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A Socially-Just EU Renovation Wave

05.05.2022

Home renovation and clean heating will include low-income households in the energy transition

The European Green Deal can bring down lowest-income household energy bills by at least one-third in the medium to long term with home renovation and a switch to clean heating – finds a study by the Institute for European Energy and Climate Policy, covering 10 European countries, including Bulgaria, Greece, Hungary, Romania, Czechia, Slovakia, Poland, Italy, Portugal and Spain.

The study shows that the European Green Deal could deliver a fairer society and alleviate energy poverty, ensuring that the most vulnerable have access to clean, affordable heating and live in energy-efficient homes. 

Policies to boost home renovation and the uptake of renewable heating of the EU Renovation Wave will help the EU cut 60% of emissions from the building sector by 2030 and fully decarbonise it by 2050, while also reducing dependency on Russian gas imports and shielding consumers from volatile fossil fuel prices.

A combination of building regulations to increase energy renovations and the uptake of clean heating in homes, combined with smart recycling of carbon pricing revenues, can achieve these outcomes.

Find further below the Summary Report and the report series by the Institute for European Energy and Climate Policy.

ecf socially just homes portrait

Main findings of the report

  • Minimum energy performance standards for buildings, alongside a phase-out of the sale of fossil fuel boilers and a carbon price for heating fuels, would reduce the lowest-income households’ energy costs by one-third in 2050 while boosting disposable income. All three policies together would result in the lowest energy costs in 2050 and benefit the climate, compared to implementing only one or two policies.
  • Introducing a carbon price on heating fuels alone could push more households into energy poverty. Low-income households already consume around 28% less energy than average households, suggesting they have little room to further reduce energy use unless home renovations allow them to do so.
  • Minimum energy performance standards to upgrade buildings to energy label E by 2033 and then D by 2040 could make low-income household energy bills 19% lower in 2050. If this is combined with a fossil boiler phase-out, bills could fall by 30%.
  • Without any of these policies, low-income households will spend at least 19% more on energy than today, and the EU will fail to reach its climate targets.
  • Substantial public funding will be needed for investments to decarbonise buildings owned or occupied by low-income households. A proportion of this could be met with national revenues from an emissions trading system for buildings and the proposed Social Climate Fund, however additional financing will be needed to cover the full €140 billion investment needs for the ten countries analysed.

This study has been supported by the European Climate Foundation. Responsibility for the information and views set out here lies with the author. The European Climate Foundation cannot be held responsible for any use which may be made of the information contained or expressed therein.