German cabinet agrees to replace green heating law amid policy shift

10:48

Germany’s cabinet has agreed to replace a controversial heating regulation introduced in 2023 that required new building heating systems to rely heavily on renewable energy sources, marking a significant shift in the country’s climate and housing policy.

The original legislation, widely known as the “Heating Law,” had mandated that at least 65% of energy used in new heating installations come from renewable sources. It was introduced under the previous government and aimed at accelerating the transition away from fossil fuel-based heating systems such as gas and oil boilers.

The revised approach, approved by Chancellor Friedrich Merz’s cabinet, removes the mandatory renewable energy requirement and allows households to retain existing heating systems unless they voluntarily choose to upgrade. Alternative systems such as heat pumps, district heating, and biomass technologies remain available but will no longer be compulsory under the new framework.

Government officials argue that the previous law created uncertainty in the construction and housing sectors, discouraging investment and placing financial pressure on homeowners who would otherwise be required to replace existing systems at significant cost.

Industry groups have welcomed the decision, saying it could stimulate investment in building modernization and reduce regulatory burdens on households and developers. However, environmental advocates and opposition politicians have criticized the move, warning that it could slow down progress toward national climate targets.

Analysts say the reform reflects broader political tensions in Germany over the pace and cost of the energy transition, as policymakers attempt to balance climate commitments with economic competitiveness and public acceptance.