Looming collapse of sustainable building retrofitting threatens climate targets, social peace – associations

An alliance of more than a dozen NGOs in Germany has voiced “great sorrow” about a looming collapse of sustainable building retrofitting in the country, arguing this could threaten climate targets, jobs and social peace. In an open letter to the government and the parliament, the alliance - which includes environmental NGOs Bund, Nabu, WWF, consumer protection organisation vzbv and industry associations such as energy efficiency initiative Deneff - said that orders for building modernisation have “massively declined or come to a halt altogether”. Applications for façade renovations, insulation and heat pumps have gone down significantly, the alliance said. This drop could lead to higher building emissions and to a rise in energy costs which would burden poorer households in poorly insulated homes even more - possibly leading to "massive social upheavals", wrote the organisations. “In the skilled trades, there’s a risk of layoffs. Companies that built up capacities based on political signalling will not be able to maintain them due to a lack of demand,” the alliance said, calling for a subsidy programme in the building sector. A lack of skilled workers could then also threaten long-term modernisation and construction targets. The alliance said it would be “an illusion” to believe that high energy and CO2 prices alone could lead to higher energy efficiency. The country needed a “schedule for retrofitting the entire building stock”, with respective changes to subsidy schemes, financing frameworks, regulative law and tenancy law, the group added.

Fast price increases and higher interest rates in the context of the energy crisis and generally higher inflation have had a negative impact on Germany’s construction sector and connected industries, making construction targets of the government increasingly difficult to achieve. Moreover, changing subsidy regimes and a high-level dispute over the country’s building energy law and bans on fossil heating have let customers hold back on energy efficiency and climate investments.