We know that fossil fuels like gas are our Achilles' heel. They're harmful for the environment, harmful for our health, and leave us dependent on moody foreign leaders.

Clean electricity, meanwhile, can be produced domestically and is more efficient.

The EU just announced its goal to double its electrification rate by 2040, from around 23% to 46%. That means almost half the continent, from cars to heat pumps and industrial processes, would run on electricity, ideally from renewable sources.

But in most EU member states, taxation still penalises the use of electricity over gas.

Why does electricity cost so much?

Gas can be either burned directly in a home boiler to provide heat, or at a power plant to generate electricity. Both come with drawbacks.

“Since Russia's invasion of Ukraine, wholesale electricity prices have fallen in many member states thanks to the rapid expansion of renewable energy and the declining role of gas in power generation,” Christophe Jost, energy policy coordinator at Climate Action Network Europe (CAN) explained to The European Correspondent.

“However, increases in taxes, levies, and other regulated charges have offset part of these savings, limiting the pass-through of lower wholesale prices to consumers,” he said.

According to Eurostat data, these charges account for roughly 25-29% of the average EU household electricity bill, and up to 35% in Italy.

The money collected in charges on electricity is mostly used to fund the energy transition. But while clean electricity – the technology the EU aims to boost – carries these costs, gas for direct use is light on taxes. As EU countries treat gas as the “cheap transitioning” fuel, they economically favour what they're trying to get rid off. That gives little motivation for people with gas boilers to switch to a heat pump.

Can we even it out?

The EU is now pushing member states to rebalance the price gap between electricity and gas, but actually reforming the system depends on national governments.

Eurelectric, an association representing the European electricity industry, recommends shifting taxes and levies from electricity to fossil fuels, particularly gas. That way, national budgets could stay balanced while a price incentive supports the use of electricity. CAN suggests taxes and levies that burden all energy sources equally.

Price impacts people's willingness to use different technologies. Countries such as Sweden and Finland, where the price difference between gas and electricity is the smallest, see the greatest sales of electric heat pumps.

Heat pumps are generally up to four times more efficient than the average gas boiler, so they need much less energy (in this case: electricity). Therefore, even if one unit of electricity is roughly two and half times more expensive than one unit of gas, a heat pump still pays off, according to Cool Heating Coalition.

Heat pumps are much more expensive to install than a boiler, however, which often keeps households from switching.

“Governments must act quickly to end the preferential treatment of fossil gas while ensuring that vulnerable households are not exposed to higher costs to access electric alternatives,” Jost from CAN underlined.