Electrification key to boost industrial competitiveness, new study shows

BRUSSELS, June 3, 2025 /PRNewswire/ -- Electrification can help restore competitiveness, cut fossil fuel dependence and unlock economic benefits for European industry, according to a new study commissioned by Eurelectric. While electricity already outcompetes fossil fuels in some sectors, electrifying energy-intensive operations could become cost-competitive by 2030 - with the help of financial support, long-term contracts, and expanded Carbon Contracts for Difference (CCfDs).

In recent years, dependency on fossil fuels imports has undermined Europe's competitiveness, exposing industries to external volatility and high electricity prices. In 2024 alone, this cost Europe €350bn, down from €600bn in 2022 – a burden it can no longer afford if it aims to remain competitive on the global stage.

Electrification is a key part of the solution to restoring Europe's competitive edge. But tailored approaches for individual manufacturing segments are needed to unlock a new 'Industrial Age' powered by clean electricity. By comparing the total cost of ownership of electric technologies to fossil fuels in three industrial archetypes, a new study elaborates ways to close the competitiveness gap by 2030.  

For industrial processes operating at less than 500˚C like battery cell manufacturing, electric solutions such as heat pumps already outcompete fossil fuels. For energy-intensive industrial sectors like milk powder production, electrification can reduce the total energy consumption and leverage competitiveness. Finally, for more energy-intensive sectors like in ethylene production, technological advancements and innovation are needed to reduce the upfront costs of electric solutions.

"Electrifying Europe's industrial sectors is essential to unlocking economic opportunities, cutting emissions, and strengthening the continent's role as a global innovation leader. To achieve this, we need targeted industrial strategies that reflect each sector's unique needs." – said Kristian Ruby, Eurelectric's Secretary General.

To enhance industrial competitiveness through electrification, financial support is needed to reduce capital and operating expenses. Additionally, long-term contracts and an expansion of Carbon Contracts for Difference (CCfDs) will be vital to improve project bankability and protect against CO₂ and fossil fuel price volatility. Unlocking the flexibility potential and upgrading grid infrastructure will also be crucial to support this transition.

Note to Editors:

Eurelectric represents the interests of the European electricity industry. We seek to contribute to our industry's competitiveness, provide effective representation in public affairs and promote the role of electricity in the advancement of society.