By May 2025, EU member states must have completed the transposition into national law of the latest revision of the EU’s renewable energy directive (RED III). Targets of the new law include ramping up the share of renewable energy in heating and cooling in buildings, with an indicative target of 49 per cent by 2030 – up from around 26 per cent today. The combustion of solid biomass, predominantly wood, currently makes up about three-quarters of what is counted as renewable heating and cooling in buildings under EU rules.

It’s a problematic definition, to say the least. According to Martin Pigeon, campaigner at the Brussels-based forest protection NGO Fern, “Theoretically there are only two very specific use cases for burning forestry and wood-processing residues that could be considered as sustainable from a carbon emissions perspective.” These are the combustion of wood-processing residues (i.e. sawdust from sawmills or the black liquor produced in paper mills as a residue) that don’t have competing uses and are burned in place of fossil fuels; and forestry residues coming from better forestry practices such as continuous cover forestry. Both cases create a short-term (2-3 years) “carbon debt” that is then, in theory, eliminated due to growth in the remaining forest.

“But currently, because of renewable energy incentives, all accessible trees that don’t really have a market value as timber or pulp are logged for energy, and referred to as ‘residues’ by the industry,” says Pigeon. Burning wood causes immediate carbon emissions, while the assumption that future forest growth, taking decades, will offset them depends on sustainable forest management.

The broad classification of wood-burning as renewable bioenergy has led to perversities such as the UK’s Drax power station, which has benefited from billions in renewable energy subsidies while importing wood fuel from primary forests and old-growth forests in the US and Canada. Richard Lowes, heating policy expert at the Regulatory Assistance Project, comments: “Clearly there’s a big difference between importing wood pellets from the other side of the world to burn for electricity production, and someone having a forest that they own and chopping down a tree to burn for heating purposes – while also planting one to replace it. There’s such a broad spectrum of biomass energy technologies that it’s very difficult to just say ‘biomass is bad’.”

A key challenge of biomass regulation is that much of the implementation is left to national governments. For the current transposition of the RED III, “the best example we have at the moment”, says Pigeon, is the approach initiated by the previous Dutch government, which ends all biomass subsidies for electricity generation. It’s an important distinction to disincentivise the most unsustainable forms of bioenergy: between 1991 and 2021, reported carbon emissions from bioenergy use have tripled in the EU-27, with biomass combustion for energy supply (e.g. electricity generation, but also district heating) emerging as a significant driver. 

The recognition of these distinctions is particularly important in Central and Eastern Europe, where, depending on the country, firewood covers 30-60 per cent of final energy use for heating, with low-income households significantly more likely to depend wholly upon wood-burning for home heating. Ádám Harmat, regional lead of the climate and energy programme of WWF Central and Eastern Europe, explains: “The assumption that biomass is renewable energy is negatively affecting the firewood user households: the growing appetite of industrial-scale biomass use is one of the drivers increasing the price of firewood. But because it also contributes to national and EU targets, maintaining the status quo is an easy way for member states to reach higher [renewable energy] targets.”

Policy reform on biomass is further challenged by the easily evoked and highly emotive image of the traditional hearth. In 2024 the Scottish government introduced higher energy performance requirements for new homes that meant biomass central heating would be excluded. The proposed regulation was widely misrepresented in sensationalist media coverage claiming the government was “banning wood burners in all homes”. A subsequent backlash forced the government to amend the regulation, even though “it was highly unlikely that anyone would install a biomass boiler in a new home anyway,” notes Lowes.

Pollution and loss of life  

The contribution of biomass combustion to poor air quality, and consequent loss of life, is well-evidenced. Air pollution is named by the European Environment Agency as the biggest environmental health risk in Europe. Across the EU, in 2022 human exposure to ambient fine particulate matter (PM2.5) above the World Health Organization recommendations caused an estimated 239,000 premature deaths, according to the agency’s research.

In over half of Europe’s cities, the residential sector is the single biggest source of PM2.5 emissions, according to research published by Nature in 2024. On average, the residential sector accounts for 27 per cent of PM2.5 formation. Other major drivers of air pollution – industry, agriculture, and road transport – show average contributions of 18 per cent, 17 per cent, and 14 per cent, respectively.

These emissions from the residential sector are almost entirely due to biomass burning, leading to the conclusion that “the residential sector should be a key target of any policy to improve air quality and that climate policies promoting biomass as a climate-neutral fuel could have a detrimental effect on air quality.”         

A key challenge of biomass regulation is that much of the implementation is left to national governments.

This is a particularly urgent issue for the EU’s air pollution hotspots: Central and Eastern Europe and Italy, where the highest levels of particulate matter are found. In a number of cities in Northern Italy and Eastern Europe, over half of PM2.5 formation is coming from residential wood-burning for home heating, according to the same research.

The human cost is considerable: the EU’s 10 per cent most-polluted regions suffer 25 per cent of the burden of mortality attributable to air pollution, according to research findings from Brussels-based economic think tank Bruegel. In these places, economic losses linked to air pollution (lower productivity, increased absenteeism, harm to ecosystems) are projected to remain above 6 per cent of GDP until 2030. The EU average yearly losses are estimated at 600 billion euros, or 4 per cent of the bloc’s GDP. Estimated costs are even higher in Hungary, where “all regions [are] exposed to critical levels of air pollution, leading to significant health impacts, in particular on vulnerable groups, and 9502 premature deaths annually,” according to the OECD’s country report (2023).

Effective policy responses must be appropriately tailored to the local context, and “set out appropriate and concrete actions for each region”, notes the Bruegel paper. In profiling households using firewood, campaigners make a distinction between the “voluntary” or “luxury” segment (intentional use of wood, pellets, or other biomass fuels mostly for cost savings, aesthetics, or to avoid fossil fuel use) and the “involuntary” group, who are wholly or predominantly reliant on firewood due to a lack of alternatives. Detailed data from Hungary (see Figure 1) highlights the link between household income and home heating fuels, and shows a clear correlation between income level and access to cleaner heating solutions.  

“It’s important to understand how limited the choices are for certain populations,” says Anna Zsófia Bajomi, energy poverty policy officer with the European Federation of National Organisations Working with the Homeless (FEANTSA). Referring to the national statistics, Bajomi explains: “If we look at Hungary as an example, 30 per cent of homes use firewood for heating, and half of these households have only firewood heating: 9 per cent room heating, 6.4 per cent central boilers. The other half use firewood and gas as complementary heating methods. As firewood heating is predominant in lower-income groups, I would not say it’s usually a voluntary heating method. It is more like a coping mechanism to balance energy costs.”

Across Europe, increasing numbers of households are using this coping mechanism to deal with rising energy costs: in 2023, 41 million EU citizens (9.3 per cent of the total population) could not afford adequate heating – up from 30.8 million in 2021. Commenting on the increase, Delia Villagrasa, director at clean heat advocacy group the Cool Heating Coalition, says: “Warm and healthy homes are not a luxury but a necessity. While in some cases wood may currently be cheaper than other heating sources such as heat pumps or solar thermal, it is also a fuel which pollutes the air and degrades forests and public health. Clean heat solutions must be accessible to all.”

Across the EU, in 2022 human exposure to ambient fine particulate matter (PM2.5) above WHO recommendations caused an estimated 239,000 premature deaths.

Fuel of the poor

Aranka Rostás, Roma community activist and founder of the energy poverty NGO Lightbringers Foundation, is passionate about working to change the harsh reality of heating poverty in Hungary and its impact on low-income and marginalised communities. It’s a conviction born of her lived experience in the Csongrád region: “I struggle with the same difficulties every day, living in these circumstances, unfortunately, so that is exactly why I am working to find a solution to energy poverty,” says Rostás.

“Wood-fired heating is a very difficult option for poor people in winter, as many of them have outdated stoves or inadequate heating equipment, which can only produce very minimal heat and warmth,” explains Rostás. The problem is further compounded by living conditions: overcrowded, substandard housing, often lacking basic infrastructure like bathrooms, sewage, and internet access. Poor construction makes many homes vulnerable to cold and damp, resulting in high energy costs.

Fuel-switching to electricity is not an option for this group. Rostás says: “Electric heating is almost a luxury, because many people cannot pay their electricity bills, and there are many households that do not have energy services; they are disconnected. For so many families, it’s as if we were back in the 1800s, with no electricity.” Although grid connections are available, in some areas energy poverty is so acute that up to one-third of residents are unable to top up their prepayment meters and lose access to electricity once money runs out towards the end of every month. Rostás’ Lightbringers Foundation is seeking to address this by providing solar panels for low-income households, and has ambitions to extend its activities to clean home heating. 

To date, funding for energy efficiency and clean heating improvements is largely inaccessible to the poorest households. Publicly funded grants and subsidies are by far the most used financial instruments for home energy improvement programmes: relatively simple to administer but typically leaving those most in need underserved. Rostás advocates for public funding schemes specifically designed to target the most vulnerable families directly rather than benefiting higher-income groups. She says: “We need solutions that focus on the poorest families. Improving insulation and basic infrastructure must be a high priority, and delivered with the involvement of the communities and grassroots organisations who are on the frontlines, and dealing with these problems every day.”

For Rostás, access to affordable and clean heating is not just a policy issue – it is a fundamental human right. “It’s like saying you can only eat but not drink – there is no such thing. These are all basic human rights.”

A just heat transition

Across the EU, residential heating accounts for almost one-fifth of total energy demand, and mostly depends on fossil fuel and biomass combustion. It also makes up a sizeable portion of overall heating and cooling demand (47 per cent of energy use), the decarbonisation of which is a current political priority for the European Commission. Ensuring the widespread availability of affordable clean energy solutions for householders will be a cornerstone of achieving this goal – a concept referred to by advocates as “a just heat transition”.

A significant number of provisions for decarbonising heating and cooling are included in legislation brought forward under the European Green Deal. Amongst this raft of EU policies referencing heating and cooling, the ones most likely to affect communities similar to those represented by Rostás are the ecodesign directive, which sets energy efficiency and environmental performance requirements for products (including biomass heaters); and the extension of carbon pricing to buildings and transport under the emissions trading system (ETS2).

There is a significant challenge as well as a clear need to realign renewable energy targets with public health and climate goals.

In recognition of the potential impacts on lower-income households’ budgets, ETS2 will be directed into the Social Climate Fund (SCF), an 86-billion-euro fund and the first EU fund developed with the explicit purpose of alleviating energy and transport poverty resulting from carbon pricing. Concerns about the SCF have been raised regarding the degree of consultation with subnational governments and other groups, and whether the money will, in practice, reach those most in need. 

Bajomi is unequivocal on how public money should be allocated to the lowest-income communities: free upgrades of inadequate housing stock as a public health measure, primarily aimed at reducing heat demand. Local projects carried out by NGOs, including WWF and Habitat for Humanity in Hungary, Bulgaria, and Romania have focused on practical interventions such as roof repair and insulation, and more efficient and less polluting biomass heaters rather than fuel-switching to gas or electric heating.

Similarly, a “harm reduction” approach may be most appropriate for staged reform of EU policy on biomass. With some eastern European member states achieving over 60 per cent of their renewables target under current biomass accounting rules, there’s a significant challenge as well as a clear need to realign renewable energy targets with public health and climate goals.

“There’s a number of policy measures which can be considered here,” says Lowes. “Clearly, stronger sustainability criteria along with more accurate carbon accounting methods are required. To accelerate the broader shift towards cleaner heating incentives, it’s important to prioritise and incentivise non-combustion heating alternatives like heat pumps. Ensuring electricity prices are appropriate for the transition is crucial to make heat pumps and electric heating more accessible.”

Without targeted investment in insulation, clean heating technologies, and financial assistance, low-income families will continue to bear the highest costs – both in terms of energy affordability and health impacts from air pollution.

“Low-income households bear the brunt of rising energy prices: we need to ensure that no one is left out in the cold,” says Finnish Green MEP and former environment minister Ville Niinistö. “The energy transition will not succeed unless it is a just transition; nor will it succeed without accelerating the rollout of clean heating and cooling solutions.”