Resolute state intervention must initiate heating transition - study

Getting the energy transition in Germany’s heating sector off the ground will be difficult since most investments have to be made by private citizens rather than by commercial actors and therefore this task warrants large-scale state intervention, a study commissioned by the Mannheim-based public utility MVV finds. “The heating transition is much more multi-layered and more complex in its redistribution effects than the transition in the power sector,” and modernisation efforts costing up to nine billion euros by 2030 are made even more difficult by the already high housing costs in the country, the study carried out by the research institute ifeu and the consultancy Ecofys says. But the challenges in the heating sector can no longer be ignored if Germany is to reach its climate goals, and the state therefore has to generate demand for “green heating” through instruments like a CO2 tax, regulation of carbon intensity in the sector, or subsidising cleaner technology.
According to Germany’s Climate Action Plan 2050, greenhouse gas emissions from heating will have to be cut by at least 66 percent by 2030 compared to 1990 levels. Emissions from buildings amounted to 130 million tonnes of CO2 equivalent in 2016, which translates into a reduction of 38 percent, figures published by Germany’s environment ministry (BMU) show. If Germany fails to reduce emissions as planned, it could face costs of up to 30 billion euros in the 2020s for buying additional EU emissions certificates.