The federal cabinet approved a draft reform of the heating law on Wednesday. According to Federal Minister of Economics Katherina Reiche (CDU), the government approach prioritizes “common sense, freedom, and speed over prohibitions”.
The reform addresses concerns about property modernization, with Federal Minister of Justice Stefanie Hubig (SPD) emphasizing that tenant protection will be central to the updated rules regarding building modernization. While Hubig stated that the new law will give homeowners greater freedom when it comes to installing new heating systems, she stressed that this increased choice will not come at the expense of tenants. Specifically, she pointed out that if landlords choose a new fossil-fueled heating system, they will be responsible for contributing to the running heating costs, ensuring that heating does not become a financial burden for renters.
Among the most significant changes is the abolition of the previous mandate that required new heaters to run at least 65 percent of their time on renewable energy sources. Consequently, gas and oil boilers will now be permitted for installation even after 2045, despite the national climate protection law requiring the government to achieve climate neutrality by that date.
Instead, the federal government plans to establish a minimum quota for biogas and synthetic fuels. This quota is set to rise from 10 percent in 2029 to 60 percent by 2040. Earlier calculations by the Fraunhofer Institute for System and Innovation Research (ISI) suggested that, based on initial drafts, a tenant installing a gas heater instead of a heat pump in 2025 would face a monthly increase in costs of 55 euros. This added burden was projected to rise to 272 euros by 2045. Eventually, the black-red coalition agreed that landlords establishing new gas or oil heaters must bear half of the network charges, the CO2 cost, and the bio-fuel costs-this cost-sharing, however, is capped at a biogas share of 30 percent.
These proposals have sparked considerable discussion among various groups. Environmental organizations doubt that the established quota will be sufficient to meet the CO2 sector targets for the residential sector. The property owner association, Haus und Grund, criticized the division of costs agreed upon by the CDU and SPD. Meanwhile, the Tenants’ Association welcomed the revised cost-sharing plan following strong criticism of the initial outlines, although they insisted on further amendments to ensure that tenants are not left solely responsible for costs when higher biogas shares are involved.
