The European Union is preparing a reform of energy taxation and network fees that would place a lower tax burden on electricity compared to natural gas, according to a draft proposal reported by Reuters. The initiative is intended to ease pressure on household budgets, which have been strained by rising energy prices following turmoil in global markets linked to the Iran conflict and its impact on oil and gas supplies.
Under the proposed framework, member states would be required to ensure electricity is taxed at a lower rate than gas. The goal is to support a broader shift away from fossil fuels and toward electrification in key sectors such as transport, industry, and heating, where oil and natural gas still dominate. By narrowing the price gap in favor of electricity, the EU aims to strengthen the competitiveness of electric vehicles, heat pumps, and other low-carbon technologies.
The document stresses urgency, stating that swift action is necessary “to reduce household bills and the EU’s dependence on fossil fuels,” as reported by Reuters.
While the proposal sets a common direction, national governments would retain authority over tax levels, as long as they follow the overarching rule. The text also foresees measures encouraging consumers to shift electricity use to periods of lower demand and lower prices.
