The German government intends to make building and living in Germany more climate-friendly with a mix of more incentives, CO2 pricing and regulatory measures.

The percentage of CO2 emissions accounted for by the building sector is actually about twice as high as this. This sector accounts for 28 per cent of the total rather than 14 per cent, if we take into account the emissions arising from power generation, combined heat and power plants and the production of construction materials. Although these products are used primarily in the building sector, the emissions are classed as energy-sector or industrial emissions. This makes it clear just how important it is to upgrade the building stock to enhance energy efficiency, replace older central heating systems and use environmentally sound construction materials.

Tax breaks for energy-efficient renovation

The costs of refurbishment designed to enhance energy efficiency such as replacing central heating, fitting new windows, and insulating roofs and outside walls are to be partially tax deductible as of 1 January 2020. 20 per cent of the costs will be tax deductible over a period of three years. Property owners, whatever their income class, will benefit equally.

The assistance rates of programmes already in place, including those run by the Kreditanstalt für Wiederaufbau (KfW) and the Federal Office for Economic Affairs and Export Control (BAFA) will be fine-tuned and raised by 10 per cent.

Replacing central heating systems

Over the next few years it will be worthwhile replacing older oil and gas central heating systems with more climate-friendly models or switching directly to renewables. To this end a "replacement bonus" will be introduced with 40 per cent assistance.

As of 2026 it will no longer be permissible to fit oil central heating in buildings in which it is possible to install a more climate-friendly heating system.