Citizens Energy Package

On March 10, 2026, the European Commission published a Communication on the Citizens Energy Package (COM/2026/115), which outlines concrete actions for more affordable energy for all European citizens and aims to reduce energy bills, protect and empower citizens to actively participate in the clean energy transition, tackle energy poverty, and help EU countries implement existing legislation so that citizens can fully benefit from the transition. As a key outcome of the Affordable Energy Action Plan, the initiatives presented complement ongoing efforts to ensure affordable energy with a focus on citizens.

Retail electricity prices in the EU as a whole remain higher than pre-energy crisis levels, mainly due to external factors affecting wholesale energy prices, such as global supply patterns, meteorological anomalies affecting the amount of electricity produced from wind and hydro power, and cold spells during the winter season, which increase demand. High energy prices hit vulnerable households hardest, with millions of Europeans in energy poverty, as well as businesses.

The Citizens’ Energy Package aims to address these pressing challenges. Focusing on the components of energy bills, data shows that taxes and levies on electricity account for an average of 25% of the cost to households. The Commission supports EU countries in reducing these taxes and levies on household electricity.

The package also aims to ensure energy markets that are easier for consumers to navigate – giving them easier access to transparent information and allowing them to switch to more affordable and sustainable energy offers. By stimulating the development of energy communities and encouraging the introduction of flexible retail electricity contracts, it will help European households reduce their energy costs and reduce their exposure to price volatility in wholesale energy markets for fossil fuels In combination with higher energy efficiency, the potential savings for citizens are significant.

A key feature of the package is a strong focus on protecting vulnerable and energy-poor households, introducing enhanced safeguards against electricity disconnections, alongside long-term structural reforms to tackle the root causes of energy unaffordability.

To implement the initiatives and ensure that the energy package delivers tangible benefits for citizens, the European Commission will work closely with EU countries, regional and local authorities, civil society, and industry.

Next steps

The package will be complemented by additional guidance to Member States on energy communities, flexibility in retail electricity contracts and consumer protection, as well as calls for proposals under the LIFE programme to tackle energy poverty.

Summary of the proposals

The document is structured around four pillars: reducing household energy bills, protecting and empowering consumers, tackling energy poverty, and effectively implementing existing European legislation.

The context is clear: retail electricity prices for households in the EU remain 36% above the average for the period 2014-2020, and natural gas prices are 68% higher. With inflation at 26% over the same period, the real increase is around 10%. The Commission emphasizes electrification as a path to lower and more stable prices, greater energy independence, and competitiveness.

Pillar I: Reducing household energy bills

The first pillar contains four actions. Action 1 calls on Member States to reduce taxes and charges on electricity to the minimum levels in the EU, using the flexibility provided by the Energy Taxation Directive and the VAT Directive. Taxes and duties account for an average of 25% of the price of electricity for households. The expected result is a reduction in bills of around 14%, or an average of €200 per year. The Commission also calls for the removal of non-energy-related charges from bills (e.g. public radio and television distribution fees in Greece, Italy, and Portugal).

Action 2 aims to reduce network costs for local consumers. Network tariffs account for between a quarter and a third of the price of electricity. The Commission encourages national regulators to introduce targeted incentives in network tariffs for flexible local consumption, which would reduce overall network costs, with a particular focus on energy communities and energy sharing.

Action 3 provides for the promotion of clean and energy-efficient technologies. In 2023, 62.5% of final energy consumption in the residential sector is for heating. The Commission encourages Member States and companies to go beyond a grant-only approach and develop innovative financial models such as social leasing, heat-as-a-service, and flexible tariffs for heat pumps.

Action 4 aims to make it easier to switch suppliers. Estimates show that consumers lose an average of €152 per year because they do not switch suppliers. The Commission will adopt technical rules to enable switching within 24 hours, as well as a recommendation for a standardized summary of key contract terms. Suppliers should provide their customers with advice on the best tariff at least once a year.

Pillar II: Consumer protection and empowerment

Action 5 is dedicated to energy communities and energy sharing. There are currently over 8,000 energy communities operating in Europe, but the untapped potential is huge. By 2030, over 16 million households and 630,000 SMEs could be producing their own energy from RES. Individual households could save €260-550 per year, and energy communities €440-930. The Commission will issue an action plan for energy communities and a regulation on data interoperability in 2027.

Action 6 promotes demand flexibility through retail contracts. Consumers with flexible contracts can reduce their bills by up to 40% when they shift their heating demand to periods when electricity prices are low. The potential annual savings at system level are estimated at €2.7 billion by 2030. Smart metering systems are a key tool for realizing this potential.

Action 7 aims to strengthen consumer confidence. The Commission will develop a new voluntary customer service code for energy suppliers, which will serve as a mark of quality and trust. According to Eurobarometer, 82% of respondents would have more confidence in a supplier that had signed up to an officially certified code of consumer rights. The Commission will also assess the need for a new legislative proposal after 2029 to address aggressive marketing practices and new challenges related to AI and digitalization.

Pillar III: Combating energy poverty and vulnerability

In 2024, around 42 million Europeans (9.2% of the EU population) were unable to adequately heat their homes. Protecting vulnerable consumers is a top priority for Europeans, according to the latest Eurobarometer survey.

Action 8 provides for a concerted effort to reduce energy poverty. The Commission will update its recommendation on energy poverty, help Member States develop national building renovation plans by the end of 2026, and launch a new call for projects under the LIFE program. The Social Climate Fund will provide up to €86.7 billion between 2026 and 2032 to support vulnerable groups.

Action 9 addresses protection against energy supply disruptions. In 2024, around 31 million Europeans were in arrears on their utility bills. The Commission will work to establish early warning and debt management systems to prevent disconnections, especially for vulnerable households.

Pillar IV: Effective implementation of existing legislation

The fourth pillar recognizes that the EU already has a strong regulatory framework, but its implementation remains uneven. The Commission will work with Member States to adopt guidelines and technical analyses in key areas: energy communities and self-consumption, protection of vulnerable consumers, contract terms, supplier risk management, market-based pricing, rewarding flexibility, and technical rules for switching suppliers.

Existing support tools – such as the Citizens Energy Advisory Hub, the Energy Poverty Advisory Hub, the Covenant of Mayors, etc. – will be consolidated, and the existing Citizens Energy Forum will be upgraded as a central point for sharing good practices and tracking progress. The Commission will also issue guidance to Member States on empowering local authorities in the energy transition, with a particular focus on informing citizens about their rights and opportunities in the EU energy market.

The Energy for Citizens package complements a number of other Commission initiatives – the Clean Industrial Deal, the Affordable Energy Action Plan, the Affordable Housing Plan, the Networks Package, and the upcoming strategies on electrification, heating and cooling, and the digitalization of the energy sector. Taken together, these measures outline an ambitious framework whose success will depend on effective interaction between the Commission, Member States, regulators, industry, and citizens themselves.

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