A compromise has been reached on Germany’s building energy law, often referred to as the “heating law.” The agreement, reached between the Union and SPD parties on February 25, 2026, significantly alters the path toward decarbonizing the country’s heating systems.
What Changed?
The most significant change is the removal of a key provision requiring modern heating systems to operate on at least 65% renewable energy. This rule, initially championed by former Economics Minister Habeck, applied to new buildings and included transitional periods for existing structures. According to Union faction leader Jens Spahn, “All types of heating are possible again.” The new legislation will not mandate the replacement of existing, functional heating systems.
The Future of Gas and Oil Heating
While the 65% rule is gone, gas and oil heating systems will still be subject to new regulations. These systems will be required to utilize an increasing percentage of climate-neutral fuels, such as biomethane. The “green gas quota” is set to begin at 10% by 2029, with further increases planned in three stages through 2040. The CO2 price will not apply to this climate-friendly fuel component.
Industry representatives have cautioned that climate-friendly fuels are currently more expensive than conventional options and supply may be limited, potentially increasing costs for homeowners.
What About Renewable Energy Incentives?
Support for climate-friendly heating technologies, such as heat pumps, will continue. Funding for these systems is expected to remain available through at least 2029.
Protecting Renters
The agreement includes provisions to protect renters from excessive costs associated with the installation of inefficient heating systems, but details on how this protection will be implemented are currently lacking.
Implications for Climate Goals
The governing coalition maintains that the country’s overall climate goals will still be met. However, the agreement includes a provision for reevaluation in 2030. If the building sector fails to meet its climate targets, further adjustments may be considered. The transportation and building sectors have historically lagged behind in achieving climate objectives.
Timeline for Implementation
Union and SPD factions presented a five-page outline of the agreement on Tuesday. A draft law is expected to be presented by the cabinet by Easter, with a final vote in the Bundestag to follow. The new law is scheduled to take effect on July 1, 2026.
Frequently Asked Questions
What is the Gebäudeenergiegesetz (GEG)?
The Gebäudeenergiegesetz (GEG), also known as the heating law, regulates the gradual replacement of oil and gas heating systems with climate-friendly alternatives. It was initially passed in 2020 and revised in 2024.
What was the role of the former Economics Minister Habeck in the original legislation?
The former Economics Minister Habeck (Greens) initiated the rule requiring new heating systems to operate on at least 65% renewable energy.
When will the new rules take effect?
The new rules are scheduled to take effect on July 1, 2026, pending approval by the cabinet and Bundestag.
How will these changes impact the long-term goals for reducing carbon emissions in the building sector?
