On 17 July, the European Commission unveiled the long-awaited Electrification Action Plan (EAP), alongside with a regulation on future-proofing electricity bills. Both texts offer concrete steps in the right direction, providing an opportunity to tackle the structural obstacles hindering the transition from fossil fuels to renewable electricity. 

ELECTRIFICATION ACTION PLAN 

The EAP highlights that the EU’s electrification rate has remained at 23% for a decade (industrial electrification is also stagnated, at around 33%¹). A number of barriers explain the slow uptake of electrification: electricity tends to be more expensive than gas in most Member States, upfront investment costs for switching stay high, and the electricity grid is slow in accommodating new demand. Morever, innovation uptake of electrification solutions has been slow, and Europe still lacks a robust supply chain to scale deployment.  

If we are to achieve results in time and help industry decarbonise, actions targeted at these barriers must be implemented and enforced at EU and national level.  

A binding electrification target to provide certainty 

«We need a binding electrification target that drives genuine electrification, powered by renewables and paired with energy efficiency, rather than simply increasing electricity demand without displacing fossil fuels. Only then will the EU deliver on its competitiveness and decarbonisation objectives.»

Establishing an electrification target is a positive measure, as it would send a clear message to industry and investors. However, to be credible and trigger investment decisions, this target must become binding.  

The target must drive genuine electrification, transforming consumption by replacing fossil fuels with electricity, and going beyond merely increasing demand. Safeguards around the target are needed to ensure that it is met with renewable electricity and that energy efficiency is leveraged. We therefore call for a concrete follow-through on the target in the upcoming Energy Package, planned for the end of the year. 

Industry: one size does not fit all 

The EAP addresses the reduction of initial costs for end-use sectors, with industry as a key part of that effort. Electrification is already technologically viable for a large share of industrial processes, yet economic and structural barriers continue to slow down the switch. Among the announced initiatives, we particularly welcome the commitment to develop sector-specific electrification roadmaps along the value chain, and a methodology to assess the flexibility potential of different industries and processes.

Taking a more granular approach, differentiating by sector and temperature, is the only way to address the specific barriers each industrial sector faces. 

The Commission encourages system operators to “involve in their network planning and grid capacity expansion processes the key actors in electrification investments, including industrial sites and parks such as the Industrial Acceleration Areas, […]”. This is crucial for industrial electrification. In practice, TSOs tend to incorporate data on upcoming electricity demand late in their planning exercises, which undermines timely and adequate grid buildout. Bellona Europa has consistently advocated for this in the context of the preparation of the Grids Package and welcomes its recognition in the EAP.  

Data centres: an emerging challenge 

The EAP also addresses the interlinkages between AI and energy, a topic increasingly prominent in the energy policy agenda. Data centres warrant particular attention, given their intensive use of energy and water.  

The methodology announced by the EAP to assess flexibility potential across industries, industrial processes and data centres is a positive measure. Implementing a Union-wide data centre rating or labelling scheme would also provide much needed transparency around energy use. These measures would support better planning by giving policymakers clearer visibility of the impact of data centres on the energy system. 

Implement, implement, implement 

Through the EAP, the Commission repeatedly points to Member States’ delayed implementation of measures existing in EU law to foster electrification. Clean and affordable electrification has long been an EU priority, and the existing energy framework already pushes in that direction. 

Yet the gap between legislation and delivery tells a different story. Even though the deadline for transposing the Renewable Energy Directive (RED III) expired in May 2025, no Member State has yet fully transposed it. The new goal is to achieve “full and adequate transposition by summer 2027”, which amounts to a two-year delay in rules intended to facilitate the deployment of renewables and, by extension, electrification. We urge the Member States to achieve their targets for renewable energy and efficiency measures; this is the only way to make the electrification target effective. 

REGULATION ON FUTURE-PROOFING ELECTRICITY BILLS 

The Commission’s future proofing electricity bills legislative proposal, published alongside the EAP, focuses on aspects including network charges design, electricity taxation and grid access. 

«The proposal is right to push tariff design in the direction of electrification. Time-of-use signals, locational pricing, and non-wire solutions have been recognised as best practice, the proposal now makes them the expected standard rather than the exception. Member States should move quickly to put them into practice, building the foundation electrification needs to take off.»

Network Design Changes 

Currently network tariff design principles at EU level are relatively general. For example, charges have to reflect costs and not discriminate between users, but the decisions that actually shape charges are mostly left to national regulators. This proposal has now expanded on what methodologies “shall” include in their design, with more prescriptive language around known best practices such as: 

• Operational spending: Methodologies must now reflect both capital and operational spending. The current model rewards operators for growing the value of their physical asset base, so capital-intensive solutions consistently win against operational ones, even where the operational option is cheaper and faster to deploy.  

• Locational signals: Tariff methodologies must now provide locational signals, giving projects a reason to site where the network has spare capacity rather than where it is already stressed.  

• Time-of-use pricing: Tariff methodologies must now adapt charges based on when users draw or feed in electricity, which would reward users who shift consumption away from peak hours.  

• Non-wire and digital solutions: Tariff methodologies must now provide incentives for operators to deploy flexibility, storage, and grid-enhancing technologies to get more out of the existing network, rather than defaulting to new lines and transformers.  

Grid Connection 

The proposal also tackles grid connection queues. The text explicitly allows regulators in cases of capacity scarcity to deter speculative requests, check that projects are mature enough to build, and prioritise categories of users, from public sector and households to data centres and energy-intensive industry. The environmental angle, though, is soft. Prioritisation criteria “may” consider environmental benefits, not “shall”.  

Non-wire alternatives in network planning 

The proposal also reaches into how the grid is planned. National regulators are now required to promote non-wire, smart and digital solutions (something Bellona Europa has defended repeatedly, most recently in our work on the Grids Package, both through tariff incentives and by giving those solutions priority in national network development plans. It is telling that a mechanism usually associated with energy system planning has been pulled into a network charges file, which signals the Commission is starting to treat infrastructure planning and tariff design as parts of the same conversation about bringing prices down. While the new language is useful, “considered with priority” still leaves too much open. What counts as considering an alternative, and how that consideration is documented and made public should be further described in the final text. 

Taxation 

The accompanying proposal introduces a much needed rule to address the unequal tax treatment when compared to gas that electricity receives in many countries. Member States now “shall” tax electricity at a rate no higher than natural gas, with a view to meeting a KPI by 2030 (electricity/gas ratios at a maximum of 2.5 for households and 2 for industry). Still, the Commission may authorise a Member State to defer compliance of this taxation limit “based on specific national circumstances, including in view of the fiscal situation“. These authorisations have no fixed deadline, only a vague point in time that finds a balance between national circumstances and EU electrification objectives. It remains to be seen whether the deferral becomes a routine mechanism for Member States to delay tax reforms. 

Special tariff regimes 

National regulators are explicitly allowed to give preferential treatment on network charges to specific categories, namely energy-intensive industries, data centres, and energy communities. A regulator can grant a special tariff if it can show two things: that the user costs the network more or less than a normal user, and that the resulting tariff still reflects the costs the user actually imposes. What the text does not specify is how to measure any of that. 

Contacts: 

Ganni Vassallo
Policy Manager – Energy Systems
ganni@bellonaeuropa.eu  

Arianna Avallone
Policy Advisor – Energy Systems
arianna@bellonaeuropa.eu