The Federal Government is launching a comprehensive push for modernisation with the amendment to the Building Energy Act. The aim is also to push ahead with the heating system transformation needed to protect the climate. "We are doing this with a clear and deliberate focus on newly installed heating systems," Robert Habeck, Federal Minister for Economic Affairs and Climate Action, explained.
In this way the Federal Government is sending out a clear signal to the effect that anyone investing in a new heating system must ensure that it is sustainable because a heating system installed today will be in use for 20 to 30 years. "We are including transitional periods, exemptions and, above all, a reorganisation of subsidy arrangements to mitigate social hardship," said the Minister as he introduced the amendment to the Building Energy Act, which was approved by the Federal Cabinet. "So, we are also providing financial support to enable citizens to replace their heating systems."
Nobody would have to sell their house, said Minister for Housing, Urban Development and Building Klara Geywitz adding: "We will be providing ancillary support and tax measures to ensure that no one is overburdened by the new requirements. We need a solution that suits the residents of every flat and house precisely because people only have one home."
Heating with fossil fuels is damaging the climate and is becoming increasingly expensive
But it would be cost prohibitive to install gas or oil heating systems and no one would do so in future, said Geywitz. "How we heat our homes has a direct impact on our wallets," she added: "Gas will probably never be as cheap as it was before the war in Ukraine." Those who were relying on legacy systems were increasingly investing in money-draining technology, she said, adding that this legislation offered a solution that was socially acceptable, economically feasible, and ecologically meaningful. This is because, so far, the climate targets have not been met in the building sector, which is why the Federal Government is launching this emergency programme. Using renewable energies for heating purposes represents an important building block for climate protection.
Important questions and answers concerning the Building Energy Act:
How will homeowners be affected as of 1 January 2024 and who will be required to use renewable energy for heating from then on?
The mandatory switch to heating systems that use 65 percent renewable energy as of 1 January 2024 only applies to new heating system installations.
Existing heating systems do not have to be replaced in the short term and can continue to be used. Repairs may also be carried out on defective heating systems.
When heating systems break down and can no longer be repaired, then provision has been made for generous transition periods in which to install a new heating system that uses 65 percent renewable energy. The legislation also provides for exceptions in order, for example, to ease the burden on elderly homeowners or those with limited financial resources.
Are new heating systems subject to any legal requirements?
The law is pragmatic and deliberately technology-neutral: owners have the right to implement individualised solutions and can also provide theoretical proof of the renewable share (at least 65 percent).
Alternatively they will also be able to choose between various options provided for within the legislation to ensure the system includes at least a 65 percent share of renewable heating fuel: options include a connection to a heating network, the use electrical heat pumps, direct electrical heating, hybrid heating (a combination of renewable heating and gas or oil boiler), and solar thermal energy-based heating systems. The use of so-called "H2-ready" gas heating systems, i.e., heating systems that can be converted to 100 percent hydrogen, is also an option under certain circumstances.
There are also other options for existing buildings including biomass heating or gas heating demonstrably based on the use of renewable gases of which at least 65 percent must be bio-methane, biogenic liquid gas, or hydrogen.
What exceptions and what transition periods does the legislation provide for?
Transitional periods will apply if the heating system is defective and can no longer be repaired – a so-called heating system failure: in general, this period will be three years but may be extended to 13 years in the case of gas-powered building storey heating systems. It will also be permissible to temporarily install a second-hand, fossil-fuel-based heating system. If the building is likely to be connected to a district heating network in the foreseeable future, a transitional period of up to ten years will apply.
In the event of a heating system failure, the mandatory conversion to renewable heating will be waived for homeowners over 80 years of age who occupy a building with up to six flats. This will also apply to the replacement of storey heating systems for flat owners over 80 years of age who live in the flat themselves.
How will the switch to new renewable energy-based heating systems be funded?
The well-established "Federal Support Scheme for Efficient Buildings" (BEG) will be slightly modified to ensure that the subsidy will continue to comply with the legal requirements going forward. Specifically, this means that all citizens living in owner-occupied housing will continue to receive a subsidy for replacing an old fossil-fuel heating system with a new climate-friendly alternative. Irrespective of which of the climate-friendly heating systems mentioned in the legislation is chosen, the subsidy rate will be a uniform 30 percent in future.
In addition to the basic subsidy, three different climate bonuses, i.e. higher subsidy rates, will be introduced to promote a more rapid changeover from particularly old and inefficient heating systems to sustainable alternatives.
Provision will also be made for older homeowners or those with limited financial resources or on state benefits to replace their heating system with one that uses renewable energy.
Is there a time limit for heating with fossil fuels?
Yes. 31 December 2044 is the cut-off point for the use of fossil fuels in heating systems. This legislation mandates that, as of 2045, all buildings must be heated in a climate-neutral manner using only renewable energies.
Why is the heating transition necessary?
Germany has committed to becoming greenhouse gas neutral by 2045 as set out in the Climate Protection Act. Achieving this target requires progress in the heating transition within the building sector. We urgently need to get the message out that anyone investing in a new heating system must ensure that it is sustainable. The Federal Government’s intention with the draft legislation is to drive forward the heating transition.
In the longer term, the draft legislation will also reinforce the resilience of the heat supply and make it independent of fossil energy imports from unreliable sources, which will shield consumers from price hikes due to sharp increases in fossil commodity prices.
Three quarters of existing buildings are still heated with fossil fuel-based heating systems, the most widespread of which use natural gas. Over 40 percent of natural gas consumption is for heating and hot water. Of the approximately 41 million households in Germany, almost half use natural gas for heating and just under a quarter use fuel oil whilst a good 14 percent are connected to a district heating grid. By contrast, direct current (DC) electric heating and heat pumps each account for less than three per cent. The share of newly installed gas heating systems in 2021 was as high as 70 percent.