Clean electrification State of play in the EU and major economies
Summary
Electrification of the economy is key to avoiding energy and cost‑of‑living crises driven by dependence on imported fossil fuels, as well as to meeting European and international climate goals. The Strait of Hormuz crisis has caused significant and persistent spikes in fossil fuel prices and once again highlighted Europe's strategic dependence on energy imports. Switching from fossil fuels to electricity offers an opportunity to reduce such vulnerabilities by increasing the share of domestically produced clean energy. Clean electrification means that a growing share of renewable and nuclear power can help eliminate carbon emissions from electricity generation. The EU's electrification action plan pursues ambitious targets, and the Turkish presidency of the COP31 climate conference has proposed a target to electrify 35 % of the world economy by 2035.
From electro‑state to electro‑continent
The concept of the electro‑state has been gaining attention as a model for economic progress, prosperity and resilience based on growing the production and use of electricity. The concept was first used to characterise current economic developments in China and forms the basis of the EU electrification action plan, which aims to make Europe the first electro‑continent. Oxford University professor Jan Rosenow has identified four dimensions of a successful electro‑state:
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a large share of the country's final energy is electricity;
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most of the country's electricity comes from its own resources, including solar, wind, hydro and nuclear;
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the government has made a conscious decision to electrify its economy;
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domestic manufacturing and export of equipment needed for electrification is in evidence (e.g. batteries, electrical wires, transformers, heat pumps and electric vehicles).
The electrification competitiveness index identifies China, France and Spain as advanced in deployment and confirms that all the European countries included have a high potential for take‑off. The EU electrification action plan, complemented by a legislative proposal to lower electricity bills, lays out a roadmap to boost the share of electricity in the EU economy by addressing key barriers to electrification, notably cost, infrastructure, innovation and skills.
The Electrify Now initiative, launched in June 2026, consists of two complementary coalitions that aim to advance electrification. The government coalition, coordinated by the European Commission, facilitates policy and regulatory exchanges while the non‑governmental coalition, composed of business, think tanks and civil society organisations, focuses on deployment, identification of barriers and opportunities, technical expertise and policy advice. The International Energy Agency (IEA) and the International Renewable Energy Agency provide analytical support.
Electrification targets
Electrification targets set the direction for energy and industrial policies. The EU electrification action plan lays down an indicative electrification target for the EU economy: 46 % of final energy use in 2040 should come from electricity, double today's rate of electrification. The presidency of the COP31 climate change conference in Antalya, Türkiye has proposed a global electrification target of 35 % by 2035 (35‑by‑35 global electrification pledge). This complements the pledge adopted during COP28 of tripling renewable energy capacity and doubling energy efficiency improvements by 2030. The European Parliament resolution on COP31 calls on the European Commission to propose an ambitious EU‑wide electrification target in addition to renewable energy and energy efficiency targets.
Share of electricity in energy consumption
Electrification targets are defined by the share of electricity in final energy use. Electrification of end uses tends to reduce overall energy consumption because many electrical applications are more efficient than their fossil‑based equivalents. According to the IEA, an electric vehicle is two to four times more energy efficient than a combustion vehicle, where around two thirds of the energy input is lost as heat. An electric heat pump is three to five times more efficient than a gas boiler. In this way, electrification reduces total energy consumption and the need for fossil fuel imports, even if electricity generation is not yet fully decarbonised.
Figure 1 shows the electrification rates in the EU as a whole and in selected non‑EU countries. The share of electricity in final energy consumption has remained stable in the EU and the United States (US), but grown rapidly in China thanks to a growth in generation capacity, expansion of the grid and electrification of end uses, notably transport.
Share of clean energy for electricity generation
To reap the full climate benefits of electrification, power generation should move away from fossil fuels towards a fully decarbonised system based on renewable energy sources, as well as nuclear power for countries that choose this option. While the 35‑by‑35 global electrification pledge makes no mention of the source of electricity, the EU's negotiating mandate for COP31 insists on clean electrification and transitioning away from fossil fuels.
The energy transition in electricity systems benefits from the rapidly falling cost of solar and wind power plants. Technological advances in energy generation and cost reductions in battery energy storage systems help to make clean electricity available on demand around the clock.
Figure 2 shows the growing share of clean electricity generation in the EU and selected major economies. While China aims to generate 50 % of its electricity from non‑fossil sources by 2030, the EU electricity mix is already dominated by clean energy sources as a result of the Renewable Energy Directive and the EU emissions trading system, which puts a carbon price on electricity generation from coal and gas. In Q2/2026, 54 % of EU electricity came from renewable sources.
Drivers of electricity demand
The EU's electricity demand is expected to grow by almost 30 % between 2025 and 2030, while global electricity demand is set to increase by 3.5 % per year. This is mainly explained by the growing demand in heating (heat pumps) and cooling, data centres, production of clean hydrogen by electrolysis, electrification of industrial processes and electrification of transport through electric vehicles.
Figure 3 shows the rising share of electric cars in sales and registration of new vehicles. In September 2026, more than 40 % of new cars registered in the EU were electric (battery electric and plug‑in hybrid). This increased share is driven by high fuel prices and by CO2 emission performance standards for newly registered vehicles.
Investment in clean electricity and power grids
Electrification requires massive investment in clean power plants, grids and storage capacities. EU electricity grids will need an estimated investment of €1.3 trillion over the 2024‑2040 period. A strong and competitive industry producing the equipment needed for electrification can benefit from these opportunities while also contributing to strategic autonomy and avoiding new import dependencies. Although the EU has lost the lead on solar panels and batteries, it remains a global leader in grid equipment, with €150 billion of revenues in 2025. To ensure a domestic supply of batteries for the European automotive industry and other uses, the new EU battery booster supports the ramping‑up of battery cell manufacturing in Europe with up to €1.5 billion in funding.
Figure 4 shows investment in clean electricity generation, grids and storage. EU investment in low‑emission electricity has grown by 160 % from 2015 to 2025, and EU investment in grids and storage has more than tripled over this period.
Main references
- Butorac, S., Fostering electrification and digitalisation, EPRS, European Parliament, September 2026.
- Butorac, S., EU electricity grids, EPRS, European Parliament, May 2025.
- George, J.F. et al, Electrification of European industry – Opportunities, economic barriers, and the role of flexibility, Policy Department for Transformation, Innovation and Health, European Parliament, October 2026.
- Electrification – Special report, International Energy Agency, September 2026.
Classification
Policy areas: Energy | Environment
Regions: European Union
Committees: Environment, Climate and Food Safety (ENVI)
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