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24.11.2023 | KPMG Law Insights

GEG 2024: Many new obligations, not just for heating systems

On January 1, 2024, numerous new regulations of the Building Energy Act (GEG) will come into force. The law is intended to make a significant contribution to achieving the national climate protection targets (climate neutrality by 2045). In future, at least 65 percent of new heating systems are to be powered by renewable energies. Many people are asking themselves the question: does this mean that functional heating systems have to be replaced with heat pumps and the like?

In addition, the new GEG contains a series of requirements for existing buildings, for example with regard to the insulation of buildings, the automation of technical building systems and testing and optimization obligations for existing heating systems.

This applies to new heating systems under the GEG

A key pillar of the new GEG is the requirement that newly installed heating systems must be powered by at least 65 percent renewable energy. How this requirement can be met depends on the type of heating system (solar thermal, green/blue hydrogen, district heating, heat pump, etc.).

There is also no uniform regulation as to when the requirement applies. For new buildings in new development areas, the requirement of 65 percent renewable energy will already apply from January 1, 2024. For existing buildings and for buildings that are not erected in a new development area, the law only applies after transitional periods have expired. The size of the municipality is decisive here. In larger cities (more than 100,000 inhabitants), the requirements only apply to heating systems that are installed after June 30, 2026. In smaller municipalities (less than 100,000 inhabitants), new heating systems do not have to meet the requirements until July 1, 2028. The background: building owners should have the opportunity to make their investment decision dependent on municipal heating planning. The municipalities must prepare these by the dates specified.

Old heating systems may need to be retrofitted

However, anyone who installs a new oil or gas heating system during the transition period must retrofit it later or install a heating system from the outset that can be operated not only with fossil fuels but also with renewable energy, for example hydrogen. The following applies to new heating systems installed during this period: from January 1, 2029, at least 15 percent of them must be powered by renewable energies (i.e. biomass, green or blue hydrogen), from January 1, 2035 at least 30 percent and from January 1, 2040 at least 60 percent.

Obligation to replace the heating system?

However, there is no obligation to replace an existing and functional oil or gas heating system with a heat pump or other heating system powered by renewable energy. Defective heating systems may also be repaired if they are not operated with at least 65 percent renewable energy. However, this does not apply to boilers that are operated with liquid or gaseous fuel and were either installed before January 1, 1991 or have been in operation for more than 30 years. These are already inadmissible under the previous provisions of the GEG.

Further new requirements for existing buildings

The many other regulations of the new GEG have received less attention in the media, which mostly only talk about the “Heating Act”. There are a number of other obligations and requirements that do not affect heating systems and that will apply to owners of residential and non-residential buildings from January 1, 2024:

In existing buildings, systems and equipment for heating, cooling, ventilation and hot water supply that reduce energy consumption must be kept in working order and used and operated as intended or properly. Under certain circumstances, building owners may have to add insulation if the top storey ceiling has a heat transfer coefficient that is too high. In addition, the energy quality of existing residential buildings must not be adversely affected, for example by changing the exterior components, the heating, cooling or ventilation systems or the hot water supply.

Energy efficiency requirements

New buildings, on the other hand, must be constructed as nearly zero-energy buildings from the outset and have a certain minimum level of thermal insulation. Further requirements for new buildings are: the minimization of thermal bridges, summer heat insulation, the maximum permissible heat loss and the maximum permissible primary energy requirement.

Finally, the new GEG contains various requirements for heating, cooling and ventilation systems. In particular, this means that central heating and air conditioning systems must be equipped with automatic control devices. This applies both to new buildings and to existing buildings that are not intended for residential purposes if the nominal output of the heating system or the combined space heating and ventilation system is more than 290 kilowatts. For non-residential buildings to be constructed, a building automation system may also be required.

Other obligations for all property owners

The obligation to draw up an energy performance certificate has been extended by the GEG: in future, the type of renewable energy used to meet the 65 percent EE target must also be specified in the certificate. In addition, there are various obligations to optimize heating systems and inspect air conditioning and ventilation systems.

Property owners should check whether they are affected by the GEG

The new GEG contains a large number of obligations in relation to buildings. In order to avoid bad investments that may not meet the requirements of the GEG, property owners should therefore now carefully examine which requirements will apply to their specific property in the future. In each federal state, requirements could be added in accordance with state law, for example for mandatory photovoltaics in new buildings and roof renovations or roof refurbishments on existing buildings. This could be important for the choice of future energy source and heating system. Homeowners should also look into the possibilities for subsidies. The Federal Office of Economics and Export Control (BAFA) provides several programs for subsidies for efficient buildings.

Contrary to the impression that may have been created during the public discussion about the “Heating Act”, property owners who are not planning any structural measures, in particular no heating replacement, should also inform themselves in detail about the requirements of the new GEG. Even if the new GEG does not provide for a direct obligation to replace heating systems, it does contain a number of requirements and prohibitions that apply to existing buildings and their owners. Early information protects against expensive surprises.

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