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German Coalition Divided on Heating Law as Economy Minister Flags Subsidy Cuts

With no reform text on the table and climate obligations still binding, the lack of clarity leaves consumers and industry unsure about future rules and support.

Overview

  • Environment Minister Carsten Schneider says the Building Energy Act will largely remain and promises to keep socially tiered grants of up to 70 percent for low-income households.
  • CSU leader Markus Söder reiterates that the ‘heating law’ will be abolished and calls current heat-pump aid a “complete oversubsidization” that should be sharply reduced.
  • Economy Minister Katherina Reiche signals a pullback in heating subsidies, arguing for stricter reviews, fewer distortions and more targeted, market-oriented support; current grants can reach €21,000.
  • The coalition agreement vows to scrap the Ampel-era framework yet continue renovation and heating programs, pointing to a technology-neutral, simpler, and more flexible rewrite rather than an outright end.
  • Government ministries confirm work on a GEG revision without a timetable, as heat-pump installations have recently surpassed gas boilers and municipal heat-planning deadlines start in mid-2026.