The cabinet is not expected to issue a resolution regarding the reform of the Building Energy Act (GEG), also known as the “heating law” until at least mid-May, according to newly released cabinet scheduling reported by the “Handelsblatt”. Specifically, the draft for the new Building Modernization Act (GMG), as it is slated to be named in the future, is scheduled for a cabinet decision on May 13th.
Despite the planned timeline, the CDU/CSU (Union) and SPD remain unable to resolve key disputes related to the reforms. The coalition had originally aimed to clarify the issues by Easter; most recently, the topic had been scheduled for April 29th. The primary sticking point remains the protection of tenants against rising ancillary costs linked to the installation of heating systems that use fossil fuels.
Earlier, in February, the party leaderships of the Union and SPD put forward a framework paper proposing a “regulation to protect tenants from exaggerated ancillary costs due to the installation of uneconomical heating”. This protective regulation has yet to be finalized.
Looking at the wider implications, model calculations from the Fraunhofer Institute for System and Innovation Research (ISI) indicate that if the heating law reform proceeds with gas, tenants face an additional projected burden of approximately €18,600 between 2027 and 2045. This increased cost is attributed to the rising CO2 price and new regulations requiring a greater mixture of biomethane and relatively expensive synthetic fuels mixed into natural gas.
Furthermore, according to the Institute for Economics and Groups (Öko-Institut), the reform will worsen the existing gap to the 2030 climate goal by an additional five to eight megatonnes of CO2 equivalents (Mt CO2e). For the 2040 climate goal, the already sizable gap of 102 Mt CO2e per year is projected to increase by an additional 14 to 22 Mt CO2e, reaching a total of 116 to 124 Mt CO2e annually.
