EU Commission Takes Action to Combat Rising Energy Poverty and Promote Green Transition

In 2022, a surge in energy prices coupled with a cost-of-living crisis hit hard across all European Union member states, leading to a concerning increase in energy poverty. According to recent statistics, an estimated 9.3% of Europeans found it impossible to adequately heat their homes, marking a significant rise from the 6.9% recorded in the previous year. Acknowledging the urgency of the situation, the European Commission has unveiled a comprehensive set of recommendations aimed at empowering EU countries to combat energy poverty effectively. These measures align with the broader goals of the European Green Deal, emphasizing the protection of vulnerable citizens and the promotion of a just and equitable energy transition. Key components of the Commission's recommendations include a focus on long-lasting structural changes, such as investments in energy efficiency and renewable energy. These measures target the root causes of energy poverty, including the inadequate energy performance of homes and household appliances, disproportionate energy expenditures relative to household budgets, and lower income levels - a challenge further exacerbated by inflation. To provide a detailed roadmap for implementation, the recommendations are accompanied by a Staff Working Document, offering in-depth analysis and insights into the proposed measures. The release of these recommendations follows the recent revision of the Energy Efficiency Directive, which, for the first time, introduced an EU-wide definition of energy poverty and outlines the procedure for identifying and addressing it at the national level. The Commission's recommendations encourage EU member states to incorporate these measures into their National Energy and Climate Plans (NECPs) and Social Climate Plans. NECPs are mandated by the EU legal framework, and each member state is required to identify and address energy poverty within its NECP, to be updated in 2024. Additionally, Social Climate Plans must be submitted to the Commission by June 30, 2025, to access the Social Climate Fund. The Commission's initiative is the result of extensive consultations with member states and stakeholders, including consumer and civil society organizations, trade unions, anti-poverty groups, social housing providers, environmental activists, health organizations, energy cooperatives, and energy providers. It reflects a collaborative effort to tackle the pressing issue of energy poverty comprehensively. In tandem with these recommendations, the Commission has renewed the Joint Declaration on enhanced consumer protection for the winter. Originally signed in December 2022, this declaration brings together key stakeholders representing consumers, regulators, energy suppliers, and distributors. They pledge to uphold common principles and adopt measures that go beyond existing legislation to support households during the 2022-2023 winter season. Given that wholesale energy prices have decreased since the previous winter, vulnerable customers and those experiencing energy poverty still grapple with bill payments in the face of a high cost of living. Consequently, the stakeholders have agreed to extend the Joint Declaration for the 2023-2024 winter. Commissioner for Energy, Kadri Simson, emphasized the importance of addressing the root causes of energy poverty and fostering a sustainable solution: "Energy poverty is not a new phenomenon in the EU. Moving beyond crisis response measures, we must address its root causes so that we overcome it in an effective and sustainable way. Today’s Recommendation focuses on long-term structural measures such as ensuring access to energy-efficient housing and appliances as well as renewables, which will help drive Europe’s clean energy transition while ensuring that nobody gets left behind." Commissioner for Justice, Didier Reynders, underscored the need to continue battling energy poverty and protecting consumers: "The rise in energy prices and the cost of living has put millions of consumers in a vulnerable situation. With winter already around the corner, we must continue doing everything in our hands to battle energy poverty and protect consumers in need." As the EU takes concrete steps to address energy poverty and promote a fair energy transition, these recommendations and declarations offer hope for a more equitable and sustainable future for all European citizens.

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