fact finder
The federal government’s draft law on climate-friendly heating has caused quite a stir. False reports are also circulating – for example, all oil and gas heating systems will have to be replaced in the coming year.
“Completely insane regulations, compulsory purchase of heat pumps, de facto ban on oil and gas heating: All of this inevitably leads to the impoverishment of the middle class because people simply can no longer afford it,” tweeted AfD co-chairman Alice Weidel at the end of April . The reason for the excitement: The Draft amendment to the Building Energy Act (GEG) written by the Federal Government, led by the Ministry of Construction (BMWSB) and the Ministry of Economic Affairs (BMWK). But what is the truth of the points of contention?
No obligation to replace the heating system
One of the main accusations against the bill is that the federal government wants to ban oil and gas heating in general. But that’s wrong, says Benjamin Pfluger from the Fraunhofer Institute for Energy Infrastructure and Geothermal Energy IEG. Because the law only affects the installation of new heaters from 2024: “The point is that if an oil or gas heater is irreparably broken, it can normally no longer simply be replaced with an oil or gas heater, but that a device or a combination of devices must be installed that are operated with at least 65 percent renewable energy.” There are also a few exceptions in the draft: For example, the GEG does not apply to all types of buildings, and a hardship provision is also provided.
The background to this is that the government has committedto reduce the proportion of fossil fuel heating systems in the building sector. According to the Economics Ministry, more than 80 percent of heat demand is currently covered by burning oil and gas – primarily natural gas from Russia. According to the Federal Association of Energy and Water Management, 148 million tons of CO2 were produced in 2021 when heating, cooling and providing hot water in buildings. This corresponds to 22 percent of energy-related CO2 emissions in Germany.
Against this background, according to Pfluger, the main problem is that gas heating, for example, has been subsidized in Germany for so long. “Germany has made itself comfortable in its cozy corner of cheap Russian gas and slept through the transformation. And that’s hitting us twice as hard,” he says. Because the outcry is now so great because the topic can no longer be tackled slowly, but a lot has to happen within a few years. “Our way of heating is simply not sustainable,” says Pfluger. “Therefore, moving away from fossil fuel heating systems is simply unavoidable.”
The federal government therefore wants to promote and encourage the purchase of climate-friendly heating systems. A look at heat pumps shows how far Germany is lagging behind in a European comparison: in Germany last year according to the European Heat Pump Association (EHPA) only 5.75 heat pumps per 1000 households were sold, compared to almost three times as many in the Netherlands and France. The Scandinavian countries are even further ahead, with Finland at the top with 69.36 heat pumps.
Manuel Ruppert, group manager for transport and energy at the Karlsruhe Institute of Technology (KIT), considers the amendment to the GEG to be “a sensible instrument”. “In recent years we have observed a very high level of inertia in the building sector when it comes to renovations.” There is definitely potential for savings in the heating sector with regard to CO2 emissions. If Germany wants to achieve the climate goals, greenhouse gas emissions would have to be reduced in all areas.
The crux with the technology openness
Another contentious issue is the question of openness to technology. Even if there is no compulsion to purchase heat pumps, as AfD boss Weidel claimed, according to the draft law they are ascribed a “decisive” role – together with solar thermal energy. On the other hand, the ranks of the FDP, among others, called for more openness to technology with more climate-friendly alternatives for fossil heating systems. From the point of view of the experts, however, the criticism does not go far enough.
“I think openness to technology is wonderful,” says Jan Steinbach, Managing Director of the Institute for Resource Efficiency and Energy Strategies (IREES). “But if the goal is that we want to become climate-neutral, then I can only move within a target system where I compare technologies that provide climate-neutral heat. And then a lot of technologies are eliminated.”
Ruppert sees it that way too. “When it comes to legislation, we are first talking about the framework conditions for the next few years.” As a result, alternative heating systems, which are operated with green hydrogen, for example, would play practically no role. “Our analyzes show that green hydrogen will still be a very scarce commodity, at least for the next few years,” says Ruppert.
In addition, other areas, such as the aviation sector or the steel sector, are much more dependent on green hydrogen to reduce CO2 emissions. Because there are fewer alternatives. In addition, according to one Study by the Potsdam Institute for Climate Impact Research (PIK) the production volume expected for 2035 is not even enough to cover the demand in shipping and air traffic as well as in the chemical industry. Since e-fuels are based on green hydrogen, the experts believe that they can also be ruled out as a climate-friendly heating method.
According to Pfluger, the problem is that it is now necessary to decide which technology to use. Because the infrastructure would be adapted based on this. “And that’s an incredibly complex process,” says Pfluger. “And if we then prepare everything to move in the direction of hydrogen, and therefore don’t install heat pumps or expand district heating networks, it will fall on our feet if the hydrogen doesn’t work because it comes too late or is unaffordable for heating is.”
When do heat pumps pay off financially?
The experts therefore see a mix of heat pumps, district heating and solar thermal energy as the most realistic options for completing the heat transition. However, since many households are not yet covered by a district heating network, the focus is on heat pumps. “The biggest benefit of a heat pump is efficiency and that it’s available for individual buildings,” says Steinbach.
However, critics complain about the high costs of purchasing a heat pump on the one hand and operating it on the other. However, general statements are difficult, says Steinbach. Because the prices of heat pumps and their installation are heavily dependent on the regional providers. The same applies to the running costs, since the electricity tariffs are not uniform – in some places, for example, there are heat pump tariffs that are below the regular electricity price.
Still would scenarios show that – calculated over a longer period of time – heat pumps are more economical than pure oil or gas heating in most cases – even with the assumption that the currently high gas prices will fall again, says Steinbach. In the long term, the operating costs of a heat pump would make up for the relatively high acquisition costs, since the experts also assume that electricity prices will fall in the future. There are also subsidies for climate-friendly heating systems.
“However, the relationship changes significantly when a heat pump is used in a poorly insulated building,” says Ruppert. “In addition, there are the very specific circumstances, for example the radiators that are already installed. It involves a relatively large amount of effort to adapt the entire system, especially in older existing buildings.” These points would then significantly reduce the overall efficiency of the heat pump. However, when comparing oil and gas heating systems, it must also be taken into account that fossil heating systems can become significantly more expensive to operate as CO2 prices rise.
Electricity mix a decisive factor in the CO2 balance
There is also an important unknown in the equation when it comes to CO2 emissions. After all, how climate-friendly a heat pump is ultimately depends heavily on the electricity mix. “The CO2 balance of a heat pump depends largely on the renewable share of the electricity,” says Ruppert. “That’s by far the biggest influencing factor.” Because the higher the share of renewable energies in the electricity mix, the more climate-friendly the heat pump is. However, the current German electricity mix is already sufficient for a heat pump to have a better CO2 balance in a direct comparison. Also several studies come to the conclusion that heat pumps are already a more climate-friendly alternative for many buildings.
In addition, the federal government wants to significantly expand the share of renewable energies in the coming years, so that the CO2 balance of a heat pump will be even better in the long term. Pfluger therefore warns against buying another oil or gas heating system too hastily. “I think that will make people fall on their faces. In a few years, CO2 trading will make fossil fuels such as natural gas very expensive.”
Heat transition also in coalition agreement
Incidentally, the draft law to amend the GEG does not come as a real surprise. Already in coalition agreement SPD, Greens and FDP wrote that by January 1, 2025 “every newly installed heating system will be operated on the basis of 65 percent renewable energies [soll]”. In March 2022, the coalition then decided to bring the start forward a year “against the background of the Russian war of aggression against Ukraine” in order to “end the dependency on fossil fuels from conflict regions and achieve climate protection goals”. In July 2022 it was published BMWSB and the BMWK a first concept paper in addition.
And there are already efforts at EU level to replace fossil heating systems with greener methods in the long term. From 2035, no new gas boilers should be installed in buildings – with the exception of gas boilers that are certified for operation with biogas or hydrogen. There are also considerations to further tighten the guidelines for certain heating systems.