Energy
Renewables make up an ever greater share of Europe’s energy mix, but other countries like China are quickly catching up. Europe will need clearer demand signals to boost renewables investment, while investment in grids is also crucial.
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Share of electricity in EU transport (2025) 1.9%
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Share of Biofuels in EU transport (2025) 5.1%
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Share of fossil fuels in EU transport (2025) 92.9%
The growth in electric vehicles means Europe has probably passed the high-water mark for fossil fuels in transport.
Electrification
Europe’s grid intensity is lower than any other large region in the world thanks to a high uptake of renewables and reduced use of coal.
E-fuels & hydrogen
Europe is leading the way in terms of hydrogen and e-fuels projects. But when it comes to delivery, China is way ahead.
The lack of final investment decisions in Europe is often down to a lack of clear demand, making investment risky. EU regulations provide for clear e-fuels mandates for aviation, but not for shipping.
In the context of the EU’s “simplification” agenda, several actors in the fuels industry appear to be waiting and seeing if climate mandates will be watered down. This is leading to the EU wasting precious time while producers in the US and China are ploughing ahead.
At the end of last year, the EU published its Sustainable Transport Investment Plan (STIP). The STIP establishes a market intermediary to end the deadlock of the e-fuels market and help companies reach final investment decisions through smart financing tools. However, the STIP is still open to investments in biofuels, which are more market-ready than e-fuels and will likely attract the bulk of funding.
This is a problem.
Biofuels
Biofuels are being touted as a solution for cars, ships and planes. Aside from environmental concerns around biofuels, reliance on biofuels also leaves Europe dependent on imports. Unlike the US and China, Europe is heavily dependent on imports.
Sources
T&E analysis, based on data from Eurostat, Ember, Eurocontrol, Stratas Advisors and the IEA.
Biofuels import dependency estimates are based on extrapolated data published by key EU countries like France (Carbure), Germany (BLE), Spain (Miteco) and Italy (GSE), and USDA reports for the US and China