Europe is set to become the world’s first continent powered by clean energy

Europe is set to become the world’s first continent powered by clean energy - Portugal Business News

Renewable Energy News Europe - Europe is set to become the world’s first continent powered by clean energy and its target is to cut the EU's fossil fuel import bill by 260 billion euros per year by 2040. Here are the EU targets and plan for energy transition, the main measures taken to lower the costs of clean energy, as well as the benefits of the new EU Electrification Action Plan:

The European Commission has unveiled its plan to reduce electricity costs and accelerate Europe’s electrification, with the aim to reduce gas demand by two-thirds, to cut its oil consumption by 50%, and to save 260 billion euros in fossil fuel imports by 2040.

Here are the EU targets for energy transition:

1️⃣ By 2040, electricity should account for 46% of Europe's final energy consumption

2️⃣ Europe aims to reduce the price gap between electricity and fossil energy

3️⃣ The EU aims to lower its electricity network charges and taxes

4️⃣ The EU will enable its energy transition by a faster deployment of smart meters

Here is the European Commission´s policy concerning Energy Transition:

¨Our message is clear: choose electricity over fossil fuels.¨- European Commission

What is the percentage of electricity generated by clean energy in the EU?

While 70% of EU´s electricity is now generated from homegrown clean energy sources, the energy electrification rate is set to accelerate with it new indicative electrification target of 46% by 2040. The EU´s new energy target will be assessed by the European Commission as part of the post-2030 Energy Union package.

What is the European Commission´s 2026 plan for Energy Transition?

The European Commission presented its Electrification Action Plan to make Europe the first electro-powered continent, including a stronger carbon market to support the EU's industries in the transition towards clean energy and electrification, according to an announcement dated July 17th, 2026.

Here is the European Commission´s 2026 plan for Energy Transition:

1 - The Revised EU Emissions Trading System (ETS):

The EU Emissions Trading System (ETS) has generated more than 270 billion euros in revenues that were reinvested in innovation, industrial decarbonization and the modernization of Europe's energy system since its launch in 2005. The EU Emissions Trading System (ETS) has thus made it possible for Europe to cut carbon emissions by 50%.

However, the EU ETS Review will be an investment engine that will fulfil the European Commission´s 2040 goals for Energy Transition. The revised EU Emissions Trading System (ETS) updates the Linear Reduction Factor of 3.7% for 2031-2035 and 1.7% for 2036-2040, allowing Europe´s energy transition to be more gradual and aligned with domestic climate goals, while there will be up to 2% high-quality international credits to finance decarbonization projects abroad.

2 - The EU Industrial Decarbonization Bank:

The EU Industrial Decarbonization Bank will have funding amounting to 100 billion euros for industrial decarbonization across Europe at scale, and the ETS Investment Booster will be available before 2030 for the first phase.

The EU ETS Innovation Fund will continue to support commercial applications of innovative clean technologies in a wide range of sectors, with EU Member States required to spend 50% of their national ETS revenues on investments to decarbonize targeted sectors. The EU ETS Innovation Fund will thus contribute to investments amounting to over 100 billion euros in investments by 2030.

The EU ETS Modernization Fund will continue to support lower-income Member States to upgrade energy systems and industrial transformation as well as free allocations for companies that will continue beyond 2030. The European Commission also has a proposal to increase free ETS allocations to industries with a total amount of 6 billion euros for the period 2026-2030.

What are the main measures taken by the EU to lower the costs of clean energy?

The EU Energy Transition Plan includes lowering the upfront costs of electrification technologies across key sectors, including construction, transport and industry through the following measures:

1 - The use of social leasing schemes

2 - ETS financial instruments - including the Social Climate Fund and the Industrial Decarbonization Bank

3 - The EU Clean Heat Market mechanism

What are the benefits of the new EU Electrification Action Plan?

The new EU Electrification Action Plan includes the following benefits across sectors including the automotive sector and the heating sector:

1 - Here are the benefits of battery-electric vehicles (BEV):

The benefits of battery-electric vehicles (BEV) include savings of up to 78% compared to an equivalent fossil-fueled car.

2 - Here are the benefits of switching from gas boilers to heat pumps:

The benefits of switching from gas boilers to heat pumps include cutting the average EU household's heating bill by up to 60%, while providing important co-benefits for climate adaptation.

Here is the best way to reduce Europe's fossil energy dependency according to the European Commission:

¨The best way to reduce Europe's fossil energy dependency is to power our economy with electricity from clean, homegrown sources. To keep the clean transition on track, bring relief to our industry, and support decarbonization. Let's switch it on!“ - Ursula von der Leyen, President of the European Commission.