EU Member States should reduce electricity taxation to make it more affordable for citizens compared to gas, according to the European Commission’s Citizens’ Energy Package, published today.
Jozefien Vanbecelaere, Policy Director at the European Heat Pump Association (EHPA) commented:
“The electricity-to gas price imbalance has long needed fixing, and it is great that the European Commission now says so. Taxing electricity many times more than gas makes little sense when Europe wants energy that is reliable, clean, home-grown and competitive. It is now crucial that Member States act to make electricity the obvious and affordable choice for households.”
EHPA has long called for the electricity price to be no more than twice that of gas to make heat pumps competitive.
We recently published a report that showed countries which tax electricity more heavily than gas see slower adoption of heat pumps and remain more dependent on fossil fuels.
By contrast, countries that keep electricity taxes lower and put a stronger price signal on fossil fuels achieve significantly higher heat pump uptake.
The European Commission says Member States should remove non-energy-related costs from electricity bills and make full use of the existing flexibilities in EU legislation to lower VAT and excise duty rates.
It says this could reduce household electricity bills by up to 14%, or around €200 per year on average according to the European Commission.
EHPA is also pleased to see the Commission’s focus on flexible electricity use and innovative financing models, including social leasing and energy-as-a-service, which can help households overcome upfront costs and access efficient heating.
Combined with flexible tariffs and smart energy services, heat pumps can significantly lower energy bills while supporting a more efficient electricity system.
With nearly 10% of Europeans unable to adequately heat their homes in 2024, accelerating access to efficient electric heating will also be key to tackling energy poverty.
