Spain, Portugal, and Luxembourg are advocating for the European Union to implement a concrete, binding target for renewable energy by 2040. This push comes as the EU has already given final approval to a new climate target aiming to cut greenhouse gas emissions by 90% by 2040 compared to 1990 levels. The countries believe that an explicit renewable energy goal is crucial for achieving the broader emissions reduction targets and reducing reliance on fossil fuel imports, especially after geopolitical events caused energy prices to soar.
The European Commission is expected to unveil a policy plan on July 17 that will include an electrification goal, expressed as a percentage share of energy consumption by 2040. This electrification drive is seen as a key strategy to replace two-thirds of the EU's gas demand and halve oil consumption, potentially saving €200 billion in fossil fuel import costs by the end of the next decade. Currently, the EU's electrification rate, at 23% for the past decade, lags behind countries like China, Korea, and Japan, which exceed 30%.
While the EU's renewable electricity generation reached almost 50% in 2025, and 70% of its power already comes from local clean sources, significant challenges remain. These include modernizing electricity grids, expanding generation capacities, and addressing high upfront investment costs. The Commission's plans also involve reforming energy taxation rules and progressively phasing out fossil fuel subsidies after 2030 to facilitate the transition. The internal document from the European Commission indicates that the existing renewable energy law is insufficient to meet the 2040 climate ambition, necessitating a new proposal by the end of the year to revamp the framework and align all sectors with the goal of climate neutrality by 2050.
