# Why Electricity Costs 3× More Than Gas in Europe Tax policies emerge as the biggest barrier to electrification transition. - **Source:** [Forbes - Business](https://brifing.si/source/e0310925-a7af-4d4b-80a7-c80d400e49fa) - **Published:** 2026-07-19 - **Topic:** [Business](https://brifing.si/c/business) - **Original article:** - **On Brifing:** https://brifing.si/s/8010f0c4-fc8c-484d-a1cc-4d5a9dfadad2 ## Tax Disparity EU countries tax electricity roughly 3 times higher than natural gas on average. Commission reports show this gap stands at 2.5x for households and 3x for industry. Experts identify it as the primary obstacle slowing down adoption of electric technologies across sectors. ## Official Recognition The European Commission's 2026 Electrification Action Plan formally acknowledged the tax imbalance. The document states most member states tax electricity more than gas as a deliberate policy choice. Correcting this could provide a subsidy-free solution for faster transition. ## Industry Appeal The $1.5 trillion Global Renewables Alliance behind Electrify Now campaign urges governments to reform energy taxation. CEO Bruce Douglas highlights how electricity taxes remain 2-4 times higher than gas historically. The tax structure needs redesign to support electrification goals. ## French Case Study France aims to cut fossil fuels to 40% of energy use by 2030 with €10B annual electrification funding. Yet its electricity excise (€33.70/MWh) still doubles gas taxes (€17.16/MWh). This shows even ambitious nations fall short on tax alignment for clean energy transition. ## EU Targets The Commission plans to increase electricity's share from 23% to 46% by 2040, potentially saving €260B in annual fossil fuel imports. It set 2030 targets for electricity/gas price ratios (2x for industry, 2.5x households). But tax directive changes require unanimous member state approval. ## Revenue-Neutral Solution Experts propose shifting electricity taxes to income tax or VAT. This revenue-neutral approach maintains state income while accelerating electrification. For finance ministries, it offers reform without new subsidies, making it politically viable despite implementation challenges. ## Dutch-Belgian Initiatives The Netherlands and Belgium took initial steps to rebalance electricity and gas taxes. Denmark reduced electricity taxes for heat pump households. However, these measures barely make a dent in the EU-wide disparity. The Commission promises deeper post-2030 reforms. ## Economic Transformation Potential Tax reform could revolutionize economics of electric vehicles and heating systems before building new generation capacity. Combined with plans to phase out €97B annual fossil fuel subsidies, it creates a powerful policy lever for Europe's energy transition at minimal fiscal cost. ## Sources covering this story - https://www.forbes.com/sites/guneyyildiz/2026/07/19/electricity-costs-3-gas-in-europe-tax-is-a-big-reason-why/ — --- _Summary written by Brifing from the original reporting. Copyright in the original article belongs to its publisher; read the full piece at the link above._