The European Commission has proposed an Electrification Action Plan and reforms to the EU Emissions Trading System (ETS) aimed at raising the bloc's electrification rate to 46% by 2040. The plan includes a 100 billion euro Industrial Decarbonization Bank to support clean industrial investments and requires member states to reinvest half of national ETS revenues into decarbonization. The commission estimates these measures could reduce the EU's annual fossil fuel import bill by 260 billion euros by 2040. The proposed ETS overhaul would maintain free emissions allowances for industry beyond 2030 but link them more closely to decarbonization investments. It also integrates permanent carbon removals into the system and extends coverage to waste incineration. The Electrification Action Plan includes measures to narrow the electricity-to-fossil fuel price gap, accelerate smart meter deployment, support heat pumps and EVs, and speed up grid expansion. These proposals are designed to reduce dependence on imported fossil fuels while strengthening European industrial competitiveness.
