‘Electrification is the answer to save Europe’s industry,’ IEA tells Euronews

By Marta Pacheco Published on 28/05/2026 - 16:54 GMT+2•Updated 17:32 Share Comments Share Facebook Twitter Flipboard Send Reddit Linkedin Messenger Telegram VK Bluesky Threads Whatsapp Copy/paste the article video embed link below: Copied

The International Energy Agency's chief Fatih Birol told Euronews that the EU should embrace the 'age of electricity' to boost industrial competitiveness.

Investing in the electrification of transport and heavy industry is the right energy strategy if the European Union wants to preserve its economic sovereignty and revive struggling industries, International Energy Agency (IEA) chief Fatih Birol told Euronews.

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“We can generate electricity from renewables, nuclear power and perhaps natural gas, and we should electrify our economies as much as possible,” Birol said, arguing for a shift away from fossil fuels towards an electricity-powered economy.

His comments come as the EU faces a deepening energy crisis, worsened by the US-led conflict with Iran and the closure of the Strait of Hormuz, a key shipping route that handles around 20% of global oil and gas supplies.

The disruption has pushed up energy bills for households and intensified pressure on heavy industry, which was already struggling with high electricity prices and weakening competitiveness. Manufacturers now warn that soaring production costs could force widespread shutdowns.

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In line with the IEA’s recommendations, EU leaders have increasingly backed investment in electric vehicles (EVs), heat pumps and the replacement of fossil-fuel-powered blast furnaces with electric arc furnaces in heavy industry. The aim is to reduce reliance on fossil fuels, which still account for nearly 60% of the bloc’s energy imports.

However, the European Commission’s long-awaited electrification strategy — expected to include targets for member states and industry — has been delayed twice and is now due to be published on 22 July.

Critics argue that the EU’s energy transition is moving faster than infrastructure and consumers can keep up with. Concerns include insufficient EV charging networks, storage, high electricity costs and congestion on power grids.

France pushes ahead with electrification

Beyond the technical challenges, Italian Prime Minister Giorgia Meloni recently warned that high energy costs are placing growing strain on households and businesses, urging Brussels to relax fiscal rules to help lower prices.

France, whose nuclear-powered energy system has helped shield it from price spikes, unveiled a 22-point roadmap last month aimed at cutting dependence on imported fossil fuels from almost 60% of energy consumption to 30% by 2035.

French President Emmanuel Macron on Thursday called for a nationwide drive to accelerate electrification, arguing that it would boost purchasing power, strengthen competitiveness and reinforce France’s energy sovereignty.

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Carmaker Stellantis plans to invest more than €1 billion in its Mulhouse plant to produce next-generation EVs from 2029. The French government also intends to install 240,000 additional charging points and launch a subsidised heat-pump leasing scheme for low-income households replacing oil and gas heating systems.

“France can be proud of being a major electricity power in the current geopolitical context,” Macron said on Tuesday. “This is also why electricity price rises have been more limited in France than elsewhere.”

He added that electricity prices in Germany are nearly twice as high as in France.

Electrification as a European strategy

Despite the challenges, the IEA’s latest global investment report, published on Thursday, found that electricity-related spending now accounts for almost 60% of global energy investment — a trend that closely aligns with Europe’s industrial and regulatory ambitions.

The report suggests the “age of electricity” is also becoming a European project, even as China remains the global leader in electrification investment.

“Investments in renewables, nuclear, electrification and efficiency over the past decade have tangibly improved energy security in major fuel-importing regions and reduced emissions,” the report said, highlighting the EU alongside China, Japan and South Korea.

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According to the IEA, EV sales in Europe rose by 30% while heat-pump sales increased by 17% in the first quarter of 2026, despite subsidy cuts in some countries.

In Germany, heat pumps have become one of the country’s best-selling heating technologies, according to the energy agency dena. Nearly half of all new heating systems sold last year were heat pumps, and 2025 marked the first year in which sales overtook those of gas boilers.

The report also pointed to rising European investment in electricity grids and storage, underlining a challenge Brussels has long underestimated: expanding power generation without upgrading transmission networks creates new vulnerabilities.

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