Energy poverty in the EU

Written by Agnieszka Widuto.

In 2020, about 36 million Europeans were unable to keep their homes adequately warm. Energy poverty is a multi-dimensional phenomenon, considered to be caused by a combination of low income, high energy expenses, and poor energy efficiency in buildings.

The EU has been addressing this issue in various legislative and non-legislative initiatives, most recently in the context of its climate policies and energy transition. The Gas and Electricity Directives call for the protection of vulnerable consumers, and the Energy Efficiency and Energy Efficiency of Buildings Directives require measures to alleviate energy poverty alongside efficiency efforts. The ‘renovation wave’ initiative under the European Green Deal aims to boost structural renovation in private and public buildings, while the Social Climate Fund includes households in energy poverty among its main beneficiaries.

The 2020 European Commission recommendation on the topic defines energy poverty as a situation in which households are unable to access essential energy services. It also provides a set of indicators relating for instance to the inability to keep a home adequately warm, arrears on utility bills, and a high share of income spent on energy bills. At the same time, no binding EU-level definition currently exists, and the proposed indicator set is not monitored systematically by Eurostat.

A number of possible policy options exist to address energy poverty under energy policy, social policy, or a mix of various regulatory solutions. Specific measures range from price regulation and tax breaks, to limits on disconnection, to social tariffs, energy efficiency improvements, and energy savings. Against the backdrop of security of energy supply concerns, the expected further rise in energy prices, and the ongoing EU transition to climate neutrality, the issue of energy poverty will be a crucial one in the months and years to come.

Read the complete briefing on ‘Energy poverty in the EU‘ in the Think Tank pages of the European Parliament.