Taking the burn out of heating for low-income households

The energy price crisis – which has seen the price of fossil gas multiply many times in a matter of months and the prices of other fossil heating fuels follow suit – has closed the gap between the cost of heating with a heat pump and heating with fossil fuels. [...] 10 The European Commission’s REPowerEU Plan, Europe’s response to the need to rapidly reduce reliance on Russian gas and accelerate the energy transition, proposes to bring forward the end date for subsidies for fossil fuel boilers from 2027 to 2025 and proposes a phase-out of the installation and replacement of fossil fuel boilers from 2029. [...] The running cost of heating is reliant on both the price paid by households for the heating fuels and the efficiency of the heating system. [...] Based on the picture in the first half of 2021, low-income households would need significant support to cover the additional upfront cost of a heat pump and to reduce the cost of heating. [...] The current proposals for revision of the Energy Tax Directive35 would be a step in the right direction of reducing the tax burden on electricity and ensuring that the energy content and environmental impact of fuels is reflected in taxation.