Electrification Action Plan

An indicative electrification target of 46% by 2040 (electricity share in final energy consumption) will be subject to an impact assessment by the Commission as part of the Energy Union Package for the decade ahead (Q4 2026).

The Commission has adopted alongside this plan

• a legislative proposal on network charges to incentivise electrification, a flexible and system-friendly use of the grid, including storage installations and accelerating smart meter deployment, and to improve the electricity-to-gas price ratio from the network charges side.

The Commission will

• propose a new network code and the revision of the network codes on requirements for generators and demand connection in 2026 to facilitate demand response and the seamless integration of battery storage, thermal storage, geothermal, EVs and heat pumps into the electricity grid;

• together with other parties to the Tripartite Agreement on Storage, and the Energy Union Task Force, ensure robust implementation of the commitments agreed in this cooperative model, covering the whole storage value chain, including long-term storage solutions;

• organise a high-level conference to assess barriers and solutions for storage, including long-duration storage and combined with renewable PPAs;

• assess the EU’s long-duration flexibility needs for 2030, 2040 and 2050, drawing on flexibility needs assessments and estimating in particular the potential of long-duration storage and demand response, and help identifying priority use cases, barriers to deployment and investment needs, including in energy-intensive industries, data centres, islands, remote areas, grid-constrained regions.

KPI: 200 GW of storage capacity by 2030 from around 55 GW in 2026.

The Commission will

• launch a framework for regulatory sandboxes and living labs across Member States to enable new vehicle-to-grid (V2G) business models (cf. SWD(2026) 596);

• assess and promote the introduction of smart charging by default in electricity supply contracts linked to EVs by mid-2027;

• introduce by end of 2027 V2G requirements for new EVs placed on the internal market in the Union as of 2030, including technical requirements to enable interoperability such as standardised communication protocols 34;

• support the development of a methodology to assess the flexibility potential in different industries and industrial processes, as well as data centres, to fill the knowledge gap in the emerging industrial flexibility sector by 2027;

• adopt a common Union rating scheme for data centres to increase transparency in the energy use of data centres and promote lead markets for sustainable digital assets and services across Europe, as well as introduce minimum performance standards for data centres to leverage their flexibility potential.

The Commission has adopted alongside this plan

• as part of the legislative proposal on network charges a provision regarding the tax differential between electricity and gas.

The Commission will

• propose measures on progressively phasing out fossil fuel subsidies as part of the post- 2030 Energy Union package (Q4 2026).

KPI on national electricity/gas price ratios to maximum 2.5 for households and 2 for industry by 2030.

The Commission will

• reinforce support to Member States in implementing Directive (EU) 2023/2413 on the promotion of energy from renewable sources (REDIII) with the aim to have full and adequate transposition by Summer 2027.

• support cross border cooperation amongst national authorities in the interest of faster nuclear reactor licensing decisions. In full respect of Member States' prerogative to determine their own energy mix, lifetime extension of existing reactors should be pursued unless uneconomical or incompatible with highest safety standards.

• review relevant EU legislation to facilitate the conclusion of long-term cross-border electricity contracts, including between low-carbon generators in one Member State and off-takers in another and launch, by Q2 2027, a map-based tool to help energy-intensive industries and investors assess the location-specific factors that inform their energy investments decisions (“GeoDep”), such as proximity of generation, available infrastructure or favourable electricity-to-gas price ratios42;

• set up a detailed auction design database by 2027 to complement the existing RES auction platform , to make the best use of public support;

• adopt guidance on NZIA non-price criteria in renewable energy auctions to ensure a secure and diversified industrial base for clean energy technologies.

The Commission will create a Geothermal Stakeholder Partnership by Q1 2027 to help lifting regulatory, technical and investment barriers and accelerating the deployment of geothermal energy. The Geothermal Stakeholder Partnership will gather skilled professionals from Member States and the industry to exchange best practices on data collection, national geothermal development strategies, financing, permitting, skills and public acceptance.

Member States are encouraged to make use of the options already laid down in the VAT Directive50 to support electrification by applying lower VAT rates to electrification technologies, e.g., heat pumps, solar panels and residential batteries, and to offer reduced registration taxes for electric vehicles, shorter depreciation times or tax incentives for company BEVs. As part of the Circular VAT initiative announced in the Clean Industrial Deal, the Commission will present an EU framework for Member States to encourage electrification of corporate fleets.

The proposal for the revision of the ETS Directive supports the decarbonisation of industry, including energy-intensive industries, inter alia through ensuring the Member States spend more of the national ETS revenues on the decarbonisation of the industrial sector and making the transitional free allocation of allowances conditional to investments into emissions reductions, including electrification.

• The proposal for a revised ETS framework includes the establishment of the € 100 billion Industrial Decarbonisation Bank including the €30 billion ETS Investment Booster. Both mechanisms can support investments in industrial electrification, as the critical pathway for industrial decarbonisation, grid connection infrastructure, on-site energy management systems and battery or thermal storage, benefiting system integration. The calls for proposals will be launched immediately after the legislation is adopted.

The Commission will

• launch a second industrial heat auction under the Innovation Fund in 2026 and further support the rollout of electrified and renewable heat solutions and industrial flexibility solutions to reduce reliance on imported fossil fuels;

• examine the case for an EU-level mechanism to pool industrial electricity demand and improve access to diversified low-carbon energy to reduce financial risks associated with PPAs;

• support exploring the potential and barriers for deploying direct-use renewable heating technologies (including thermal energy storage) for certain types of industries and geographies where direct heat might be plausible and more efficient than electrifying57;

• collaborate with industrial sectors, technology suppliers and Member States to develop sector-specific electrification roadmaps along the value chain, including the scale-up of electrification technologies, standards, modularisation of components, demand flexibility and protocols for the effective integration of these technologies in industrial processes, innovative business models and access to financing;

• work with industry to facilitate cluster-based partnerships for electrification and waste heat reuse of industrial sites, involving industrial actors, including data centres , as well as providers of energy and flexibility services59

The Commission will

• review the Clean Vehicles Directive to assess targets and possibly further strengthening public procurement of zero emission vehicles by Q4 2027;

• put forward a recommendation on Fiscal and Non-fiscal demand-side incentives for zero-emission vehicles by Q4 2026;

KPI: By 2040, sufficient grid connections for publicly accessible HDV recharging and HDV depot charging will have to be deployed to enable 40% battery electric propulsion of EU truck fleet.

The Commission will

• explore the possibility to introduce a clean heat market mechanism to incentivise rising shares of heat pump sales from manufacturers, redirect installers and manufacturers to clean heating and cooling solutions and boost competition, narrowing the upfront costs difference for heat pumps by 2027;

• examine ways to accelerate deployment of heat pumps in public buildings through public procurement;

• to ensure heat pump cost transparency, facilitate the rollout of national online comparison tools allowing consumers to easily secure a tailored, transparent and comparable “heat pump quote” from different brands and installers;

• promote innovative financing and business models for heat pumps within integrated packages of renovation and adaptation works in residential buildings through the Better Homes Partnerships, to accelerate uptake, replication and access to finance;

• mobilise the Heat Pump Accelerator platform and the Energy Efficiency Financing Accelerator to derisk and finance investment in heat pumps and connections to district heating and cooling systems with related to solar thermal and geothermal projects;

• adopt a Cooling and Heating Action Plan, including to address the growing need for efficient cooling for EU citizens and economy.

KPI: increase installation rate of heat pumps to around 4 million per year in 2030 compared to 2025 of 2.4 million

The Commission will

• review the Alternative Fuels Infrastructure Regulation (AFIR) in 2026 to further support the accelerated roll-out of charging infrastructure, including for e-HDV, while ensuring no region is left behind. The review will address data collection on current and future needs on depots charging, and further support the accelerated roll-out of OPS;

• update common technical specifications for publicly accessible and private recharging points under AFIR to ensure technical interoperability and ensure bi-directional recharging capabilities;

• ensure a coordinated European deployment of e-HDV charging infrastructure as part of the whole value chain approach to e-HDV in 2026 and expand e-HDVs Clean Transport Corridors initiative to other TEN-T corridors, and design with Member States a European financial tool for the derisking of investment in e-HDV recharging stations;

• work with Member States and industry to identify remaining enabling conditions for the deployment of zero-emission HDVs, including incentives for the demand for the vehicles and agree on joint action plans for the enabling framework for the transition under the 2030 CO2 targets for HDVs;

• work on removing barriers for the electrification of ferries and inland navigation vessels, such as lack of recharging infrastructure in ports. Member States should consider the frontloading of credits under the RED credit mechanism to facilitate investment in recharging points, including depots charging73.

KPI: By 2040, deployment of sufficient port grid capacity and shore-side charging infrastructure to enable battery-electric propulsion for one third of the EU ferry fleet.

The Commission will

• launch an EU Waste Heat initiative to provide investment certainty and support business models for waste heat recovery and use in DHC (by Q2 2027);

• mobilise the Energy Efficiency Financing Coalition and the Energy Efficiency Financing Accelerator to derisk and finance DHC investment and strengthen the EU supply chain;

• support the European City Facility to fund municipal heating and cooling plans and launch by in summer 2026 a first pilot action of EUR 15 million funding up to 180 plans launched, with the aim to expand to turn 1000 local heating and cooling plans into investible business.

KPIs: Supply 11% of EU heat demand from waste heat recovery by 2050; DHC systems to supply 15% of total heating and cooling supply by 2030 and DHC networks to grow 6-7% per year by 2030.

The Commission will

• reinforce within the SET Plan the support of the uptake of clean energy technologies central to electrification of certain industrial processes, by developing and endorsing Common Investment and Implementation Plan for these technologies by Q1 2027;

• work with the European Industrial Alliance on SMRs to conclude the second call for projects in the context of the objective of first SMR projects becoming operational in Europe by early 2030s;

• update the EU hydrogen strategy to ensure the availability of complementary decarbonisation solutions for industrial processes where direct electrification is not feasible or cost-effective.

The Commission will:

• support Member States and industry in the context of the upcoming European Strategy for Vocational Education and Training (VET) with a stronger sectoral focus and awareness raising to attract a new generation of skilled workers across the electrification value chain;

• adopt an initiative to support the portability of qualifications and skills across the EU, including dual use technologies and cyber protection applications for electricity grids;

• provide through the Clean Heat Market Mechanism sufficient incentives for manufactures to support training of electricians and installers through vocational and educational training partnerships between companies and technical schools to share equipment and develop real-life cutting-edge equipment;

• explore support for access to certifications for energy-efficient construction and installation services and electrification by design in the upcoming Construction Services Act.

The Commission will

• adopt guidance on NZIA provisions on public procurement procedures for net-zero technologies.

• create an Electrification Action Plan Alliance with national authorities in synergy with the Energy Union Task Force and bringing together all stakeholders across the value chain with a special focus the swift electrification.

The Commission will

• seek to unlock ambition across all regions of the globe with its partners of the Electrify Now Initiative by showcasing successes, identifying opportunities, securing commitments and strengthening delivery plans;

• build a wide coalition of countries that are willing to commit to global clean electrification, rooted in the tripling of renewable energy capacity globally and the new global objectives to reach 35% of electrification by 2035 promoted by the COP31 presidency.