#Brussels #Electrification #European Union #Eurelectric #Competitiveness

Electrification: A Key Strategy for Industry

A recent study commissioned by Eurelectric highlights the critical role that electrification can play in enhancing the competitiveness of the European industrial sector. According to the findings presented, the transition towards electrification not only presents a pathway to reduce reliance on fossil fuels but also unlocks substantial economic benefits for the industry.

The Current Landscape: Challenges Faced by the Industry

Over the past few years, Europe's dependency on imported fossil fuels has significantly undermined its industrial competitiveness. Fluctuating prices and high energy costs have made it increasingly difficult for European industries to operate effectively. In fact, costs related to energy imports reached approximately 350 billion euros in 2024, a noticeable decrease from 600 billion euros in 2022. However, such costs remain a burden that European industries cannot afford to sustain in the global market for the long term.

The Path Forward: Electrification as a Solution

The study illustrates that electrification is vital for restoring Europe's industrial edge. Tailored strategies that account for the unique characteristics of different industry segments will be essential for ushering in a new 'era of industry' powered by clean electricity. The comparison of the total costs of electric technologies versus fossil fuel-based processes across three industrial archetypes reveals the potential for aligning competitiveness by 2030.

In processes operating below 500 °C, such as battery cell manufacturing, electric solutions like heat pumps have already outperformed fossil fuels. Moreover, in energy-intensive sectors like powdered milk production, electrification can lead to significant reductions in energy consumption while enhancing competitiveness. However, for extremely energy-intensive industries, like ethylene production, advancements in technology and innovation are necessary to lower the initial costs associated with electric solutions.

Promoting Economic Opportunities

Kristian Ruby, Secretary General of Eurelectric, underlines the importance of electrifying Europe's industrial landscape to tap into economic opportunities, reduce emissions, and bolster Europe’s position as a global innovator. He emphasizes the need for industry-specific strategies that address the distinct needs of each sector.

To enhance industrial competitiveness through electrification, financial support mechanisms will be crucial to lower investment and operational costs. Long-term contracts and the expansion of Carbon Contracts for Difference (CCfDs) are also indispensable for improving project financeability and shielding industries from fluctuations in CO₂ and fuel prices. Enhancing flexibility potential and upgrading grid infrastructure will be key components in facilitating this transition.

Conclusion: A Call to Action

In light of these findings, there is no doubt that transitioning towards electrification is fundamental for achieving a competitive advantage within the European industrial sector. Ongoing dialogue among industry leaders and policymakers is essential to craft strategies that will fuel this transition and guarantee a sustainable energy future that meets the needs of both the economy and the environment.

Eurelectric continues to advocate for the interests of the European electricity sector, championing the role of electricity as a critical driver of societal progress and fostering a competitive European industry in the face of global challenges.