electricity-based technologies of the future. In other words, Brussels is calling for an electrification jump as big as anything Beijing attained in its peak build-out years.

And the EU cannot get there by focusing only on the power sector, where it has made the most climate progress so far. Shutting down a coal plant and replacing it with the equivalent output of wind turbines changes the rate not at all. Rapid progress on electrification will be best achieved by a step-change: not continuing to make combustion engines go further on a litre of petrol, nor a blast furnace burn less coal to make a ton of iron, but replacing fossil-fuelled devices altogether.

Grounds for optimism

Yet the EU has several advantages in this endeavour.

First, electricity-based technologies have become better and cheaper than ever before. For example, manufacturers are now able to use electricity for lower-temperature industrial processes, from sugar refining in Belgium to brick drying in Austria. In 2025 in Germany heat pumps finally outsold gas boilers. Electric vehicles, powered by ever-cheaper batteries, are already so attractive that European registrations of new EVs grew about 50% between March 2025 and March 2026.

Excessive European dependence on imported fossil fuels or industrial goods is presently a bigger risk than “single market distortions”

Second, the work EU policymakers have done since the 2022 shock will keep paying off in the second half of the decade. In 2023, the EU revised the energy efficiency directive to mandate national action to bring down final energy consumption, while a new EU-wide carbon pricing system (ETS2) comes in from 2027. It was correct for the 2025 Clean Industrial Deal to relax state aid rules for decarbonisation, allowing subsidies for industrial power prices. Excessive European dependence on imported fossil fuels or industrial goods is presently a bigger risk than “single market distortions”

How to hit the target

But for electricity to keep outcompeting combustion, European policymakers at all levels will have to be more aggressive. Here are five good approaches.

1.     Remove bottlenecks

Too often electricity cannot get where it most needed. Spain, a land of bounteous solar power, only has enough transmission to send about 2% of its installed capacity to France and beyond. The European Commission announced a promising grids package in December 2025, including measures to centralise the planning of cross-border power infrastructure and streamline permitting processes. The EU should quickly turn the proposal into law, ideally by early next year.

Also holding electrification back is a shortage of the skilled workers to install devices. The European Centre for the Development of Vocational Training estimated in 2022 that more than 1.6m job openings for “electroengineering workers” would need to be filled by 2035. Many electricians are older men heading for retirement, and with demand growing for heat pumps, EV chargers and data centres, governments must do more to train the coming generation.

2.     Reach all of society

The boom in EV sales benefits primarily the wealthier half of society; after all, many Europeans do not buy new cars or drive one at all. Subsidising public transport and investing in more frequent service can obviate the need for any kind of car. For those who do need private vehicles, there is promise in expanding the French social leasing scheme, wherein the government helps rural, car-dependent citizens make the upfront payment on an electric car, which have lower operating costs. If these vehicles are to be more convenient as well, the public EV charging network must expand faster: the EU is well off the pace for its 2030 target of having 3.5 million public chargers. Local policymakers can play their part by replacing parking spaces with bike lanes, as in Paris, which cut car traffic by more than half between 2002 and 2022.

3.     Tilt the playing field

Faced with yet another fossil fuel price shock, EU decision-makers are making a renewed effort to finally amend the energy taxation directive to ensure electricity is taxed less than fossil fuels. Currently, industrial consumers pay about three times as much tax on electricity as they do on gas. The commission proposed doing this back in 2021 but this has foundered on the opposition of member states, like Italy and Poland, concerned about their tax policy authority or raising taxes on gas. It is past time for European tax policy to stop favouring expensive imported fuels.

4.     Keep producers onside

European policymakers should ignore the hypocritical complaints from China and continue to favour their own domestic manufacturers of electricity-based technologies. European citizens will not support electrification if it entails a further decline in the industrial base—in other words, don’t do this entirely with Chinese EVs. The measures included in the Industrial Accelerator Act proposed in March—such as “Made in EU” requirements for industrial products receiving European subsidies or bought by European governments—could prevent Europe from losing its wind turbine production capacity.

But price does matter, and there are trade-offs between the speed and security of electrification. The EU’s solar manufacturing capacity is already largely gone, so at this point it is worth welcoming low-cost imports of solar panels, whose production does not deliver broad economic benefits and where import dependence presents limited security risks (with the exception of the inverters that connect the panels to the grid).

5.     Go big in the budget and punish the laggards

To get even close to the 32% target will require more money. In the light of this latest expensive energy crisis, the commission should raise its 2025 ask—about €30bn over seven years in the energy portion of the Connecting Europe Facility—for strengthening Europe’s power grids in the EU’s next multiannual budget (2028-34).

Indeed, Europeans should be willing to undertake joint borrowing to cover the cost of ditching imported fossil fuels. Brussels could leverage a bigger pot for electrification and grid expansion, declining to disburse funds for domestic energy projects to countries that are not building sufficient interconnections to their neighbours. 

And these plans need teeth. The forthcoming electrification action plan will be yet another EU communication, not a proposed regulation. If the commission took electrification as seriously as its rhetoric now suggests, it would propose binding targets for electrification, on the model of the effort sharing regulation. This forces member states that fail to cut emissions in the transport and buildings sector to buy emission allowances from better-performing peers.

The EU has many, many energy targets. But with the electrification rate, it has finally found the right one.