The long journey to end energy poverty in Europe

Energy poverty is on the rise in Europe, even though it is unevenly distributed across social groups and territories. In general, policymaking is hampered by the misaligned incentives between landlords and tenants on who should bear the costs of energy inefficient buildings. At EU level, the absence of reliable indicators across member states makes the identification of energy-poor consumers difficult. In this Policy Brief, Claire Dhéret and Marco Giuli emphasise that the European Union’s added value in the fight against energy poverty should not be underestimated, because of the relatively new nature of the concept and the lack of policy experience among many member states in confronting this issue.

The fight against energy poverty is mainly led at national and regional levels as it’s sensitive to local specificities and dealt with through social policies, which remain in the national remit. National governments and local authorities rely mainly on two types of interventions: short-term measures providing financial relief to vulnerable consumers and long-term measures addressing the structural causes of energy poverty through energy efficiency interventions and building refurbishment.

At EU level, despite the limited competences in social policy, there has been an increased focus on vulnerable consumers in energy-related legislation. Recent policy measures contain positive innovations. This Brief argues, however, that the EU can do more to end energy poverty in Europe proposing three recommendations. First, the upcoming European Energy Poverty Observatory should be instrumental in raising awareness about the issue and driving policy changes at national level. Second, the innovative solutions developed by social entrepreneurs should be promoted and supported across the Union. Third, improving the energy efficiency of the building stock is key to provide vulnerable consumers with decent housing. To this end, upfront investment is required and interventions from both the EU budget and the European Investment Bank are needed to address market failures in the financial sector.