Energy affordability across and within 26 European countries: Insights into the prevalence and depth of problems using microeconomic data

Abstract

The main aim of this study is to assess energy affordability across and within European countries, using microeconomic data from the European Household Budget Survey.Our results have shown great heterogeneity: the average energy burden ranges from 2.9% in Malta to 10.9% in Latvia, while the proportion of households with a burden above 10% is as low as 2% in Luxembourg and Malta, surpassing 43% in Hungary, Latvia and Slovakia. Affordability problems are concentrated among poorer households, as confirmed by negative concentration indexes in all countries analysed but are not restricted to the poorest - in 10 out of 25 countries, families in the second bottom income quintile also face problematic ratios. For families with affordability problems, the average burden might be extreme even in high-income countries like France, where it reaches 19%.Beyond the inequality analysis, the comparison of different metrics uncovered issues that would go unnoticed under single-indicator approaches. Baltic and Central-Eastern European countries experience higher prevalence and depth of energy burden problems accompanied by high rates of arrears. Mediterranean countries like Cyprus and Portugal do not exhibit great energy burdens but struggle with inadequate thermal comfort, raising concerns about underconsumption. Bulgaria and Greece stand out with worrying results across all indicators. The panorama is less heterogeneous across Europe regarding efficiency-related problems in dwellings.To be effective, measures should prioritise the most prevalent problems and consider their cross-cutting or group-restricted nature. In countries with more widespread and severe issues, solutions may require a co-financing by European Union. A common policy framework is needed to facilitate comprehensive and effective action, such as improving energy efficiency in housing stock and preventing the escalation of affordability problems due to the energy and climate crises, which disproportionately affect the most vulnerable households in Europe.