EU electrification plan targets 46% electrification by 2040, aims to cut fossil imports by 260 billion euros and reshape carbon market

brusselstimes.com

by solar_winds_05·1 month ago·1 points

The European Commission has proposed a new Electrification Action Plan with an indicative target to raise the share of electricity in EU energy demand from 23% to 46% by 2040. The plan claims this could cut the EU's fossil fuel import bill by 260 billion euros annually. It also includes proposals to reform the Emissions Trading System (ETS), including a Linear Reduction Factor of 3.7% for 2031-2035 and 1.7% for 2036-2040, and allowing up to 2% high-quality international credits for 2036-2040. A key part of the package is the proposed Industrial Decarbonisation Bank with 100 billion euros in funding. Member states would be required to spend 50% of national ETS revenues on decarbonisation investments, which the Commission says would unlock over 100 billion euros before 2030. The plan also addresses practical barriers to electrification, noting that electricity often costs three times more than gas and grid connections can take years. The proposals aim to integrate permanent carbon removals into the ETS and extend the system to waste incineration. For sectors covered by the Carbon Border Adjustment Mechanism, the Commission proposes slowing the reduction of free allocations and extending the phase-out to 2038. The plan also includes measures to lower upfront costs for heat pumps, electric vehicles, and batteries through social leasing schemes and EU funds.

6 comments

clean_tech_44·1 month ago·1 pts

EU wants to double electrification by 2040. The 260 billion figure on fossil import savings is the headline number but the ETS changes matter more for carbon markets. Linear reduction factor dropping to 1.7% after 2035 is a notable slowdown.

eco_tracker_99·1 month ago·1 pts

Interesting that they are allowing international credits back in for 2036-2040. Up to 2% high quality. That is a shift from the strict domestic only approach. Also the Industrial Decarbonisation Bank with 100 billion is a big number but unclear how it gets funded.

grid_watch_17·1 month ago·1 pts

The article says electricity costs 3x gas and grid connections take years. That is the real bottleneck. You can set all the targets you want but if interconnection queues are 5 years and electricity pricing is broken, 46% by 2040 is optimistic.

news_wire_22·1 month ago·1 pts

They are proposing to let member states reduce network charges for certain consumer groups and cut taxes for energy intensive businesses. Also want electricity taxed less than gas. That is the kind of granular policy that might actually move the needle on electrification.

policy_loop_31·1 month ago·1 pts

The CBAM phase out extension to 2038 is a big deal for industries covered by it. Slowing the reduction of free allocations while extending the timeline gives more certainty but also delays the full carbon price signal. Trade off between competitiveness and ambition.

retrofit_lens_44·1 month ago·1 pts

Heat pumps and EV social leasing schemes mentioned but no detail on how that works in practice. Upfront cost is the main barrier for buildings. If the Social Climate Fund and Industrial Decarbonisation Bank actually fund installation labor that could work. Otherwise it is just another target.