German government reaches hard-fought compromise on fossil fuel heating ban

The German government has reached a compromise on the shift to climate-friendly heating by effectively postponing a ban on the installation of new fossil fuel heating systems, following months of bickering among the three-way coalition. Agreement on a draft law was only made possible by a number of concessions that were previously considered non-negotiable by individual governing parties - the Social Democrats (SPD), Greens, and pro-business Free Democrats (FDP). According to a report in Table.Media, the law – which has long been blocked by the pro-business FDP – will also postpone municipalities’ obligation to provide climate-friendly heating networks by several years. The main part of the law – a ban on fossil fuel-only heating systems – will only apply to new buildings from January 2024, and only to buildings in purely new construction areas. In its highly controversial previous agreement, the government had proposed a general de-facto ban on the installation of new fossil fuel heating systems from the start of next year.

In existing buildings and new buildings outside of development areas, new oil and gas heating systems can continue to be installed until the municipality has delivered a climate-neutral district heating plan, also with an extended deadline, the compromise states. Economy minister Robert Habeck described the result of the negotiations as “good,” adding that he was pleased that the government wanted to pass the law before the summer break - Habeck's long-stated aim. Energy and water industry association BDEW also welcomed the plans. However, environmental NGO Deutsche Umwelthilfe described it as “a low point for climate policy.” After a months-long debate, the coalition initially agreed in April to allow various technologies, longer transition periods and more compliance options to make the law “even more consumer-friendly.”

Germany has neglected the decarbonisation of its building sector for years — which is directly responsible for around 15 percent of the country’s entire CO2 output. The draft law for a phase-out of fossil fuel-powered boilers triggered a fierce debate, with critics arguing that the investment costs for climate-friendly solutions like heat pumps will overburden homeowners or tenants.