Government support for addressing energy poverty in the context of low-carbon transition
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DOIhttp://dx.doi.org/10.21511/pmf.14(2).2025.07
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Article InfoVolume 14 2025, Issue #2, pp. 64-82
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The development and implementation of state policy to overcome energy poverty has become particularly important in Ukraine and requires adequate methods and tools to support consumers in transitioning to a low-carbon economy. The study aims to conduct a comparative analysis of energy poverty in the EU and Ukraine, evaluate the cost of government support for vulnerable households through subsidy mechanisms, and improve the methodology for calculating heating subsidies in Ukraine under low-carbon transition conditions. Based on statistical data, the study reveals the intensifying negative impact of the 2021–2022 energy crisis on households in both the European Union and Ukraine. The results of evaluating the cost and structure of energy subsidy portfolios indicate that most governments worldwide are shifting toward economic decarburization and phasing out coal consumption subsidies in response to stricter climate obligations. The findings reveal that while energy subsidies in Ukraine are socially oriented, they place a significant burden on the state budget and fail to address the root causes of energy poverty. The paper explores the mechanism of fuel subsidies and argues that the implementation of energy efficiency measures must accompany the gradual elimination of such support. It also presents a calculation of heating subsidies based on the energy efficiency class of residential buildings, consistent with the goal of introducing NZEB standards. The formulated proposals seek to strengthen support for energy-vulnerable households and enhance monitoring activities to obtain more comprehensive and objective data on the extent of energy poverty in Ukraine.
- Keywords
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JEL Classification (Paper profile tab)D62, I38, Q41, Q48
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References53
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Tables8
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Figures5
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- Figure 1. Sequence of estimating the cost of fossil fuel consumption for energy-exporting and energy-importing countries
- Figure 2. Fossil fuel annual prices in 1990–2024
- Figure 3. Cost of fossil fuel subsidies 2010–2023, billion USD (in real prices)
- Figure 4. Calculation of the cost of heating subsidies for households
- Figure 5. Level of settlements with electricity producers under the green tariff in 2021–2024, %
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- Table 1. Values of the key energy poverty indicators in the EU countries and Ukraine
- Table 2. Types of energy subsidies
- Table 3. Structure of fossil fuel consumption subsidies in 2010–2023, %
- Table 4. Fossil fuel consumption subsidies in 2022–2023
- Table 5. Fossil fuel subsidies in Ukraine in 2010–2023
- Table 6. Value of the coefficients for adjusting the heating fee depending on the building’s energy efficiency class
- Table 7. Example of calculating heating subsidies for households
- Table A1. Household electricity consumption as part of electricity available for final consumption, %
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