Germany updates heating regulations and renewable energy mandates

New legal changes in Germany regarding the Building Modernization Act (GModG) have altered the requirements for heating systems. As of late July, the previous mandate requiring new heating systems to operate with at least 65 percent renewable energy has been removed, granting property owners more flexibility in choosing between heat pumps, district heating, biomass, hybrid solutions, or gas and oil.

However, fossil fuel options remain subject to increasing restrictions. Owners installing new gas, oil, or liquid gas heaters must comply with the ‘Bio-Treppe’ (Bio-Staircase) regulation. This requires a gradually increasing share of climate-friendly fuels, starting at 10 percent in 2029, rising to 15 percent in 2030, 30 percent in 2035, and 60 percent by 2040. Recognized fuels include biomethane, bio-oil, and hydrogen.

This shift places greater economic responsibility on property owners, who must now weigh initial installation costs against long-term variables such as fuel availability, electricity prices, CO2 costs, and future regulatory requirements.