On Wednesday, the German cabinet approved a bill prohibiting most new oil and gas heating systems from 2024, aimed at reducing greenhouse gas emissions. However, critics argue that this policy may impose financial burdens on low- and middle-income households.
Last month, Berlin’s ruling coalition agreed that nearly all new heating systems in Germany, including those in existing buildings, should operate on 65% renewable energy starting in 2024. This initiative supports Germany’s goal of becoming climate-neutral by 2045, as the construction sector accounted for 15% of the country’s emissions in 2021.
According to the bill, acceptable alternatives to fossil fuel heating include heat pumps powered by renewable electricity, district heating, electric heating, and solar thermal systems. Despite facing opposition within Chancellor Olaf Scholz’s coalition, the shift is expected to cost Germans around €9.16 billion ($10 billion) annually until 2028. From 2029, the expense is projected to decrease to €5 billion as renewable energy expansion and increased heat pump production make the transition more affordable.
Subsidies of 30% for residential properties and an additional 10% for early climate-friendly heating switches will be offered to homeowners, regardless of income. Homeowners receiving income-related welfare benefits could qualify for an extra 20% subsidy. Funding will come from the Climate and Transformation Fund, which has allocated €180 billion for 2023-2026.
Economy Minister Robert Habeck presented the bill, stating that the financing was secured, although he did not provide a cost estimate. The bill includes exemptions for homeowners over 80 years old experiencing hardship and imposes a €5,000 fine for noncompliance.
Germany’s urgency to phase out gas heating intensified following Moscow’s invasion of Ukraine, which prompted Berlin to halt Russian fossil fuel imports. Heating accounts for over 40% of Germany’s annual gas consumption, with almost half of the nation’s 41 million households using natural gas for heating and nearly 25% relying on heating oil.
A recent Forsa pollster survey revealed that 78% of Germans oppose the planned law, with 62% expecting higher heating bills after transitioning to renewables. Despite the challenges, environmental group Greenpeace praised the bill as a “milestone” for Germany’s climate protection efforts.
