Fighting energy poverty: Securing an affordable energy supply should top the policy agenda of EU countries

Gas flame in a kitchen

As the number of EU households unable to warm their homes is likely to grow and with energy annual inflation hitting over 40%, the EU and the Member States should adopt and implement urgent measures to prevent and tackle energy poverty threatening Europeans

The European Economic and Social Committee (EESC) is urging the European Union and Member States to make equal access to energy and the security of energy supply at affordable cost their absolute priority, the civil society body said in an opinion on tackling energy poverty and the EU's resilience, adopted at its plenary session in September.

The EESC acknowledged the importance given to energy in the European Commission's recent initiatives, such as in the Fit for 55 package, the implementation of the European Green Deal and the Renovation Wave, but warned that without swift implementation, strong commitments and concrete measures by Member States, these initiatives would not be sufficient to address the current crisis.

There should be a common approach to understanding and addressing energy poverty at EU level, said rapporteur of the opinion Ioannis Vardakastanis. And this approach may lead to a common definition. At the same time, we should be leaving it to each Member State to find tailor-made solutions.

To ensure a truly all-encompassing approach, the EESC called for the establishment of a broad and ambitious political coalition for addressing energy poverty. Its goal would be to bring it to a minimum level by 2030 and eliminate it altogether in the long term.

Apart from the EU institutions, the coalition would include organised civil society organisations, including representatives of business, consumer organisations and organisations representing the populations most at risk of energy poverty.

Local and municipal authorities should also be involved as they are often best placed to identify household at risk of energy poverty at an early stage, the EESC said in the opinion. It also placed special emphasis on vulnerable consumers, whose experiences and behavioral attitudes must be incorporated into the design and implementation of all measures, given that they are generally less likely to quickly adapt their consumption patterns.

The actions of the coalition would be further developed and elaborated in an EU strategy against energy poverty. The strategy, based on the recognition of the right to energy, should include energy and non-energy measures to address the root causes of energy poverty, and to alleviate conditions for energy-poor and vulnerable consumers. It would also ensure that climate and energy transitions are designed and implemented to be just, fair and inclusive, leaving nobody behind.

With the support from the Commission, Member States should develop national plans or policies to eradicate energy poverty by creating synergies between national and EU policies and funding instruments.

Member States must ensure that the most vulnerable are not left without support. Direct financial support and social policies should be in place to mitigate the negative effects of price increases on the most vulnerable groups. Direct assistance to those in need must be targeted, said Mr Vardakastanis.

National measures to mitigate the negative effects of rising prices on the most vulnerable should include direct financial support and social policies, or incentives and supports to decrease energy consumption, depending on specific national and local circumstances.

Some Member States have already started implementing measures. By February 2022, for example, 18 Member States transferred funds to vulnerable groups and 11 Member States reduced energy tax.

In 2020, the percentage of population in the EU unable to keep their homes adequately warm stood at 8%, but this is estimated to have risen due to the sharp increase of energy prices in mid-2021. The war in Ukraine and the dependency of some EU Member States on Russian gas further exacerbated the situation.

Those hardest hit by energy poverty are the poorest segments of society, such as low-income workers and pensioners, students, young adults, multi-child families and single parents, as well as disadvantaged groups, including persons with disabilities, older persons, migrants and Roma minorities. Women are at a higher risk of energy poverty and people in eastern and southern Member States are also more affected by it on average.

Businesses are also under strain, with raising utility bills putting SMEs at risk of bankruptcy, which may lead to job losses.

The spike in energy prices therefore has a negative effect on the whole economy. Europe faces a risk of stagflation and lower economic growth, which will push more people into poverty.

This is why tackling energy poverty will have multiple benefits and can directly boost economic growth and prosperity in the EU, Mr Vardakastanis said.

The EESC also stressed the importance of investing in renewable energy and energy efficiency as well as in the large-scale renovation of buildings. This should support the lowest income groups by making sure that vulnerable people have money to invest in energy efficiency and by giving priority to the worst performing buildings.

Member States, working with local and regional authorities, should prioritise a deep renovation that would lead to over 60% in energy savings. For this to be feasible, a large amount of private investment is clearly needed, the EESC concluded.