Germany Scraps Controversial Heating Law to Boost Investment

German Chancellor Friedrich Merz's cabinet has agreed to abolish a contentious law mandating new buildings use 65% renewable energy for heating, citing investment deterrence. The new legislation allows existing gas and oil boilers, requiring new systems to blend climate-neutral fuels from 2029. Critics argue it abandons climate goals.

In a significant policy shift, German Chancellor Friedrich Merz's cabinet has decided to abolish a controversial law requiring that new building heating systems utilize 65% renewable energy. The measure, introduced under former Chancellor Olaf Scholz's government, faced backlash for potentially forcing households to abandon traditional heating systems in favor of green alternatives.

Part of a broader legislative package, this move aims to boost investment by replacing the old law with a building modernization initiative that drops the mandatory renewable heating requirement. Households will retain the option to keep existing boilers or switch to systems like heat pumps and district heating.

While the industry has welcomed the change as revitalizing investment, critics, notably the Greens, argue it undermines Germany's climate objectives. The new legislation still commits to climate neutrality by 2045, complying with EU directives to make new buildings zero-emission by 2030.