On Germany’s new heating law, green molecules, and the difference between a bridge and an excuse
By Rose-Marie Nielsen, Managing Director, Arne Nielsen A/S
In May, Euronews reported that Germany was scrapping its green heating law just as heat pumps were gaining momentum. The headline was accurate. But what replaced the law is more interesting than what disappeared – and it deserves a reading in Denmark, where we are about to decide what happens to gas boilers in 2035 and to the target of 100 per cent green gas.
What Germany adopted
On 10 July 2026, the Bundestag passed the Gebäudemodernisierungsgesetz. The law took effect on 29 July and replaces the “Heizungsgesetz” introduced by the previous government in 2023, which required new heating systems to run on at least 65 per cent renewable energy.
That requirement is gone. New oil and gas boilers are permitted again, and existing ones may stay. In return, the law shifts its focus from the appliance to the fuel. From 2029, new oil and gas boilers must run on a rising share of climate-neutral fuels – biomethane, biogenic LPG, bio-oil such as HVO, and hydrogen – and from 2045 the fuel must be fully climate-neutral.
More important still: the government is obliged to present, by 1 December 2026, a separate law establishing a green-gas and green-heating-oil quota. It places the obligation on suppliers – those who bring gas, heating oil and LPG to market – and it applies not only to new boilers but to the entire existing stock. The quota is to start in 2028 at below 1 per cent for households and reach 100 per cent in 2045.
That is a rising CO2 displacement requirement on the molecule, placed with the supplier. It is, word for word, the instrument we propose in the essay Regulate the molecule, not the appliance – for gas and for HVO used in heating. Germany has now written it into law.
The criticism that must be taken seriously
The law was passed under sharp criticism, and that criticism matters for the Danish debate.
Jan Rosenow, professor of energy and climate policy at Oxford, points out that biomethane and synthetic fuels are scarce and expensive resources, urgently needed in industry and other sectors. If they are used to extend the life of fossil heating systems, the structural decisions the building sector needs are postponed. Germany’s community-energy heat networks warn that homeowners will now opt for individual oil and gas boilers for longer, leaving shared heat networks without the connection commitments they need to be built.
And the timing: heat pumps accounted for 48 per cent of new heating systems sold in Germany in 2025 – 299,000 units – and sales in the first quarter of 2026 were 34 per cent above the year before. The market was already moving, driven less by the law than by volatile gas prices. Rosenow calls the law’s signal contradictory.
We agree with most of that. Green molecules are a scarce resource, and they must not become the excuse for installing new fossil boilers with no end date. That is precisely why our proposal differs from the German one.
The difference between a bridge and an excuse
Germany did two things at once: it removed the end date for new fossil installations, and it introduced the green-molecule requirement. We propose only the latter – and we propose it as a bridge and as peak load, not as permanent base load.
In concrete terms, three things separate the Danish path from the German one:
An end date for new fossil installations. 4,358 new gas boilers were installed in Denmark in 2025. A date is better than ambiguity, for us as a supplier too. But “fossil” must be defined by the molecule: a system demonstrably running on biogas or HVO is not fossil. Germany gave up the date. Denmark should not.
The hybrid as the standard solution in existing buildings. The heat pump takes the base load; the existing boiler takes the few hundred hours a year when the grid is under the greatest strain – on green fuel. The scarce molecules are then used where they save the most CO2 and the most grid capacity per litre. That is the answer to Rosenow’s objection: the molecules are not used to prolong the fossil system, but to make the last stretch green while electricity does the rest.
A metering requirement. A hybrid system must document the actual split between its heat sources, so that a badly configured controller cannot let the boiler run too much. That requirement is absent from the German law. It should be present in the Danish one.
Denmark has what Germany is looking for
And then there is the most striking part of the comparison.
The German quota starts in 2028 at below 1 per cent green gas. Germany needs until 2045 to build a market for green molecules that does not exist today.
Denmark was above 40 per cent green gas in 2025. In July 2026 it was 99.7 per cent. We already have the gas system the German law is trying to create – around 150 plants, 18,000 kilometres of pipe, slurry and food waste from Danish agriculture and industry.
And Danish tax policy treats it like natural gas from the North Sea. HVO for heating pays a higher energy tax than the fossil heating oil it replaces.
Germany now regulates the molecule but lacks the molecules. Denmark has the molecules but still regulates the appliance. It is a strange division of labour – and an easy one to fix.
One more thing Denmark could take from it
The German reform also raised the heat-pump subsidy for households with an income below 30,000 euros from 30 to 40 per cent. Income-graduated support, in other words.
It is the same discussion the Danish Economic Councils have raised at home, where two out of three subsidies go to homeowners who would have bought a heat pump anyway – and for which the Minister for Climate, Energy and Utilities is now working on a solution. Our proposal goes one step further: reward documented fossil displacement, not only full replacement, so that support also reaches those who cannot carry a full conversion. The arithmetic for one of them is set out in the article Gaby wants to go green.
Finally
Germany has shown that a displacement requirement on suppliers can be written into law. Germany has also shown what happens when it is done without a date, without a hybrid requirement and without metering: the criticism becomes justified, and the signal becomes contradictory.
Denmark can take the instrument and leave the mistakes behind. We already have the green gas. We have HVO in the tanks. All we lack is a tax system that can tell slurry from the North Sea – and a date, so that no one mistakes it for an excuse.
Arne Nielsen A/S has supplied heating technology to installers, industry, agriculture and marine since 1969 – today both combustion technology and renewables. We therefore have no technology to defend, only an interest in buildings being heated without fossil fuel. That is why biogas, hydrogen and HVO belong in the conversation.
info@arnenielsen.dk · https://arnenielsen.dk/
Sources
- Euronews, 14 May 2026: “Contradictory signal”: Germany scraps renewable heating law just as heat pumps gain momentum
- Deutscher Bundestag, 10 July 2026: Bundestag beschließt Heizungsgesetz-Novelle
- Bundesregierung, 29 July 2026: Gebäudemodernisierungsgesetz – Fragen und Antworten
- BDEW, 21 July 2026: Gebäudemodernisierungsgesetz ist beschlossen
- GÖRG, 17 July 2026: GModG schafft GEG ab (quota starting below 1 per cent in 2028; applies to the existing stock)
- Solarserver, 10 July 2026: Bundestag beschließt Gebäudemodernisierungsgesetz (criticism from heat networks and environmental organisations)
- European Heat Pump Association: German heat-pump sales 2025 and Q1 2026 (as reported by Euronews)
- HVO.BIO: Regulate the molecule, not the appliance
- Arne Nielsen A/S: Gaby vil gerne være grøn (in Danish)
- Biogas Danmark / Energinet: green gas above 40 per cent in 2025, 99.7 per cent in July 2026
- HVACFOKUS, 18 March 2026: 4,358 new gas boilers in 2025
