Berlin is facing a political seismic shift in its approach to energy transition. In a move that signals a definitive break from the climate mandates of the previous administration, Economic Minister Katherina Reiche is preparing to scrap the long-contested ban on fossil-fuel heating systems originally slated for 2045.
The proposal, detailed in a new draft for the “Gebäudemodernisierungsgesetz” (Building Modernization Act), represents a substantial retreat from the Building Energy Act (GEG) championed by former Minister Robert Habeck. While the previous law set a hard deadline for the end of fossil-fuel boiler operation by 2044, the new framework under the government of Friedrich Merz appears to prioritize economic flexibility and social cushioning over rigid calendar deadlines.
According to details first reported by t-online.de, the draft currently undergoing inter-ministerial coordination removes any mention of a hard ban on fossil fuels by 2045. Instead, the government has pivoted to a more ambiguous target: securing a “nearly climate-neutral building stock by the year 2050.” This five-year extension, combined with the removal of the operational ban, fundamentally alters the trajectory of Germany’s residential heating transition.
A Strategic Retreat from 2045
The shift in dates is not merely a bureaucratic adjustment; it creates a significant tension between domestic policy and international commitments. Germany has previously pledged to reach full climate neutrality by 2045—the exact milestone where the previous ban was designed to take effect. By pushing the building sector’s goal to 2050 and qualifying it as “nearly” climate-neutral, the Reiche plan introduces a gap in the national climate strategy.
For homeowners, this change removes the “ticking clock” pressure that defined the Habeck era. The previous GEG was often criticized as a “heating hammer” that forced rapid, expensive upgrades. Minister Reiche’s approach suggests a belief that market incentives and gradual technological integration are more sustainable than legislative mandates. However, critics argue that removing the 2045 deadline may discourage the immediate investment needed to reach long-term goals.
The transition from the GEG to the Gebäudemodernisierungsgesetz is part of a broader ideological pivot by the Merz government, which has sought to dismantle several pillars of the “Ampel” coalition’s energy policy in favor of a more industry-friendly, pragmatic framework.
The ‘Bio-Treppe’: A Gradual Phase-Out
Rather than an outright ban, the new law introduces a mechanism known as the “Bio-Treppe” (Bio-Staircase). This system implements mandatory blending quotas for “green” gases and sustainable heating oils for owners of new gas or oil heating systems. Instead of forcing a switch to heat pumps, the government intends to gradually “green” the existing fossil fuel infrastructure.
The proposed quotas follow a steady upward trajectory:
- 2029: A minimum blend of 10% green energy.
- 2030: An increase to 15% green energy.
- 2040: A peak requirement of 60% green energy.
Under this model, by 2040, a heating system would still be permitted to use 40% fossil fuels. This approach provides a lifeline to the existing heating industry and avoids the immediate logistical bottlenecks associated with a nationwide heat-pump rollout, though it relies heavily on the future availability and affordability of synthetic fuels and biomethane.
Balancing the Burden: The Tenant Cost Brake
One of the most contentious aspects of the previous heating laws was the “modernization levy,” which allowed landlords to pass a significant portion of the costs of new, green heating systems onto tenants through rent increases. Minister Reiche has addressed this by introducing a “Kostenbremse” (cost brake) designed to redistribute financial risk.
In a deal reached between the CDU/CSU and SPD parliamentary groups, as well as the ministries of Justice and Construction, the new law will mandate a more equitable split of costs between landlords and tenants. Notably, the draft includes a provision requiring landlords to contribute to the costs of network fees and fuel when installing new gas or oil systems—a departure from traditional rental laws where operational energy costs are borne almost exclusively by the occupant.
Minister Reiche described the agreement on tenant protection as “the last piece of the puzzle,” clearing the legislative path for the Building Modernization Act to move forward.
Comparing the Policy Shift
The following table outlines the primary differences between the previous Building Energy Act (GEG) and the proposed Building Modernization Act.
| Feature | Previous GEG (Habeck) | Proposed Act (Reiche) |
|---|---|---|
| Fossil Fuel Ban | Hard stop by end of 2044 | Removed / No operational ban |
| Climate Target | Neutrality by 2045 | “Nearly” neutral by 2050 |
| Transition Path | Rapid switch to renewables | “Bio-Treppe” blending quotas |
| Tenant Impact | Modernization rent increases | Cost-sharing “Brake” |
| Max Fossil Use | 0% after 2045 | 40% permitted in 2040 |
Disclaimer: This article discusses legislative proposals and legal frameworks. It is intended for informational purposes and does not constitute legal or financial advice regarding property modernization or energy compliance.
The draft is currently in the “Ressortabstimmung” phase, meaning it is being reviewed by various government ministries to ensure consistency across departments. The next critical checkpoint will be the formal presentation of the cabinet draft to the Bundestag, where it is expected to face intense scrutiny from climate advocacy groups and opposition members concerned about the 2050 timeline.
We want to hear from you. Does a gradual “Bio-Treppe” approach make more sense for homeowners, or is the 2050 target too late to meet climate goals? Share your thoughts in the comments below or share this story on social media.
