The European Commission has unveiled its Affordable Energy Action Plan aimed at saving European consumers and businesses €260 billion annually by 2040.

The plan is a key component of the Clean Industrial Deal, also announced by the Commission on 26 February. The Clean Industrial Deal will accelerate decarbonisation, while securing the future of manufacturing in Europe. The Affordable Energy Action Plan will bring relief to households facing high energy bills, and also to industries that struggle with high production costs.

Annual savings from the Affordable Energy Action Plan in 2025 are projected to be €45 billion, progressively increasing to €130 billion by 2030 before reaching the 2040 target.

The logic underlying the plan is that energy can be made more affordable by accelerating investments in clean energy and infrastructure, and by bringing transparency and fairness to gas markets. As such, the plan proposes “actions to tackle the structural challenges that are driving up energy costs in the EU, notably Europe’s reliance on imported fossil fuels and lack of full integration of the electricity system. A further reduction in permitting times for renewables and energy infrastructure will also help lower power production costs.

Quoted in a press release issued by the Commission, EU President Ursula von der Leyen said, “With [the plan], we will achieve more predictable prices, stronger connections across Europe, and increased energy offtake. We will systematically remove remaining obstacles so that we can build a true Energy Union.”

In an interview with DW News, European Commissioner for Energy and Housing, Dan Jorgensen said the plan would “ease the burden on households, make businesses more competitive and increase security amid Russia’s war in Ukraine.”

Watch the interview here.

Read more about the Clean Industrial Deal here.