Uncertainty over climate friendly construction programmes after German government’s break-up

Programmes supporting climate friendly construction in Germany could become severely affected by the break-up of Germany’s coalition government, the building owner protection association BHB has warned. The country will likely enter 2025 on a provisional budget that provides no certainty whether certain schemes are continued, the group said.

If parliament fails to agree on a budget by 2025, provisional budgeting meant that money for support programmes coming from the country’s Climate and Transformation Fund (CTF) for private construction projects and energy-efficient modernisation might be halted, the BHB warned. Home builders which depend on these funds could run into "significant financial challenges", the association added. If no clarity is achieved on these programmes soon, building owners would put investments on hold and throw modernisation schemes back by several months.

In a debate in parliament on Wednesday (13 November), the construction policy committee debated the possible effects of the coalition government’s collapse, which is expected to lead to parliament getting dissolved in mid-December and a snap election on 23 February. 

Representatives of chancellor Olaf Scholz’s remaining coalition said the government would be in talks to ensure that important programmes continue in 2025 even if the year is started on a provisional budget, adding that public construction projects would not be affected by this. The government said that a programme for “Climate friendly new construction” had disbursed credits worth about 7.6 billion euros in 2023 and 5.9 billion euros for 2024.