Energy is a building block and a driving force of our Union, and an area where most actions to mitigate climate change can be taken. However, high energy costs are hurting EU citizens and businesses. Energy poverty affects more than 46 million Europeans and electricity is about 3 times more expensive than gas in many European countries. For industries, retail electricity prices have almost doubled since the beginning of the energy crisis in 2021.
Affordable Energy Action Plan
As part of the Clean Industrial Deal, the Commission presented on 26 February 2025 an Affordable Energy Action Plan (COM/2025/79), which is based on 4 pillars:
- Lowering energy costs for all
- Completing the Energy Union
- Attracting investments and ensuring delivery
- Being ready for potential energy crises
The Action Plan includes 8 actions, many of which will be delivered already in 2025.
EU countries can already lower electricity bills, but greater ambition is needed, especially in the areas of network charges and taxation. The Commission will put forward a methodology to ensure that network charges incentivise the most efficient use of the grid, lowering energy system costs and total new grid investment needs, and will make recommendations to EU countries to lower national taxes on electricity, immediately reducing energy bills.
Costs can be better controlled by swiftly and fully applying existing EU electricity rules, and additional actions to promote the uptake of long-term electricity supply contracts, accelerate permitting procedures for key energy projects, reinforce grids and boost flexibility. An energy system underpinned by market integration, renewable generation and flexibility could result in 40% lower wholesale electricity prices on average in the EU.
EU gas wholesale prices have not fully reverted to pre-crisis levels, affecting the competitiveness of the European industry. Full regulatory oversight and close cooperation between energy and financial regulators is required. The Commission will explore how to harness the Union’s purchasing power to get a better deal for imported natural gas. Protecting EU buyers against price volatility of fossil fuels could lead to a significant short-term reduction in retail prices.
Energy efficiency helps avoid high energy bills. The Commission will support market actors who provide energy efficiency solutions for businesses through the European Energy Efficiency Financing Coalition and update its rules on energy labelling and ecodesign for products - which brought estimated savings of around €120 billion on energy bills in 2023, and could rise to about €162 billion in 2030.
Energy prices can differ considerably between EU countries. To enhance coordination and strengthen governance of the electricity system, the completion of a genuine Energy Union, including a fully integrated energy market and a cohesive governance framework, is key to preventing sharp increases of system costsof up to €103 billionby 2040 if no action is taken. Measures covered under this action include the launch of an Energy Union Task Force.
To counteract high energy prices and market uncertainty, a broader tripartite contract for affordable energy can bring together the public sector, energy producers, and energy-consuming industries to create a favourable investment climate, facilitating a competitive EU industrial sector, while ensuring the retention and creation of quality jobs.
Ensuring secure EU energy supplies is critical for our economic resilience, continued access to affordable energy and avoiding extreme price volatility. A resilient energy system must be able to withstand potential supply disruptions resulting from geopolitical tensions, cyberattacks, deliberate attacks or extreme weather events, which threaten affordability.
Europe must be prepared to protect the affordability of energy in the event of an energy price crisis. The Commission will guide EU countries on the application of measures that incentivise consumers to reduce demand at certain times and will work with transmission system operators and national regulatory authorities to temporarily increase electricity flows in cross-border interconnectors, in certain situations.
The action plan's implementation will enable the EU to save €130 billion on fossil fuel imports per year by 2030, representing an estimated 0.65% of the GDP by 2030. Savings will increase annually up to €260 billion by 2040. Such savings from reducing fossil fuel use can be roughly broken down along 3 lines:
Related links
- Affordable Energy Action Plan (COM/2025/79)
- Press release: Commission brings relief to European consumers and businesses with Action Plan to save €260 billion annually by 2040 (26/2/2025)
- Speech: Opening statement of Commissioner Jørgensen in the European Parliament Plenary debate on the Action Plan for Affordable Energy (13/3/2025)
- Factsheet - Action Plan Affordable Energy (24 EU languages)
- Clean Industrial Deal
- Energy union
- Energy consumers and prosumers