General – Energy Transition Germany
The German cabinet on Wednesday approved a bill that bans most new oil and gas heating systems from 2024, the economy minister said, a policy designed to cut greenhouse gas emissions but that critics warned could be costly for poorer households.
Berlin’s ruling coalition last month agreed that almost all newly installed heating systems in Germany should run on 65% renewable energy from 2024, both in new and old buildings.
The plan is part of Germany’s ambition to become climate neutral by 2045 as the construction sector was responsible for 112 million tonnes of greenhouse emissions last year or 15% of the country’s emissions.
Houses could also use heat pumps that run on renewable electricity, district heating, electric heating or solar thermal systems as acceptable alternatives to fossil fuel heating, according to the bill, which was seen by Reuters.
The policy has met resistance from within Chancellor Olaf Scholz’s coalition, with critics calling it too costly and a burden on low- and medium-income households and tenants.
Such a shift could cost Germans around 9.16 billion euros ($10 billion) annually until 2028, the draft bill showed. The costs would fall to 5 billion from 2029 as Berlin expects renewable energy expansion and a ramp up of heating pumps production to make the switch cheaper.
The government will offer a subsidy of 30% for residential properties occupied by owners and 10% extra if the owners opt for an earlier climate-friendly heating switch than required by law, regardless of the household income.
Homeowners who receive income-related welfare benefits could get 20% extra subsidy for the switch.
The money will come from the Climate and Transformation Fund, a supplementary budget to push green investments, with some 180 billion euros earmarked for 2023 to 2026.
“The financing is secured,” Economy Minister Robert Habeck told journalists in a news conference presenting the bill. Habeck declined to give a figure of how much this would cost the government but the sum would be moderate.
The bill gives some exemptions, for instance for homeowners who are over 80 years old and living in hardship.
Those who violate the new rules face a fine of 5,000 euros, said the draft law, which will be now be debated in parliament.
Germany’s push to phase out gas in heating became more urgent after Moscow’s invasion of Ukraine prompted Berlin to halt Russian fossil fuel imports.