Analysis , | 12/10/2025 : Heating Should Never Be a Luxury

Anticipation and impatience are growing with the German government set to release a white paper outlining a reform of renewable energy regulations for the building sector, better known as the “Heating Act”. First introduced by then minister for economic affairs Robert Habeck of the Greens, this piece of legislation became the subject of a fierce, months-long political brawl before being pushed through in 2023 by the traffic-light coalition. Just one-and-a-half years later, the Christian Democrats and their Bavarian sister party (CDU/CSU) succeeded in scrapping the agreement in coalition negotiations with the Social Democrats (SPD).

But the dispute is not over. Environment minister Carsten Schneider (SPD) has promised to maintain the requirement that 65 percent of heating be based on renewable energy. The CDU and CSU, on the other hand, insist on repealing the act.

Whether it be the traffic-light coalition or the grand coalition, for three years the Heating Act has strained coalition governments to the limit. The law is meant to shape Germany’s “heating transition”: the shift away from heating with fossil fuels such as gas, oil, or coal to renewable energy, together with a reduction in energy demand through building retrofits. The Right has turned the Heating Act into an opportunity to wage a culture war against heat pump technology and climate action more generally. In doing so, they have obscured the social consequences of a heating transition that is taking much too long.

A Political Powder Keg

The key levers of the heating transition — legal provisions on the one hand, grant programmes for climate-friendly construction and heating on the other — are under massive pressure. In order to fill gaping holes in the budget, the CDU/CSU–SPD coalition agreed on cutting the 2026 budgetary item “Federal Grants for Efficient Buildings” down to just 11.9 billion euro. It marks a bitter setback to climate policy, with the building sector already failing to reach statutory climate-related targets year after year.

The Right’s culture war continues to malign the heat pump as a vanity project of the Greens. Top Free Democratic (FDP) and CDU/CSU politicians have denounced the Building Energy Act as the “biggest destruction of value since World War II”. Simultaneously, Christian Lindner (FDP) — at that time minister for finance — himself had a heat pump installed at his period property (originally built, tellingly enough, in 1937).

The debate over the Heating Act is a doom loop, devoid of ideas, leaving voters with the false impression that nothing in their lives will — or will have to — change.

Following several months in office, the culture warriors from the CDU/CSU have revealed themselves to be just as clueless when it comes to overhauling the legislation. The latter is to become “more technology-agnostic” — a ridiculous comparative that is only necessary because the current law is already designed to be “technology-agnostic”. We see again that the politicians involved have no interest in discussing the revision on the basis of facts and relevant arguments.

Two years ago, the CDU/CSU delayed the passage of the Building Energy Act by three months with an historically unprecedented constitutional appeal, only to ultimately fail to propose even a single amendment. Today, too, those responsible — led by energy minister Katherina Reiche (CDU) — are charting a regressive course back into the age of fossil fuels. The debate over the Heating Act is a doom loop, devoid of ideas, leaving voters with the false impression that nothing in their lives will — or will have to — change.

Fossil-Fuel Dependency Hangs Tenants Out to Dry

This retrograde discourse is having dramatic effects on the social situation in Germany, as well as on the security situation and the climate. Following the Russian attack on Ukraine in February 2022, the federal government paid dearly for its policy of appeasement towards Russia. It was obliged to establish a 200-billion-euro buffer against rising gas and electricity prices, a mechanism dubbed the “electricity and gas price brake”. The bail-out of the biggest German gas company, Uniper, cost taxpayers a further 51 billion.

Geopolitical energy supply dependencies remain a key factor. Energy prices are unlikely to remain stable, let alone drop. Only recently, the European Union concluded a tariff deal with the US, promising Trump energy imports of 750 billion US dollars, mostly oil and gas. Billions per year also flow from the Climate and Transformation Fund and the special 500-billion-euro off-budget Infrastructure and Climate-Neutrality Fund to fossil fuel industry hangovers — such as through the financing of the gas storage facility or incentives for the construction of LNG terminals.

Given these figures, how is it possible that heat-pump subsidies amounting to 3 billion euro per year could become a colossal political football? To the German government, every private household that will no longer need to be supplied with gas in future ought to be worth its weight in gold.

Particularly for people in Germany with low and middle incomes, the situation is already tough. Housing costs have in any case undergone massive jumps over the last few years. Besides net rents, operating expenses have recently become a source of profit for real estate and energy companies, for instance through inaccurate heating cost account statements or legal loopholes relating to the provision of heating.

Curbing the costs for private households must become a key aim of the legislative framework.

In the face of these developments, non-government welfare and social advocacy organizations are sounding the alarm. A new report by the Deutscher Paritätischer Wohlfahrtsverband points out that when housing costs are taken into account, significantly more people live in poverty than is otherwise supposed. Housing poverty affects a total of around 21 percent of the population — 17.5 million people. The Federal Statistical Office recently published a shocking statistic: more than 5 million people in Germany can no longer to afford to heat their homes adequately.

The heating transition has a major role to play in the fight against housing poverty. Disproportionately, people with low incomes live in uninsulated buildings heated by means of fossil fuels. They have hardly any opportunity to escape from the current price spiral. Households with higher incomes often own their own homes, and can invest in climate-friendly technologies such as heat pumps and building renovations. Households with low incomes have no opportunity to do so, whether for lack of the financial means or for other reasons, since tenants have no say over whether their home will be hooked up to the gas line or renovated.

The resulting social disparities leave groups that are already burdened with scarcely any options. The fact that, currently, “investments” in climate policy measures are largely refinanced via rent payments generates a toxic cocktail in which climate protection is increasingly viewed as a threat to people in their individual life situations. Given a housing crisis that continues to worsen, governments need to take up the task of ensuring universal access to a heating transition rooted in social justice.

A Socially Just Heating Transition Rather Than Policy Made for Lobbyists

A just heating transition depends on a socially just funding policy. But while it is true that people on low incomes currently receive an additional means-tested bonus when replacing their heating system, households with very high incomes are the ones that mainly make use of the Federal Government Grants for Efficient Buildings programme. The money for the grants stems from the Climate and Transformation Fund; they are therefore funded partly by the CO2 levy that everybody pays to use heating oil or natural gas. The result is that the funding programme involves a massive redistribution of wealth from people at the bottom of the income scale to those at the top. This is squandering a great deal of confidence that needs to be regained.

However, that can only happen by means of regulations and protective mechanisms, alongside a transparent debate on how to transition to a heating infrastructure without fossil fuels. Curbing the costs for private households must become a key aim of the legislative framework. Changes to the Building Energy Act, as well as further legislation on the provision of heating, must guarantee that affected social groups will be protected and able to participate in decision-making. In addition, it is imperative that heating costs be capped and programmes for incentives that support climate policy in the building and heating sectors be linked with social justice criteria and a system of income-dependent grant payments.

Unfortunately, lobby groups exercise major influence on public debate and political decisions. The gas industry is worried about its future profits, the finance and real estate sectors about their lucrative trade in home heating. A response to vested interests and the right-wing demagoguery that decries climate protection and the heating transition cannot consist in dropping the topic from public discourse or blaming the traffic-light coalition. Only with a clear commitment to a heating transition that sets out to redress the social balance and ensure that no one is left behind will it be possible to persuade a majority of people of the advantages of a (heated) fossil-free future — and above all, to enable them to participate in it.

Translated by Marc Hiatt and Anna Dinwoodie for Gegensatz Translation Collective.