Identifying and supporting vulnerable households in light of rising fossil energy costs : interim report

The study explores the concept of energy poverty and vulnerability within the German context, emphasizing the impact of rising energy costs and low energy efficiency of buildings on energy poor or vulnerable households. Vulnerability, in this setting, refers to the risk households face due to external factors, such as increased energy prices and the lack of resources to improve energy efficiency in their homes. As climate goals drive energy prices up, particularly through mechanisms like carbon pricing, lower-income households, often reliant on fossil fuels and lacking funds for energy efficiency upgrades, are disproportionately affected. The report, therefore, advocates for climate policies that account for social impacts and offer adaptation support. Germany currently lacks a standardized definition and robust indicators for energy poverty, viewing it as part of general poverty rather than as a distinct structural issue. This perspective limits the effectiveness of targeted interventions. Although Germany has measures like the "Stromspar-Check" for low income households to address behavioural energy savings, these are insufficient to address deeper, structural inefficiencies. The EU’s Energy Efficiency Directive, however, requires a portion of energy savings to be directed specifically toward vulnerable groups. The Social Climate Plans, to be submitted in 2025, mandates EU member states to define energy poverty and vulnerability, develop indicators to identify these groups and design policies and measures that support these groups to transition to climate-friendly technologies. The study estimates around 3 million households to be vulnerable with respect to increasing fossil energy or CO2 prices. This corresponds to about 10% of all 30 million households using fossil fuels for heating. More than 80% of these vulnerable households live in multi-family buildings, almost all of them as tenants. It should be noted that in this study, in light of carbon pricing systems only households using fossil fuel-based heating are considered. These households make up about 75% of all households in Germany. A socially differentiated program for energy-efficient building renovation, similar to the French MaPrimeRénov’ program, could support these households. This program would offer targeted subsidies, helping households save energy and transition to renewable energy sources. By adapting a similar program, Germany could enhance its current policies, shifting from basic income support to a targeted, efficiency-focused approach that promotes sustainable energy use and mitigates social inequality. In conclusion, the study calls for clear definitions, comprehensive data, and indicators, as well as a targeted subsidy program to effectively address energy poverty and vulnerability. Only with these measures can Germany ensure a socially equitable energy transition.