1. Overview of the Coalition Agreement
The coalition of CDU/CSU and SPD has agreed on a reform of the building energy law and the heating law that introduces a tenant cost cap. The goal is to protect tenants by sharing several costs between tenants and landlords, reduce acute household burdens and make the law more technology-neutral and flexible. This agreement was announced in 2026 and aims to balance affordability for tenants with longer-term energy and climate policy goals.
2. Main elements: how the cost cap works
The central measure is a cost-sharing approach that splits key risks and costs 50/50 between tenants and landlords. This is intended to limit the direct financial exposure of tenants to rising charges related to heating systems and fuels.
Key cost items shared
- Net charges (Netzentgelte) for energy delivery — shared equally between tenants and landlords.
- CO2 price-related costs — tenants and landlords each take half of the burden.
- Costs for biogenic fuels (biogenic blends) — split 50/50 in the relevant stages.
Justice Minister Stefanie Hubig (SPD) summarized the principle clearly: “Whoever decides on the heating system also carries the economic consequences.” She added that landlords must then pay half of net charges, the CO2 price, and costs for biogenic fuels. This shifts part of the economic responsibility for fuel and system choices toward property owners.
3. The “Biotreppe” (bio-step) from 2029
From 2029 a four-stage “Biotreppe” will apply in existing buildings. Each step increases the required share of biogenic fuels blended into heating fuel. The first three stages include the agreed cost-sharing rule, while the fourth stage represents a higher requirement.
| Stage | Description | Cost Sharing |
|---|---|---|
| Stage 1 | Initial low-level biogenic blend | Costs split 50/50 |
| Stage 2 | Increased biogenic share | Costs split 50/50 |
| Stage 3 | Further increased biogenic share | Costs split 50/50 |
| Stage 4 | Highest biogenic requirement | Costs treatment differs; not fully within the shared-rule of first three stages |
| A hardship clause protects unmodernized buildings from disproportionate burdens. | ||
The law explicitly includes a hardship clause to protect households and buildings that cannot be quickly modernized, ensuring vulnerable tenants are not forced into immediate, unaffordable upgrades.
4. Deadlines, the 65% renewable threshold and technology openness
To avoid the controversial 65% rule for renewables in certain timelines, the government has chosen to shift implementation deadlines. The coalition said it wants a “technology-friendlier, more flexible” law that keeps options open, including the continued long-term allowance of gas and oil heating under certain conditions.
- Deadlines for some obligations were postponed to smooth implementation and avoid immediate enforcement of the 65% renewable requirement.
- The law aims to be technology-neutral and flexible, allowing different technical solutions and transition pathways.
- Gas and oil heating remain possible in the long term under the revised approach.
SPD parliamentary leader Matthias Miersch emphasized affordability: “Climate protection must remain affordable for tenants.” This illustrates the coalition’s intent to combine climate goals with social fairness.
5. Parallel relief measures for households
The coalition paired the building energy reform with a broader relief package aimed at reducing immediate household energy costs and increasing net income flexibility.
- Abolition of the gas storage levy to directly lower gas bills.
- Lowering of network charges to reduce recurring energy costs for consumers.
- A tax-free 1,000-euro premium for employees to provide immediate financial relief.
Main elements of the relief package include removal of the gas storage levy, reductions in network charges (Netzentgelte), and a one-time tax-free 1,000-euro payment for employees to ease living costs.
6. Reactions, criticism and practical implications
Reactions are mixed. Supporters highlight tenant protections and affordability; critics warn that cost risks for tenants remain and that climate ambition may be weakened.
Support and government view
Government supporters point to fairer distribution of costs between landlords and tenants and the combination of regulatory and fiscal relief as a balanced way to protect households while pursuing energy transition goals.
For tenants, the immediate effect should be more predictable heating costs because net charges, CO2-related costs and biogenic-fuel costs are split. For landlords, the reform increases responsibility for energy choices and part of ongoing fuel costs. The combination of shared costs, delayed deadlines and relief measures aims to ease the short-term burden while preserving policy flexibility.
Critics and concerns
Tenant organizations like the German Tenants’ Association (Deutscher Mieterbund) and environmental groups criticized the reform, arguing that some cost risks for tenants persist and that steps back in climate protection were possible. They worry that postponing deadlines and avoiding a strict renewables threshold could slow the transition.
Overall, the coalition presents the package as a compromise: protecting tenants with a cost cap and hardship protections, while keeping paths open for different heating technologies and pacing the transition to renewable heating fuels.
