REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS Report on energy prices and costs in Europe
Date: 2025-02-26
Institutions: Directorate-General for Energy, European Commission
Subjects: EU energy policy, coal, electrical energy, energy efficiency, energy supply, gas, petroleum, price of energy, retail price, wholesale price

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 26.2.2025  COM(2025) 72 final  REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS Report on energy prices and costs in Europe  
 
 
1. 

INTRODUCTION  

The  2024  edition  of  the  energy  prices  and  costs  report  emerges  against  the  backdrop  of  a 
prolonged  period  of  turmoil  that  has  characterised  the  global  and  European  energy  markets 
since 2020. The energy price slump experienced during COVID-19 gave way to a sustained 
period of high energy prices from mid-2021 until end of 2023. Exceptionally high prices had, 
and  continue  to  have,  serious  implications  for  European  households,  industry,  the  broader 
economy and public finances. The purpose of this report is to analyse the evolution of energy 
prices and to  provide a clear understanding  of  their impact  on energy costs for EU industry 
and households, on EU energy imports and energy taxes. 

The  European  Union  has  established  an  ambitious  energy  policy  framework  under  the 
European  Green  Deal,  which  requires  further  reinforcement  in  response  to  past  crises  and 
ongoing challenges. Furthermore, the geo-economic landscape necessitates tangible actions to 
guarantee competitive and affordable energy for both businesses and citizens, while ensuring 
continued  progress  towards  decarbonisation.  The  Clean  Industrial  Deal  and  Affordable 
Energy Action Plan aim to address these challenges. 

This report provides a comprehensive overview of the evolution of energy prices and costs in 
the European Union from 2010 to 2023, with additional data covering the first half of 2024 
where  available1.  Building  on  the  approach  used  in  previous  editions2,  the  report  draws  on 
data  and  analyses  from  an  in-depth  study3  and  the  Commission’s  own  work,  prioritizing 
publicly available statistical sources and supplementing these with targeted data collections. 

Wholesale prices have stabilised on both electricity and gas markets since the energy crisis 
of  2021-2023,  although  at  a  level  higher  than  their  historical  averages.4  On  the  other  hand, 
due notably to the time lag in transmission of prices between the two market segments,  the 
drop in wholesale prices is yet to bring down retail energy prices, which are still higher 
for households and enterprises than before 2021. Household gas prices were almost twice as 
high in 2023 than before the crisis. Similarly, industrial gas and electricity prices, while lower 
than during the crisis, are still 2-4 times higher than in the EU’s main trading partners, which 
threatens  the  long-term  competitiveness  of  European  industry.  Especially  in  the  energy-
intensive sectors, soaring energy prices are a key factor impacting their competitiveness. 

The EU is dependent on imports to cover >90% of its oil and gas consumption. Aside from 
the  energy  security  considerations,  the  fossil  energy  import  bill,  which  reached  EUR  427 
billion in 2023 (2.5% of EU GDP), is a significant drain on the European economy. Crude oil 
remains the main import (with 56% share of the total bill), followed by natural gas and coal. 
Despite a sharp decrease as prices of these commodities came down, the import bill in 2023 
was  still  45%  higher  than  the  2014-2020  average.  The  2022  RePowerEU  Plan  proposed 
measures to enhance the security of energy supply, accelerate the deployment of renewables, 
moderate  demand  and  increase  energy  efficiency  to  achieve  a  more  flexible,  cost-efficient, 
and resilient European energy system in the future. 

1 Depending on availability, some benchmarks were updated as of September 2024 to reflect latest available data 
2 COM(2016)769 final, COM(2019)1 final, COM(2020)951 final and COM(2024)136 
3 The study will be published through the Publications Office. 
4In nominal terms energy price levels are higher than before crisis, but in real terms (deflated by price indices) they are moving down very 

close to the level of real prices before the crisis.  

 
 
 
Finally, the energy crisis also had an impact on energy taxation policy. Together with other 
measures,  energy  tax  revenues  decreased  at  the  same  time  as  many  Member  States 
compensated household and industrial for higher energy costs. 

.  

 
 
 
2. 

TRENDS IN ENERGY PRICES 

2.1. 

Electricity prices 

From  2015  to  2019,  European  wholesale  electricity  prices  fluctuated  between  40  and  60 
EUR/MWh. Spot prices were relatively stable until the end of 2018, then decreased in 2019 
due to weak demand, lower fuel costs, and increased renewable generation. In 2020, COVID-
19 led to a further significant drop in the demand for electricity, which, together with rising 
renewable generation, pushed wholesale prices to exceptionally low levels (17 EUR/MWh in 
May 2020), including increasingly frequent periods of negative prices during the day. 

The energy crisis of 2021-2022 led to a widespread disruption in global and European energy 
markets. This also impacted wholesale electricity prices in the EU, as higher gas prices  (see 
Chapter  2.2  on  gas)  drove  electricity  prices  upwards5  to  between  150  and  270  EUR/MWh 
(Figure 1). On the top of soaring gas prices that commanded higher electricity prices, low or 
variable  levels  of  hydropower  and  renewable  generation,  as  well  as  nuclear  outages  (due  to 
maintenance), pushed electricity prices to record highs during 2022 (reaching 400 EUR/MWh 
in August 2022). 

However, since the end of 2022, wholesale electricity market prices stabilised at lower levels 
on  day-ahead  markets,  although  at  a  level  higher  than  their  historical  averages  (85 
EUR2023/MWh average in Q4 2023 compared to 56 EUR2023/MWh on average in 2008-2020 
period). Prices on forward markets have in 2023 also stabilised above their historical average. 

Figure 1: Evolution of monthly average wholesale day-ahead baseload electricity prices in Europe in EUR/MWh, showing the 
European Power Benchmark and the range of minimum and maximum prices across the main EU markets 

Source: Trinomics et al. (2024), based on data from S&P Platts, ENTSO-E 

In  the  decade  before  the  energy  crisis,  EU  wholesale  electricity  prices  were  lower  than,  or 
comparable  to,  those  in  Japan  and  the  UK  (Figure  2)  but  somewhat  higher  than  US  prices. 
The energy crisis led to a convergence of prices between Europe and Asia. At the same time, 
prices  in  the  US,  due  to  cheap  domestic  gas  supply,  stayed  comparatively  low,  further 
increasing the gap between European and US electricity wholesale prices6. 

5 In Europe, gas-fired power stations are often the marginal technology setting the wholesale electricity prices. 
6 No data available for China after 2020. 

 
 
 
Figure 2: Comparison of monthly average day-ahead wholesale electricity prices in the EU with global trade (EUR2023/MWh) 

Source: Trinomics et al. (2024), based on data from S&P Platts, ENTSO-E, JEPX, EIA 

Retail  electricity  prices  have  also  increased  in  2022  and  2023,  following  the  wholesale 
electricity  prices,  which  were  passed  on  to  consumers  with  a  time  delay,  despite  the 
increasing  use  of  dynamic  price  contracts.  On  average,  the  energy  component  of  household 
retail  prices  increased  considerably  in  this  period,  while  the  share  of  taxes  and  levies 
decreased,  driven  by  temporary  compensation  measures  taken  by  national  authorities  across 
the EU-27 (Figure 3).  

Figure 3: Evolution and composition of the EU household electricity price (without VAT) 

Source: Trinomics et al. (2024), based on data from Eurostat (nrg_pc_204_c), VaasaETT 

In  concrete  terms,  the  average  EU27  retail  household  electricity  price  increased  by  12%  to 
262 EUR2023/MWh7 between 2020 and 2022. In 2023, prices increased by a further 4% to 272 
EUR2023/MWh.  During  the  crisis,  retail  electricity  prices  peaked  above  500  EUR/MWh  in 
Austria, Belgium, Denmark, Germany, Italy and the Netherlands. 

The  situation  of  retail  household  prices  varies  widely  across  Member  States,  in  part  due  to 
their recently introduced retail market interventions8 (Figure 4). Many countries temporarily 
provided  direct  subsidies  or  reduced  their  taxes  in  2023  to  alleviate  the  impact  of  price 
increases  and  some  MS  had  very  low  or  even  negative  taxes  for  electricity  for  households, 

7Prices refer to DD consumption band, in real euros (EUR2023 means adjusted for inflation with 2023 as the base year) 
8 Such as in Hungary, Malta or Bulgaria. 

 
 
 
including Ireland (66 EUR/MWh subsidy), Portugal (40 EUR/MWh subsidy) and Greece (37 
EUR/MWh subsidy)9. 

Similar  to  previous  years,  there  are  significant  differences  in  household  electricity  prices 
across Member States. In 2023, the highest average retail market price in the EU was recorded 
in Belgium with 383 EUR2023/MWh , whereas Bulgaria had the lowest at 116 EUR2023/MWh. 

Figure 4: Household electricity prices in EU Member States10 (2023, DD consumption band) 

Source: Trinomics et al. (2024), based on data from Eurostat (nrg_pc_204_c), VaasaETT 

Industrial electricity prices followed a trajectory similar to household prices increasing from 
132 EUR/MWh in 2020 to 238 EUR/MWh in the second half of 2022 (80.3%), reaching peak 
in  first  half  of  2023  of 241  EUR/MWh,  started  decreasing  in  latter  part  of  2023,  landing  at 
197 EUR/MWh in first half of 2024. But unlike household prices, industrial electricity prices 
are driven more by the wholesale market, because of their bigger exposure to the energy price 
component. The massive growth in the share of the energy price component was only partially 
counteracted  by  reductions  in  taxes  and  levies.  In  2023,  the  energy  price  component 
represented  63%  of  the  overall  electricity  costs  for  medium  industrial  electricity  consumers 
(in  the  ID  consumption  band11),  while  network  charges’  share  has  shrunk  to  12%  of  costs 
(from about 30% in 2018 and before), and taxes and levies represented only 25% of overall 
costs. 

In  international  comparison,  electricity  prices  increased  significantly  across  all  major 

9  The  Irish  measure  is  particularly  notable,  where  the  consumption  subsidy  mitigated  the  exposure  of  retail  prices  (via  the  “Energy  and 

supply” component of 339 EUR/MWh in 2023) to the high wholesale market prices. 

10 The DD consumption band (Eurostat) is used as the main point of reference for this comparative analysis, in some Member States another 

might be the most representative. 

11 The ID consumption band (Eurostat) is representative for medium industrial electricity consumer companies; on average 24% of the total 

non-household electricity consumption in EU Member States falls in this band. 

 
 
 
economies during the energy crisis, except in the US (Figure 5). The electricity prices faced 
by the EU industry were similar to those of Japan in 2023, whereas the EU industry used to 
have a competitive advantage before the energy crisis. The UK’s electricity prices remained at 
very  high  levels  throughout  2023,  while  prices  in  the  USA  were  relatively  stable  and 
continued close to their historical levels. 

Figure 5: Industrial electricity prices in the EU-27, USA, UK, Japan, Canada and South Korea (EUR2023/MWh) 

Source: Trinomics et al. (2024), S&P Platts, Eurostat, Enerdata EnerMonthly 

2.2. 

Gas prices 

Wholesale gas prices in EU gas hubs fluctuated between 5 and 30 EUR/MWh in the period 
from  2015  to  2020,  then  fell  in  2020,  when  a  relatively  mild  winter  and  COVID-19 
lockdowns depressed gas prices, below 5 EUR/MWh in May-July 2020. Increasing demand in 
the  post-COVID  recovery  period  started  to  drive  gas  prices  higher  from  mid-2021  and  by 
December 2021, tight European gas markets drove wholesale prices to 113 EUR/MWh. The 
Russian invasion of Ukraine, the weaponisation of its gas exports by Russia and subsequent 
uncertainty  around  gas  supplies  led  to  continuing  high  spot  prices,  staying  above  100 
EUR2023/MWh12 throughout June-December 2022, while the share of Russian pipeline gas in 
European imports dropped from 51% in 2021 to 15% in 2023. Overall Russian gas imports’ 
share dropped from 45% to 15%, the share of Russian LNG in EU LNG imports dropped to 
15%  from  20%  in  the  same  period  of  2021-2023.  Despite  lower  demand,  prices  increased 
further and reached an all-time high peak spot price on 26 August 2022 at 320 EUR2023/MWh. 

Starting in September 2022, gas spot prices gradually decreased from the peak in August 2022 
to 42 EUR2023/MWh by April 2023 due to several reasons – high storage levels, a mild winter, 
and reduced uncertainty about Russian pipeline supply (based on RePowerWU efforts to limit 
the gas  consumption in  EU, but  also  Russian  resolve to  stop  supplying  certain  EU Member 
States)  and  positive  developments  in  LNG  import  capacity.  By  early  2024,  a  new  ‘price 
equilibrium’ has emerged at around ~30-40 EUR2023/MWh (Figure 6) reflecting the phasing 
out  of  Russian  pipeline  gas,  reduced  domestic  production  in  the  EU  and  the  shift  from 
pipeline supply to LNG (liquefied natural gas) imports. 

Regional wholesale price differences (e.g. between the TTF, NBP and THE hubs) are largely 

12 EUR2023 means in 2023 euros (real euros). 

 
 
 
 
 
explained  by  the  differences  in  market  characteristics  in  terms  of  pipeline,  LNG  export  and 
interconnection  capacities  with  neighbouring  regions.  In  general,  markets  with  multiple 
import sources (e.g. several  gas pipelines and access  to  LNG terminals) show a lower price 
level than markets with only one supply source. 

Wholesale  natural  gas  prices  are  influenced  by  a  number  of  factors  such  as  temperature 
(through  heating  demand),  the  level  of  industrial  activities,  the  availability  of  renewable 
power  generation  (mainly  through  demand  for  gas-fired  power  generation),  filling  levels  of 
gas storage facilities and injection rates to fill storages, pipeline and LNG imports. One of the 
most important recent factors defining gas prices was the shift of gas imports from pipeline 
gas to LNG imports, which further exposed European gas markets to global LNG markets and 
thus created higher price volatility.  

Figure 6: Selected wholesale day-ahead gas prices in European gas hubs 

Source: Trinomics et al (2024), based on data from P Platts, Enerdata EnerMonthly 

LNG only played a balancing role in the EU’s gas supply prior to 2021, which can partly be 
linked  to  the  cost  competitiveness  of  Russian  pipeline  gas  over  LNG13,  and  the  abundantly 
available European supply coming from the Netherlands (up until 2023).To replace Russian 
pipeline  gas,  Europe  turned  to  increased  imports  of  LNG,  coming  especially  from  the  US 
(Figure 7), the  share of which increased from 27% in 2021 to 43% in 2023, and other global 
sources, such as Qatar, which increased LNG exports to the EU by 22% in 2022 and by 12% 
in 2023. In the same period of 2021-2023, Russia’s LNG exports’ share decreased from 20% 
to  15%  in  the  context  of  almost  doubling  overall  EU  LNG  imports,  while  Russian  LNG 
volumes increased by 32%. This is supplemented by increased pipeline imports from Norway, 
Algeria  and  Azerbaijan.  As  Russian  pipeline  gas  imports  shrank  dramatically,  the  share  of 
LNG in the overall imports doubled between 2021 and 2023 (from 15-20% to 35-40%).  

13 Baker Institute for Public Policy. (2023). Why is Europe not replacing Russian pipeline gas with long-term LNG contracts? 

 
 
 
 
 
 
Figure 7: LNG imports and their share in the EU-27 total gas imports and consumption 

Source: Trinomics et al. (2024), based on data from ENTSO-G, Eurostat 

This  shift  in  European  gas  supply,  in  turn,  impacted  the  global  LNG  markets  as  well,  as 
Europe  became  the  biggest  LNG  importer  in  2022-2023,  overtaking  Japan,  China  and 
South  Korea.  Additional  EU  demand  has  driven  up  global  LNG  prices  and  redirected  a 
significant amount of LNG shipments, which previously favoured Asian markets, to Europe.  

A comparison of international wholesale natural gas prices clearly shows this impact: with 
the  exception  of  the  US,  both  the  EU  and  major  LNG  importing  countries  (Japan,  South 
Korea, China and India) experienced price spikes (Figure 8), while prices in the US did not 
change drastically during the same period. 

Figure 8: Day-ahead wholesale gas prices in the EU (NL TTF) and its major trading partners14 

14 For Japan/Korea, India and China LNG CIF prices are used as proxy. All prices are EUR2023. 

Source: Trinomics et al., based on data from S&P Platts 

 
 
 
 
 
Retail gas prices  (Figure 9)  are mainly  driven by wholesale gas prices,  but  changes  during 
2021 and 2022 were reflected differently (in the magnitude and the speed of the pass through) 
across Member States. This was mainly due to differences in type and level of national crisis 
mitigation measures, but also to Member States’ difference  in contract-length structures and 
retailers’ difference gas procurement strategies (long-term contracts, price hedging). 

Figure 9: Average household gas prices in EU Member States15 in 2023 in the D2 consumption band 

Source: Trinomics et al. (2024), based on data from VaasaETT, Eurostat 

In  parallel  with  the  large  increase  in  wholesale  gas  prices  in  2021  and  2022,  average 
household  prices  started  to  increase  from  their  2021  level  of  70-80  EUR2023/MWh  to  125 
EUR2023/MWh16 by August 2022. Household prices were highest from Q3 2022 to Q2 2023 at 
112 EUR2023/MWh, after which they decreased and stabilised in all Member States, at levels 
almost twice as high as pre-crisis (100 EUR2023/MWh instead of ~60 EUR2023/MWh).  

Due  to  differences  in  retail  market  characteristics,  national  crisis  measures  and  their 
consequences  for  the  pass-through  rate  there  are  significant  differences  in  household  gas 
prices between Member States: in 2023 the highest prices were observed in Sweden and the 
Netherlands (~210 EUR2023/MWh) and the lowest in Slovakia, Romania, Croatia and Hungary 
(all lower than 60 EUR2023/MWh). 

The relative shares of energy costs, networks charges and taxes and levies in household gas 
prices also changed significantly. The energy costs component (wholesale price plus a mark-
up) accounted for 43% of the retail price in 2020 but reached 64% in 2023. During the same 
period,  the  share  of  the  network  charges  component  dropped  from  24%  to  17%,  while  the 
share  of  taxes  and  levies  dropped  from  33%  to  19%,  mostly  as  a  result  of  government 
interventions (lower tax rates or refunds) in retail prices. 

Industrial retail gas prices in the EU increased significantly during the energy crisis: prices 
for  the  medium  industrial  gas  consumers  (I3  consumption  band)17    almost  doubled  from  40 
EUR2023/MWh in 2021 to 76 EUR2023/MWh in 2023. For the largest industrial gas consumers 

15 Eurostat does not report retail gas prices for Cyprus, Finland and Malta. 
16 EUR2023 means in 2023 euros (real euros). 
17 I3 consumption band (Eurostat) is for SME and middle companies with consumption between 10.000 GJ and 99.999 GJ 

 
 
 
(I518 band), prices jumped from 39 EUR2023/MWh in 2021 to 87 EUR2023/MWh in 2022 then 
fell  to  59  EUR2023/MWh  in  2023.  Significant  gas  price  increases  led  to  large  energy  cost 
increases,  especially  for  energy-intensive  businesses.  The  higher  gas  price  levels  decreased 
the  competitiveness  of  European  industry,  especially  in  energy-intensive  sectors,  compared 
with competitors such as the US and China, where prices remain substantially lower (Figure 
10). 

Figure 10: Industrial end-user (I5 band) natural gas prices in the EU and its major trading partners 

Source: Trinomics et al (2024), based on data from Eurostat, Enerdata EnerMonthly 

2.3. 

Oil and coal 

Recent years have also seen new episodes of volatility in crude oil prices, which fell to less 
than  20  USD/barrel  (dated  Brent)  in  April  2020  due  to  significantly  reduced  demand  and 
excessive supply during the first months of COVID-19 lockdowns. Crude oil prices started to 
rise in parallel with economic recovery and the easing of COVID travel restrictions, peaking 
at  130  USD/barrel  in  March  2022.  Since  then,  prices  fell  to  between  70-80  USD/barrel 
(Figure 11), despite OPEC+ production cuts and continuing geopolitical conflicts in the Near 
and  Middle  East,  mostly  due  to  increased  production  in  the  US  and  relatively  low 
consumption in Asia. 

18 I5 consumption band (Eurostat) is representative for big companies with consumption between 1.000.000 GJ and 3.999.999 GJ 

 
 
 
 
 
Figure 11: Daily Europe Brent Spot Price FOB (USD and EUR per barrel, nominal prices) 

Source: DG ENER ENERScope, based on Energy Market Observatory database 

Brent  prices  in  2023 averaged 82 USD/bbl and  the year was characterized as a “stable year 
after three turbulent years” by the IEA. Oil supply remained high and is expected to stay high, 
with planned capacity expansions in non-OPEC countries. On the demand side, further global 
emission reductions,  increased  attention for energy security  and subdued industrial  demand, 
coupled  with  the  transition  to  renewable  energy  in  various  economic  sectors,  created 
downward pressure on oil prices, which was still felt in 2024. 

The retail prices of oil-based fuel products (Figure 12) closely followed the crude oil price 
trend, and significantly declined after the autumn of 2022. Diesel and heating oil experienced 
more severe price hikes mainly due to globally restricted refinery capacities. 

Figure 12: Average annual retail price of oil products in the EU-27 in EUR2023/litre, excluding taxes and duties 

Source: DG ENER ENERScope, based on Energy Market Observatory database 

 
 
3. 

TRENDS IN ENERGY COSTS 

3.1. 

EU energy import bill 

The  EU  is  a  net  importer  of  energy  and  depended  on  imports  to  cover  63%  of  its  energy 
consumption in 2022. The energy import bill of the EU depends on the quantity of the fuels, 
the prices of these fuels (increasing set by global markets) and the EUR/USD exchange rate. 
In 2022, the energy import bill reached an estimated EUR 600 billion (3.8% of EU27 GDP). 
Both oil and gas prices contributed to the increase (Figure 13). 

Following  the  drop  in  prices,  the  energy  import  bill  decreased  in  2023  to  an  estimated 
EUR 427 billion (2.5% of EU GDP), mostly attributable to lower natural gas and LNG prices. 
Nevertheless,  the  energy  import  bill  is  still  significantly  higher  than  before  and  the  sharp 
increase in 2021-2022 shows how much fossil fuel prices are weighing on the EU economy. 

Figure 13: Estimated EU energy import bill 2014-2024 (billion EUR; % EU GDP) 

Source: Eurostat Comext 

Putting  this differently: if  the clean energy transition  had been accelerated before the crisis, 
the EU would have had fewer fossil fuels in the energy mix (still 69% in 2022) and the impact 
of volatile fossil fuel prices on European energy prices could have been lower. 

3.2. 

Household energy expenditure 

The energy expenditure of European households (determined by retail prices and households’ 
consumption)  fell  for  all  income  levels  between  2012  and  mid-2021,  when  the  trend  was 
reversed by the energy crisis. In 2020, low-income European households19 spent on average 
7.3%  of  their  total  budget  on  energy,  which  increased  to  7.5%  (EUR  1250)  by  202220  with 
significant  differences  between  MS.  Lower-middle-  and  middle-income  households  tend  to 
have  higher  absolute  energy  expenditure,  but  this  expenditure  represents  a  smaller  share  of 
their household budget. In 2022, these households spent 6.9% and 6.4%, respectively, of their 
total budget on energy (down from 7.6% and 6.9% in 2010). 

19 In this report, households in the first income decile are defined as low-income; low-middle income households are in the third income 
decile; and the fifth income decile is used as a representation of middle-income households. For those Member States where only quintile 
data is available the first, second, and third income quintiles are used. 

20 Based on latest data available from the Household Budget Survey. 

 
 
 
Rising  energy  prices,  particularly  in  the  second  half  of  2021  and  during  2022,  resulted  in 
higher  than  usual  energy  expenditures  for  European  households,  with  increasing  number  of 
households  struggling  to  meet  their  energy  needs.  Energy  costs  increases  in  2022 
disproportionally  affected  the  most  vulnerable  households.  Across  all  Member  States,  an 
estimated  10%  of  households  were  unable  to  keep  their  homes  adequately  warm  and  had 
arrears on their utility bills21. 

The increases in energy costs were mainly driven by the prices of natural gas, liquid fuels and 
electricity  and  could  not  be  fully  counterbalanced  by  households’  efforts  to  reduce  energy 
consumption.  National  measures  supporting  households’  energy  expenditures  helped  to 
mitigate the impact of the energy crisis, but very often these measures (for example a decrease 
in VAT rates) were not specifically targeted at the most vulnerable households. 

The  situation  of  households  varied  substantially  across  Member  States,  both  in  terms  of 
absolute expenditures and expressed as a share of total expenditures. 

• 

• 

In  relative terms, the poorest  households spent  over 20% of their household  budget 
on energy in Slovakia and over 15% in Romania; and less than 5% of their budget in 
Sweden, Malta, Finland and Luxembourg.  

In  absolute  terms,  low-income  households  spent  less  than  EUR  500  on  energy 
products  in  Latvia  and  Romania,  while  they  spent  more  than  EUR  1.500  in 
Luxembourg and more than EUR 3.000 in Denmark. 

Figure 14: Energy share in total consumption expenditure by income group of Member States in the EU27 

Source: Trinomics et al (2024), based on ad hoc data collection on household consumption expenditures 

21 Source: EPAH (2024), except for Romania and Croatia (2022) 

 
 
 
As regards consumer choice, electricity remained the most expensive energy carrier in 2023 
(289 EUR/MWh) (Table 1). In comparison, both natural gas (at 116 EUR/MWh) and heating 
oil (116 EUR/MWh) were cheaper options for space heating. Despite the cost difference for 
the energy input, heat pumps can compete with oil and gas boilers on operational costs on EU 
average as they are much more efficient in producing heat. In a similar way, electric vehicles 
are  using  the  energy  input  much  more  efficiently  and  especially  with  dynamic  electricity 
prices already offer much lower operational  costs.  Upfront investment  costs for heat  pumps 
and  electric  cars  could  still  pose  a  risk  for  the  widespread  adoption.  The  revised  Energy 
Taxation  Directive  proposes  significantly  lower  minimum  tax  rates  for  electricity22,  thus 
giving MS the possibility to reduce electricity taxes (and prices) and support electrification in 
heating and transport. Member States will also have the possibility to exempt from electricity 
taxation households, thus providing further support for electrification. 

Table 1: Comparison of various energy options for households in EU per MWh 

Source: Eurostat; for electricity NRG_PC_204 and NRG_PC_204_C, data for first semester; for gas NRG_PC_202 and NRG_PC_202_C, data for first semester DG 
ENER Weekly Oil Bulletin (for oil products), data for 2023. Conversion of gasoline to MWh was done using factor of 1.000 l = 8.9 MWh. Conversion of diesel and 
heating oil to MWh was done using factor of 1.000 l = 10 MWh 

3.3. 

Industrial energy costs 

Energy is critical to economic activity and energy costs play a significant role in determining 
European  industrial  competitiveness.  In  2023,  even  as  electricity  and  natural  gas  prices 
decreased from 2022 levels, energy costs for EU industries were still significantly higher than 
pre-COVID and pre-crisis levels. The highest share of energy cost (electricity and natural gas 
costs  combined)  was  registered  in  the  electro-intensive  sectors  such  as  Primary  aluminium 
(38%) and  Ferro-alloys and silicon  (29%). These are followed by the  Flat glass (25%) and 
Mining (20%) sectors that have both a relative high gas and electricity cost shares. 

For  the  average  European  business,  energy  costs  range  between  1-3%  of  total  production 
costs.  For  energy-intensive  sectors  (such  as  Pulp  and  paper,  Basic  chemicals,  Man-made 
fibres, Glass, Clay building materials, Cement, lime and plaster and Iron and steel), energy 
costs  reach  between  5-10%  of  their  total  production  costs,  which  makes  them  particularly 
vulnerable to price increases and import competition (Figure 15). 

22  EUR  1/MWh  for  non-business  use,  which  is  replaced  by  one  minimum  rate  of  EUR  0,15/GJ  or  EUR 
0,54/MWh for both business and non-business use under the proposed revision of the Directive. 

GasolineDieselHeating oilConsumer typeComponentPrice 2023 per MWhShare 2023Price 2023 per MWhShare 2023Price 2023 per MWhShare 2023Price 2023 per MWhShare 2023Price 2023 per MWhShare 2023Energy/Gas/Fuel net price133.546%62.654%93.148%89.554%81.370%Network59.621%16.614%Taxes95.433%36.231%102.452%77.646%34.830%Total288.5115.6195.5100%167.1100%116.1100%Household (DC)Household (D2)ElectricityGas 
 
 
 
 
 
 
Figure 15: Estimated energy costs (as shares of production costs) for manufacturing sectors in 2021–2023, EU average 

Source: Trinomics et al. (2024), based on data from industrial plant operators. 

In most sectors, energy cost shares are reported to have increased in 2022 and 2023, compared 
to  2021,  which  is  particularly  noticeable  in  the  energy  intensive  industries,  (e.g.  Pulp  and 
paper, Man-made fibres, Glass, Clay building materials, Cement, lime and plaster, Iron and 
steel and Non-ferrous metals). 

In  the  international  perspective,  manufacturing  sectors  in  some  non-EU  G20  countries  are 
often enjoying lower energy costs thanks to: (i) access to relatively more abundant domestic 
energy sources; (ii) ) differences in national policies, in particular regarding energy subsidies 
and  governmental  support  measures.  Energy  intensities  of  EU  industries  tend  to  be 
comparable or lower than in the EU’s main trading partners (with the exception of Pulp and 
paper  and  Refineries);  but  due  in  part  to  higher  energy  prices,  the  profitability  of  EU 
manufacturing sectors tends to be lower. 

3.4. 

Energy taxation 

Energy taxes, both on the production and on the consumption of energy, provide significant 
revenues  to  Member  States’  budgets.  Energy  tax  revenue  was  stable  in  2010-2019  at  an 
average  of  1.88%  of  GDP  (Figure  16),  but  during  COVID  (2020),  lower  energy  prices  and 
lower consumption triggered a drop to 1.74% of GDP. In 2021, energy tax revenue started to 
increase,  but  by  2022,  largely  due  to  the  measures  to  counteract  energy  prices  increases, 
energy taxes collected in the EU decreased to EUR 248 billion (1.6% of GDP). 

Figure 1617: Energy tax revenues in the EU27 (billion EUR; % of GDP) 

 
 
 
Source: Trinomics et al. (2024), based on data from Eurostat (env_ac_tax) 

The role of energy taxes in government revenue varies significantly between Member States. 
In 2022, energy taxes in Bulgaria made up over 14% of total tax revenue, while this share was 
only 2.5% in Austria and Ireland (Figure 18). Energy tax revenue in comparison to national 
GDP was the highest in Greece (4.8%) and the lowest in Ireland (0.5%). Generally, Member 
States with a lower GDP/capita have a higher share of energy taxes relative to both total tax 
revenue and GDP. 

Figure 18: Energy tax revenue as a percentage of tax revenue and of GDP23 (2021) 

Source: Trinomics et al. (2024), based on data from Eurostat (env_ac_tax) 

23 Latest available figures are for 2020. 

 
 
 
 
 
4. 

CONCLUSION 

The  EU  responded  with  unity,  solidarity  and  determination  to  overcome  the  potentially 
devasting  energy  crisis  of  2021-2022.  Member  States  agreed  on  measures  to  address 
excessive  gas  prices,  to  accelerate  the  rollout  of  affordable  clean  energy,  and  to  plan  for 
solidarity measures in the event of a gas emergency, which all played a role in stabilising EU 
markets.  At  the  same  time,  Member  States  adopted  several  measures  to  protect  their 
households and industries from the consequences of high and volatile energy prices. 

Energy policy proved to be critical for driving the zero-carbon transition of energy systems, 
while maintaining energy security and affordability. It is also a cornerstone in the EU’s efforts 
to  decarbonise  its  economy  while  ensuring  European  industrial  competitiveness  and  a  just 
transition for everyone. During the past years, the EU has lived up to its commitments, taking 
firm actions to ensure its security and the progress in the clean energy transition. It has acted 
in unity to advance on the objectives of the REPowerEU Plan, with a view to building a more 
secure  and decarbonised energy system  for all Europeans in  a  rapidly changing  geopolitical 
context. 

While wholesale electricity and gas prices have fallen significantly since the end of 2022, they 
remain  higher  than  before  the  crisis.  Their  impact  on  energy  bills,  particularly  for  the  most 
vulnerable households and businesses24, is  still considerable. The rise  in energy costs led to 
higher energy expenditure in particular for low-income households. Similarly, the previously 
observed decline in energy costs shares in -energy intensive industries stopped. The reversal 
led to a significant challenge for most energy intensive industrial sectors, in part cushioned by 
their efforts in improving energy efficiency and by public support. The impact on the entire 
EU  economy  has  also  been  substantial,  with  a  significant  increase  in  the  EU’s  fossil  fuel 
import bill, mainly driven by soaring gas and oil prices. 

The crisis of 2021/2022 has already induced long-lasting changes in the EU’s energy system, 
starting  with  LNG,  which  now  accounts  for  a  much  higher  share  (~40%)  of  gas  imports, 
replacing Russian pipeline gas. The accelerated energy transition will progressively introduce 
further changes into energy supply and demand already in this decade and will help the EU 
achieve a greater degree of independence from fossil fuel imports, and ultimately to lower the 
EU energy bill. 

The energy market  outlook for 2024-2025  has  improved  but  tensions remain. The measures 
put in place by Member States and the Commission to fight the energy crisis25 significantly 
contributed  to  the  improvement.  However,  the  impact  of  high  energy  prices  on  the 
competitiveness of the EU’s industry remains a major challenge. The EU has to act swiftly on 
the  suggestions  of  Mario  Draghi  and  Enrico  Letta  on  enhancing  industrial  competitiveness. 
Furthermore,  the  EU  needs  to  continue  pursuing  an  active  trade  policy  that  contributes  to 
increased diversification of supply and economic resilience. 

In particular, the EU needs  to  accelerate the  widespread adoption of  clean technologies  and 
energy  efficiency  measures  to  avoid  fossil  fuels-induced  crises  in  the  future.  Technologies 

24 The impact on SMEs is detailed in the SME envoy report: SMEs and rising energy prices - First findings & recommendations 
25 These measures include supply diversification, demand reduction, expansion of LNG import capacity, obligations to fill in gas storages in 
advance, demand aggregation and joint purchasing and measures to address high prices and volatility (e.g. market correction mechanism, 
intra-day volatility mechanism). 

 
 
 
such as heat pumps and electric vehicles, together with demand response, energy storage  as 
well as sufficient grid interconnections and their efficient use, will play an important role in 
protecting  households  and  industries  from  further  energy  shocks.  In  order  to  preserve  their 
competitiveness,  European  companies,  especially  energy  intensive  industries,  need  to  keep 
improving  their  energy  efficiency,  increase  their  flexibility  for  demand  response,  and  adopt 
decarbonised  energy  technologies,  while  the  EU  is  working  on  measures  to  enable  them  to 
benefit from the transition through continued investments in research and innovation, the new 
design for electricity markets and ensuring an international level playing field. Also, the EU 
should  remain  committed  to  tackling  energy  poverty,  protecting  vulnerable  consumers  and 
empowering  consumers  to  actively  participate  in  the  green  transition  by  implementing 
policies  that  promote  energy  efficiency,  renewable  energy  sources,  and  affordable  clean 
energy options.