German Economy Minister Reiche fast-tracks energy policy rollback, scrapping 2045 ban on new gas and oil heating

The Minister of Economic Affairs wants to push her laws for a new energy policy through the Bundestag quickly. The new Heating Act marks the start.

Publication date: 2026-06-20 20:03

On the roadway in front of Katherina Reiche's Federal Ministry of Economic Affairs on Berlin's Chausseestraße, traffic heading out of the city can only go in one direction: right. The straight-ahead route and the opposite turning lane are blocked by a large construction site.

Everyone who doesn't want to turn right is annoyed: drivers wanting to go straight; cyclists and pedestrians get in each other's way on the narrow sidewalk strip next to the construction site. It's similar with the energy policy of the minister, who resides here in the former building of the Vattenfall corporation. Almost everyone is irritated.

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Unlike the Swedish energy company, Reiche is not heading towards a fossil-free future. On the contrary. The minister repeatedly speaks of a "realignment" of the energy transition, better management, and greater cost efficiency.

Her tools include:

• The gutting of the traffic light coalition's Heating Act
• The construction of a massive gas power plant infrastructure
• Ending support for rooftop solar systems
• Worse financing conditions for wind turbines

She wants to get one part of these projects through the Bundestag before the summer break, and at least the other part through the cabinet.

Critics See a Neo-Fossil Agenda

In the eyes of her critics, this is a neo-fossil agenda, a massive rollback.

"We are in critical weeks for the energy transition," says Green Party MP Michael Kellner, former State Secretary in Robert Habeck's Ministry of Economic Affairs. He fears a "brutal slowdown" of the energy transition if Reiche actually has her way. "Important years threaten to be lost," he says. If the minister's plans become reality, it will "take a lot of effort after her term to get the energy transition back on track."

Important years threaten to be lost. — Michael Kellner, Former Green State Secretary

Next week, an important project enters the home stretch: the Building Modernisation Act, which guts the traffic light coalition's Heating Act. The highly controversial law is set to pass through the Bundestag and Bundesrat before the summer break – although the upper house cannot block it.

Criticism and Review of Legal Steps

The draft law, led by Reiche, cancels the expiry date for gas and oil heating systems, which under current law must cease operation by 2045 at the latest. By then, Germany aims to be climate-neutral. However, new gas and oil heating systems must be operated with certain percentages of so-called biofuels. Where the required quantities are to come from is unclear. Industry fears that burning biofuels will make them even more expensive, which are needed for the climate-neutral conversion of production.

Not only environmentalists reject the draft law, but also social and tenant associations. They expect that heating costs, especially for tenants, will rise enormously. Landlords alone decide on the type of heating. Installing a gas heating system is comparatively cheap for them, while tenants have to bear the high operating costs.

Experts predict that gas prices will rise sharply in the coming years due to higher levies and market developments. The planned quota for biofuels will also lead to higher costs due to scarcity. Landlords are supposed to partially share in the costs, but not in the expenses for gas.