‘Contradictory signal’: Germany scraps renewable heating law just as heat pumps gain momentum

By Angela Symons Published on 14/05/2026 - 15:27 GMT+2 Share Comments Share Facebook Twitter Flipboard Send Reddit Linkedin Messenger Telegram VK Bluesky Threads Whatsapp

Germany has back-peddled on its green heating law, despite heat pumps recently outselling traditional gas boilers.

A draft law requiring German households to replace fossil-fuelled boilers with climate-friendly alternatives has been dropped by the Cabinet.

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The Buildings Energy Act, also known as the Heating Act, has come under constant fire from critics who feared it would force households to spend thousands of euros on new systems.

The latest reform to the law, announced on Wednesday (13 May), aims to give homeowners greater freedom of choice and create “investment security” for construction companies, Economics Minister Katherina Reiche said after the cabinet meeting.

She announced that the “rigid” requirement that new heating systems must be powered by at least 65 per cent renewable energy would be abolished, along with “forced heating system replacements or bans”. This includes the ban on new oil and gas heating systems, phased in since 2024.

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However, critics say the reform could be “catastrophic” for the climate.

The “significant watering down of key provisions… postpones necessary decisions and will ultimately make the transition more expensive and more chaotic,” says Jan Rosenow, professor of energy and climate policy at Oxford University, adding that “the buildings sector has been missing its climate targets for years”.

The Greens’ parliamentary leader Katherina Droege, whose party introduced the original law in 2023, has called it “a complete abandonment of Germany's climate targets”.

The changes come as German Chancellor Friedrich Merz’s coalition government attempts to reverse declining approval ratings amid wrangling over tax, pension and welfare reforms.

Can ‘climate neutral’ fuels keep Germany’s climate targets on track?

The new Building Modernisation Act promises a more “flexible, practical and simpler” approach to its predecessor, “strengthening freedom of choice and personal responsibility" while “keeping climate targets in mind”, a summary from the German coalition government reads. The country has committed to achieving climate neutrality by 2045.

Germany’s BDI industry federation welcomed the change as “an important step towards finally getting investment back on track” and said it would boost construction, Reuters reports.

Under the proposal, gas and oil heating systems will still be allowed in future and households will be able to keep existing ones, but they must use an increasing proportion of “climate neutral” fuels – such as biofuels, biomethane, synthetic fuels and renewable hydrogen – starting at 10 per cent in 2029 and rising to 60 per cent by 2040.

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Made from plant materials, such as food crops or agricultural waste, biofuels have been touted as a green alternative to oil and gas. However, some climate experts warn that their production is emissions-intensive, drives deforestation, and creates conflict with food production.

The proposal to use biomethane and synthetic fuels is unrealistic, according to Rosenow. “[They] are limited and expensive resources. They are urgently needed in industry and other sectors,” he explains. “If they are now used to extend the lifetime of fossil heating systems, we are postponing essential structural decisions.”

The proposed law is expected to be passed before summer 2026.

The new law also implements the EU directive requiring all new buildings to be zero-emissions from 2030. Separately, if an evaluation in 2030 shows the building sector is missing its climate targets, the government has committed to adjusting the legislation.

Heating Act dropped as heat pumps gain traction

The abolition of the Heating Act comes just as heat pumps have begun to outsell gas boilers in Germany, as homeowners seek to reduce their exposure to volatile gas prices amid the war on Iran.

Last year, heat pumps accounted for almost half (48 per cent) of all new heating systems sold in the country, with 299,000 units sold. According to the European Heat Pump Association (EHPA), German sales of heat pumps in the first quarter of 2026 are up by 34 per cent compared to the same period in 2025.

“The timing is particularly critical: heat pumps are currently gaining significant momentum,” says Rosenow.

“Production capacity has been expanded, skilled workers trained, supply chains strengthened. Many homeowners are already voluntarily choosing climate-friendly solutions. At this stage, the reform sends a contradictory signal.”

The expert argues that energy policy should “learn from crises, not wait for the next one”, as he calls for clear investment signals and an “honest debate” about how climate targets can still be met under the reform.

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