Search
Contact
23.06.2023 | KPMG Law Insights, KPMG Law Insights

Traffic light coalition dovetails building energy law with municipal heat planning

In the debate on the amendment to the Building Energy Act (GEG), also known as the Heating Act, the traffic light coalition has agreed on “guard rails”. The linking of the GEG amendment with municipal heating planning is particularly new. This significantly changes the situation for existing buildings.

After the original bill provided, among other things, for a ban on the installation of oil and gas heating systems in new and existing buildings from 01.01.2024, the German government is now moving away from this rigid requirement. The installation ban is to apply only to new buildings from January 2024. For existing buildings, under the current draft, the regulations would not apply until municipal heat planning is completed.

The coalition government wants to pass the amended GEG before the summer break.

Interlocking of building energy law and municipal heat planning

Probably the most significant announcement by the federal government for the proposed legislation is the dovetailing of municipal heat planning with the GEG. Municipal heat planning is currently being advanced in a parallel piece of legislation, the Heat Planning and Decarbonization of Heat Networks Act (Heat Planning Act – WPG). The core of the WPG is that the municipalities identify their existing potential for a climate-neutral heat supply and the construction of corresponding heating networks, and create investment security through heating plans. Another goal of the law: by 2030, half of the heat supplied by pipelines is to be climate-neutral.

For owners of existing buildings, the linkage of the two legislative projects means that they can take into account the heat plan for the building when deciding on the heating technology to be installed when a heating system replacement is required. Because at that point they know whether the building can prospectively be connected to a heating network or whether a heat pump is worthwhile.

Building energy law to be more open to technology

The requirement that 65% of the energy used to supply heat must come from renewable sources is to remain in place. However, the requirements to meet this goal are to be revised. Heating systems that run on wood or pellets are now also considered regenerative. Furthermore, gas heating systems are to be allowed to be installed in new and existing buildings even after 01.01.2024 if they can be converted to hydrogen. The transformation plans previously provided for are no longer required. Instead, municipalities and gas grid operators must present a binding roadmap with binding interim targets for a hydrogen infrastructure by 2045.

Measures to avoid hardship

To avoid hardship for building owners and tenants, the federal government’s “guardrails” call for the creation of a comprehensive funding landscape. This is to be financed from the Climate and Transformation Fund. Further, the federal government intends to revise the exemption like the current exemption for owners over 80 years of age. Hardships in rental relationships are to be prevented by revising the modernization apportionment. In addition, landlords should be able to claim a further modernization levy for investments in climate-friendly heating if they have taken advantage of subsidies and the tenants benefit financially despite the further levy.

Conclusion

With the published guard rail paper of the Federal Government, the much discussed amendment of the GEG takes a new turn. Owners of existing buildings are likely to welcome the link between the obligations under the GEG and the results of municipal heat planning. The intended changes to the subsidy programs and the adjustments to the regulations on modernization apportionment under rental law can also make a significant contribution to the heat turnaround.

 

Explore #more

17.04.2025 | KPMG Law Insights

What the coalition agreement means for the financial sector

The coalition agreement between the CDU/CSU and SPD also has an impact on the financial sector. Here is an overview. Increasing the energy supply The…

17.04.2025 | KPMG Law Insights

AWG amendment provides for tougher penalties for sanction violations

Due to the ongoing Russian war of aggression against Ukraine, the EU wants to make it easier to prosecute violations of EU sanctions. The corresponding…

16.04.2025 | KPMG Law Insights

What the new digitization plans in the coalition agreement mean

The coalition agreement shows how the future government wants to shape Germany’s digital future. What do the plans mean for companies in concrete terms? Here…

14.04.2025 | KPMG Law Insights

How the new coalition wants to accelerate investment in infrastructure

The coalition agreement between the CDU/CSU and SPD marks a fundamental new beginning in German infrastructure policy. In view of a considerable investment backlog, the…

14.04.2025 | KPMG Law Insights

Coalition agreement 2025 and NKWS: Booster for environmental and planning law?

In the current coalition agreement, environmental and planning law is mentioned at various points throughout the coalition agreement, highlighting its great importance. However, the…

11.04.2025 | KPMG Law Insights

What’s next for foreign trade? The plans in the 2025 coalition agreement

Foreign trade and foreign trade have become particularly explosive in view of the new US tariffs. The CDU/CSU and SPD have agreed on the following…

11.04.2025 | KPMG Law Insights

Coalition agreement 2025: What the plans mean for the economy

The CDU/CSU and SPD have agreed on a coalition agreement. The central theme is the renewal of the promise of the social market economy. The…

10.04.2025 | KPMG Law Insights

Coalition agreement 2025: Housing construction on the move

In the coalition agreement, the CDU/CSU and SPD have agreed comprehensive reform plans in the area of housing construction. The aim is to speed…

10.04.2025 | KPMG Law Insights

Energy in the 2025 coalition agreement: what the future government is planning

In the coalition agreement, the CDU/CSU and SPD commit to the German and European climate targets and Germany’s climate neutrality by 2045. To this…

10.04.2025 | KPMG Law Insights

Focus on labor law – this is what the 2025 coalition agreement provides for

The CDU/CSU and SPD agreed on a coalition agreement on April 9, 2025. The overarching title of the paper is “Responsibility for Germany”. On 146…

Contact

Marc Goldberg

Partner

Tersteegenstraße 19-23
40474 Düsseldorf

Tel.: +49 211 4155597976
marcgoldberg@kpmg-law.de

Johannes Embacher

Manager

Tersteegenstraße 19-23
40474 Düsseldorf

Tel.:
jembacher@kpmg-law.com

© 2024 KPMG Law Rechtsanwaltsgesellschaft mbH, associated with KPMG AG Wirtschaftsprüfungsgesellschaft, a public limited company under German law and a member of the global KPMG organisation of independent member firms affiliated with KPMG International Limited, a Private English Company Limited by Guarantee. All rights reserved. For more details on the structure of KPMG’s global organisation, please visit https://home.kpmg/governance.

 KPMG International does not provide services to clients. No member firm is authorised to bind or contract KPMG International or any other member firm to any third party, just as KPMG International is not authorised to bind or contract any other member firm.

Scroll