New heating law: Merz is planning radical reforms for the future!

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New federal government plans to abolish the heating law. Chancellor election on May 6, 2025 to improve economic sentiment.

Neue Bundesregierung plant Abschaffung des Heizungsgesetzes. Kanzlerwahl am 6. Mai 2025, um wirtschaftliche Stimmung zu verbessern.
New federal government plans to abolish the heating law. Chancellor election on May 6, 2025 to improve economic sentiment.

New heating law: Merz is planning radical reforms for the future!

The new federal government is planning to abolish the heating law Mercury reported. This is seen as one of the first measures under the leadership of Friedrich Merz (CDU), who is due to be elected Chancellor on May 6, 2025. Merz aims to ensure a better mood in the economy by the summer, with a focus on reforming the Building Energy Act (GEG). While the Union speaks of complete abolition, the SPD describes the project as a reform.

Merz has emphasized that fossil heating systems should no longer be supported. The plan is to increase prices for fossil fuels in order to promote the transition to climate-friendly heating. A central component of this new heating law will be the CO₂ price. The coalition also plans to introduce EU Emissions Trading II (ETS II) from 2027, which will focus on the building and transport sectors. The ETS II will work according to the “cap & trade” principle and is designed to reduce CO₂ emissions annually.

Price Increases and Future Policies

Heating oil prices are expected to rise by 50 percent by 2035, while gas prices will increase by a third. From January 1, 2026, new oil boilers may only be installed under certain conditions, such as hybrid heating. However, homeowners are not required to replace working oil or gas heaters. Experts recommend considering alternatives at an early stage, especially when modernizations are imminent.

Reported in a further context Climate protection in the Bundestag that the federal government must implement the emissions trading directive into national law. Since 2021, the Federal Emissions Trading Act (BEHG) has levied a CO₂ price on those who distribute fossil energies in the heating and transport sectors. The ETS II will be introduced from 2027 in parallel to the existing EU emissions trading system (ETS I), which has existed since 2005 and provides emission certificates for the electricity and industrial sectors.

It is expected that the BEHG will be replaced by ETS II, depending on national implementation in Germany. The current CO₂ price in the BEHG is 45 euros per ton and increases annually. In contrast, the price in ETS and ETS II is negotiated by market participants themselves. Forecasts show that CO₂ prices in the building sector can vary greatly by 2030.