With the climate clock ticking, Europe must speed up the uptake of clean electricity across its economy. Why? Because electrification is the most cost-efficient pathway towards decarbonisation.
Large swaths of the European economy continue to rely on fossil fuel inputs that increase greenhouse gas (GHG) emissions. And given that such emissions contribute to the exacerbation of the climate crisis, converting some of the highest-emitting sectors, such as transport, buildings and industrial processes, to clean electricity will be imperative if Europe is to meet its climate targets.
Such a profound economic transformation will indeed require unprecedented effort.
At Eurelectric, we are ready to lead Europe’s decarbonisation to meet the ambitious Green Deal targets and become the worlds’ first carbon neutral continent by mid-century.
What is decarbonisation?
As defined by the Cambridge Dictionary, decarbonisation is “…the process of stopping or reducing carbon gases, especially carbon dioxide, [from] being released into the atmosphere as the result of a process.”
There are multiple carbon-emitting processes, but the one that has proven to be most emitting is the burning of fossil fuels. This is why the Oxford Dictionary defines decarbonisation as the process of “replacing fossil fuels with a fuel that is less harmful to the environment.” What the dictionary does not mention, however, is that there are several possible replacements available, of which some are not necessarily fuels.
The five primary alternatives to fossil fuels include renewable energy, nuclear power, hydrogen, gas, biomass and geothermal energy. Although all five come with a low carbon footprint, not all share the same energy efficiency, as we’ll see later on.
Why is decarbonisation crucial for Europe’s economy?
As per the landmark 2015 Paris Agreement, 195 United Nations member states agreed to limit the rise of global temperatures to below 2 degrees Celsius by 2100. The consequences of exceeding this will be dramatic: rising sea levels, more frequent forest fires and heavy precipitation events, but also longer and more intense droughts.
According to the Intergovernmental Panel on Climate Change (IPCC), the continued emission of GHGs will lead to “long-lasting changes in all components of the climate system, increasing the likelihood of severe, pervasive and irreversible impacts for people and ecosystems”. Decisive action on climate change by all sectors is therefore needed to meet the goals set by the Paris Agreement.
What is the EU doing for decarbonisation?
The EU has distinguished itself as a leader in climate action worldwide with its landmark Green Deal and commitment to reach carbon neutrality by 2050. Much has happened since the inception of the Deal.
Unforeseen global events such as the COVID pandemic, the energy crisis induced by Russia’s gas cutoff to Europe and mounting foreign competition on green energy technologies has led to calls for an adaptation of the original Deal and a revision of its initial benchmarks.
Let’s deep dive into what these new targets entail.
The EU 2030 vision
In 2019, European Commission President Ursula Von Der Leyen presented its landmark Green Deal on climate action. Prior to the Deal, the EU had committed to curbing at least 40% of its CO2 emissions (below 1990 levels) by 2030 and set an aspirational target of 80-95% reduction by 2050. The target was further raised in 2021 with the EU’s ‘Fit for 55’ package, presented by the Commission as an extension of the European Green Deal. The new target aims at reducing net greenhouse gas emissions by at least 55% by 2030 (when compared to 1990 levels) and achieving climate neutrality by 2050.
In 2022, following Russia’s invasion of Ukraine and the subsequent sanctions, the continent experienced one of its harshest energy crises marked by skyrocketing gas and electricity prices. The crisis was triggered by Russia’s curtailment of gas towards import-dependent EU countries.
This is when decarbonisation through homegrown renewables and low-carbon technologies became an opportunity to strengthen Europe’s energy security while lowering emissions. To end the EU’s dependence on Russian gas, the Commission further enhanced its decarbonisation ambition with its REPowerEU proposal. The plan called for an additional 41 gigawatt (GW) of wind power and 62 GW of solar PV to the Fit For 55 targets. The proposal also established a voluntary target to reduce gas demand by 15%, increase gas storage capacity and energy efficiency, as well as to diversify energy suppliers.
Such a proposal was welcomed by Eurelectric’s Secretary General Kristian Ruby, who stated that:
“Lowering Europe’s dependence on fossil imports will require a reliable electricity system drawing on the full range of technologies. It is encouraging that the European Commission actively seeks to harvest the clean-energy potential of electricity by accelerating heat pump installations and deployment of new renewable projects.”
The Commission’s proposal also spurred the revision of the Renewable Energy Directive, which brought the binding 2030 renewable target from 32% to a minimum of 42.5%, with the aspiration to reach 45%. In practice, this will mean nearly doubling the share of renewable energy in less than six years. After lengthy negotiations among the Commission, the European Parliament and the Council the directive entered into force on 20 November 2023.
The EU 2040 vision
When looking at the 2040 interim target, one thing is clear: the future of Europe’s energy system is electric. This has been confirmed by the Commission in its Communication on 2040 climate targets, which forecasts up to a doubling of the electricity share in the EU final energy consumption by 2040.
Let us give you a bit of context.
On 6 February 2024, the European Commission published its Communication and accompanying impact assessment on the EU climate target for 2040. Here, the Commission recommended a target of 90% net emissions reduction by 2040. The actual legislative proposal is expected to be tabled by the incoming Commission and will trigger the revision of the European Climate Law.
The EU already has binding laws for 2030 (55%) and for 2050 (climate neutrality). The 2040 target is designed to provide predictability to stakeholders and investors for the period between 2030 and 2050. The Climate Law mandates that the Commission makes a legislative proposal for a 2040 climate target within 6 months of the global stocktake under the Paris Agreement (December 2023). The 2040 target will also inform the EU’s future after the 2030 Nationally Determined Contributions (NDCs) that all Parties must submit to the UNFCCC by COP30.
The Communication calls for fast-tracking electrification of end-uses to cut their emissions, reaching 50% electrification by 2050 – a stark increase from today’s rate of 22.8%. It also paves the way for an almost fully decarbonised power sector by 2040, where renewables and nuclear will make up 90% of power generation.
The supporting analysis provided by the Commission also suggests that cutting emission reductions substantially beyond the current pace will require the deployment of non-mature technologies such as direct air capture (DAC), as well as carbon capture and storage (CCS) across most industry sectors. This will require a double-digit billion euro figure of additional investments every year at a time when armed conflicts, deindustrialisation, higher interest rates and a cost-of-living crisis present a more challenging environment for the transformation of the European economy.
For additional information on this, please check out our full analysis of the EU 2040 climate targets.
The EU 2050 vision
The EU is aiming for carbon neutrality by 2050. Eurelectric believes that this is achievable if we electrify high-polluting sectors such as transport, buildings and heavy industry. Yet, Europe’s economy can reach net zero only to the extent that the electricity itself does not generate emissions. Our core mission is therefore to make sure that decarbonised electricity is safely and affordably delivered across Europe.
With this in mind, let’s take a quick look at our advocacy.
What is Eurelectric doing for decarbonisation?
Eurelectric strongly welcomed the Paris Agreement as a major step towards addressing the global climate change challenge. The Agreement signalled that the international community recognised the need to fight climate change and transition to a low-carbon world. Good intentions, however, must be complemented by concrete actions.
Decarbonised electricity is a key part to achieving these good intentions. Our members are committed to a carbon-neutral electricity mix in Europe well before mid-century, moving towards a low-carbon economy in a way that is both environmentally and economically sustainable. This goes hand in hand with ensuring a competitively priced and reliable electricity supply throughout an integrated European energy market.
Eurelectric therefore welcomes the recognition of electricity as a clear pathway towards climate neutrality, and calls on the EU to provide clear measures for advancing electrification.
Underlining the industry commitment to climate neutrality, Eurelectric’s President and E.ON CEO, Leonhard Birnbaum said:
“The EU has highly ambitious targets for 2030. The step change we achieve already this decade will determine our success in delivering any target we might set ourselves for 2040. That is why we must get laser-focused on making progress on the ground now. This means ensuring investors’ confidence, reaching warp speed in permitting for power generation and grid infrastructure, defending competitiveness – and modernising our grids to manage a bigger more complex system.”
But what do we mean by electrification?
What is electrification?
The Oxford Dictionary provides the clearest and most concise definition, describing electrification as: “the process of changing something so that it works by electricity.”
Historically, electrification referred to the process of bringing electricity to geographical places where it was not yet available. However, our current use of the word has shifted to mean replacing the use of fossil fuels in sectors such as transportation, heating, cooling, and industry with clean electricity.
Decarbonising electricity has immense value beyond the power sector itself. Clean electricity can help sectors like transport or space heating, which cannot decarbonise on their own, but need to decrease their emissions to achieve the Paris agreement targets.
Investing in clean power generation and transition-enabling solutions therefore facilitates both a cost-effective decarbonisation and the sustainable development of the EU economy.
3 reasons why electrification is the best way to decarbonise
Today 70% of the final energy demand in transport, buildings and industry relies on fossil fuels – shows Eurelectric’s Decarbonisation Speedway study. This is the main target for decarbonisation. Electrification is a direct, efficient, and effective way to achieve society’s decarbonisation. Here’s why.
Reduced emissions
Clean and renewable electrification can reduce greenhouse gas (GHG) emissions in three ways:
• Switching to carbon-neutral electricity: Using net zero energy sources to generate electricity is much cleaner and safer than burning fossil fuels.
• Reducing total energy demand thanks to higher energy efficiency.
• Producing carbon-neutral fuels: through the electric production of fuels such as hydrogen and power-to-X, electrification can reduce emissions in end uses where direct use of electricity is not appropriate, such as marine transport and aviation, and select industrial processes.
Electrification can thus transform highly-polluting technologies used for transport (such as internal combustion engines for cars, trucks and airplanes), heating and cooling (like gas boilers) or industrial processes (including the use of coking coal for steel production).
The growing share of renewable electricity in the European electricity generation mix is making it easier and cheaper to source clean energy, hence making fossil fuels less attractive to all sectors.
2024 marked the lowest emissions from the EU power sector with a 15% drop compared to 2023. Renewables contributed 48% of the EU power generation mix, followed by nuclear at 24% and fossil fuels at 28% – the lowest share ever. While nuclear remained the single leading technology in producing power, wind kept its lead over natural gas from the past year. Electricity from hydro and solar PV remarkably increased by more than 40 TWh year-on-year. This corresponds to half of the annual power demand in Belgium and the whole annual demand in Denmark.
“Electrification remains the low-hanging fruit to decarbonise the EU. The more you electrify your energy applications the easier you decarbonise, but demand for electricity is not where it should be today.”
Energy efficiency
Electrification reduces total energy demand thanks to the higher efficiency of electric solutions when compared to conventional solutions for most applications. For example, electric vehicles consume only 25% of the energy consumed by conventional vehicles. In space heating, heat pumps are 4 to 5 times more efficient than conventional gas boilers.
Security of supply
As Europe grapples with securing its energy supply while facing worsening climate change, decarbonisation has taken on a new meaning, with electrification remaining the speedway to both Europe’s net zero, energy independence and ultimately cheaper energy bills for consumers. As electrification will mostly come from domestic renewable sources, switching to decarbonised power also means reducing our dependence on fossil fuel imports, thereby ensuring our security of energy supply.
This was the rationale that led the EU to raise its targets for wind and solar to 42.5% through the RePowerEU proposal, set into law with the revised Renewable Energy Directive.
The untold benefits of electrification
Beyond efficiency gains, improved energy security and emission reductions, there are many other benefits from clean and renewable electricity, such as improved air quality and citizen health, job creation, and increased European competitiveness in clean technologies.
Switching to electric alternatives also empowers customers to play an active role in the energy transition, whether at the local, regional or state level. Now, more than ever, decisive action is needed to power Europe’s decarbonisation journey in a changing balance of power.
Moreover, as climate change is set to become the main driver of biodiversity loss, more renewable/low-carbon generation can also benefit the preservation of ecosystems and the restoration of degraded areas by mitigating the disastrous effects of climate change.
At Eurelectric we tapped into the potential of clean power to address the twin crises of biodiversity loss and climate change with our “Power Plant” project – a guide for electrifying in harmony with nature.
For more information, check out our latest Power Plant study.
Zeroing in on climate neutrality
In our Decarbonisation Speedways study, we analysed three scenarios for Europe’s decarbonisation in the building, transport and industry sectors, with key milestones in 2030, 2040 and 2050.
By 2050, 70% of fossil-fuel-based final energy demand in Europe’s transport, buildings and industry must be decarbonised. The study reveals that clean and renewable power is the cost-efficient solution for curbing emissions and reducing energy use thanks to its superior energy efficiency. Specifically, the transportation sector will witness the highest efficiency gains, with at least a 53% reduction in energy use in 2050 compared to 2015.
Electricity capacity will have to triple by 2040, with a ten-fold expansion in renewables and a stable basis of firm capacity to match around 4,600 TWh of final electricity demand by 2040.
The EU Emissions Trading System, which puts a price on carbon emissions, will continue to play a significant role in driving Europe’s decarbonisation, incentivising consumers to increasingly opt for low-carbon solutions.
How can electrification help decarbonisation?
To achieve the EU’s decarbonisation, all sectors must be electrified. Massive electrification rates will be made available by large shares of renewables – mainly wind, solar and hydropower – and other decarbonised power generation.
Where direct electrification is not an option, renewable hydrogen and bio-based energy carriers will replace fossil fuels. This will mostly be the case for energy-intensive industries, heavy transports – such as heavy trucks carrying cargoes over long distances – and other hard-to-abate sectors.
Electrification of industry
Industry represents 18% of global CO2 emissions, with process heating being responsible for three quarters of industrial greenhouse gas emissions due a significant reliance on fossil fuels
Eurelectric’ Decarbonisation Speedways study shows that 74% of light industries can be directly electrified by 2050, while heavy industries can reach an electrification rate of 31%.
A recent Fraunhofer study has shown a technical potential of 92% direct electrification of industrial heat processes, as promising solutions are becoming increasingly available. Electric boilers, engines, arc furnaces and industrial heat pumps can replace fossil fuels in industrial processes, even when temperature requirements are above 200 degrees Celsius. Technological developments in the field of electric alternatives are promising also for hard-to-abate sectors, which require high heat processes. Yet both the cost and regulatory barriers prevent the electrification of industrial heat processes to happen at the scale needed.
Electrification of transport
It is often forgotten that in the late 19th and early 20th centuries, electric transportation ruled the world. Electricity used to power the engines of early automobiles and trams. Autonomy was not important back then, as transport was mostly limited to urban and local areas, making trams easy to charge and maintain. However, as we began to travel greater distances, internal combustion engines became the norm, increasing carbon emissions and air pollution from transportation.
Today, there is growing will to electrify transportation, as it accounts for 25% of the EU’s GHG emissions. That is why in recent decades, governments have been increasing their support for innovation, research and development related to the electrification of transportation, and development of batteries.
The increasing automotive & vehicle electrification
You may have noticed by walking around various European cities that there is a growing number of public transport services powered by electricity. Electric vehicle (EV) technologies have greatly improved over the past few years, gaining long range autonomy and popularity, as well as reaching an all-time 11.4% market share in 2020 across the EU, Norway, Switzerland, Iceland and the UK.
In 2024, annual EV sales reached 22.7% of total vehicle sales in Europe – reports Eurelectric’s EVision 2025 study.
Key advantages of EVs:
• No emissions, air pollution or noise pollution in cities.
• Contributes to the decarbonisation of the European economy.
• Lower total cost of ownership than internal combustion engines (upfront cost is higher, but recharging and maintenance costs are lower).
• No tolls in zero emissions cities.
As we move closer to 2035, the de facto ban on the sale of new petrol and diesel vehicles will come into effect in some jurisdictions, creating even greater momentum around EV uptake.
Eurelectric is an active supporter of the uptake of e-mobility across Europe through its Business Hub EVision. Read more about our activities here.
Electrification of housing
Electrification is also set to play a role in our homes, from more efficient space heating and cooling energy solutions, such as heat pumps, to integrated home management systems.
Europe’s buildings consume 40% of all the energy used across the continent. With three-quarters of the EU’s building stock being deemed energy inefficient, the need for space heating and cooling is higher, and the bills paid by consumers are heftier. Furthermore, by relying heavily on fossil fuels for heating our homes and water, this sector is responsible for over one-third of the overall CO2 emissions.
Legislation-wise, the EC Energy System Integration strategy outlines that 40% of all residential buildings and 65% of all buildings in the services sector should use electricity for heating and cooling by 2030 – an increase from 11% in residential buildings today. This empowers consumers by giving them the ability to interact with the power system, manage their consumption, and become prosumers (i.e., selling electricity back to the grid).
Time for an EU Electrification Action Plan
It is for all of these aforementioned reasons that Eurelectric has been advocating for the new EU commission to develop an Electrification Action Plan (EAP) within the first 100 days of the new 5-year mandate.
Specifically, we ask policymakers to:
• Reinforce governance with an EU Electrification Action Plan – Publish an EAP that sets an indicative target of 35% electrification of final energy use across the EU by 2030. In addition, an electrification indicator in the national energy and climate plans (NECPs) to monitor and deliver progress should be introduced.
• Showcase the true value of electricity – Continue efforts to relieve the electricity price of taxes and levies to create favourable economic conditions for consumers to switch from more carbon-intensive energy carriers.
• Increase awareness of electricity’s cost saving potential – Acknowledge that our exposure to volatile fossil fuel imports from external sources is coming with a massive yet avoidable cost: the positive impact of large-scale electrification with clean domestic power generation on security of supply should be duly considered as a saving in the mid to long term, rather than just an expenditure.
This EAP serves therefore as a guidance for dedicated policy proposals to let electrification play its required role in the energy transition and guide EU Member States in successfully implementing provisions from the European Green Deal and the REpowerEU legislation with decarbonisation and electrification at its core.
The EAP is also not an end in itself: further analysis is needed to better understand the effects of an increased share of electricity in certain sectors of the economy with due recognition of sector specific differences and starting points in decarbonisation of the various EU Member States.
In addition to the EAP, we are also calling for the following proposals, which we like to call the 4 i’s, to be implemented by the EU:
- Implementation: of existing EU legislation at the national level must be monitored and ensured.
- Investment certainty: is a must for the build out of clean generation, flexibility and storage.
- Infrastructure development: must be facilitated. Investments of €67 billion a year are needed for distribution grids thanks to modernised tariffs and access to EU funds. Grid strategies such as anticipatory investments should also be implemented to reduce the bill to €55 billion a year.
- Industry electrification: is also a must. A market-friendly framework ensuring revenue stabilisation AND incentives to participate in the forward, spot and balancing markets will also be paramount.
Thus, we call on the EU to embark upon these four critical steps to provide a solid foundation for a secure, sustainable, electrified and decarbonised Europe.
We need you
Ambitious targets to implement, new challenges to face and the climate clock keeps on ticking faster targets: the energy industry needs all hands on deck to succeed!
Boosting the number of green workers in Europe is now crucial to implementing our decarbonisation targets. Europe must equip its workforce with the right skills to deliver the efficient, clean, and safe electrical installations we need. In this way electrification can also help to fuel local growth and career opportunities – shows the Electrification Alliance Manifesto.
This means expanding the ‘pipeline’ of workers by reaching out to young people, existing professionals and workers looking to change careers. We can do this by making green jobs more attractive, increasing gender diversity, ensuring that technical education and apprenticeships are properly valued, and making upskilling readily available. Europe must make the most of the Skills chapter in the Net Zero Industry Act (NZIA).
Contact us to know more about our advocacy, learn about our upcoming products and high-level events!