Germany plans to ban the installation of most oil and gas heating systems from next year, and the proposals approved on Wednesday triggered angry divisions in the cabinet.
The sweeping plans are designed to transform Germany’s heating systems in a bid to meet net-zero emissions targets that critics have called unworkable and discriminatory. Approximately half of the 41 million households in Germany currently use natural gas heating and almost a quarter use oil for heating.
Promoted by Finance Minister Robert Habeck of the Greens, the bill is due to reach parliament in June. But the pro-business FDP has lashed out, calling it the equivalent of an “atomic bomb” for Germany and expressing concern about its effect on the economy, the burden it will place on poorer households and the technical practicalities of its implementation. .
FDP leader Christian Lindner, who is also finance minister, indicated in a protocol note sent to his cabinet colleagues that he was willing to support the bill only if changes were made. He said he feared that the budget needed to carry out the task would blow up Germany’s strict debt control mechanisms. The party’s general secretary, Bijan Djir-Sarai, said the proposal was impractical and would have to be changed.
The CDU opposition, which has said it will oppose the bill, has called it a “leverage reform”, and Jens Spahn, the leader of the deputy parliamentary group, said his party “will do everything possible to ensure that this law does not happen this way.”
Environmentalists have largely embraced the proposal, with Greenpeace calling it a long-awaited milestone. Many experts have said that it does not go far enough.
Habeck said it was a necessary part of Germany’s ambition to become carbon neutral by 2045, saying the country was falling behind. “Compared to other countries that have done this before, we are starting late with this,” he said, referring to the Nordic countries, which are much less dependent on fossil fuels to heat their homes.
He responded to the FDP’s criticism by saying that “gazing at a problem doesn’t make things better.”
If the bill passes in June, it will enact a virtual ban on installing oil and gas heating starting in 2024. It will require nearly all newly installed heating systems to run on 65% renewable energy in new buildings and old ones, on which outdated models they would need to be replaced.
Homeowners will be encouraged to install heat pumps that run on renewable sources of electricity, or switch to district heating, electric or solar thermal systems. Biomass heat, hydrogen and gas obtained from an approved green source, such as biomethane, will be promoted under a subsidy payment program of 10-40% for each heating system.
Besides, “climabonis” or additional climate bonus payments, will be available in certain cases, for example, if someone voluntarily switches to a more climate-friendly system, regardless of income.
The challenge will be to make these energy sources more readily available. Other questions relate to a shortage of heating engineers (the industry estimates a shortfall of 60,000 workers), supply chain problems and a lack of technological development. Heat pumps are still considered unsuitable for many types of older houses, for which they require large amounts of electricity to be effective, even as the largest providers in the heating industry are working feverishly to improve the systems.
Homeowners over the age of 80 will be exempt from having to switch to new systems, as will those who receive social benefits.
The German Association of Local Utilities (VKU), which governs municipal infrastructure, urged the government to extend transition periods, calling the proposed law an “emotional roller coaster.”
A Forsa Institute poll showed that 78% of Germans were against the plans and 62% expected heating bills to rise as a result of the switch to renewables.
Initially, the scheme is expected to cost German taxpayers around €9.16bn a year until 2028, declining to €5bn from 2029 as the expansion of renewables and the reduction in the cost of Heat pumps due to mass production help offset costs.
It will be financed with the Climate and Transformation Fund of 180,000 million euros, to which the money collected from a CO2 the tax on emissions from fossil fuels is paid. A large segment of this fund is already dedicated to projects to insulate buildings to make them more energy efficient, raising concerns that finances may be tight.
Fines of €5,000 to €50,000 can be imposed on people who break the law.
Discussion of phasing out gas heating in Germany was reserved for environmental experts until Moscow’s invasion of Ukraine, which cut off Russia’s oil and gas supplies and prompted the decision to shift imports from fossil fuels.
Last week, Germany shut down the last of its three operating nuclear power plants, after decades of discussion.