Report · First edition · September 2026
The State of Industrial Electrification in Europe 2026
How much of Europe's industrial heat could run on electricity, what it costs against natural gas in each member state, and how much of it already pays for itself. Built on a full year of hourly power prices, with each country's own taxes, levies and network fees.
The numbers
On 2025 prices, taxes and network fees across the EU.
What the report finds
Heat pumps already beat gas in most of the EU
In 15 member states, heat-pump heat costs less than heat from a gas boiler on full-year prices. Germany and Italy are not among them, despite the largest industrial heat demand in Europe.
Electric steam is a harder case
An electric boiler, although cheaper to buy than a heat pump, suffers from lower efficiency and is struggling for competitiveness. Adding thermal storage cuts the cost substantially everywhere, but on 2025 prices it clears the gas benchmark in only Sweden and Finland.
The spread between countries is mainly about policy rather than power prices
Wholesale power prices vary far less between member states than the LCOH of electric heat. What separates countries the most are taxes, levies and network charges.
Reform moves the line
Cutting the electricity tax for heat to the EU minimum and discounting network fees for flexible use takes the number of countries where electric steam beats gas from two to seven.
Use and citation
The report is free to download and its charts are published under CC BY 4.0, so they may be reused with attribution.
Cite as: Hannula, I. (2026). The State of Industrial Electrification in Europe 2026. Carbon Economics.
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