Overview
- On Tuesday, July 7, 2026 the coalition circulated draft reforms that set out both the subsidy cuts and the new fuel rules, and the package has moved into parliamentary committee review with cabinet‑level steps reported.
- The government would drop the prior requirement that new heaters run on 65% renewable energy and instead impose a staged 'Biotreppe' that requires 10% green fuels from 2029, 15% from 2030, 35% from 2035 and 60% from 2040.
- The ministry’s draft would reduce grants for heat pumps and other low‑carbon heaters to save up to €2.1 billion between 2027 and 2030, cut the current maximum subsidy levels over time and shift support toward lower‑income households and families with children.
- Tenant protections in the draft force a 50:50 split of grid charges and CO2 costs for newly installed gas or oil heaters from 2028 and extend cost‑sharing for mandated biofuel surcharges from 2029, a change that industry says will add billing complexity and cost risk for landlords and tenants.
- Industry groups and environmental organizations warn the combined rollback of standards and subsidies will slow the heating transition and raise future fuel bills, and the coalition may delay a full Bundestag vote while awaiting possible Constitutional Court review.