The German government is embroiled in a contentious debate over the reform of the Building Energy Act (GEG), with Economy Minister Katarina Reiche (CDU) advocating for a significant reduction in subsidies. In an interview with the Frankfurter Allgemeine Sonntagszeitung, Reiche questioned the reliance on mandates, arguing for a shift towards incentivizing emissions reductions through carbon pricing and a more targeted approach to financial support.
Reiche’s proposals center on the assertion that existing subsidy levels are driving up costs for consumers. She claims the installation of heat pumps in Germany is substantially more expensive than in other countries, implicitly suggesting a need for reassessment. Her preferred model focuses on directing aid specifically to lower-income households, effectively scaling back support for higher earners.
The proposed reforms follow protracted negotiations between Reiche and Construction Minister Verena Hubertz (SPD), a direct consequence of the demands from the CDU/CSU bloc to abolish the current legislation during the recent election campaign. The existing “heating law” as it’s colloquially known, will be rebranded as the “Building Modernization Act”. This renaming signals a broader shift in approach, moving away from a prescriptive regulatory framework tied to heating systems.
While the SPD appears to concur with the reduction of subsidies for higher-income bracket homeowners, they remain steadfast in their insistence on prohibiting the installation of new, climate-damaging heating systems. Despite the sharp divergence in viewpoints, Reiche expressed cautious optimism about reaching a compromise, emphasizing ongoing discussions with various stakeholders within the governing coalition.
However, experts warn that significant challenges remain. The German Advisory Council on Climate Change, charged with monitoring the implementation of the Federal Climate Protection Act, highlights continued urgency in the building sector’s emissions reduction efforts. The council’s analysis underscores that accelerated action in this area is critical for mitigating energy costs for consumers and minimizing the broader social and economic burden across Germany and the EU. Delaying or weakening climate-focused policies risks exacerbating the energy crisis and jeopardizing Germany’s long-term climate goals, potentially undermining public trust in the government’s commitment to environmental sustainability.