Germany to ban new gas and oil heating from next year

Source: https://www.ft.com/content/fbb800a9-5c6e-4781-943b-a6235f4149c9?sharetype=blocked

The German government has approved a bill banning new oil and gas heating systems from 2024 that opposition parties claimed would impose “incalculable costs” on homeowners.

The bill, which resolves a dispute between liberals and Greens in Olaf Scholz’s three-party coalition, stipulates that any heating system installed in new or old buildings after January 1, 2024 must be 65 percent based on renewable energy. Exemptions will be made for people on low incomes.

“Germany can neither achieve its climate goals nor quickly reduce its dependence on fossil fuels without a rapid sea change in the heating of buildings,” the bill said.

But the legislation attracted fierce criticism from homeowners’ groups. “The government wants to push through the energy revolution with a crowbar,” said Kai Warnecke, head of Haus & Grund, an association of property owners.

The measure will speed up the shift to heat pumps, solar panels and hydrogen boilers powered by renewables in German buildings. It is seen as a crucial part of Berlin’s efforts to achieve carbon neutrality by 2045.

Germany’s buildings were responsible for 112mn tonnes of greenhouse gas emissions last year, or 15 percent of total emissions.

The bill also serves a strategy of reducing Germany’s dependence on imports of natural gas. Berlin has been working on several fronts to shore up its energy security since Russia cut gas supplies after its invasion of Ukraine.

Heating buildings accounts for a third of Germany’s total energy consumption and 80 percent of the heat is derived from fossil fuels, according to government statistics. Almost half of Germany’s 41mn households use gas in heating and 25 percent heating oil.

Yet the price of running such fossil fuel-based systems is expected to increase substantially in the next few years as the EU’s emissions trading scheme is extended to buildings. That would, in effect, put a price on greenhouse gas emissions from buildings from 2027.

The opposition Christian Democrats (CDU) criticised the reform as a “profound intrusion into people’s property”.

“Homeowners, tenants, housing associations and heating network operators will face incalculable costs,” said Anne König, the CDU’s spokesperson on energy policy. “Many now worry . . . whether they can even afford the roof over their heads.”

The bill was one of several compromises negotiated during 30 hours of talks last month between Scholz’s Social Democrats, the Greens and the FDP, a liberal, pro-business party. The talks succeeded in breaking a logjam in the coalition’s legislative programme.

The fact that it has come about at all is seen as a big success for the Greens, who have long pushed for an ecological revolution in residential heating. But the FDP said they would seek changes to the text of the bill once it had been submitted to parliament.

Huge subsidies will be made available to help people make the transition, with the government covering 30 percent of the cost of installing new heating systems. A 10 percent bonus will be offered for homeowners who switch to climate-friendly heating before the deadline.

Under the bill, Germans living in old buildings will not be obliged to switch their heating systems after January 1 unless they break down. Exemptions will also be made for people on low incomes and those aged over 80.

After 2045, all heating systems will have to run exclusively on renewable energy.