German Building Modernisation Law Overhauls Heating Regulations

The Bundestag and Bundesrat approved the new Gebäudemodernisierungsgesetz (GModG) on 10 July 2026, repealing the previous building‑energy law and the 65 % renewable‑heat requirement. The law opens the market to gas and oil boilers again but introduces a stepped “bio‑fuel ladder” (Biotreppe) that obliges new installations to use at least 10 % climate‑neutral fuels from 2029, rising to 15 % in 2030, 30 % in 2035, 60 % in 2040 and 100 % by 2045.

Simultaneously, federal funding for efficient buildings (BEG) was revised, taking effect on 21 July 2026. KfW subsidies are reduced – the maximum eligible amount drops from €30 000 to €28 000 and will be lowered by €750 every six months. Income‑based bonuses are introduced (40 % for households ≤ €30 000, 30 % for ≤ €40 000, 10 % for ≤ €50 000) and the climate‑speed bonus is cut from 20 % to 16 % then declines semi‑annually. Certain bonuses for efficiency and biomass are removed.

The reform reshapes the heating market: owners can choose any technology – heat pumps, hybrids, biomass, or fossil boilers – but must meet the future bio‑fuel quotas. From 2028 landlords share half of network and CO₂ costs, and from 2029 also half of the additional bio‑fuel surcharge. Industry groups (MEW, TSD, engineering chambers) stress the need for planning certainty and warn that added bureaucracy could slow the transition. A Fraunhofer IFAM study warns that biogas alone will not keep gas networks viable, potentially leading to network closures by 2045. Municipal representatives highlight implementation gaps and call for faster, standardized serial renovation programmes.