Energy Ladder, Decarbonisation and Energy Poverty: The European Union Inside

Abstract

In the forthcoming decades, the energy sector will confront significant transitions related to climate change, supply stability, and energy poverty. The initial two aspects have undergone thorough scientific analysis, whilst the third has received comparatively less analysis despite its significant impact on the lives of millions. Using a systematic literature review, laws and regulations and document analysis, and based on the assumption of an energy ladder, this study provides an overview of energy poverty and its implications. The research focuses on energy poverty in developed countries and answers whether the European Union’s implemented and planned actions to reduce greenhouse gas emissions cause energy poverty. Based on the Polish case, the study shows that the EU’s scheduled actions aimed to stabilise climate change, although right in intention, require modification because they do not fully consider the significant economic and energy development diversity of the European Union Member States and may increase energy poverty affecting the European inhabitants. The findings show that due to the implementation of the EU Emission Trading System 2 in 2027, transport costs may increase by almost one-third, which will raise the prices of goods and services and affect energy poverty. This study develops the stream of research on energy poverty, modifies the concept of the energy ladder and shows threats resulting from the ETS2 implementation. The paper proposes the avenues of future research.

Full text

Academic Editor: Mika Goto
Received: 6 February 2025
Revised: 17 February 2025
Accepted: 24 February 2025
Published: 28 February 2025
Citation: Dobrowolski, Z.; Adamišin,
P.; Sługocki, W.; Kotylak, S. Energy
Ladder, Decarbonisation and Energy
Poverty: The European Union Inside.
Energies 2025,18, 1180. https://
doi.org/10.3390/en18051180
Copyright: © 2025 by the authors.
Licensee MDPI, Basel, Switzerland.
This article is an open access article
distributed under the terms and
conditions of the Creative Commons
Attribution (CC BY) license
(https://creativecommons.org/
licenses/by/4.0/).
Article
Energy Ladder, Decarbonisation and Energy Poverty: The
European Union Inside
Zbysław Dobrowolski 1, * , Peter Adamišin 2, Waldemar Sługocki 1and Sławomir Kotylak 1
1Institute of Economics and Finance, University of Zielona Góra, 65-417 Zielona Góra, Poland;
w.slugocki@wez.uz.zgora.pl (W.S.); s.kotylak@wez.uz.zgora.pl (S.K.)
2
Faculty of Management and Business, University of Prešov, 080 01 Prešov, Slovakia; peter.adamisin@unipo.sk
*Correspondence: z.dobrowolski@wez.uz.zgora.pl
Abstract: In the forthcoming decades, the energy sector will confront significant transitions
related to climate change, supply stability, and energy poverty. The initial two aspects have
undergone thorough scientific analysis, whilst the third has received comparatively less
analysis despite its significant impact on the lives of millions. Using a systematic literature
review, laws and regulations and document analysis, and based on the assumption of an
energy ladder, this study provides an overview of energy poverty and its implications.
The research focuses on energy poverty in developed countries and answers whether the
European Union’s implemented and planned actions to reduce greenhouse gas emissions
cause energy poverty. Based on the Polish case, the study shows that the EU’s scheduled
actions aimed to stabilise climate change, although right in intention, require modification
because they do not fully consider the significant economic and energy development
diversity of the European Union Member States and may increase energy poverty affecting
the European inhabitants. The findings show that due to the implementation of the EU
Emission Trading System 2 in 2027, transport costs may increase by almost one-third, which
will raise the prices of goods and services and affect energy poverty. This study develops
the stream of research on energy poverty, modifies the concept of the energy ladder and
shows threats resulting from the ETS2 implementation. The paper proposes the avenues of
future research.
Keywords: energy ladder; energy transition; decarbonisation; fuel choices; energy poverty;
ETS; ETS2
1. Introduction
The energy sector will confront energy security, climate change, and poverty in the
forthcoming decades [
1
]. The initial two problems have undergone thorough analysis,
e.g., [
2
–
5
], whereas the third has received comparatively less focus in research, e.g.,
[6–10]
.
The extant literature presents several perspectives on energy poverty, e.g., [
6
–
11
]; nonethe-
less, this study is conducted to facilitate the identification of the most critical parts of the
issue in developed countries. We examine the circumstances of energy poverty and its
future outlook related to the European Union’s policy to radically reduce the emission of
greenhouse gases by the mid-21st century. The sustainable approach implemented by the
European Union (EU) concentrates mainly on environmental issues. However, does this
approach sufficiently consider social issues and, therefore, the problem of energy poverty?
This article does not aim to explore poverty’s fundamental causes and consequences,
including energy poverty, or analyse the diverse technological choices for energy access.
Instead, it concentrates on how initiatives to implement a greenhouse gas reduction plan
Energies 2025,18, 1180 https://doi.org/10.3390/en18051180

Energies 2025,18, 1180 2 of 27
in the European Union (EU) may increase energy poverty among citizens. We focus on
developed countries. Therefore, the specific characteristics of energy poverty in developing
nations are beyond this study’s purview.
This paper enhances the current literature in the following respect. We examine
energy poverty through the lens of the modified energy ladder model, which includes the
imperatives of environmental protection. We focus on the EU Emissions Trading System
(ETS) and its modification (ETS2), which encompasses carbon dioxide emissions from fuel
combustion in buildings, road transport, and other sectors, primarily small industries not
included in the existing ETS. We examine the implications of ETS2 implementation for
energy consumers and formulate the model of an inverted energy ladder in the country
with the energy sector mainly based on fossil fuels.
The document is structured as follows: Section 2delineates the idea of energy poverty
and enumerates the several methodologies employed for measuring it. Section 3presents
the research methodology. Section 4examines the present circumstances and trends
concerning energy poverty. Section 5presents conclusions and identified avenues for
future studies.
2. Literature Review
2.1. Energy Ladder
Cross-country analyses indicate a positive association between economic growth and
the usage of modern fuels, implying that as a nation advances in industrialisation, its
dependence on petroleum and electricity, including nuclear power, escalates while the
significance of biomass diminishes. Empirical research has also substantiated the correla-
tion between energy consumers’ income and fuel selection at a micro level [
12
–
14
]. The
energy ladder model posits that households emulate the behaviour of a utility-maximising
neoclassical consumer, suggesting that they would transition to more advanced energy
carriers as their income rises [
15
]. Fuel switching is fundamental in energy transmission,
referring to replacing one fuel with another. Transitioning to a new fuel concurrently
signifies a departure from the previously utilised fuel [
16
]. The fuels on the energy ladder
are arranged according to household preferences, including physical attributes such as
cleanliness, usability, cooking speed, and efficiency [17].
The ascent of the energy ladder is characterised by a linear progression comprising
three separate phases (Figure 1). As consumers ascend the socio-economic ladder, they
discard inefficient and more polluting technologies, transitioning from universal depen-
dence on biomass fuels to transitional fuels like kerosene and coal in the subsequent phase.
In the final phase, consumers transition to fuels such as LPG and electricity [
18
]. Higher-
ranked fuels typically exhibit more significant efficiency, necessitating reduced labour
input and generating diminished pollution per fuel unit [
18
]. The energy ladder posits
that more costly technologies are regarded as indicators of elevated status locally and
internationally [
19
–
21
]. It depicts wood as the fuel impoverished societies utilise and shows
a significant link between consumers’ income and fuel selection. Nevertheless, evidence
indicates that the correlations between fuel selection and income level are infrequently as
robust as the energy ladder model assumes [21].
The energy ladder remains somewhat of an assumption. The linear pattern shows
energy transition at higher levels of energy consumer income. However, it is essential to
consider the subsistence strategy by which households cope with irregular income flows,
protect themselves from volatile markets, and stick to their cultural practices rather than in-
come alone as the primary driver of energy fuel switching. Existing empirical studies have
identified several factors that influence fuel switching. These include internal household
factors such as cultural background and household characteristics and external household

Energies 2025,18, 1180 3 of 27
factors such as fuel access and price levels [
21
]. Studies show that fuel-switching behaviour
depends on more than income, as the energy ladder suggests [
21
]. To date, relatively
little attention has been paid to the policy decision-making process and energy poverty.
Meanwhile, existing international and government policies can play an important role
in household fuel choice decisions [
21
]. In addition, the energy ladder model illustrates
the situation in less affluent and developing countries and requires a modified construc-
tion for developed countries classified as wealthy in the case of most EU Member States.
Considering the above, it is necessary to examine how the European Union’s greenhouse
gas emission reduction policy, obliging Member States to phase out fossil fuels in energy
production, affects the situation of energy consumers and energy poverty. The remainder
of this article presents a modified authored energy ladder (Figure 2) that considers the
impact of fuel type on greenhouse gas emissions.
Energies 2025, 18, x FOR PEER REVIEW 3 of 28
Figure 1. The energy ladder. Source: [20,21].
The energy ladder remains somewhat of an assumption. The linear paern shows
energy transition at higher levels of energy consumer income. However, it is essential to
consider the subsistence strategy by which households cope with irregular income flows,
protect themselves from volatile markets, and stick to their cultural practices rather than
income alone as the primary driver of energy fuel switching. Existing empirical studies
have identified several factors that influence fuel switching. These include internal house-
hold factors such as cultural background and household characteristics and external
household factors such as fuel access and price levels [21]. Studies show that fuel-switch-
ing behaviour depends on more than income, as the energy ladder suggests [21]. To date,
relatively lile aention has been paid to the policy decision-making process and energy
poverty. Meanwhile, existing international and government policies can play an im-
portant role in household fuel choice decisions [21]. In addition, the energy ladder model
illustrates the situation in less affluent and developing countries and requires a modified
construction for developed countries classified as wealthy in the case of most EU Member
States. Considering the above, it is necessary to examine how the European Union’s green-
house gas emission reduction policy, obliging Member States to phase out fossil fuels in
energy production, affects the situation of energy consumers and energy poverty. The re-
mainder of this article presents a modified authored energy ladder (Figure 2) that consid-
ers the impact of fuel type on greenhouse gas emissions.
Figure 2. Energy and gas emissions ladder.
Basic fuels
Firewood, Charcoal
& Coal;
Agricultural &
animal waste;
Kerosene, Oil &
Biofuels
High greenhouse gas
emissions
Transition fuels
LPG
Neutral fuels
Nuclear energy
Renewable energy
Low greenhouse gas
emissions
Figure 1. The energy ladder. Source: [20,21].
Energies 2025, 18, x FOR PEER REVIEW 3 of 28
Figure 1. The energy ladder. Source: [20,21].
The energy ladder remains somewhat of an assumption. The linear paern shows
energy transition at higher levels of energy consumer income. However, it is essential to
consider the subsistence strategy by which households cope with irregular income flows,
protect themselves from volatile markets, and stick to their cultural practices rather than
income alone as the primary driver of energy fuel switching. Existing empirical studies
have identified several factors that influence fuel switching. These include internal house-
hold factors such as cultural background and household characteristics and external
household factors such as fuel access and price levels [21]. Studies show that fuel-switch-
ing behaviour depends on more than income, as the energy ladder suggests [21]. To date,
relatively lile aention has been paid to the policy decision-making process and energy
poverty. Meanwhile, existing international and government policies can play an im-
portant role in household fuel choice decisions [21]. In addition, the energy ladder model
illustrates the situation in less affluent and developing countries and requires a modified
construction for developed countries classified as wealthy in the case of most EU Member
States. Considering the above, it is necessary to examine how the European Union’s green-
house gas emission reduction policy, obliging Member States to phase out fossil fuels in
energy production, affects the situation of energy consumers and energy poverty. The re-
mainder of this article presents a modified authored energy ladder (Figure 2) that consid-
ers the impact of fuel type on greenhouse gas emissions.
Figure 2. Energy and gas emissions ladder.
Basic fuels
Firewood, Charcoal
& Coal;
Agricultural &
animal waste;
Kerosene, Oil &
Biofuels
High greenhouse gas
emissions
Transition fuels
LPG
Neutral fuels
Nuclear energy
Renewable energy
Low greenhouse gas
emissions
Figure 2. Energy and gas emissions ladder.
2.2. Energy Poverty
Sustainable development involves solutions that limit the degradation of the natural
environment, understood as the depletion of the world’s natural resources and simul-
taneously environmental pollution [
11
], caused by human activities rather than natural
phenomena [
22
]. A key component for environmentally friendly economic development is
decreasing the use of fossil fuels and reducing carbon outputs by promoting renewable
energy [
23
]. The problem is that countries are at different levels of economic development,
and energy transformation is expensive and may lead to energy poverty.

Energies 2025,18, 1180 4 of 27
The concept of energy poverty was initially introduced in the United Kingdom
throughout the 1980s [
24
]. Since then, numerous definitions and interpretations of en-
ergy poverty exist, all denoting energy use as inadequate to fulfil essential demands [
25
].
Boardman [
25
] identified three primary elements contributing to energy poverty: inad-
equate income, inefficient housing, and elevated energy costs. Hills [
26
] introduced the
low-income/high-cost (LIHC) indicator to evaluate energy poverty, defining it as a house-
hold where (i) income falls below the poverty threshold and (ii) energy expenses above the
national average (median) fuel cost, hence categorising it as energy poor.
These indicators are criticised for lacking empirical explanation [
27
] and concentrating
on a narrow facet of the energy poverty problem [
28
–
30
]. Energy poverty perceived
through the prism of individual energy consumers’ income should be linked with social
consequences (e.g., living in unheated apartments or houses due to insufficient financial
resources may result in health problems) [
10
,
31
–
35
]. Unlike earlier definitions, which
concentrated on energy spending related to “fuels” or “energy”, the latest definitions
prioritise delivering energy “services”, e.g., [36,37]. Bouzarovski [38] characterises energy
poverty as the inability of a household to obtain socially and materially required levels
of energy services within the home. Reddy [
39
] understands energy poverty as the lack
of sufficient options for accessing adequate, affordable, reliable, high-quality, safe, and
environmentally friendly energy services to facilitate economic and human development.
This definition was chosen for further consideration because it includes several critical
components and nuances [
6
]. Primarily, it underlines the lack of options. Sen [
40
] posits
that development is mainly about avoiding exclusion from the possibilities that facilitate
attaining well-being in its most comprehensive form rather than merely obtaining a specific
income level (or some piece of energy per capita). Energy exclusion may, therefore, result
from the fact that electricity supplies are expensive due to specific conditions. For example,
due to legal restrictions, onshore wind energy development is hindered, and consumers are
forced to purchase energy from combined heat and power plants that generate electricity
and hot water from burning fossil fuels, burdened in the European Union with high
environmental fees. Secondly, the definition emphasises fulfilling the demand for “energy
services”. While it may appear evident, it is essential to remember that the objective is
not energy consumption but delivering energy services from diverse sources. The concept
also delineates specific advantageous attributes of the technology employed to access
energy services. These technologies must be “adequate”, meaning they should align
with each region’s geographical characteristics, knowledge base, financial possibilities,
and culture. Development initiatives are likely to fail if they attempt to reproduce the
same technology across different areas without considering the unique characteristics
of each region [
6
]. Although Birol [
6
], analysing the definition of Reddy [
39
], explains
what the word “adequate” means through the prism of technology, this issue should be
supplemented. The word “adequate” should be understood primarily in such a way that
technology must consider the environment’s requirements (geographical characteristics).
For example, it is challenging to build onshore wind farms on unstable ground or in places
where, as previous research shows, there is no strong wind. Using this example further,
energy transformation cannot occur at the expense of worsening the financial situation of
energy users produced from wind farms. It cannot take place without taking into account
cultural conditions. For example, fear of installing wind farms fuelled by information
that they generate waves that increase cancer incidence must be dispelled based on the
presentation of reliable scientific research. Technologies must also be “affordable”, meaning
they should be as inexpensive as possible relative to available alternatives. The “energy
ladder” concept states that higher-quality, more versatile fuels supplant lower-quality fuels

Energies 2025,18, 1180 5 of 27
as affluence rises. A significant caveat in energy ladder theory is that low-quality fuels are
not invariably the least expensive; frequently, they are only the sole alternative available [
6
].
Ultimately, technologies must be “reliable”, meaning they should not experience
frequent service interruptions (since power outages lasting several hours daily are prevalent
in many nations), and “safe”, indicating they should not pose health risks. The criteria
also state that technology must be “environmentally benign”, meaning it should not
jeopardise future generations. Technological solutions aimed at alleviating energy poverty
must include their effects on climate change and the environment to ensure sustainable
development in the future. Furthermore, as stated in the definition, the objective of energy
utilisation is “to facilitate economic and human development”; thus, the mere existence of
energy resources and economic activities, specifically extraction, does not ensure overall
development or specifically energy development [6].
From a legal point of view, there are two definitions to consider. The United Nations
Development Programme (UNDP) states that clean, reliable, and affordable energy services
are indispensable for global prosperity and achieving the Millennium Development Goals
(MDGs). Yet 1.4 billion people have no access to electricity, and 3 billion people continue to
rely on solid fuels for cooking and heating, which influences their health. Therefore, energy
poverty is characterised as the absence of access to clean, commercial energy, efficient
appliances, and a significant reliance on conventional energy sources, including fossil
fuels for cooking [
41
]. The Directive on Common Rules for the Internal Electricity Market
(2009/72/EC) introduced the concept of energy poverty in EU law [
42
]. According to the
European Union, energy poverty arises when a family is compelled to diminish its energy
usage to a level that adversely affects its occupants’ health and well-being. It is primarily
motivated by three fundamental factors: (1) a high proportion of household expenditure
is spent on energy; (2) low income of energy consumers; and (3) low energy performance
of buildings and appliances [
42
]. The European approach posits that each country may
formulate distinct definitions to align with national characteristics and standards while
concurrently addressing shared issues [36].
Both single and composite indicators assess energy poverty. A singular indicator
measures whether the proportion of household energy expenditure to income is beyond a
predetermined threshold [
43
]. These indicators define energy-poverty households as those
spending above 10% or the median share of their income on energy services. This indicator
depends on household income and energy prices [
37
]. However, some authors, e.g., [
44
]
contend that the 10% metric fails to consider households compelled to diminish it due
to financial constraints. Moreover, the computation process of the indicator neglects the
effects of increasing energy tariffs and advancements in residential energy efficiency [
45
].
Furthermore, the measuring above approaches lack a fundamental theoretical basis and
require empirical data to validate their efficacy [37,43].
Composite indicators have been suggested for measuring energy poverty in recent
years. The multidimensional energy poverty index (MEPI), initially established by Nuss-
baumer et al. [
46
], highlights the multifaceted nature of energy poverty [
47
]. Price et al. [
48
]
performed a survey to enquire about households’ capacity to maintain a suitable indoor
temperature, prompt payment of energy bills, and other enquiries related to living condi-
tions for assessment purposes. These metrics seek to encapsulate subjective viewpoints
and comprehensively understand energy poverty. However, they face criticism for their
exclusionary limitations, as some households may not recognise their own experience of
energy poverty despite their circumstances [
37
]. Hasheminasab et al. [
49
] employed health
and social, locational, economic, and political criteria to assess energy poverty in European
Union countries. Hosan et al. [
50
] used the MEPI, incorporating factors such as indoor

Energies 2025,18, 1180 6 of 27
smoking, cooking, entertainment/education, household appliances, and communication to
evaluate the energy poverty condition.
Energy poverty can also be assessed using three distinct yet complementary method-
ologies [
51
]. These methodologies emphasise energy access based on technological, phys-
ical, or economic criteria. Technological threshold: this perspective posits that energy
poverty primarily constitutes an issue of access to “modern” energy services. This word
refers to electricity and energy sources, excluding biomass for cooking and residential
heating. Conventional energy sources restrict or obstruct access to numerous fundamental
energy services. From this perspective, energy poverty is quantified by enumerating the
people lacking access to electricity. Physical threshold: This method assesses the minimum
energy expenditure required for fundamental needs. Individuals falling below that thresh-
old are deemed to be experiencing energy poverty. The issue resides in defining a “basic
necessity” and determining whether energy utilised for manufacturing is encompassed
within that definition. Economic threshold: This method aims to determine the optimal
percentage of income that is justifiable for allocation towards energy expenditures [
51
]. This
methodology resembles what the World Bank employs to assess absolute poverty levels. It
is also the predominant system for assessing energy poverty in industrialised countries,
where the issue mainly pertains to purchasing power, energy costs, and the challenge of
sustaining sufficient indoor temperatures, particularly during winter (“fuel poverty”) [
51
].
Based on the literature review, one may agree with previous arguments [
52
] that as-
sessing energy poverty is complex due to disparities across various locations and temporal
contexts, its multifaceted nature, and its cultural sensitivity. The relativity of the criteria
used complicates comparisons between countries with varying economic conditions.
Numerous studies have examined emissions trading systems—the EU Emissions Trad-
ing System (EU ETS) launched in 2005, which requires polluters to pay for their greenhouse
gas (GHG) emissions; launched in 2005 (this system covers emissions from the electricity
and heat generation, industrial manufacturing, and aviation sectors—which account for
roughly 40 per cent of total GHG emissions in the EU; it operates in all EU countries plus
Iceland, Liechtenstein, and Norway, and is linked to the Swiss ETS) [
53
]. These studies
state that although decarbonisation tools such as ETS may impact the socio-economic
landscape in the countries where they are introduced, it is still too early to formulate
clear-cut conclusions. For example, Chevallier et al. [
54
] elucidate the relationship between
the carbon futures market and macroeconomic indicators, including stock, securities, and
commodities markets, by multivariate linear regression analysis. They asserted that the
carbon futures market had a tenuous correlation with the macro-economy. Likewise, Anger
and Oberndorfer [
55
] conducted an empirical investigation on the effects of the EU ETS
on corporate performance and job conditions in Germany. They found that the surplus
allocation of CO
2
emission allowances resulted in the EU ETS having a negligible impact on
company performance and employment. Zhang and Wei [
56
] assert that owing to the brief
history of the EU ETS, their understanding of and investigation of the carbon trading mar-
ket have remained rudimentary, with existing research findings encompassing numerous
uncertainties. Literature shows that some of the revenue generated from decarbonisation
tools is assumed to be reinvested in other activities to reduce emissions. However, there are
gaps in understanding how pricing instruments interact with other climate policy tools [
56
].
In the case of ETS 2, which will enter into force in 2027 in the EU Member States,
the scenario paths indicate an increase in the financial burden on society, particularly
for its less affluent part. Cammeo et al. [
57
] examine the influence of European climate
policy, particularly the Emission Trading System (ETS), on three countries: France, Italy,
and Hungary. Berghmans [
58
] indicates that implementing the EU ETS 2 is anticipated
to exert distributional effects on French households. The research reveals minimal effect

Energies 2025,18, 1180 7 of 27
on household disposable income, with an estimated adverse impact of less than EUR
0.35 annually without redistribution measures. The distributional consequences are more
significant across various income deciles and locations. The most substantial adverse effects
are evident among middle-income households (deciles 4 to 8), which may encounter a 1 per
cent decrease in disposable income, corresponding to a financial loss ranging from EUR 323
to EUR 510 annually. The redistribution of auction earnings considerably alleviates these
impacts. For the lowest-income households, comprising 30 per cent, the redistribution
can yield a favourable effect. However, the EU program designed to mitigate potential
energy poverty is inadequate to completely counterbalance income reductions, requiring
supplementary allocations from national auction revenues. Moreover, the geography study
indicates that households in densely populated regions experience more significant adverse
impacts. Consequently, tailored redistribution policies are crucial for mitigating the adverse
effects on at-risk households [57,58].
Costantini et al. [
59
] examine the execution of EU ETS 2 within the framework of
the FF55 package in Italy. The distributional impact in Italy was evaluated by utilising a
dynamic Computable General Equilibrium (CGE) model and an estimation of consumer
demand systems. The study assessed three scenarios: eliminating fossil fuel subsidies,
implementing a carbon price, and using a hybrid approach, which included both measures.
Findings revealed a national yearly welfare loss beyond EUR 10 billion across all scenarios,
equating to an average loss of EUR 166 per capita [57,59].
The continuation of carbon pricing inside the EU ETS 2 has more pronounced distri-
butional effects in Hungary [
57
,
60
]. A carbon tax in Hungary is anticipated to diminish
natural gas imports by as much as 35 per cent by 2032, thus reducing reliance on fossil fuel
imports and bolstering energy and climate security. Conversely, decreases in household
welfare demonstrate regressive characteristics, disproportionately impacting lower-income
households. By 2032, the lowest 10 per cent of families will have welfare losses 1.6 times
greater than the highest 10 per cent. The European Commission evaluated the effect of
EU ETS2 on heating oil and natural gas consumer prices across each European country,
assuming an average carbon price of 48 EUR/tonne CO
2
, which is lower than the current
value. Implementing carbon pricing would substantially impact consumer costs for heating
oil and natural gas in France, Italy, and Hungary. In France, heating oil prices may increase
by 17 per cent and natural gas by 12 per cent. Italy may experience an 11 per cent rise in
heating oil prices and a 12 per cent increase in natural gas prices. In Hungary, heating oil
prices may increase by 12 per cent, while natural gas could rise by 31 per cent. [57,60].
Cammeo et al. [
57
] assert that scenario paths centred on energy and sustainability
transition processes underscore the imperative for significant escalations in carbon (shadow)
pricing (exceeding EUR 500 per tonne of CO
2
) to attain emission reductions. However, this
analysis focuses too much on environmental protection goals without pointing out the long-
term consequences for EU countries resulting from the introduction of very high emission
fees. Switching the economy to zero emissions requires not only significant financial outlays
in business but also huge funds for protective measures for less affluent parts of societies,
thermal insulation of buildings, and this in a situation where the rest of the world does not
intend to introduce any fees for greenhouse gas emissions, and any EU emission taxes will
be treated as a restriction on trade and will be met with a counter-reaction and an increase
in customs duties, as announced by the new administration in the USA. Furthermore, the
Cammeo study [
57
] pertains to warmer countries not part of northern or north-central
Europe, where Poland is affiliated.
In studies concerning Poland, attention is drawn to the specificity of this country. The
residential sector in Poland is heavily dependent on coal. Notwithstanding advancements
in the residential energy transition, one-third of households continue to utilise solid fuels,

Energies 2025,18, 1180 8 of 27
particularly coal. Consequently, decarbonisation will present a significant challenge for
Poles [
61
]. Poles continue to exhibit enthusiasm regarding European integration com-
pared to other nations, while concurrently, they hesitate to implement new environmental
taxes [
61
]. New carbon levies lacking social safety tools modifications can exacerbate soci-
etal polarisation. Radical politicians use societal apprehensions around escalating energy
prices, leveraging opposition to climate policies to garner political support [
60
]. Decarboni-
sation may influence political sympathies and compel politicians advocating for workers in
energy-intensive sectors to oppose climate legislation [
62
]. Therefore, climate policies must
be implemented transparently, and proposed solutions must be comprehensible, efficacious,
and progressive. They should also safeguard social groups confronting the most difficult
circumstances against extreme energy price increases [63].
Some authors state that the efficacy of diverse devices to alleviate energy poverty,
including social benefits [
64
], investment assistance schemes [
65
], and temporary subsidies
like the coal allowance, is constrained [
60
]. Policymakers prioritised ease of implementation
over efficiency, such as granting everyone eligibility for the coal benefit irrespective of
income levels [
60
]. However, it is too early to draw such clear conclusions. Formulating
reliable opinions regarding the effectiveness of energy poverty prevention policies requires
long-term analysis and examination of various social policies that result in the redistribution
of income to the poorest and the rest of society, and not just focusing on a narrow group of
social policy tools, including carbon subsidies.
Literature shows that a carbon tax—ETS2 implemented by 2032—would adversely
affect employment. The effect would result in a reduction of around 1 per cent relative to
the no-tax scenario. The most significant substantial decline in employment is anticipated
within the industrial sector. The long-term impact of the carbon tax on employment
is expected to intensify [
60
,
65
]. Imposing taxes on emissions will pose a considerable
macroeconomic problem within regional policy and political economics. Decarbonisation
may diminish the significance of the Silesia Region as a hub for coal and energy sectors [
66
].
A significant portion of the declared investments in energy, including offshore wind and a
nuclear power plant, is intended for the country’s northern region [60].
The potential for identifying renewable energy sources, such as wind and solar electric-
ity, in conventional industrial districts is less robust than in other areas of the country [
60
].
In Poland, the carbon tax—ETS2 will be regressive, indicating that lower-income house-
holds will incur a disproportionately more significant burden of the expenditures associated
with the new measures than higher-income households. Simulation suggests that, by 2032,
families in Poland will, on average, experience a 2 per cent decrease in income relative
to a scenario devoid of the carbon tax. Households in the highest income brackets (the
final three deciles of the income distribution) will incur more minor income losses than
the average families in Poland. Implementing a carbon price in Poland will have higher
regressive impacts than other EU nations [60,67].
In light of the literature review, there is a need for further exploration of the research
area—the impact of the EU decarbonisation policy using the ETS2 tool on energy poverty
in Poland, an example of an EU Member State and developed country.
3. Materials and Methods
The research gap determined through a literature review affects this study’s research
framework and indicates the interaction between energy poverty and the EU plan to reduce
greenhouse gas emissions (energy and gas emissions ladder). This work used the Web
of Science (WoS) database for bibliometric analysis owing to its extensive and consistent
document records [
14
]. The data retrieval occurred in December 2024 and January 2025,
aiming to capture the maximum quantity of research related to energy poverty. The inquiry

Energies 2025,18, 1180 9 of 27
was confined to scholarly articles published in English-language journals. Documents were
deemed eligible if they had the term “energy poverty” in the title, keywords, or abstract
fields. The filtered search results were the analytical input to examine the contents and
conclusions about energy poverty through literature synthesis.
A systematic literature review showed that from current studies, little is known about
whether pro-ecological actions initiated by the EU to reduce greenhouse gas emissions
through ETC2 may affect energy poverty in developed countries. The following research
problem was formulated: (1) do the EU’s planned actions to reduce greenhouse gas emis-
sions affect the level of energy poverty in EU Member States? The authors adopted the
following central hypothesis: “ETS2 implementation in a country with an energy sector
mainly based on fossil fuels may increase energy poverty”.
It is difficult to predict the situation that will occur in 2027 and the years after the
introduction of ETS2 in Poland because it depends on the geopolitical situation, which is
unpredictable (as shown by the war in Europe between Russia and Ukraine). Our analysis
assumes that the geopolitical situation in Europe will not change. Therefore, Poland will
have to rapidly increase financial resources for the purchase of weapons and increase the
army’s defence capabilities. We calculate how much transport costs in Poland will increase
with the introduction of ETS2. Transport costs cause an increase in the prices of goods
and services. We also determine what expenses Poland must incur concerning the energy
transformation and the implementation of ETS2 to annual budget expenditures. Against
this background, we determine whether such a situation, which is related to the cumulative
increase in prices and, at the same time, budget expenditures, may affect the increase in the
level of energy poverty.
To eliminate the research gap and solve research problem, and verify hypothesis, EU
documents related to the planned reduction of greenhouse gases and actions to reduce en-
ergy poverty were analysed, e.g.,: (1) the EU Energy Poverty Observatory (EPOV) initiative
and the European Pillar of Social Rights; (2) the Clean Energy for All Europeans package;
(3) the
EU Recommendation on energy poverty (EU/2020/1563); (4) the “Fit for 55” pack-
age; (5) the EU document entitled, “Tackling rising energy prices: a toolbox for action and
support” (EU/2021/660); (6) Decision EU/2022/589 establishing the Commission Energy
Poverty and Vulnerable Consumers Coordination Group; (7) Regulation EU/2023/955;
(8) Energy Efficiency Directive (EU/2023/1791); (9) Recommendation on energy poverty
(C/2023/4080), together with a guidance document (SWD(2023) 647);
(10) Energy
Perfor-
mance of Buildings Directive (EU/2024/1275); (11) Directive (EU) 2024/1711 and Regu-
lation (EU) 2024/1747); (12) ETS Directive; (13) Directive 2023/959 amending Directive
2003/87/EC establishing a system for greenhouse gas emission allowance trading within
the Union and Decision (EU) 2015/1814 concerning the establishment and operation of a
market stability reserve for the Union greenhouse gas emission trading system.
Poland was selected for the study for the following reasons: (1) it is a developed
country and an EU Member State; (2) it is the 22nd largest economy in the world;
(3) energy
production is mainly based on coal combustion; (4) the country is among the largest emitters
of greenhouse gases within the EU [
68
,
69
]; (5) in 2023, Denmark and Ireland had the
highest share of wind in their electricity mix, with 56 per cent and 36 per cent, respectively.
Wind met at least 20 per cent of electricity demand in another eight countries: Germany
(
31 per cent
), the Netherlands (27 per cent), Spain (27 per cent), Sweden (
26 per cent
),
Portugal (26 per cent), Lithuania (21 per cent) and Greece (20 per cent). Poland and the
Czech Republic had 13 per cent and 1 per cent respectively [
70
]. However, by February
2025, six nuclear plants had been operating in the Czech Republic, giving 3.934 MWe.
Poland has no nuclear plants [
71
]. In 2022, the share of solid fossil fuels in gross available
energy was highest in Poland (40.2 per cent) among other EU countries [
72
]. In 2023, the

Energies 2025,18, 1180 10 of 27
share of electricity from fossil fuels (coal, oil, and gas) was in Poland, Germany, and the
Czech Republic with 87.85 per cent, 75.08 per cent and 74.11 per cent, respectively [
73
,
74
].
Although it would seem that the situation in Poland does not differ significantly from
neighbouring countries, the reality is different. The introduction of the 10H Act in Poland
in 2016 hindered wind energy development because it imposed restrictive, impossible
requirements on investors for the location of new wind farms near human settlements
and nature conservation areas. Only the currently planned amendment to this Act will
unblock investments in renewable energy [
75
]. By the time this article was prepared, the
amendment to this Act had not entered into force.
4. Results and Discussion
4.1. The EU’s Initiatives to Reduce Greenhouse Gas Emissions
The Energy Union Strategy (COM/2015/080), released on 25 February 2015, seeks to
establish a fully integrated internal energy market, diminish reliance on energy imports,
and decarbonise the European Union’s economy [
75
]. The Regulation on the Governance
of the Energy Union and Climate Action (EU) 2018/1999 became effective on 24 December
2018 as a component of the Clean Energy for All Europeans initiative [
76
]. In 2019, the
EU reformed its energy policy framework to facilitate the transition from fossil fuels to
cleaner energy, specifically to fulfil the EU’s goals under the Paris Agreement for lowering
greenhouse gas emissions. The accord on the new energy framework, termed the Clean
Energy for All Europeans package, intends to execute the energy union strategy released in
2015. This package consists of eight laws: (1) Energy Performance of Buildings Directive
2018/844; (2) Renewable Energy Directive (EU) 2018/2001; (3) Energy Efficiency Directive
(EU) 2018/2002; (4) Governance of the Energy Union and Climate Action (EU) Regulation
2018/1999; (5) Risk-preparedness in the electricity sector—Regulation (EU) 2019/941;
(6) European
Union Agency for the Cooperation of Energy Regulators—Regulation (EU)
2019/942; (7) Internal market for electricity—Regulation (EU) 2019/943; (8) Common
rules for the internal electricity market—Directive (EU) 2019/944). The EU countries have
1–2 years
to convert the new directives into national law. The new rules intend to achieve
the EU’s long-term strategy of achieving carbon neutrality (net-zero emissions) by 2050 [
76
].
The European Union’s objectives regarding the reduction of greenhouse gases and
achieving zero emissions have been realised in the EU Emissions Trading System (ETS), the
legal framework of which is defined in the following legal acts: (1) Directive 2003/87/EC
of the European Parliament and of the Council of 13 October 2003 establishing a system
for greenhouse gas emission allowance trading within the Union and amending Council
Directive 96/61/EC; (2) Directive 2023/959 amending Directive 2003/87/EC establishing
a system for greenhouse gas emission allowance trading within the Union and Decision
(EU) 2015/1814 concerning the establishment and operation of a market stability reserve
for the Union greenhouse gas emission trading system; (3) Directive (EU) 2018/410 amend-
ing Directive 2003/87/EC to enhance cost-effective emission reductions and low-carbon
investments, and Decision (EU) 2015/1814; (4) Directive 2009/29/EC amending Directive
2003/87/EC to improve and extend the greenhouse gas emission allowance trading scheme;
(5) Directive 2008/101/EC amending Directive 2003/87/EC to include aviation activities
in the scheme for greenhouse gas emission allowance trading; (6) Directive 2004/101/EC
amending Directive 2003/87/EC establishing a scheme for greenhouse gas emission al-
lowance trading; (7) Directive 2003/87/EC establishing a scheme for greenhouse gas
emission allowance trading and amending Council Directive 96/61/EC [77].
The ETS operates on a “cap and trade” framework. The cap denotes the maximum
allowable total greenhouse gas emissions for installations and operators included within
the system’s scope. Following the EU’s climate objectives, this cap is diminished yearly,

Energies 2025,18, 1180 11 of 27
guaranteeing a gradual reduction in overall EU emissions. As of 2023, the ETS has con-
tributed to a decrease in emissions from European power and industrial facilities by almost
47 per cent relative to 2005 levels. The ETS cap is quantified in emission permits, with each
allowance permitting the emission of one tonne of carbon dioxide equivalent. Allowances
are auctioned and can be swapped. As the cap diminishes, the supply of allowances to
the EU carbon market also declines. This indicates that demand and prices are increasing
in countries where energy generation relies on hard coal, e.g., Poland. Companies are
required to monitor and report their emissions annually. Failure to meet these rules results
in substantial fines. The permissions are primarily offered through auctions. Companies
may swap allowances among themselves as required. If an installation or operator lowers
emissions, the corporation may sell surplus allowances or retain them for future use. All
these transactions are documented in the Union Registry. The EU carbon market establishes
the cost of allowances and is governed by oversight regulations. The diminishing ETS
cap signals to corporations the enduring shortage of allowances while guaranteeing their
market value. The carbon price incentivises enterprises to reduce emissions. This price
also dictates the revenue produced from the selling of allowances. Since 2013, the ETS has
generated around EUR 175 billion. The revenue from the ETS predominantly contributes
to national budgets, and Member States must allocate it towards investments in renewable
energy, enhancements in energy efficiency, and low-carbon technology that facilitate emis-
sion reductions and mitigate firms’ carbon expenses. Some of the ETS revenue also funds
low-carbon innovation and the EU’s energy transition through the Innovation Fund and
the Modernisation Fund [77].
The 2023 modifications to the ETS Directive instituted a new emissions trading mecha-
nism, ETS2, separate from the existing ETS. This new approach will address carbon dioxide
emissions from fuel combustion in buildings, road transport, and other sectors, particularly
small enterprises excluded from the current ETS. The ETS2 aims to support the EU plan
to achieve the 2050 climate neutrality target. The EU assumes that the carbon price set
by the ETS2 will generate a financial incentive for investments in building renovations
and low-emission mobility. The ETS2 will attain complete operational capability in 2027.
ETS2 will operate as a “cap and trade” system akin to the existing ETS, except it includes
the fuel suppliers (not the end consumers such as households or vehicle operators). They
will be required to monitor and report their emissions. These entities will be regulated
by the ETS2, requiring the submission of sufficient permits to mitigate their emissions.
Regulated entities will obtain these permissions via auctions. The ETS2 cap intends to
decrease emissions by 42 per cent by 2030 compared to 2005. All emission allowances
inside ETS2 will be auctioned, with a fraction of the revenue targeted to support vulnerable
households and micro-enterprises through a specific Social Climate Fund (SCF). Entities
governed by the ETS2 must secure a greenhouse gas emissions permit and an approved
monitoring plan for evaluating and reporting their annual emissions [78,79].
The legal solutions adopted by the European Union to force Member States to switch to
zero-emission energy sources can be presented using an energy ladder model that considers
climate goals (Figure 2).
The European Commission assumes that ETS and ETS2 help achieve zero emissions in
Europe by 2050. However, these tools may diminish the competitiveness of the European
economy due to increased energy production costs. One may also question the efficacy of
such actions in addressing global pollution, given that the primary polluters are China and
the United States (Table 1) [69].

Energies 2025,18, 1180 12 of 27
Table 1. CO2emissions by emitters.
Country CO2Emissions 2022
Gigatons CO2
% of World CO2
Emissions 2022
Total 38,526.247 100
China 12,667.43 32.88
USA 4853.78 12.6
India 2693.03 6.99
Russia 1909.04 4.96
Japan 1082.65 2.81
Other countries 12,425.527 32.25
European Union 2894.79 7.51
Source: [69].
4.2. Combating Energy Poverty in the European Union: Assumptions and Emerging Threats
The idea of energy poverty emerged in EU documents in 2009. It was explicitly
referenced in the Electricity Directive (2009/72/EC, repealed) [
42
] and the Gas Directive
(2009/73/EC) [
80
], which urged the EU Member States to create national action plans or
other activities to address energy poverty. The energy package, titled “Clean Energy for All
Europeans”, encompasses multiple legislative measures with provisions addressing energy
poverty. A significant solution in the legislative framework is the requirement for Member
States to evaluate the number of families experiencing energy poverty. The stipulation is
specified in Article 3(3)(d) of the 2018 Governance Regulation [
76
] as a requisite component
of the National Energy and Climate Plans (NECPs). Should the assessment indicate a
considerable prevalence of energy-poor households, the relevant Member State must
incorporate a national indicative objective aimed at alleviating energy poverty within its
NECP, delineate policies and measures to tackle energy poverty (including timelines), and
provide progress reports to the European Commission [76].
The 2019 revised Electricity Directive permits public interventions in electricity pricing
for energy-poor or vulnerable household customers (Article 5). It extends the requirement
for reporting on the number of energy-poor households to those Member States implement-
ing such interventions (Article 5(5)) [
81
]. Article 28 of this directive also mandates Member
States to protect vulnerable customers (under the risk of energy poverty) through various
measures. These include adequate safeguards, a prohibition on electricity disconnections
during critical times, transparency in contractual terms and conditions, access to general
information and dispute resolution mechanisms, benefits under social security systems,
support for energy efficiency improvements, and other measures addressing energy poverty
within the broader context of poverty [
81
]. Moreover, Article 27 of the Electricity Directive
requires Member States to provide universal service to all household customers and, where
appropriate, small enterprises. This includes the right to receive electricity of a specified
quality at competitive, transparent, and non-discriminatory prices. Member States must
impose on distribution system operators the duty to connect customers to their networks,
as specified in the directive [
81
]. The 2009 Gas Directive includes provisions to protect
vulnerable customers, including safeguards against disconnections during critical periods
(e.g., lower temperature) [42].
In its energy savings obligations, the Energy Efficiency Directive (2012/27/EU,
amended in 2021) requires Member States to consider alleviating energy poverty. This in-
volves prioritising national energy efficiency measures or alternative programs that benefit
vulnerable households, especially those affected by energy poverty [
81
]. The Energy Perfor-
mance of Buildings Directive (2010/31/EU), amended by Directive (EU) 2018/844 and last
revised in 2021, compels Member States to create long-term renovation strategies as part
of their National Energy and Climate Plans (NECPs). According to Article 2a(1)(d), such
strategies must include an overview of policies aimed at improving the worst-performing

Energies 2025,18, 1180 13 of 27
segments of national building stock and outline national actions relevant to alleviating
energy poverty [82].
While the Renewable Energy Directive (EU) 2018/2001 does not explicitly address
energy poverty, it promotes the accessibility of renewable energy for low-income and vul-
nerable households, for instance, through self-consumption options that enable households
to generate energy for their use [83].
The regulation on a social climate fund [
84
,
85
], designed to offset the future costs
of extending the emissions trading system (ETS) to the building and road transport sec-
tors, identifies households experiencing energy poverty as key beneficiaries of the fund
(
Article 1
) and defines energy poverty (Article 2). The social climate plans must estimate
how the inclusion of buildings and road transport in the ETS will impact households,
particularly regarding energy poverty (Article 4). Access to support from the social climate
fund is contingent upon achieving designated milestones and targets to reduce the number
of vulnerable households, particularly those in energy poverty (Article 5). The implemen-
tation progress report for the plan (included in the national energy and climate progress
report) must contain detailed data on the number of households in energy poverty and,
where applicable, on progress towards the national objective of reducing energy poverty.
The fund also addresses the issue of transport poverty [84,85].
In October 2022, the Council of the EU adopted a regulation to address high energy
prices through emergency measures. The regulation states that states can use finances for
direct transfers to customers, reductions in network tariffs, and to encourage customer
investments in renewable energy and energy efficiency. Additionally, the regulation allows
Member States to intervene temporarily in price setting [86].
Poland developed the NECP in 2019. It states that “it is planned to create a compre-
hensive state policy to solve the problem of energy poverty. The proposed comprehensive
public policy will reduce energy poverty and protect vulnerable consumers” ([
87
], p. 59). It
was stated that the following tasks were realised: (1) create a definition of energy poverty
adapted to Polish conditions, (2) develop a coherent methodology for diagnosing it. A
vulnerable electricity consumer is defined in the Energy Law and entitled to a flat-rate
energy allowance. The amount of the energy allowance is announced annually by the
minister responsible for energy. It depends on the electricity consumption limit product
and the average electricity price for a household consumer [87].
In 2020, EPOV released the report above detailing the implementation of energy
poverty regulations by Member States inside their NECPs, along with an extensive review
of energy poverty initiatives in each Member State. For Poland, the NECP mentions
a comprehensive state policy against energy poverty, defining energy poverty and the
relevant indicators to determine the number of households affected. Currently, the key
policy is an energy allowance for vulnerable consumers. Energy efficiency for households
and infrastructure investments (district heating networks) are priorities [88].
A 2022 study on “Energy Poverty National Indicators” suggested more diagnostic
methods for evaluating energy poverty and realising mitigation strategies. Poland sub-
mitted its draft updated integrated national energy and climate plan on 1 March 2024.
Reducing energy poverty is a goal (point 4.5.1) in this plan. The plan states that, according
to forecasts, Poland can stabilise the scale of energy poverty at a level of no more than
11 per cent
in 2030 and no more than 7 per cent in 2040. It lists actions aimed at monitoring
and reducing the scale of energy poverty, including improving the energy efficiency of
buildings and subsidies for the purchase of energy for people eligible for this type of
assistance [
89
]. The European Commission formulated 23 recommendations for the Polish
plan mentioned above. Among others, Poland was obliged to provide additional analysis
on the relevant climate vulnerabilities and risks regarding achieving national objectives,

Energies 2025,18, 1180 14 of 27
targets, and contributions, as well as the policies and measures in the different dimensions
of the Energy Union [
90
]. However, the European Commission could not verify the Polish
realisation of its recommendations six months before the final update of national energy
and climate plans was due (as required by Article 9(2) of Regulation (EU) 2018/1999) [
90
].
The EU initiatives have not reduced energy poverty, as the number of Europeans
unable to keep their homes adequately warm is growing, from 6.9 per cent in 2021 to
10.6 per cent
in 2023 [
91
]. According to the European Commission Energy Poverty Advisory
Hub, the inability to keep home adequately warm is not so high in Poland compared to
other EU Member States (Figure 3) [92].
Energies 2025, 18, x FOR PEER REVIEW 14 of 28
assistance [91]. The European Commission formulated 23 recommendations for the Polish
plan mentioned above. Among others, Poland was obliged to provide additional analysis
on the relevant climate vulnerabilities and risks regarding achieving national objectives,
targets, and contributions, as well as the policies and measures in the different dimensions
of the Energy Union [92]. However, the European Commission could not verify the Polish
realisation of its recommendations six months before the final update of national energy
and climate plans was due (as required by Article 9(2) of Regulation (EU) 2018/1999) [92].
The EU initiatives have not reduced energy poverty, as the number of Europeans
unable to keep their homes adequately warm is growing, from 6.9 per cent in 2021 to 10.6
per cent in 2023 [93]. According to the European Commission Energy Poverty Advisory
Hub, the inability to keep home adequately warm is not so high in Poland compared to
other EU Member States (Figure 3) [94].
Figure 3. Inability to keep home adequately warm in EU countries and Turkey. Source [94].
The worst situation was in 2023 in the southern countries, Latvia, France, and Ger-
many. In Poland, 4.7 per cent of households have problems keeping their houses ade-
quately warm [94].
The Baltic countries, Romania and southern European countries also had the highest
percentage of people at risk of poverty or social exclusion in 2023. For example, Estonia
has 24.2 per cent of the population, Spain and Romania have 26.5 and 32 per cent, respec-
tively, and Germany has 21.3 per cent. Poland was at a similar level to Finland, the Neth-
erlands, Denmark, and Belgium, and the percentage of people at risk did not exceed 16.3
per cent of the population in 2023 [95]. This exceptional situation, in which energy poverty
did not increase in Poland, was a combination of many initiatives. The act prepared and
passed by the Ministry of Energy introduced a program in Poland consisting of four ac-
tions that allowed electricity prices to stabilise in 2019. The act applied to all recipients in
the country, i.e., over 17.5 million recipients of electricity, including households, local gov-
ernments, enterprises, hospitals, hospices, and orphanages. The first action was to reduce
the excise tax on energy from PLN 20/MWh to PLN 5/MWh. This reduced the bills of
electricity recipients by PLN 1.85 billion in 2019. The second action was to reduce the tran-
sitional fee for all electricity recipients by 95 per cent. Thanks to this change, the electricity
bills of recipients in Poland decreased by PLN 2.24 billion. The third change was the direct
refund of the lost revenue of electricity trading companies. Around PLN 4 billion has been
earmarked for this purpose. The fourth element is around PLN 1 billion allocation for pro-
environmental investments. The act contains a mechanism for amending previously
Figure 3. Inability to keep home adequately warm in EU countries and Turkey. Source [92].
The worst situation was in 2023 in the southern countries, Latvia, France, and
Germany. In Poland, 4.7 per cent of households have problems keeping their houses
adequately warm [92].
The Baltic countries, Romania and southern European countries also had the highest
percentage of people at risk of poverty or social exclusion in 2023. For example, Estonia has
24.2 per cent of the population, Spain and Romania have 26.5 and 32 per cent, respectively,
and Germany has 21.3 per cent. Poland was at a similar level to Finland, the Netherlands,
Denmark, and Belgium, and the percentage of people at risk did not exceed 16.3 per cent of
the population in 2023 [
93
]. This exceptional situation, in which energy poverty did not
increase in Poland, was a combination of many initiatives. The act prepared and passed
by the Ministry of Energy introduced a program in Poland consisting of four actions that
allowed electricity prices to stabilise in 2019. The act applied to all recipients in the country,
i.e., over 17.5 million recipients of electricity, including households, local governments,
enterprises, hospitals, hospices, and orphanages. The first action was to reduce the excise
tax on energy from PLN 20/MWh to PLN 5/MWh. This reduced the bills of electricity
recipients by PLN 1.85 billion in 2019. The second action was to reduce the transitional
fee for all electricity recipients by 95 per cent. Thanks to this change, the electricity bills
of recipients in Poland decreased by PLN 2.24 billion. The third change was the direct
refund of the lost revenue of electricity trading companies. Around PLN 4 billion has been
earmarked for this purpose. The fourth element is around PLN 1 billion allocation for
pro-environmental investments. The act contains a mechanism for amending previously

Energies 2025,18, 1180 15 of 27
concluded agreements so that electricity recipients who concluded contracts unfavourable
to them in the second half of 2018 are not harmed. The price of electricity from 30 June 2018
was adopted as the reference price. Funds for the solutions prepared under the act came
from the sale of an additional 55.8 million tonnes of CO
2
emission allowances, the revenues
from which have not yet been included in the budget for 2019. This amounts to around PLN
5 billion. The European Commission agreed to sell this additional pool on 5 December 2018.
The remaining part came from reduced excise duty and a transitional fee for the electricity
supply [
94
]. In the case of gas supplies, although its prices have increased, the distribution
fees for the supply of gas to households have decreased, which has curbed the rapid price
increase [
95
]. Since 1 April 2016, the “500 Plus” program has been introduced in Poland,
which assumes that a parent receives PLN 500 (now PLN 800) for each child every month
regardless of income and whether they are employed or unemployed [
96
]. The minimum
wage in Poland has also increased. Thus, the minimum wage in Poland was
28 per cent
of the average salary in 2002 and 32 per cent of the average wage in 2007. By 2016, it
had increased to 43 per cent of the average salary. In 2023 and 2024, the minimum wage
increased by 43 per cent, while the ratio to the average salary increased from
42.6 per cent
in 2022 to 52 per cent in 2025 [
97
]. All this meant that, despite changes in the prices of
energy carriers and their supply to households, energy poverty did not increase in Poland.
In addition, Poland has introduced subsidy programs for the thermal modernisation
of buildings and installations of renewable energy sources (RES). The scale of subsidy is as
follows: (1) 36 per cent or 41 per cent for thermal modernisation of buildings (combined
with RES); (2) 80 per cent or 90 per cent for thermal modernisation or renovation of munici-
pal buildings (with apartments for the poorest) (historical buildings or located in revitalised
areas); (3) 50 per cent for RES installations in multi-family buildings;
(4) 80 per cent
for the
renovation of municipal apartments; (5) government subsidy ranges from 26 per cent to 41
per cent of the project costs. Subsidies for thermal modernisation of a house and replace-
ment of heating systems amount to PLN 66,000 for essential support, up to PLN 99,000 for
the medium level of subsidy, and up to PLN 135,000 for the highest level
of support
[
98
,
99
].
In 2017 (before ETS2 implementation in the EU), it was reported that 1.33 million out
of 13.57 million households in Poland, representing 9.8 per cent, were considered energy
poor. This issue affected approximately 3.35 million people out of Poland’s total population
of 38 million, or about 8.8 per cent. Energy-poor people had difficulty paying utility bills
and heating homes [93].
Even if Poland’s situation was better in 2023 than in 2017, due to the structure of fuels,
mainly coal, used for energy production and burdened with carbon dioxide emission fees,
the situation may deteriorate after the implementation of ETS2.
4.3. The Risk of ETS and ETS2 Implementation in Poland
In Poland, consumer energy prices are predominantly “official”, whereas enterprises
incur charges reflecting production expenses, including the acquisition of emission al-
lowances by electricity-generating firms. Subsidising end energy consumers’ bills is not
“free”; energy corporations obtain subsidies that influence taxpayer-funded market pric-
ing [
100
]. Due to its economic potential (22nd economy in the world—GDP 809.2 billion
USD) [
68
] and the structure of energy production based mainly on coal, Poland is one of
the largest emitters of carbon dioxide in the EU (Table 2) [69].

Energies 2025,18, 1180 16 of 27
Table 2. The biggest CO2emissions by emitters in the European Union.
Country CO2Emissions 2022
Million Tonnes
Germany 673.6
Italy 322.95
Poland 321.95
France 315.3
Spain 254.36
Although the ETS2 framework will mirror the existing ETS system, it incorporates
several notable modifications, such as eliminating free allowances (previously allocated
to governments; Poland has received EUR 5–6 billion annually under the ETS in recent
years) [
100
]. In Poland, 70 per cent of energy is derived from coal, and about 40 per cent of
the market price of power is attributable to fees that electricity providers incur for acquiring
carbon dioxide emission allowances [
100
]. In such a structure of energy production, a
5 per cent
annual reduction in the number of allowances awarded for emissions will create
a problem in Poland, and the expenses associated with allowances will escalate. The justi-
fication for this statement is as follows [
100
]: The predicted total cost of the ETS2 system
for the Polish economy varies significantly, ranging from a comparatively benign PLN
21.2 billion to an exorbitant PLN 96.5 billion annually, contingent upon the future price of
emission allowances within the ETS2 framework [
100
]. In 2025, the state budget revenues
will amount to PLN 632.6 billion and expenditures to PLN 921.62 billion. The state budget
deficit is to amount to PLN 288.77 billion. Spending on national defence in 2025 will reach
PLN 186.6 billion [
101
]. Although, as stated above, the cost of ETS2 may amount to over
PLN 96 billion per year if one adds to this the cumulative expenditures on the energy
transformation (see below in the article), including those related to the construction of a
nuclear power plant—approximately PLN 115 billion [
102
], or transmission networks, it
turns out that the cost of transformation and simultaneous incurring of EST2 costs will
exceed 10 per cent of the annual state budget (comparison to the state budget in 2025),
which is a significant burden for the state and the economy. These expenses caused by the
implementation of ETS2 will affect inflation, increasing the costs of energy, heating, and
consumer goods, thus diminishing household income. The justification for this statement
is as follows: the average Polish household is estimated to emit over 6 tonnes of carbon
dioxide annually, resulting in supplementary expenses between PLN 1560 per year (approx-
imately PLN 130 monthly, assuming allowances of 45 euros for each CO
2
tonne) and PLN
7100 per year (around PLN 600 monthly, assuming allowances of 200 euros for each CO
2
tonne). Owners of combustion vehicles will be required to purchase allowances for carbon
dioxide emissions, perhaps incorporated into gasoline prices. Fuel distribution firms must
buy carbon dioxide emission allowances commensurate with the product volume. Each
litre of combusted fuel produces a specific quantity of carbon dioxide, necessitating the
acquisition of permits. For instance, with a carbon allowance price of 45 euros per tonne,
one may anticipate an increase in the price per litre of gasoline by approximately 47 groszy
for the following reasons. One litre of petrol produces approximately 2.31 kg of carbon
dioxide. The expense of allowances per litre of gasoline is calculated as follows: 2.31 kg mul-
tiplied by 45 euros for 1000 kg equals 0.104 euros. At an exchange rate of
4.5 PLN per euro
,
0.104 euros
multiplied by 4.5 PLN is 0.468 PLN, approximating 47 groszy for every litre of
petrol. For diesel, the calculations are analogous, with the price rise for one litre of this fuel
around 54 groszy. One litre of diesel fuel releases approximately 2.68 kg of carbon dioxide.
The cost of permits per litre of diesel is calculated as follows: 2.68 kg multiplied by 45 euros
every 1000 kg equals 0.121 euros. At an exchange rate of 4.5 PLN per euro, 0.121 euros
multiplied by 4.5 PLN equals 0.544 PLN, approximately 54 groszy every litre of diesel. If

Energies 2025,18, 1180 17 of 27
the rates of carbon dioxide emission allowances rise from 45 euros to 200 euros per tonne,
fuel expenses may escalate significantly. In this situation, the price per litre of gasoline
might increase by more than 2 PLN, rather than 47 groszy. This means that the price per
litre of gasoline, which cost PLN 6.50 in February 2025, might cost PLN 8.50 (an increase
of about 30 per cent). Of course, the price of a litre of petrol or diesel depends on other
variables, particularly the cost of crude oil on the market. However, this estimate indicates
the measurable effects of implementing ETS2 in Poland. The operational mechanics of ETS2
in construction will be similar. The construction materials that generate carbon dioxide
during production will inevitably increase the costs of business [100].
The expenses for heating flats and homes will inevitably rise. One may project a
scenario where gas heating expenses may increase by 500 PLN per year, with current
expenditures ranging from 2500 to 3000 PLN per year. The variances in the projected costs
of allowances mainly arise from market dynamics and the potential for speculation. ETS2
implements a “soft cap” on the allowance price, set at EUR 45 per CO
2
tonne. Should the
price surpass this threshold for two consecutive months, an extra 20 million allowances
will be available to stabilise prices. Nonetheless, if financial investors allocate adequate
capital, they can elevate prices significantly, potentially reaching EUR 200 per CO
2
tonne.
This arises from the restricted availability of allowances and the potential for acquisition
through auctions, which fosters speculation. The impoverished, particularly those in rural
regions with elevated heating expenses, will experience the most significant effect of EST2
on household budgets [
100
]. Affluent individuals capable of upgrading their properties,
investing in photovoltaic systems and energy storage solutions, and purchasing electric
vehicles will experience a less significant impact from the associated expenditures [100].
Although, in 2024, as the Polish Central Statistical Office reported, the average salary
in the corporate sector increased by 10 per cent year-on-year, such an increase was not
recorded in the public sector or the group of retirees, i.e., people earning the least [
103
].
The number of retirees constitutes 24.7 per cent of the entire population of Poland [
104
],
and the average monthly nominal gross pension was PLN 3933.48 [
104
]. More than half of
the full-time positions (68.4 per cent) were in the private sector [
105
]. The average monthly
gross salary in the corporate sector was PLN 8821.25 [
106
]. At the end of 2024, the registered
unemployment rate was 5.1 per cent [
107
]. Under Art. 2 of the Act of 23 May 2024, on
the energy voucher and amending certain acts to limit the prices of electricity, natural gas
and district heating [
108
], some people living in Poland may obtain an energy voucher,
a one-time cash benefit. Such a voucher is available to a single-person household whose
average monthly income did not exceed PLN 2500 and a multi-person household whose
average income per person did not exceed PLN 1700. This refers to net income, precisely
defined in art. 3 point 1 of the Act of 28 November 2003, on family benefits [
109
], e.g., in
the case of income from work reduced by, e.g., costs of obtaining income, tax, contributions,
and after deducting the amounts of alimony provided to other people. The energy voucher
will be paid at the end of 2024 and the beginning of 2025. The payment date depends on
the submission date of the application.
These data confirm the previous statement that many people, even using state aid, will
still be at risk of energy poverty after implementing ETS2. Therefore, this study confirms
earlier analysis [
60
] about Poland’s energy poverty risk. To alleviate the adverse financial
impacts, a climate social fund will be established to offset the expenses incurred by the
most impoverished individuals living in the EU. Poland may obtain approximately EUR
15.3 billion
(roughly PLN 70 billion) from this fund between 2025 and 2032. However,
financial resources from this fund will not cover increased prices for products and services
resulting from the increased cost of energy production. Consequently, following the estab-
lishment of the Climate Fund and considering the indicator of poverty that exists in Poland,

Energies 2025,18, 1180 18 of 27
the majority of expenses will be shouldered by the middle class, who are insufficiently
affluent enough to invest in the solutions favoured by the European Commission, yet too
affluent to get financial assistance [100].
Increased costs associated with carbon dioxide emissions will impact the industry, ele-
vating production expenses and potentially diminishing the international competitiveness
of Polish firms. It creates the risk that companies may be compelled to transfer production
to nations with less stringent carbon dioxide emission restrictions, resulting in “carbon
leakage”. The Carbon Border Adjustment Mechanism (CBAM) is a new EU climate policy
instrument (see Regulation (EU) 2023/956 of the European Parliament and of the Council
of 10 May 2023 establishing the CBAM). CBAM is a mechanism for adjusting prices at
borders considering CO
2
emissions. Therefore, CBAM is called a border carbon tax. Its
main goal is to prevent the “leakage” of CO
2
emissions outside the European Union [
110
].
The implementation of a carbon tariff (CBAM) aims to mitigate this leakage; nonetheless,
there exists a possibility that non-EU nations may impose retaliatory tariffs, further en-
cumbering Polish exports. The ETS2 system, similar to the ETS, may be susceptible to
speculation. Financial institutions may employ market processes to inflate the prices of
emission allowances artificially. Implementing a soft cap of EUR 45 per CO
2
tonne aims
to stabilise prices; nonetheless, there is a potential risk that substantial investments by
speculators may surpass this threshold, resulting in price escalations [100].
In the case of Poland, which has no nuclear power plants and limited capacity to
produce energy from renewable sources, the cost of energy production will increase be-
cause fossil fuels will still be mainly used to produce energy. Total energy supply (TES)
encompasses all energy produced or imported by a country, excluding what is exported
or stored. It reflects the total energy needed to meet the demands of end users within
the country. The most significant sources of energy in Poland in 2023 were the following.
coal—36.1 per cent of TES; oil—32.6 per cent of TES; natural gas—16.2 per cent of TES;
biofuels and waste—11.7 per cent of TES; other, including renewable sources—3.4 per cent
of TES [
84
]. In 2024, the share of renewable energy sources in electricity production was
29.6 per cent, with the largest amount of electricity generated in wind farms (14.7 per cent
of energy generation) [111].
In Poland’s energy policy until 2040, the Ministry of Climate and Environment as-
sumed the following indicators: In 2030, electricity production will be based on coal
combustion to a maximum of 56 per cent. It is assumed that at least 23 per cent of renew-
able energy sources will be used in final energy consumption in 2030. It is also assumed that
nuclear energy will be implemented in 2033 and that GHG emissions will be reduced by
30 per cent by 2030 (compared to 1990) [
112
]. These are assumptions that require financial
outlays. The Ministry of Climate and Environment states that in 2021–2040, financial out-
lays may reach approximately PLN 1600 billion. Investments in the fuel and energy sectors
will involve approximately PLN 867–890 billion. The forecasted outlays in the electricity
generation sector will reach approximately PLN 320–342 billion, of which approximately
80 per cent will be allocated to zero-emission capacities, i.e., renewable energy sources and
nuclear energy [
112
]. It should be added that the expenditures of the Polish budget in 2025
will amount to PLN 921.6 billion [
113
]. This means that an amount equal to almost two
Polish budgets must be allocated for the energy transformation alone. This transformation
is threatened by the risk of delays resulting from the geopolitical situation and the need
to spend funds on armaments (almost 5 per cent of GDP per year). Financing the goals
of the energy transformation requires continuous rapid economic growth. According to
the Central Statistical Office, preliminary estimates indicate that Poland’s GDP increased
by 2.9 percentage points in 2024 compared to 2023 [
114
]. This growth and more must be
maintained in the following years to finance the energy transformation plan and other

Energies 2025,18, 1180 19 of 27
necessary public expenditures [
115
]. For now, electricity, heat production, and fuel for
petrol and diesel cars will be expensive.
Polskie Sieci Elektroenergetyczne S.A. (PSE S.A.) is a sole-shareholder company of
the State Treasury managing the National Power System in Poland as the transmission
system operator, which is the owner of the highest voltage network [
116
]. Universal access
and use of the advantages of electricity requires the efficient operation of an extensive
system of devices for its generation, transmission and distribution. Electricity supplied
to homes is generated in power plants. In Poland, these are mainly thermal power plants
fired with brown or hard coal. The transmission of energy from the power plant to the
recipient is possible thanks to an extensive network of power lines and stations [
117
].
Energy storage is one of the pillars of an effective energy system with a growing share of
renewable energy sources. Per the development plan for meeting the electricity demand
for 2023–2032, PSE S.A. will allocate almost PLN 62 billion for infrastructure investments.
In 2020–2022, expenditures on investments in transmission networks amounted to PLN
3.35 billion. According to the PSE S.A. data, 1746 km of new lines were built during this
period. Another 742 km of lines were modernised. One new power station was built,
and
18 were
modernised. Due to the energy transformation and the increase in renewable
energy sources in energy production, investments must include the construction of energy
storage facilities that secure the operation of the power grid and reduce the effects of
the unstable nature of renewable energy sources. A significant technological change is
constructing a high-voltage direct current (HVDC) line connecting the north and south
of Poland. It enables the transmission of energy generated in onshore and offshore wind
sources from the north to industry in the south [118].
As stated earlier, these investments and modernisations of transmission networks
require significant financial outlays while simultaneously financing expenses related to
state security caused by a situation unseen in Europe since 1945, such as the war between
Russia and Ukraine, which borders Poland. Incurring such significant expenses is possible
with a well-functioning economy that is competitive in terms of price and not burdened
with additional fees for greenhouse gas emissions due to the combustion of hard coal and
brown coal for energy production.
Implementing ETS2 in a country where energy production is mainly based on fossil
fuels will generate insufficient access to affordable energy services and may limit economic
and human development. This exhausts the features of energy poverty identified by Reddy.
Based on technological, physical, and economic criteria, one may state that the lack of
energy produced by nuclear plants or from renewable sources creates a technological
threshold. Energy poverty primarily constitutes a lack of access to “environmentally
neutral” energy services. Traditional energy production generates air pollution, increasing
susceptibility to illness. Economic thresholds will mainly include the ability to finance
increased energy costs and the challenge of sustaining sufficient indoor temperatures,
particularly during autumn and winter. Increased maintenance costs for companies and
individual energy users can result in an inverted energy ladder (Figure 4).
This means that the higher cost of leaving may cause a return to using environmentally
harmful but cheaper fuels and distortion of carbon dioxide emission reporting. Because
of legal restrictions, energy consumers may use fuels from the black market, as shown by
Mexican, Italian, and the United Nations Office on Drugs and Crime data. The development
of the black market is linked with corruption [119–124].

Energies 2025,18, 1180 20 of 27
Energies 2025, 18, x FOR PEER REVIEW 20 of 28
Figure 4. Inverted energy ladder.
This means that the higher cost of leaving may cause a return to using environmen-
tally harmful but cheaper fuels and distortion of carbon dioxide emission reporting. Be-
cause of legal restrictions, energy consumers may use fuels from the black market, as
shown by Mexican, Italian, and the United Nations Office on Drugs and Crime data. The
development of the black market is linked with corruption [121–126].
The producers can also use “carbon leakage”. The 1997 Kyoto Protocol on climate
change mandates industrialised nations to commence the global initiative to reduce an-
thropogenic greenhouse gas emissions (GHG). The study in other countries [127] indicates
that substantial migration of energy-intensive industries from the OECD may transpire,
contingent upon the market structure, with leakage rates reaching up to 130 per cent,
whereby GHG control strategies in industrialised nations could increase global emissions.
Nonetheless, prior research reveals no instances indicating climate initiatives result in
“carbon leakage”. The literature, e.g., [128–130], emphasises that this absence of proof is
partially aributable to protecting crucial industrial sectors, which conflicts with the de-
carbonisation strategy. Sartor and Spencer [131] noticed that the risks of carbon leakage
appear negligible for Poland under the current design of the ETS. The situation can change
because ETS2 will cover and address the CO
2
emissions from fuel combustion in build-
ings, road transport, and other sectors (mainly small industries not covered by the existing
EU ETS).
There are tangible and intangible costs associated with ETS and ETS2 implementa-
tion. Tangible costs were discussed above, and it was pointed out that they are challenging
to estimate unequivocally because their size will depend on the supply–demand balance.
Considering intangible costs, price speculation is not the only threat to implementing
ETS2. With increased household living costs, corruption may return, destroying reliable
accounting of greenhouse gas emissions and energy accountability [132]. Transparency
International data on corruption threats in the individual EU Member States indicate that
most of these countries are struggling with corruption. The only exceptions in this respect
are the Scandinavian countries [133].
5. Conclusions
This study resolves the research problem, positively verifies the hypothesis, and
proves that ETS2 implementation in a country with an energy sector based mainly on fos-
sil fuels may increase energy poverty. The current initiatives of the European Union aimed
at drastically reducing greenhouse gas emissions, including introducing a new energy
ladder that considers environmental protection requirements, are supplemented by initi-
atives to prevent energy poverty. However, this problem should be viewed much more
C
o
s
t
Figure 4. Inverted energy ladder.
The producers can also use “carbon leakage”. The 1997 Kyoto Protocol on climate
change mandates industrialised nations to commence the global initiative to reduce an-
thropogenic greenhouse gas emissions (GHG). The study in other countries [
125
] indicates
that substantial migration of energy-intensive industries from the OECD may transpire,
contingent upon the market structure, with leakage rates reaching up to 130 per cent,
whereby GHG control strategies in industrialised nations could increase global emissions.
Nonetheless, prior research reveals no instances indicating climate initiatives result in
“carbon leakage”. The literature, e.g., [
126
–
128
], emphasises that this absence of proof
is partially attributable to protecting crucial industrial sectors, which conflicts with the
decarbonisation strategy. Sartor and Spencer [
129
] noticed that the risks of carbon leakage
appear negligible for Poland under the current design of the ETS. The situation can change
because ETS2 will cover and address the CO
2
emissions from fuel combustion in buildings,
road transport, and other sectors (mainly small industries not covered by the existing
EU ETS).
There are tangible and intangible costs associated with ETS and ETS2 implementation.
Tangible costs were discussed above, and it was pointed out that they are challenging to
estimate unequivocally because their size will depend on the supply–demand balance.
Considering intangible costs, price speculation is not the only threat to implementing
ETS2. With increased household living costs, corruption may return, destroying reliable
accounting of greenhouse gas emissions and energy accountability [
130
]. Transparency
International data on corruption threats in the individual EU Member States indicate that
most of these countries are struggling with corruption. The only exceptions in this respect
are the Scandinavian countries [131].
5. Conclusions
This study resolves the research problem, positively verifies the hypothesis, and proves
that ETS2 implementation in a country with an energy sector based mainly on fossil fuels
may increase energy poverty. The current initiatives of the European Union aimed at
drastically reducing greenhouse gas emissions, including introducing a new energy ladder
that considers environmental protection requirements, are supplemented by initiatives to
prevent energy poverty. However, this problem should be viewed much more broadly.
Energy transformation and protective solutions that eliminate the negative consequences
of the increase in the prices of energy produced using fossil fuels require significant
financial outlays. These, in turn, are impossible without a strong and, therefore, competitive
economy. This is impossible when this economy uses expensive electricity produced from

Energies 2025,18, 1180 21 of 27
fossil fuels and is subject to additional emission fees. Research has clearly shown that
implementing solutions provided for ETS2 may negatively affect the development of the
economy and the daily functioning of households in Poland—a country whose energy
sector is predominantly based on fossil fuels. This conclusion results from the analysis
conducted during the research. It is challenging to state prices clearly in a few years.
However, current experience suggests that climate fees will significantly increase energy
prices. Destabilising the economy in a country bordering an unstable environment where
Russia is waging war in Ukraine poses a danger to the entire European Union. Therefore, it
is necessary to consider modifying the ETS and ETS2 systems to include the differences in
advancing energy transformation in the EU Member States to a greater extent than before.
Based on the findings, one may suggest the following policy mechanism. The European
Commission should consider differentiated emissions caps for coal-reliant economies,
expanded transition funding mechanisms, and lengthier transition periods for countries
still struggling with equalising their level of development and are using European funds.
The study also contributes to the development of theory. A model of the energy and climate
ladder and an inverted energy ladder were formulated, indicating the threats resulting
from the introduction of energy reforms that are not adapted to the capabilities of all EU
Member States. Like any study, this one has certain limitations. One of them is that, due to
the study’s prognostic nature, it is impossible to fully prove the accuracy of the analysis
of the energy prices due to climate fees in a few years. Moreover, the focus was on one of
the largest economies in the world—Poland, but the research will be more comprehensive
when it covers all EU Member States. Being aware of this, the authors indicate further
direction for the study.
Although the research context is focused on the EU, the emerging landscape is broader.
It is possible that solutions consisting of administratively forcing companies to reduce
greenhouse gas emissions may be permanently introduced in non-EU countries. For this
reason, the EU experience may be valuable for practitioners and theorists looking for a link
between decarbonisation policy and socioeconomic conditions.
Author Contributions: Conceptualization, Z.D.; methodology, Z.D.; formal analysis, Z.D.; investiga-
tion, Z.D.; resources, Z.D.; data curation, Z.D.; writing—original draft preparation, Z.D.; writing—
review and editing, Z.D., P.A., W.S. and S.K.; supervision, Z.D.; project administration, Z.D.; funding
acquisition, Z.D. All authors have read and agreed to the published version of the manuscript.
Funding: This research received funding from the University of Prešov. The paper is a partial result
of the project No. 024PU-4/2023.
Data Availability Statement: The original contributions presented in the study are included in the
article, further inquiries can be directed to the corresponding author.
Conflicts of Interest: The authors declare no conflicts of interest.
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