Energy poverty in Europe: time for a new focus and fair transition?

As energy prices soar, advocates worry that Europe’s policy for how to deal with it is spread out across too many sectoral departments.

More than 40 million Europeans cannot keep their homes adequately warm in winter, and as temperatures soar due to global warming, most cannot keep them cool in the summer.

As the EU pushes ahead with its 2050 climate neutrality target, a question raised repeatedly at a recent Euractiv event on energy poverty has become impossible to ignore: can the clean energy transition succeed if it leaves the most vulnerable households behind?

The event, “Energy Poverty in Europe – How can EU social, housing and climate policies deliver a fair transition?”, brought together policymakers, housing experts and social advocates to put the issue on the map.

Siloed policymaking

They warned that energy, housing and social policy are still largely designed and implemented in silos, even though energy poverty sits squarely at their intersection.

“In fighting poverty, we’ve seen that business as usual doesn’t really work,” Katarina Ivankovic-Kneževic, Director for Social Rights and Inclusion at the European Commission’s employment department, said at the event.

“You have the social ministries who are dealing with poverty, mostly in terms of benefits – like minimum income benefits or minimum guarantees – but the faces of poverty are so diverse and so different, and the only way to actually tackle it and address it is if you address all these different strands.”

She noted that the Commission has come forward with a package of measures, including the first-ever EU anti-poverty strategy, the strategy on breaking the cycle of child poverty, a strategy on fighting housing exclusion and the European affordable housing plan.

“I have to tell you, it was the most difficult task to make all the policies align, because still we are all working in different institutions, and at the national level in different ministries. But for the real fight against poverty, they inevitably need to work together.”

Coming together

Energy poverty is often treated as a subset of the cost-of-living debate, but experts increasingly describe it as something broader. It is what happens when low incomes, poor-quality housing and high energy costs combine to leave a household unable to afford sufficient heating, cooling, lighting or appliance use.

Because the causes are myriad, it can’t be fixed simply with income or energy bill support.

Around Europe, some associations are being formed to try to address this disconnect. For instance, in Italy, the Fondazione Banco dell’Energia, and private companies that are normally competitors have come together to tackle energy poverty with one common objective.

“In the past 20 years, energy poverty in Italy has risen from 7% to 9%, so the problem is becoming bigger,” noted the foundation’s vice president, Nicola Monti, at the event. “The idea to put together efforts, financial resources, and project management capabilities of different players gives the right economy of scale to be more effective.”

He noted that there are now five medium-to-large companies on the governance board, which together represent 40-50% of the market. “The spending capacity of the bank today is around €2 million per year.”

Supporting the most vulnerable

The EU is not starting from zero. The Social Climate Fund, operational from 2026, is meant to channel resources to vulnerable households, transport-poor citizens and small businesses hit hardest by the EU carbon market’s extention to transport and housing, partly by financing energy efficiency upgrades.

To draw on that funding, member states must submit National Social Climate Plans setting out how they will protect at-risk groups.

Alongside it, the EU’s building renovation rules now require countries to embed measurable targets for reducing energy poverty within their national renovation strategies. A newer piece of the puzzle is the EU’s emerging Affordable Housing Plan.

Borja Giménez Larraz, a Spanish MEP from the European People’s Party and the Rapporteur for the Special Committee on the Housing Crisis in the European Union, said that the lack of housing stock remains a serious issue contributing to energy poverty.

“During the last five years, the European Commission has detected that building permits have fallen by 20%,” he said.

“What reasons are behind this situation? First, we can talk about the complexity of the regulation, excessive bureaucracy, high taxes, problems of access to finance, lack of workforce, and the increase in prices of materials and energy.”

He added that EU energy efficiency measures can have a major impact on improving several of these factors.

Better data needed

Several themes emerged as prerequisites for progress. First, better identification of who is actually energy poor.

Second, long-term solutions must go beyond temporary subsidies toward structural fixes – such as deep renovation, efficient heating systems and genuinely affordable housing – since one-off payments do not resolve underlying vulnerability.

Third, fragmented responsibilities across energy, housing, social affairs and finance ministries, replicated at EU, national and local levels, slow down implementation even when funding exists.

Most of all, better data is needed to understand who is energy poor and where support is needed. Paola Valbonesi, chairperson of the Italian Observatory on Energy Poverty, gave a presentation at the event, laying out what is known.

Harmonised measures

“In the Italian experience, proper definitions and harmonised measures are essential tools for policymakers,” she said. “In the EU, we are currently facing challenges due to a lack of reliable data.”

She noted that their attempts to utilise existing databases across Europe have largely not succeeded because the data quality is quite low, despite years of waiting for their availability. “Better data is a prerequisite for effective energy poverty policies.”

Ultimately, participants agreed that Brussels can set targets, create funds and mandate national plans, but the transition will be judged by outcomes in specific neighbourhoods, buildings and households. Cities, regions and local energy agencies are where policy either translates into warmer homes and lower bills, or stalls in administrative complexity.

[BM]