Electrification is the most cost-effective and reliable way to decarbonize the EU economy in less than three decades. Realizing it now would allow Europe to avoid the worst consequences of climate change and deliver significant benefits for both its economy and citizens.
Electrification is the process of switching from fossil fuels to clean and renewable energy sources. Not only does it cut carbon emissions and protect our environment, but it will also boost Europe’s economies, create millions of new, sustainable jobs and drive new skill sets and revenue sources. Electrification empowers consumers to actively participate in the clean energy transition. It will also bring benefits in terms of reduced air pollution from industry, buildings and transport and limit the associated health risks for EU citizens.
Europe’s once-in-a century opportunity
Today we have a once-in-a-century opportunity to invest in a greener, more resilient, and sustainable Europe. It is vital that we seize it and drive electrification right across our energy system from production to grid and flexible consumption. Making this happen will require a radical transformation in the way that we produce, consume and distribute energy.
The good news is that many sectors, including transport, industry, and heating and cooling, are already in transition and today almost one-quarter of Europe’s energy system is electrified. Mindsets are changing: it’s not just policymakers who are setting the pace in pushing for a climate-neutral economy – businesses and citizens are also increasingly enthused by the prospect of a clean and renewable energy future. So let’s bring it on.
The EU has the chance to demonstrate climate and technological leadership by setting in place the right solutions – from modernized electricity grids through demand-side flexibility such as smart charging and storage systems.
So, what needs to happen next?
The ‘Fit for 55 Package’ sends a positive signal towards the decarbonization of the energy system with clear climate and energy targets for 2030 that will put Europe on track towards climate neutrality by 2050. We believe a series of no-regret priorities will further strengthen the package.
As proposed by the Commission, the Energy Taxation Directive must generally remove tax exemptions for fossil fuel consumption, consider electricity among the least taxed energy sources when used in motors and heat and eliminate double taxation for storage facilities. This represents a much needed and significant step to foster electrification in the transport and heating sectors.
Delivering on the renewable energy target is a critical precondition to reach the 55% emission reduction target by 2030. But more can be done to drive flexible and renewable-based electrification of transport, industry, and heating and cooling as well as their integration in the electricity system. The Renewable Energy Directive must be strengthened, with simplified permitting processes including for grid infrastructure that should be built up while simultaneously protecting and restoring nature.
Electrification brings major opportunities to advance the energy efficiency of end-users and across the energy system. The proposed Energy Efficiency Directive should further recognise and capture the advantages of electrification with binding and ambitious energy efficiency and renovation targets, as proposed by the Commission in the ‘Fit for 55’ package. It is of great importance to apply the Energy Efficiency First principle also at the system level, improving provisions on the Energy Savings Obligations schemes and allowing for a regular review of the primary energy factor for electricity.
The package is also a step in the right direction for the electrification of road transport. It provides clarity on the CO2 emission reduction trajectory of cars and vans while supporting smart charging functionalities. By strengthening the revisions of the CO2 emission performance standards for cars and vans regulation, the Alternative Fuels Infrastructure Regulation and the Renewable Energy Directive we could bring a raft of improvements including the dynamic roll-out of recharging infrastructure, minimum requirements for the deployment of charging pools, targets for electric vehicle uptake and a well-designed fuel-neutral credit trading mechanism.
While all of the signals and changes I mention above are urgently needed, we also need to make sure that we leave no one behind while implementing them. An ambitious Social Climate Fund can provide support to low-income households and contribute to achieving a just transition.
A new, electrified world awaits. Europe has the knowledge, resources and political will to make it a reality. We are excited by what lies ahead and look forward to working alongside governments, industry, citizens, and the entire electricity value chain in seizing the moment and creating a cleaner, smarter, healthier EU for future generations.
