After the "autumn of reforms" did not materialise, the Federal Government is now tackling the revision of legislation in the building sector at high speed: Within a few weeks, several initiatives have been launched – ranging from revisions to the Building Code and heat planning to the national building renovation plan and, above all, the long-awaited new "Heating Law".

This directly affects many companies. For them, it is crucial that clear, practical and legally secure requirements now emerge to provide businesses with planning security. It must also be economically feasible to achieve operational climate neutrality without compromising competitiveness. How this can succeed will be discussed by representatives from politics and business at the German Chamber of Commerce and Industry (DIHK) conference "Transformation in the Building Sector: Climate-neutral. Economical. Future-proof." on 28 May.

Sector with many structural challenges 

The building sector is under significant pressure: The ambitious requirements of the European Energy Performance of Buildings Directive (EPBD) collide with persistent construction and renovation bottlenecks as well as high energy, material, and construction costs. In addition, prolonged approval processes and a noticeable need for digitalisation add to the challenges.

Furthermore, the sector in Germany is very heterogeneous, which does not make things easier: It includes production and office buildings as well as residential properties or public building stock. Companies are sometimes owners, sometimes tenants; many also belong to the construction and real estate industry and are therefore regulated accordingly. Uniform solutions fall short here. From the companies' point of view, flexible, technology-neutral approaches are needed, taking into account differing economic and technical initial conditions.

Technology-neutral building modernisation 

The abolition of the previous "Heating Law" – the Building Energy Act (GEG) of the traffic light coalition government is to be replaced after the Cabinet decision of 13 May by the Building Modernisation Act (GModG) – and the blanket ban on gas and oil heating systems after 2044 are viewed positively by companies. The elimination of rigid requirements such as the "65 percent renewables obligation" for newly installed heating systems provides more flexibility and strengthens entrepreneurial decision-making freedom. Likewise, the explicit recognition of a wide range of heating technologies, including heat pumps, district heating, biomass, hybrid, gas, oil, and liquefied gas heating systems, is welcomed. Ultimately, the emissions trading system ensures that the sector reliably contributes to CO₂ reduction.

However, there remain uncertainties regarding the specific legal design of the GModG: The drafting of the core content, such as the so-called "Bio staircase for consumers" (step-by-step requirements for increasing the use of climate-friendly fuels for heating), was postponed to the summer. This leaves high uncertainties for investment decisions. Long-term investments in buildings and heat supply need reliable and consistent framework conditions.

More planning security remains the challenge 

Other unresolved issues concern the availability, economic viability, and efficiency of climate-neutral fuels as well as a reliable development path beyond the year 2040. The cost-sharing between tenants and landlords is insufficiently specified – particularly in cases where climate-neutral fuels are not sufficiently available and tenants have to bear high additional costs. Transparent, cost-oriented and reliable framework conditions would also be necessary for the expansion of district heating, including appropriate cost burdens for users.

Additional uncertainty is brought about by the planned evaluation in 2030: It fuels concerns about subsequent tightening in case of missed targets. It is therefore all the more important to establish clear and long-term stable requirements in the further legislative process.

Streamlining European requirements 

It is positive that the revised European Energy Performance of Buildings Directive (EPBD) is to be implemented 1:1 and without national tightening. "Goldplating" would create additional investment costs, bureaucracy, and considerable implementation risks. The EPBD, which is to be transposed into national law by May 2026, already includes comprehensive requirements for the building stock. These include minimum efficiency standards and binding renovation paths as well as guidelines for the use of renewable energies, charging infrastructure or building technology. Brussels is thereby significantly tightening its regulations for renovation, new construction and heating technologies overall.

On the part of the economy, there are substantial doubts about the practical feasibility of the EPBD, especially concerning non-residential buildings and structurally weaker regions. More realistic timelines and stronger integration into a reliable national renovation plan seem urgently necessary. The German Chamber of Commerce and Industry (DIHK) therefore advocates for a more practical and realistic design of the EPBD at the European level, including flexible compliance options.