malp - stock.adobe.comThe Building Modernization Act (GModG) has been finally passed.
With the approval of the Federal Council, the Building Modernization Act (GModG) was passed on July 10, 2026, thus clearing the way for its promulgation. Publication in the Federal Law Gazette is expected within the next one to two weeks. On February 24, 2026, the governing parties had previously presented key points for a reform of the Building Energy Act (GEG) . Simultaneously, a resolution recommendation from the governing parties was adopted, calling on the Federal Government to advocate at the EU level for a simplification of the EU Energy Performance of Buildings Directive (EPBD) and a postponement of the implementation deadlines.
The key innovations of the GModG
1. Abolition of the 65% renewable energy requirement
The existing requirement that new heating systems must cover at least 65 percent of their heating needs with renewable energy will be abolished. Instead, a technology-neutral catalog will be introduced.
- Heat pumps, district heating, biomass plants, highly efficient CHP and hybrid solutions remain permissible
- New gas or oil heating systems will also continue to be permitted, including the explicit inclusion of "highly efficient combined heat and power" (CHP). The prerequisite is that these systems use an increasing proportion of CO₂-neutral fuels from January 1, 2029 onwards.see “Bio-Stairway”).
- The obligation to provide advice when installing fossil fuel heating systems is waived.
- The ban on operating gas and oil boilers for more than 30 years is lifted, as is the ban on fossil fuels from 2045.
2. The “bio-staircase” for fossil fuel heating systems
What is the "bio-staircase"?
A phased transition to CO₂-neutral fuels is planned for new gas and oil heating systems. According to the current draft, the share of climate-friendly fuels such as biomethane and synthetic fuels must be at least 10% from January 1, 2029. This share is to be increased in further stages by 2040.
- From 2029: At least 10% CO₂-neutral fuels
- From 2030: 15%
- From 2035: 30%
- From 2040: 60%
- Obligation for distributors of fossil fuels: climate neutral from 2045
- The Federal Government will submit a separate draft law on this matter by December 1, 2026.
- The planned green gas/bioheating oil quota from 2028 onwards will be taken into account.
- Tenant protection in residential buildings: from 2028, CO₂ costs and gas network charges will be split equally (50:50) between landlord and tenant; hardship clause for unrenovated buildings with low rents
- “Hardship clause” for landlords whereby only a portion of the additional CO₂ costs must be borne if the following conditions apply:
- The rented apartment is located in a "tight housing market" according to the German Civil Code (BGB).
- Rent less than 85% of the local comparative rent
- Fewer than 6 residential units
- The building meets the efficiency standard G or H according to GModG.
- “Hardship clause” for landlords whereby only a portion of the additional CO₂ costs must be borne if the following conditions apply:
What technological alternatives are there to the bio-staircase?
- Possible alternatives to the bio-staircase for level 1 and level 2:
- The required proportions of additives can be covered by solar thermal energy.
- Heat pumps or biomass hybrid heating in bivalent parallel heat pump priority operating mode
- New direct electric heating systems are only permitted if thermal insulation is improved by 30% (§10 para. 4 new)
What are CO₂-neutral fuels?
- Biomethane/Biogas (from biological raw materials)
- Synthetic methane/green gas (produced from electricity)
- Bio oil (synthetic oil made from biological raw materials)
- Green hydrogen (from renewable energy sources)
- Blue hydrogen (from natural gas with CCS or CO₂)2-separation)
- Orange hydrogen (from nuclear energy)
Context: The continued permissibility of gas and oil heating systems is based on the expectation that the growing demand for biogenic fuels will be met by their market availability – otherwise, a sharp increase in demand-related costs is imminent. The CO₂ price is waived for the climate-friendly fuel component, thus mitigating the additional costs of biofuel tariffs.
3. Green gas/green oil quota for energy suppliers
In parallel, starting in 2028, energy suppliers will be required to blend an increasing proportion of green gas and green oil into the gas and oil they distribute. This quota will be credited towards the biogas target.
4. Efficiency requirements remain in place.
Regardless of the type of heating system, efficiency obligations and energy audits should remain in place:
- Heating system inspection (§ 60b GEG)
- Hydraulic balancing (§ 60c GEG)
- Optimization of heating operation and pipe insulation
These regulations partly follow European guidelines and remain central components of national energy law.
5. Federal funding BEG EM will also be adjusted.
The reform of the federal funding program for energy-efficient buildings (BEG) is taking concrete shape: The Budget Committee of the German Bundestag has approved the proposed changes. Applications under the new funding conditions will be possible via BAFA and KfW starting July 21, 2026. Until then, a transitional phase will be in effect, during which existing applications will be processed according to the previous conditions, and applications can still be submitted under the old funding regulations under certain circumstances.
6. Implementation of the EU Building Directive (EPBD)
The Building Energy Act Modernization Act (GModG) is intended to transpose the revised EU Energy Performance of Buildings Directive (EPBD) into German law. The directive aims to make the energy efficiency of buildings more comparable across Europe and to gradually make the existing building stock more climate-friendly.
Energy performance certificates
In the future, energy performance certificates will contain significantly more information than before. In addition to the familiar data on energy consumption or energy demand, additional key figures will be included. These include:
- Greenhouse gas emissions over the entire life cycle of a building (Life Cycle Assessment, LCA)
- DIN SPEC 91606 on life cycle assessment according to GModG has been published.
- the share of renewable energies
- suitability for low-temperature heating systems
- Smart readiness indicators for evaluating digital building technology
New energy performance certificates must be issued digitally and in a machine-readable format. However, energy performance certificates already issued will remain valid for ten years.
- Energy performance certificates for residential buildings: Energy efficiency classes remain unchanged (A+ to H)
- Energy performance certificates for non-residential buildings
- First-time introduction of energy efficiency classification (A to G)
- Only energy performance certificates based on actual energy demand are permitted; this also applies to mixed-use buildings (§106 is no longer applicable).
New requirements for new buildings
A key component of the EPBD is the greater consideration of a building's environmental impact throughout its entire life cycle. For this purpose, life cycle assessment (LCA) is being made mandatory. This obligation applies:
- from 2028 onwards for new buildings with more than 1.000 square meters of usable floor space
- from 2030 onwards for all new buildings
Furthermore, the calculation methods for the energy performance assessment of buildings are being adapted. This includes the introduction of the new standards DIN/TS 18599 (edition 2025-10) and DIN 4108-2 (edition 2026-06). The changes affect, for example, the calculation of heat pumps and summer heat protection.
Furthermore, the existing reference building will be replaced by a realistically constructible reference building. For future energy assessments, a technology-neutral reference heat generator will be used. The primary energy factor used for this will initially be 0,75 (until 2029) and will decrease to 0,7 from 2030 onwards. At the same time, the solar thermal system previously considered in the reference building will be eliminated for residential buildings.
Changes in energy assessment
The EPBD also leads to a fundamental adjustment of the primary energy and emission factors. In the future, the focus will no longer be solely on the non-renewable share of primary energy, but on the entire primary energy factor, including renewable energies.
The changes are particularly noticeable in electricity and district heating:
- The primary energy factor for grid electricity decreases from 1,8 to 1,5.
- At the same time, the emission factor of the German electricity mix is reduced from 560 to 100 g CO₂ per kilowatt hour.
- District heating will in future have a standard value of 0,7. The higher the share of renewable energies, the more this value improves, up to 0,5 for 100 percent renewable heat.
For district heating systems, only the so-called Carnot method will be permitted for calculation in the future. The previously frequently used electricity credit method for combined heat and power plants will no longer be permitted.
The assessment of individual energy sources is also being adjusted. Biogenic fuels such as wood will receive a primary energy factor of 0,7 in the future. The factor for fossil fuels remains unchanged at 1,1.
Overall, this improves the energy efficiency conditions, particularly for buildings with heat pumps. The future energy efficiency standards required for new buildings can be achieved relatively easily with heat pumps, whereas this can be more challenging with wood-burning heating systems or district heating.
Renovation and refurbishment of existing buildings
For existing buildings, so-called renovation passports are to be introduced. These are intended to provide owners with a long-term roadmap for energy-efficient modernizations and show in which order measures can be implemented effectively.
Furthermore, the EPBD provides for the introduction of renovation pathways and minimum standards for particularly energy-inefficient buildings. The aim is to gradually improve the energy efficiency of the worst-performing buildings.
The EU deadline for implementation is mid-2027, but initial national adjustments could begin as early as 2026.
7. Simplification of heat planning
Municipal heat planning should remain a key strategic instrument, providing guidance to municipalities, citizens, and businesses regarding future heat supply. At the same time, it should be simplified and decoupled from the Municipal Modernization Act (GModG), which means:
- Cost reduction to 20% of regular planning for small municipalities with fewer than 15.000 inhabitants.
- Mandatory data transmission is limited to multi-family dwellings (MFH) and non-residential buildings (NWG) (> 50 MWh or 35 kW).
- The obligation to submit data for single-family homes (SFH) is waived (heat demand data is intended to close the gap)
Consideration of cooling supply in the planning is limited to municipalities with over 45.000 inhabitants.
Legal note: In the context of the planned changes to heat planning, it should be taken into account that although changes to the Heat Planning Act at the federal level have direct legal effect, the relevant state laws would first have to be adapted accordingly for their implementation.
8. District heating and local heating
District heating networks (district and local heating) are being explicitly strengthened as a key technology for future heat supply. The goal is an accelerated, climate-friendly expansion and modernization of the networks, as well as a transparent, fair, and affordable heat price for end customers. The following adjustments are planned to achieve this:
- The customer's right to adjust performance without conditions (§3 AVBFernwärmeV) is to be amended (justification: planning security for district heating suppliers)
- Adaptation of § 556c BGB in conjunction with WärmeLV (cost neutrality requirement for contractors and district heating suppliers)
- Introduction of a price transparency platform for fire service providers
- A new heat law is to be introduced.
Comparison: current GEG 2024 and planned GModG
Theme | GEG 2024 | GModG 2026 |
|---|---|---|
New heating systems | 65% renewable energy target | The 65% rule no longer applies Technology-agnostic catalog (all systems possible) |
Gas/oil heating systems | New installations are only permitted with a 65% renewable energy share. Existing ones can still be used | Still permitted with “Bio-Stairway” (increasing CO₂-neutral fuel shares from 2029 – exact quotas open) |
Efficiency requirements | Heating system inspection (§ 60b GEG) Hydraulic balancing (§ 60c GEG) Pipe insulation | Unchanged, EU standardization is planned |
Energy Performance Certificate | National Assessment System (HWB/PEP) Mandatory when selling/renting | Residential buildings: Energy efficiency classes remain unchanged (A+ to H) Non-residential buildings: New EU energy efficiency classes AG This obligation also applies to the extension of rental agreements. |
BEG funding | Current subsidy rates (heat pumps, renovation) | Politically committed until 2029, depending on budgetary resources |
Retrofitting obligations | Roof/floor insulation, 30-year boiler rule, pipe insulation | It is expected to continue, with EU minimum standards. |
Municipal heat planning | Relevant for 65% implementation deadlines By 2030, 30% of heat must come from renewable energy sources, and by 2040 it must be 80% (see § 29 WPG). | Still relevant. However, the goals of the Bio-Stairway currently do not align with the goals of the Heat Planning Act (WPG). |
Author
Daniel Nebel | Teamleiter Produktmanagement Nachhaltigkeit und energetische Optimierung | Minol Messtechnik W. Lehmann GmbH & Co. KG
InsideCreativeHouse – AdobestockAlways up to date
* required fields