Germany Passes Controversial Green Heating Law Estimated to Cost Economy €1 Trillion – Junge Freiheit 9/11/23


After six months of fierce debate, Germany’s left-wing government has passed the country’s controversial green heating law, the Building Energy Act (GEG), with high estimates indicating the law will cost Germany’s economy over €1 trillion over the next 20 years.

While politicians belonging to Germany’s three-way politician applauded the heating law coming into force on Friday last week, the political fallout has likely yet to be fully realized.

Many Germans — already struggling with inflation and a slowing economy — balked at the mandate to install new expensive heating systems, with the law being rejected by the majority of the populace, according to polling. The government is also being accused of a hasty legislative process and a lack of parliamentary hearings, calling into question the democratic basis for the law in its entirety.

The law mandates that Germans with older heating systems replace them within a certain time period, although the final bill passed watered down some requirements and carved out some exceptions. Nevertheless, the final cost of the bill is still expected to be enormous, with high estimates placing it at €1 trillion and lower estimates hovering at €600 billion.

Many Germans have all of their savings in their home, and for many seniors, their homes, often featuring older heating systems, have seen their value take a hit due to the law. At the same time, in the coming years, they will be forced to make costly heating upgrades — usually in the form of a heat pump and the associated costs of making it work efficiently inside a building — to meet new green standards. Experts are also warning that landlords will have an incentive to increase rents in response to the Building Energy Act.

The problem is that approximately three-quarters of the old buildings in Germany were built before the first thermal insulation regulations came into force in 1979. Many of these buildings will now need to be made energy efficient, representing an enormous cost burden at a time when Germany has also phased out nuclear power and the price of energy, particularly oil and natural gas, has soared….

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