Current Standing of Energy Poverty Across the European Union

The European Union (EU) has taken significant strides in addressing energy poverty, a growing concern that affects millions of its citizens. The inability to afford basic energy needs due to high costs, low income, and inefficient housing has become a pressing issue, particularly during summer months when energy consumption often spikes.

However, the EU lacks a framework for assessing the summertime dimension of energy poverty. This gap in understanding is being addressed as part of the EU's 'Fit for 55' package, a series of directives and regulations aimed at cutting expenses for vulnerable and energy-poor households.

The 'Fit for 55' package includes revisions of the Energy Efficiency (EED) and the Energy Performance of Building (EPBD) Directives, which are designed to promote energy efficiency and reduce energy costs. The package also includes measures to broaden the understanding of vulnerability to include systemic discrimination such as sex, gender, age, disability, race or ethnic origin, sexual orientation, religion or belief.

The EU set binding long-term climate objectives through its first-ever European Climate Law in the spring of 2021. The European Commission's 'Clean Energy for All' legislative package, finalised in 2019, requires EU Member States to monitor energy poverty levels and implement targeted measures.

Recognising the urgency of the situation, the European Commission proposed a Green Deal in 2019 to make the economy resilient towards environmental and social emergencies. The Commission also issued a Communication on the Renovation Wave and Recommendations for Member States on addressing energy poverty in the fall of 2020.

The Commission has provided a preliminary, incomplete definition of energy poverty in Article 2 (52) of the 'Fit for 55' package. However, the recent appointment of a Housing and Energy Commissioner signals a step towards tying housing and energy policy together, with the approach extending beyond winter heating needs to address energy poverty during summer.

The Social Climate Fund, which is projected to total €72.2 billion from 2025 to 2032 and potentially reach €144.4 billion when matched by Member States, aims to ease financial burdens, promote sustainable mobility and housing, and support structural changes that reduce reliance on fossil fuels. The funds from the emission trading system (ETS) will be dedicated to the Social Climate Fund.

The European Commission estimates that between 8% and 16% of the EU population, or 35 to 72 million people, face energy poverty. Differences in energy poverty levels exist among EU countries, with Portugal, Bulgaria, Greece, and Lithuania having more than 20% of the population unable to adequately heat their homes, contrasting with smaller numbers in Sweden and the Netherlands.

Heat waves, floods, and fires show that the most socially fragile elements of societies are the first affected by climate warming. The COVID-19 pandemic and the cost of living crisis have increased poverty and inequality in Europe. Energy poverty has powerful implications today for public health, social cohesion, and productivity.

The Draghi Report on the future of European competitiveness (2024) underscores the urgency of tackling energy poverty. The Social Climate Fund is set to take effect in June 2024, with Member States required to submit Social Climate Plans by mid-2025. The EU's comprehensive approach to addressing energy poverty is a significant step towards creating a more sustainable and equitable future for all its citizens.