German Bundesrat approves controversial Building Modernization Act reform

Here is the rewritten news content in clean, professional English Markdown.

Bundesrat Largely Approves New Heating Law Despite Committee Criticism

The federal government's new heating law is broadly acceptable to the state governments, despite a more critical tone struck in committee discussions.

6.12.2026 | 4:27 PM

The heat pump will be the preferred solution in many cases in the future. Photo: Christian Ohde/imago

By Jonas Waack

The Bundesrat has largely approved the reform of the federal government's heating law, despite harsh criticism from the state chamber's environment, housing, and economic committees. The environment and economic committees, for example, criticized that the amendment slows down the "heat transition, which is just gaining momentum," and thereby "unnecessarily prolongs dependence on fossil fuel imports." However, the state governments rejected a corresponding formulation. A mandatory end to fossil fuel heating systems by the legally stipulated climate neutrality target of 2045 also failed to find a majority.

Background of the Reform

The Union and SPD agreed in February to reform the Building Energy Act, known as the heating law. Under the new law, to be called the "Building Modernization Act," the regulation requiring new heating systems to be operated with at least 65 percent renewable energy from July 2026 is dropped. This requirement would have excluded gas and oil boilers in most houses.

Instead, the so-called "bio-staircase" will gradually mandate higher proportions of gas and oil from agricultural production:

• From 2029: at least 10 percent
• By 2040: still only 60 percent

Criticism of the reform came not only from environmental associations but also from municipal utilities and energy companies.

Political Reactions

Hamburg's housing senator Karen Pein (SPD) stated in the Bundesrat that she "would put a big question mark" on whether the Building Modernization Act provides the innovation security desired by the real estate industry.

"The heat transition is the protective shield against the costs of fossil energy." — Christian Meyer, Environment Minister of Lower Saxony

Lower Saxony's Environment Minister Christian Meyer (Greens) warned that the reform, particularly in light of increased oil and gas costs following the Israeli-US attack on Iran, should not unsettle "those who have recognized the signs of the times" and have opted for a heat pump. Meyer specifically criticized the bio-staircase as a "cost trap," noting that agricultural fuels are a "scarce commodity" also needed in industry and shipping. He added that the potential for biomethane from Germany is limited, "if we do not want to fall back into import dependencies."

Bundesrat Recommendations

The Bundesrat recommended that the federal government oblige heating buyers to seek advice covering:

• Future price risks of agricultural fuels
• Upcoming CO₂ price increases
• Regional development of gas network infrastructure

The state chamber also supported giving state governments more leeway to ban certain types of heating systems themselves. Hamburg's housing senator Pein referred to a referendum obliging the Hanseatic city to achieve climate neutrality by 2040, stating, "it could be about no longer allowing oil heating systems to be installed."

Unaddressed Pitfall

The Bundesrat left one pitfall of the law untouched: Landlords must bear half of the additional costs of agricultural fuels if they opt for a fossil fuel heating system. However, this division only applies up to a share of 30 percent. If the share reaches 60 percent from 2040, tenants alone must bear this increase. The Bundesrat rejected a motion to split the additional costs equally without an upper limit. The regulation is only to be reviewed in 2030 instead of 2036.

"The heat pump will be the preferred solution in many cases in the future," defended Stefan Rouenhoff (CDU), parliamentary state secretary.