The European Commission today published its electrification action plan, setting out measures to speed up the use of clean electricity across Europe's economy and proposing an indicative electrification target of 46% for 2040. The initiative aims to strengthen Europe's competitiveness, improve energy security and reduce dependence on imported fossil fuels. Increasing the use of clean electricity is essential if Europe is to meet its climate goals, strengthen its industrial resilience and reduce its dependence on imported fossil fuels that leave the EU exposed to geopolitical crises and price shocks.

"Today's action plan points in the right direction, but unless electricity becomes affordable, investment increases and workers are put at the centre of the transition, Europe will continue to fall behind its global competitors," said Judith Kirton-Darling, General Secretary of industriAll Europe.

Setting a headline electrification target for 2040 is therefore welcome. However, targets alone, without the comprehensive policy tools, will not deliver the transition.

Europe's electrification rate has remained largely unchanged at around 23% over the past decade, while countries such as China, Japan and South Korea have already surpassed 30%. Europe cannot afford to fall further behind.

The barriers are clear – the solutions are not yet strong enough

The action plan correctly identifies the main barriers to electrification: electricity remains too expensive compared with fossil fuels, investment costs are high, grid connections are too slow, innovation must accelerate and Europe faces growing skills shortages.

The Commission's proposal to future-proof electricity bills is a welcome step, but affordable electricity cannot be achieved by lowering taxes and network charges alone. In many countries, electricity prices remain high because of limited grid capacity, national energy mixes and electricity market rules that continue to link electricity prices to fossil fuels.

A target is good, but how will it ensure greater electrification in sectors such as industry? The action plan mainly points to support already foreseen under the revised EU Emissions Trading System (ETS), including greater use of ETS revenues for industrial decarbonisation, conditional free allowances linked to decarbonisation investments, and the proposed Decarbonisation Investment Bank and ETS investment booster. While these measures are welcome, they do not sufficiently address the specific barriers to industrial electrification.

The uncertainties stemming from high and volatile electricity prices, together with limited access to electricity grids, discourage industry from investing in electrification at the scale Europe needs.

IndustriAll Europe therefore continues to call for a comprehensive assessment of the current electricity market design and alternative models that can both stimulate investment in clean energy and deliver stable, globally competitive electricity prices. Wider use of two-way Contracts for Difference and a European approach to industrial electricity pricing, with appropriate financing and social conditionalities, should form part of the solution. Modernising the electricity market so it is fit for a clean energy future, no longer driven by fossil fuel prices, must remain a priority.

Investment must match the ambition

The action plan rightly promotes industrial electrification, clean technology manufacturing and stronger European supply chains. However, these ambitions will only succeed if they are backed by adequate investment and aligned with wider industrial policy initiatives, including the effective implementation of the Net-Zero Industry Act and a strengthened Industrial Acceleration Act.

The scale of investment required is unprecedented, but it remains largely unaddressed in the EU's electrification ambitions. While the Commission's Clean Energy Investment Strategy, published earlier this year, focuses largely on de-risking private finance through existing instruments, it provides little additional EU financing. The recent proposal to give Member States greater flexibility to invest in clean energy is a welcome step, but the estimated investment needs - €660 billion annually between 2026 and 2030 and €695 billion annually from 2031 to 2040, compared with an annual average of €240 billion between 2011 and 2021 - for electricity supply, demand and infrastructure are not matched by the ambition proposed for the next Multiannual Financial Framework. This is a major shortcoming.

The plan also recognises the growing importance of flexibility across the electricity system. IndustriAll Europe welcomes the Commission's intention to assess the flexibility potential of industry and data centres, but stresses that any future measures must reflect the technical realities of different industrial sectors and prevent industrial assets from being used as speculative balancing tools for electricity markets.

Workers must be at the centre

The Commission recognises that Europe will need around 50% more workers in the electricity sector by 2030. Yet the action plan does not sufficiently address the barriers to building that workforce, including the declining attractiveness of energy careers, limited access to training and the lack of coordination between energy policy and workforce planning.

"Workers must be at the centre of Europe's electrification ambitions," said Judith Kirton-Darling. "The action plan recognises that Europe will need more skilled workers, but it does not yet provide the comprehensive strategy needed to attract, train and retain them. The Commission must work with trade unions to develop a coherent workforce strategy and ensure that electrification creates quality industrial jobs across Europe."

Turning ambition into reality

Electrification is essential for Europe's climate goals, industrial resilience and energy security. Today's action plan is an important first step, but it will only succeed if ambition is matched by concrete action and the means to deliver it.

Europe needs affordable electricity, modern electricity markets, sustained public investment, strong industrial policy and a genuine partnership with workers and their trade unions. Only then will electrification become the engine of a competitive, resilient and climate-neutral European industry.