The European Commission is preparing a sweeping electrification strategy aimed at reducing the European Union’s dependence on oil and gas, following major disruptions to global energy markets caused by the ongoing Iran war.
According to a draft proposal seen by Reuters, the plan is expected to be formally presented on July 17 and will outline measures to accelerate the transition toward electricity-based systems across transport, buildings, and industry. The initiative comes as the conflict has driven up energy costs and exposed Europe’s vulnerability to fossil fuel supply shocks, particularly those linked to the Strait of Hormuz, a critical global shipping route.
Since the escalation of hostilities earlier this year, the EU has faced significantly higher import costs for oil and gas, with estimates indicating an increase of around €50 billion. The price surge has been linked to tanker attacks and supply disruptions in the Middle East, which have tightened global markets and pushed European governments to reconsider long-term energy security strategies.
The Commission’s draft plan focuses heavily on electrification as a structural solution rather than a temporary fix. Key measures include accelerating the adoption of electric vehicles to replace petrol and diesel cars, expanding the use of heat pumps instead of gas boilers, and promoting electrification in heavy industries such as steel and manufacturing.
To encourage uptake, the EU is also considering financial incentives, including reduced value-added tax on electric technologies like EVs, batteries, and heat pumps. Additional policy tools under discussion include stricter public procurement rules that favor electrified systems and potential mandates for installing heat pumps in public buildings.
An EU official familiar with the proposal said the objective is to “build a system that is less exposed to volatile fossil fuel markets and geopolitical shocks.” The plan also aligns with broader efforts to phase out fossil fuel subsidies and redirect investment toward clean energy infrastructure.
Industry electrification will be supported through funding mechanisms, including auctions planned later this year to finance large-scale projects. These are expected to play a key role in decarbonizing energy-intensive sectors while maintaining industrial competitiveness within the bloc.
Energy analysts say the Iran war has acted as a catalyst, accelerating trends that were already underway in Europe’s energy transition. “The crisis is reinforcing the case for electrification as both a climate and security strategy,” one expert noted, pointing to the dual benefits of emissions reduction and reduced reliance on imports.
The move builds on earlier EU efforts to cushion consumers from rising energy costs, including proposals to lower electricity taxes and incentivize cleaner energy use. However, officials suggest the new electrification plan marks a more comprehensive and long-term policy shift.
If implemented, the strategy could significantly reshape Europe’s energy landscape over the coming decades, increasing the share of electricity in total energy consumption while reducing exposure to external fossil fuel shocks.