Headlines
Germany to scrap key parts of contentious heating law
Published by Global Banking & Finance Review®
Posted on February 25, 2026
2 min readLast updated: February 25, 2026
Tags:sustainability
Quick Summary
Germany plans to scrap the 2023 heating law, keeping oil and gas options while shifting to green gas quotas. New systems must use at least 10% biomethane from 2029, with higher steps to 2040; Greens fear climate goals could slip.
Germany to Roll Back Core Provisions of Disputed Heating Law
Impact on Household Budgets
What Changes for Homeowners
Economic and Policy Implications
BERLIN, Feb 25 (Reuters) - Germany's coalition parties have agreed to ditch a contentious heating law introduced by the previous government and allow homeowners to continue to install oil and gas heating systems.
Subsidies and Financing Options
Political Context and Campaign Promise
Replacing the rules, pushed through by the Greens in 2023, was an electoral promise of conservative Chancellor Friedrich Merz in last year's campaign and follows weeks of wrangling with his Social Democrat coalition partners.
Here are some details:
* Government says changes maintain goal of cutting emissionsfrom buildings, but gives households more freedom of choice overheating and technology * Under new plans, gas and oil heating systems must beoperated with increasing proportion of climate-friendly fuel,such as biomethane. Proportion is to be at least 10% in 2029 andrise in three further steps by 2040. * Previous law from 2023 required most newly-installedheating systems to use at least 65% renewable energy * Almost 80% of Germany's residential buildings arecurrently estimated to rely on oil or gas heating * Germany aims to be climate neutral by 2045. Transport andbuilding sectors have lagged on tackling climate change * Merz's conservatives and SPD promised to ditch previouslaw in their coalition deal agreed last year * Greens pushed through law in 2023 even though then EconomyMinister Robert Habeck had to water down his original plans dueto public outcry. A row within the three-way coalition of SPD,Greens and pro-business FDP caused backlash from homeowners andopposition parties, was widely viewed as beginning of end ofthat government * Greens politicians are now furious about move, arguing itputs climate goals at risk * Experts concerned that Germany may not have sufficientbiomethane, other green fuel to cover demandReporting and Editing Credits
Dateline and Attribution
(Reporting by Madeline Chambers, editing by Thomas Seythal)
Key Takeaways
- •CDU-SPD coalition moves to repeal the 2023 heating law and keep oil and gas options.
- •New plan replaces the 65% renewables mandate with rising green gas quotas.
- •Biomethane share starts at 10% in 2029, increasing in steps up to 2040.
- •Government says emissions goals for buildings remain, with more consumer choice.
- •Greens and experts warn supply of biomethane may be insufficient to meet demand.
Frequently Asked Questions about Germany to scrap key parts of contentious heating law
1What is the main topic?
Germany plans to repeal parts of its 2023 heating law, keeping oil and gas options while introducing green gas quotas that rise over time.
2What replaces the 65% renewable heating rule?
A quota system for climate-friendly fuels such as biomethane will apply to new gas and oil systems, starting at 10% in 2029 and increasing in stages to 2040.
3How does this affect climate goals?
The government says building-sector emissions targets remain, but Greens and experts warn limited biomethane and other green fuels could jeopardize progress toward 2045 climate neutrality.
