Cabinet approves new building modernization law

The federal cabinet has approved the draft of the building modernization law. The new legislation replaces the controversial heating law of the previous traffic-light coalition and aims to offer more flexibility in heating choices.

The cabinet passed the draft law on May 13 in Berlin. Federal Economy Minister Katherina Reiche said the forced heating replacement no longer applies. Gas heaters can still be installed if an increasing share of CO2-neutral fuels is used from 2029 onward.

Building Minister Verena Hubertz stressed that the chapter of the old law is now closed. Tenants and owners gain more decision freedom, the draft states.

The National Normenkontrollrat sharply criticized the text. Chairman Lutz Goebel called it one of the most poorly crafted and impractical projects in recent years. The council urged the Bundestag to revise the draft in the parliamentary process.

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Union and SPD politicians shaking hands on new Building Energy Act reform, with energy transition symbols in a Berlin conference backdrop.
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Union and SPD agree on new heating law

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The Union and SPD have agreed on the key points of a new Building Energy Act, abolishing the existing heating law. Instead of a 65 percent requirement for renewables, there will be a gradual increase in climate-friendly shares for gas and oil heaters. The reform is set to take effect before July 1.

Germany's municipal associations have positively received the planned changes to the heating law but warn of additional burdens and demand funding. The agreement between the Union and SPD aims to abolish the 65 percent rule for renewables and introduce a gradual shift to climate-friendly fuels. Meanwhile, the Federal Constitutional Court is reviewing the parliamentary process of the original version.

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The black-red coalition has agreed on key points for reforming the heating law and scrapped the controversial 65 percent rule for renewable energies. Instead, oil and gas heaters will be allowed with increasing shares of green fuels. Environmental groups and the Greens criticize the changes as a setback for climate protection.

Vermont's Affordable Heat Act, passed in 2023 to reduce heating emissions, was abandoned by regulators in February after years of debate. The policy aimed to shift the state away from fossil fuels for home and business heating but faced political opposition and design challenges. While some view the closure as a financial relief, others lament the lost opportunity for emissions cuts.

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Germany's finance ministry opposes Economy Minister Katherina Reiche's proposal to cut the electricity tax for businesses and households. The dispute in the black-red coalition over relief from high energy prices is escalating after Reiche and Finance Minister Lars Klingbeil clashed on Friday. Chancellor Friedrich Merz has expressed annoyance at Reiche's push.

Germany's greenhouse gas emissions fell by just 0.1 percent in 2025 to 649 million tons of CO₂ equivalents, marking the smallest decline in four years. Opposition parties Greens and Left criticize the federal government for shortcomings and warn of EU fines in billions. Environment Minister Carsten Schneider highlights progress but calls for a push.

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Following the neutralization of the Fuel Price Stabilization Mechanism (Mepco), President José Antonio Kast's government has promulgated a law providing relief measures against historic fuel price surges triggered by the war in Iran. Finance Minister Jorge Quiroz emphasized fiscal responsibility, detailing bonuses for transporters and paraffin price cuts.

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