German Cities’ Progress on Climate-Neutral Heating Could Stall with New Coalition Government

German cities are phasing out natural gas heating networks to become climate-neutral, but key laws driving that shift could be rolled back by the country’s new government.

“There are significant risks that the new government might derail the transition away from gas,” Jan Rosenow, vice president for global strategy at the Regulatory Assistance Project, told The Energy Mix.

“Politicians of the [Christian Democrat Union (CDU)] have said publicly that they would roll back the heating law and also reduce the grant payments substantially.”

Adopted in 2023, Germany’s heating law, the Building Energy Act, aims to eliminate natural gas for heating as part of its transition to a climate-neutral energy system. Fuels like hydrogen and biomethane will not be sufficiently available in the foreseeable future to replace gas and be distributed through the same network infrastructure (before even factoring in serious concerns about hydrogen in space heating networks). So German cities are instead developing district heating systems and deploying heat pumps.

Some cities—like Mannheim and Hamburg—have already made progress toward this goal, with Mannheim aiming to stop using gas networks entirely by 2035, writes Rosenow, with co-author Claudie Kemfert, in Progress Playbook.

The switch is driven by the controversial Building Energy Act, which aims to increase the amount of renewable energy used for heating homes and other buildings. Changes to the law’s initial drafting mean its emissions cuts will be lower than first expected.

Under the law, newly-installed heating systems have, since 2024, been required to source 65% of their energy from renewables, though gas heaters are still permitted if they are also compatible with hydrogen. All district heating networks must be climate-neutral by 2045, and so will need to be powered by 100% renewable energy by that time.

Municipalities with more than 10,000 people are also required by another law, the Heat Planning Act, to create plans that “assess the potential for integrating renewable energy sources, waste heat, and other low-emission technologies into the district heating networks or other heating solutions,” says Rosenow.

Those goals are supported by significant funding, including a €3-billion subsidy support program for district heating rolled out in 2022. The German government has also proactively pushed for homeowners to install more heat pumps and offered direct financial subsidies through the Federal Funding for Efficient Heat Generation program.

However, demand for heat pumps declined last year amid skepticism and pushback from consumers, says Deutsche Welle (DW), the German international broadcaster.

Now the cities’ transition away from gas heating could be derailed, given the results of the recent election, in which the incumbent “traffic-light coalition” was replaced by the more conservative Christian Democrats. Though the likely coalition of CDU and the Social Democratic Party (SPD) is not expected to stray far from Germany’s current climate commitments, the CDU—and Friedrich Merz, its leader and soon-to-be chancellor—have taken issue with some policies, including the heating law. CDU has promised to do away with the law, though SPD is unlikely to agree.

Recently, an alliance of heating sector associations released a joint appeal to the new government coalition to continue work to decarbonize heating, but to also reform the Building Energy Act to reduce bureaucracy and create “understandable requirements for building owners,” reports Clean Energy Wire.

“The switch to a climate-neutral heat supply and the associated CO2 reductions represent one of the greatest social and economic challenges of our time,” the appeal emphasizes.