Households in energy poverty often live in the least efficient homes and are the least able to renovate them. How EU law now links building renovation and social protection.
Energy poverty and inefficient buildings tend to go together. Households with low incomes are more likely to live in poorly insulated homes with old heating systems, where it costs more to stay warm. These are also the households least able to pay for a renovation. Breaking that cycle has become an explicit goal of EU building policy.
How big is the problem?
The most widely used indicator comes from Eurostat’s survey of income and living conditions, which asks whether households can keep their home adequately warm. According to Eurostat, 9.2% of the EU population could not keep their home adequately warm in 2024, down from 10.6% in 2023, when energy prices were higher. That is more than 40 million people. The share varies widely between countries, from below 3% in Finland to around 19% in Bulgaria and Greece.
The indicator is self-reported and captures only one side of the problem. Other measures look at the share of income spent on energy, arrears on utility bills, or living in homes with damp and leaks. The EU’s Energy Poverty Advisory Hub supports local authorities in measuring and tackling energy poverty with this wider set of indicators.
Why renovation does not reach those who need it most
- Up-front costs. Even generous subsidies usually leave a share of the cost to the owner, and low-income owners often cannot cover it or borrow against it.
- Tenure. Many energy-poor households rent. Their landlords pay for renovation but do not benefit from lower bills, and tenants have little say over the building.
- Complexity. Applying for support, finding contractors and managing works is hard, particularly for elderly or vulnerable households.
- Risk of displacement. When a building is renovated, rents can rise, and the original tenants may be pushed out. This is sometimes called “renoviction”.
What EU law now requires
A legal definition. The recast Energy Efficiency Directive, Directive (EU) 2023/1791, introduced the first EU-wide definition of energy poverty: a household’s lack of access to essential energy services that provide basic levels of a decent standard of living and health. Member states must also achieve part of their energy savings obligation among vulnerable households and people affected by energy poverty.
Priority in renovation support. The recast Energy Performance of Buildings Directive requires financial incentives for renovation to target, as a priority, vulnerable households, people affected by energy poverty and people living in social housing. Its residential renovation trajectory requires most of the reduction in energy use to come from the 43% worst-performing homes, which are disproportionately occupied by low-income households.
Protection for tenants. The directive requires member states to address the eviction of vulnerable households caused by disproportionate rent increases after an energy renovation, and to design incentives for rented buildings so that they benefit both owners and tenants.
Funding. The Social Climate Fund runs from 2026 to 2032, with up to €65 billion from the EU budget and at least €86.7 billion including national co-financing. It is designed to offset the impact of carbon pricing on heating and transport fuels, and member states can use it for building renovation, clean heating and direct income support for vulnerable households.
What works in practice
National experience points to several approaches that reach energy-poor households more effectively:
- grants that cover close to the full cost for the lowest-income households, rather than a percentage that still leaves a large bill;
- area-based programmes that renovate whole streets or estates, reducing transaction costs and reaching households that would not apply on their own;
- renovation of social housing, where a single landlord can upgrade many homes at once;
- independent advice through one-stop shops, which the recast EPBD now requires.
Rental standards, such as France’s ban on new leases of G-rated homes from 2025 (see the France profile), can raise the quality of the worst housing. They work best when paired with support for owners and protection for tenants.
For the wider policy picture, see the Renovation Wave overview and the fossil boiler phase-out, which will affect many low-income households that heat with gas or oil.