Energy poverty

We all depend on energy in our everyday lives. We need it to have sufficient levels of heating, cooling and lighting in our homes to ensure a decent standard of living and help guarantee our health.

Energy poverty occurs when a household must reduce its energy consumption to a degree that negatively impacts the inhabitants' health and wellbeing. It is mainly driven by 3 underlying root causes

• a high proportion of household expenditure spent on energy
• low income
• low energy performance of buildings and appliances

Due to its private nature, as it mainly affects households, and its complexity, energy poverty remains a major challenge to be further addressed in the EU. The COVID-19 crisis, followed by the surge in energy prices and the Russian invasion of Ukraine in February 2022, have worsened an already difficult situation for many EU citizens.

Europeans unable to keep their homes adequately warm 

The EU is committed to tackling energy poverty and protecting vulnerable consumers. The concept of energy poverty was first introduced in EU law by the Directive on common rules for the internal electricity market (2009/72/EC). Since, it has been broadened in the narrative of a just and fair energy transition and over the past decade, the EU has increased its efforts and made energy poverty a key concept.

The message is clear: energy poverty must be tackled by addressing its root causes through structural and targeted measures, and in particular through energy efficiency.

Timeline of energy poverty related initiatives

In 2016 the Commission launched the Energy Poverty Observatory (EPOV) initiative and one year later, the European Pillar of Social Rights includes energy as an essential service which everyone is entitled to. Additionally, the Pillar includes the right to appropriate help and protection against forced evictions.

The Clean energy for all Europeans package (adopted in 2019) introduced explicit obligations to identify, monitor and address energy poverty through the National Energy and Climate Plans (NECPs). Since then, several EU countries have integrated targeted measures and are developing their own definitions, measurement and monitoring methods and solutions to energy poverty.

In 2020, the Commission published its first Recommendation on energy poverty (EU/2020/1563), issued as part of the Renovation Wave Strategy. It provided guidance on adequate indicators to measure energy poverty, promoted the sharing of best practices between EU countries and highlighted EU funding programmes that prioritise measures targeting vulnerable groups.

Building on this Recommendation, the ‘Fit for 55’ package proposed in July 2021, included specific measures to identify key drivers of energy-poverty risks for consumers, taking into account structural solutions to vulnerabilities and underlying inequalities.

To clarify what measures were possible to tackle the spike in energy prices that started in 2021, the Commission published Tackling rising energy prices: a toolbox for action and support (EU/2021/660). The Communication lists a range of short and medium-term initiatives that can be taken at national level to support and help the most vulnerable consumers.

In April 2022, the Commission Energy Poverty and Vulnerable Consumers Coordination Group was established (Decision EU/2022/589). It aims to provide EU countries with a space to exchange best practices and increase coordination of policy measures to support vulnerable and energy-poor households.

The Social Climate Fund, established in May 2023 by Regulation EU/2023/955, aims to provide funding to EU countries to support vulnerable households, including those affected by energy poverty, and vulnerable micro-enterprises by supporting investments for increased energy efficiency. To access this funding, EU countries must submit their Social Climate Plans by June 2025.

The revised Energy Efficiency Directive (EU/2023/1791), agreed and published in September 2023, puts a stronger focus on alleviating energy poverty and empowering consumers through a series of wide-reaching measures.

On 23 October 2023, the Commission published a new Recommendation on energy poverty (C/2023/4080), together with a guidance document (SWD(2023) 647) and renewed, on the same day, the Joint Declaration on enhanced consumer protection for the winter, originally signed in December 2022.

The revised Energy Performance of Buildings Directive (EU/2024/1275), which entered into force in May 2024, also includes specific provisions related to energy poor, vulnerable households and people living in social housing. It foresees, among other measures, that EU countries include specific plans for the reduction of the number of people affected by energy poverty in their National Building Renovation Plans. In addition, related policies and measures, including information-related actions, will have to target the alleviation of energy poverty. 

The Electricity Market reform (Directive (EU) 2024/1711 and Regulation (EU) 2024/1747), published in June 2024, and the revised gas market legislation strengthen consumer rights and protection. Among other measures, they ensure clearer information and enhanced rights especially for the most vulnerable and those affected by energy poverty in case of gas disconnection. Moreover, for both the electricity and gas markets, in case of a natural gas price crisis, EU countries should ensure that these categories of consumers have access to affordable energy and essential social services, including through interventions on price settings to shield them from excessively high prices. 

It provides online guidance and knowledge products for diagnosing, measuring and planning actions to tackle energy poverty at local level from a national and EU perspective including

• publications
• an interactive database that allows stakeholders to discover local and international projects and measures addressing energy poverty
• courses to increase knowledge on energy poverty and mitigation actions
• calls for technical assistance to directly assist local governments in taking action on energy poverty

Together with the Covenant of Mayors, the EPAH also developed a reporting mechanism that cities can use to track the progress in eradicating energy poverty.

Across Europe, various projects are developing innovative solutions to combat energy poverty.

Horizon 2020 Energy Efficiency granted approximately €29 million to 16 projects addressing energy poverty through its 2014-2020 calls. These projects contributed to the exchange of best practices among stakeholders, empowering local communities and consumers in tackling energy poverty.

The LIFE Clean Energy Transition Programme has a budget of nearly €1 billion for the period of 2021-2027 and covers projects that further explore measures to alleviate energy poverty. Project developers work closely with networks of local actors and energy-poor households to provide practical information and advice on energy efficiency solutions and building-related interventions in vulnerable districts. 

In addition to the work of the EPAH, the EU Building Stock Observatory, the Smart Cities Marketplace and the EU Covenant of Mayors can further assist EU countries in identifying energy poverty.

• Renewal of joint common principles for enhanced consumer protection for winter 2023-2024
• A Guide to Understanding and Addressing Energy Poverty (EPAH - May 2022)
• Study - Energy poverty and vulnerable consumers in the energy sector across the EU (2015)

• Recommendation on energy poverty (C/2023/4080) | Staff working document (SWD(2023) 647)
• Energy Poverty Advisory Hub
• In focus: How can the EU help those touched by energy poverty? (16/02/2022)
• Communication - Tackling rising energy prices: a toolbox for action and support (COM/2021/660)
• Communication - 'Fit for 55': delivering the EU's 2030 Climate Target on the way to climate neutrality (COM/2021/550)
• Recommendation on energy poverty ((EU) 2020/1563) | Staff working document (SWD (2020) 960 final)
• Towards an inclusive energy transition in the European Union: Confronting energy poverty amidst a global crisis (EPOV - June 2020)
• Directive on common rules for the internal market for electricity (EU/2019/944)