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Key-points paper underpinning the new Buildings Modernisation Act
The coalition has agreed on the key elements of a new Buildings Modernisation Act, which will be technology-neutral and offer flexibility for buildings modernisation and for the replacement of heating systems. The decision as to which technology is to be used for replacement heating systems will rest with the owners. Their freedom to decide and hold themselves to account are to be strengthened.
“We want to stop banning things and focus on common sense, freedom and speed. This will enable us to clear the backlog of investment and get the modernisation of our building stock going again. It will generate confidence, trust and certainty for the people in Germany and strengthen our skilled crafts sector”, said Federal Minister for Economic Affairs and Energy Katherina Reiche.
Key elements of the new Buildings Modernisation Act
The very detailed requirements set out in the Buildings Energy Act, which included the 65% rule for renewables, forced people to take advice on how to replace their heating systems, and imposed bans on installing and operating certain types of heating systems, will be eliminated.
In future, owners will once again be able to choose the type of heating system they would like to use. Gas and oil-fired heating systems will once again be a legal option. Those who want to continue to use gas or oil will be required to add a fixed quota of bio-based fuel as of 2029. Initially, this quota will be set at 10%. The Act sets out three incremental increases of this quota by 2040.
At the same time, the Act sets additional incentives for using climate-friendly fuels to heat buildings, so as to reduce greenhouse gas emissions from buildings. As of 2028, a moderate green gas or green heating oil quota to be met by the sellers of gas and heating oil will support the ramp-up of biomethane, biogenic liquid gas, bio oil and hydrogen. At the start in 2028, this quota will stand at up to 1%. The Federal Ministry for Economic Affairs and Energy will present a key-points paper setting out the details of this by summer 2026.
In many cases, it will make sense to use a heat pump. Funding for heat pumps will continue to be available. Biomass-based heating systems and pellet heating systems will play a role in the Buildings Modernisation Act. It is still possible to use any of the common hybrid models. Building modernisation for the purpose of increasing energy efficiency will continue to play a key role. More modernisation is to be market-driven, and modernisation activities are to be increased considerably.
The key-points paper is to deliver greater clarity and certainty. The skilled crafts sector will receive much needed orders. The climate targets for the buildings sector remain in place. The new Act will support the transition to climate-friendly heating solutions. The Federal Ministry for Economic Affairs and Energy and the Federal Ministry for Housing, Urban Development and Building will develop a ministerial draft, which will then be debated by the ministries before going the Länder hearing and a consultation of the relevant associations.