Just in time for the summer break, Germany’s coalition government approved its draft heating legislation (Building Energy Act, GEG). However, with sometimes justified criticism of some of the content, as well as the timing and implementation plan, it should be noted that much of the haste and political debate was due to the fact that Germany has made extremely ineffective use of the 2012 ‘Strompreisbremse’ (energy price brake) since its introduction a decade ago, in terms of climate protection and the expansion of renewable energies. The leisurely pace in those days as a result of the energy price brake, in terms of climate protection and renewables, meant that very little was achieved in the heating supply and transport sectors, while the expansion of renewables slowed. As Germany has promised to comply with the Paris Agreement by 2030, there is now a lack of both clean electricity volumes and time to achieve the targets. But let us give credit where credit is due!
So far, industry and the energy sector in particular, have successfully reduced emissions, thanks to the EU Emissions Trading System (ETS). Since the ETS reform of 2018, an effective carbon price of around EUR 90 per ton has been established in these sectors. However, further savings are becoming increasingly difficult, of course, due to their previous success! So it is now all the more critical that sectoral climate protection targets are being abandoned in Germany, along with its approval of the GEG draft. The logic of sectors ‘helping’ each other in future in order to achieve Germany’s overall climate protection target will not work. Emissions in Germany’s heating and transport sectors – where there has so far been a widespread lack of specific measures and successes – can hardly be offset by ‘exceeding’ emission reductions in the industrial and energy supply sectors.
By 2027, the carbon price in the transport and housing sectors will be set at a national level and rise to between EUR 55 and 65 per ton in Germany as planned. From 2027, the carbon price will also be freely determined on the market in these sectors. We can assume that prices will be around EUR 100 per ton, with many well-known scientists even predicting that the price could quickly rise to between EUR 200 and 300 per ton. At EUR 200 per ton of carbon, one kilowatt hour of natural gas for residential heating, which cost around five cents prior to the war in Ukraine, will (permanently) be around five to six cents more expensive – i.e. the price of natural gas will more than double. However, this sheds an entirely different (media) light on unwelcome heat pumps! All those who are now looking forward to relaxed deadlines and ‘hydrogen-ready’ condenser boilers for detached homes need to consider how they will explain their ‘achievements’ to the electorate during the 2025 Bundestag election! And above all, the question of social equality will arise if low-income groups don’t have access to well-staggered subsidy programmes for non-fossil fuel heating or district heating by then.