Germany's building renovation law sparks debate over biofuel ladder and grid bottlenecks

Germany’s Federal Council’s specialist committees have sharply criticised the draft Building Renovation Act (GModG), describing it as “handicraft‑deficient” and warning that the proposed “bio‑ladder” – a step‑wise increase in biogas, bio‑oil or green hydrogen use for new gas and oil boilers – could create unaffordable heating costs and strain the supply of biogenic fuels. The committees call for a return to a strict 65 % renewable‑energy requirement for heating or, at minimum, more pragmatic adjustments.

At the same time, the government’s plans to reform the Renewable Energy Act (EEG) would remove feed‑in tariffs for new PV installations up to 25 kW from 2027, tighten output caps and impose direct‑marketing obligations, measures critics say could slow solar expansion. Separately, Economy Minister Katherina Reiche’s proposed “grid package” to change connection rules for renewable projects has drawn opposition from environmental groups, who argue that granting distribution network operators greater discretion and ending a ten‑year redispatch compensation scheme would worsen investment certainty and exacerbate existing grid bottlenecks. Together, these policy proposals highlight the challenges Germany faces in aligning its building sector and electricity infrastructure with climate targets.