Written by Agnieszka Widuto (updated on 18.09.2023).
In 2022, over 41 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, as well as the energy crisis. The Gas and Electricity Directives ensure 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 Social Climate Fund regulation and the revised Energy Efficiency Directive define energy poverty as a household’s lack of access to essential energy services, such as heating, hot water, cooling, lighting and energy to power appliances. The 2020 European Commission recommendation on the topic 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.
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, high 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.
This is an update of a briefing published in July 2022.
Read the complete briefing on ‘Energy poverty in the EU‘ in the Think Tank pages of the European Parliament.