Drivers of electricity prices across households and energy-intensive industries and their importance for the EU’s decarbonisation objectives

Daniela Arlia and John Hutchinson

Economic Bulletin Boxes, 2026, vol. 1

Abstract: Electrification is central to the decarbonisation objectives of the EU. Yet, electricity prices remain elevated across the euro area compared with levels observed before the 2021-22 energy crisis, while households pay around twice as much as energy-intensive industries. This box examines the drivers of these differences in the five largest euro area countries. While short-term relief measures such as price caps and tax reductions can ease price pressures, these do not address the underlying drivers of high electricity prices. Moreover, these measures should be devised so as not to weaken decarbonisation incentives for energy-intensive industries. JEL Classification: Q56, Q4

Keywords: Green transition; decarbonisation; electricity prices (search for similar items in EconPapers)
Date: 2026-02
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