EU Commission presents action plan for electrification

The EU Commission has launched an energy package, partly aimed at reducing high energy costs. The skilled trades sector says the package contains important approaches to this end. These must be implemented in a way that actually provides relief for businesses.

The European Commission has presented an action plan for electrification. Its aim is to make Europe "the first electrically powered continent" and reduce Europe's dependence on imported fossil fuels. Both businesses and citizens are expected to benefit from lower energy costs, which in turn should strengthen Europe's competitiveness.

According to the Commission, 70 percent of the EU's electricity is currently generated from its own clean energy sources. However, the electrification rate of energy demand has declined by 23 percent over the past ten years. "Therefore, we must accelerate the electrification of energy-consuming sectors, particularly industry, transport, and buildings," the Commission stated.

Increase the electrification rate

The electrification rate is to increase to 46 percent by 2040. This is expected to reduce import costs for fossil fuels by €260 billion over the same period. Electrification will bring significant benefits to the economy, businesses, and EU citizens in terms of lower energy prices and competitiveness, greater energy security, and increased resilience.

"From lowering electricity prices to adapting our CO2 _market to changing global conditions, this is also an investment and independence plan. To keep the clean transition on track, relieve pressure on our industry and support decarbonization," explains Commission President Ursula von der Leyen.

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Reducing price differences

The Commission calculates: "Driving a battery-electric vehicle can save up to 78 percent compared to an equivalent car powered by fossil fuels. Switching from gas boilers to heat pumps reduces the average heating costs of EU households by up to 60 percent and also offers important side effects for climate change adaptation."

However, electricity often costs many times more than gas. The Commission aims to reduce this price gap. Furthermore, incentives for the adoption of cleaner, electricity-based technologies such as heat pumps, electric vehicles, and batteries are intended to increase the electrification rate across Europe. The action plan aims to create a level playing field between electricity and gas.

Network charges are to be reduced

Network charges are to be reduced for certain consumer groups, as are taxes for energy-intensive companies. Electricity should also not be taxed more heavily than gas. The action plan also proposes solutions to lower the upfront costs of electrification technologies in key sectors such as buildings, transport, and industry. Grid expansion is to be accelerated. 

The skilled trades sector generally views the EU Commission's plans positively. The energy package contains important approaches to reducing the burden of high energy costs, says Holger Schwannecke, Secretary General of the German Confederation of Skilled Crafts . "For the skilled trades, the persistently high electricity costs remain the central issue in this context."

Reduce electricity tax to the EU minimum rate

The adjustments to the rules on network charges and energy taxation announced by the Commission must now be implemented swiftly in a way that provides relief to businesses. "Regardless of further decisions at the EU level, the German government can and must act now and provide relief to businesses by reducing the electricity tax to the EU minimum rate, as already announced in the coalition agreement," demands Schwannecke.

This option is already available to member states and must be used immediately by the German government. "The skilled trades are the key players in electrification on the ground, wherever it makes sense and is practical. This ranges from installing heat pumps and charging infrastructure to energy-efficient building renovations."

Implement the energy package quickly

In certain sectors, widespread electrification is difficult. For example, it is not realistic for bakeries to electrify their gas-powered high-performance ovens, at least in the medium term. Schwannecke: "For the transformation to a competitive and sustainable economy to succeed, energy prices must be affordable and the framework conditions reliable. The energy package must therefore now be implemented quickly."

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