Green light for building modernization and infrastructure future law

Following the Bundestag, the Bundesrat has also approved the Building Modernization Act and the Infrastructure Future Act. The construction industry welcomes this, but would like to see a holistic approach for the building sector.

Both the Building Modernization Act and the Infrastructure Future Act have been approved by the Federal Council . The Building Modernization Act is intended to replace the Building Energy Act passed by the previous coalition government. The new law also aims to accelerate the transition to climate-friendly heating systems, but will grant homeowners greater freedom of choice when replacing their heating systems. The requirements, in effect since 2023, for the use of at least 65 percent renewable energy for heating will be dropped; gas and oil heating systems may still be installed.

When replacing heating systems, a 10 percent share of biofuels must be added starting in 2029. This share will increase to 15 percent in 2030, 30 percent in 2035, and 60 percent in 2040. The German government calls this the "bio-staircase." The distribution of operating costs between tenants and landlords will no longer be solely to the detriment of tenants. When a new gas heating system is installed from 2028 onward, network charges and carbon dioxide costs must be split equally. From 2029, this also applies to the price component of biogenic fuels, but only for the first three stages of the bio-staircase.

The construction industry welcomes the fact that binding regulations have finally been adopted after a long period of uncertainty. However, these regulations focus on heating and building services engineering and neglect the building envelope. "Energy that isn't needed in the first place thanks to good roofs, facades, and windows doesn't have to be generated, stored, or transported later. We regret that, in addition to considering individual buildings, the neighborhood approach, as a cost-effective option for meeting the minimum standards enshrined in the EU Building Directive, was not included in the law," says Felix Pakleppa, Managing Director of the German Construction Industry Federation (ZDB).

ZDB demands reliable framework conditions

At the same time, the hastily announced and implemented reform of federal funding for energy-efficient buildings sends the wrong signal. Pakleppa: "Instead of stimulating investment, owners and companies are being unsettled and hampered by declining funding conditions. Particularly for apartment buildings, economically viable renovation projects are at risk of becoming more difficult to implement. However, the energy-efficient modernization of existing buildings requires reliable framework conditions and long-term planning security."

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There are still uncertainties regarding the implementation of the bio-staircase. The German Construction Industry Association (ZDB) is calling for a "reliable strategy" for ensuring sufficient quantities of biofuels are available. Otherwise, there are significant cost risks. On a positive note, the EU Energy Performance of Buildings Directive was implemented without substantial tightening of regulations. "Looking ahead, we expect policymakers to place greater emphasis on the energy-efficient modernization of existing buildings. Any adjustments made as part of the evaluation planned for 2030 must be implemented through subsidies and must not lead to new regulatory installation or replacement obligations," said Pakleppa.

The Infrastructure Future Act aims to accelerate the planning and approval processes for key infrastructure projects. The federal government's plan is to prioritize important infrastructure projects due to their significant impact on public and military security by assigning them to the overriding public interest. This will also include transport projects financed from the special fund for infrastructure and climate neutrality. 

Breakthrough for infrastructure

The law also includes provisions to simplify the implementation of nature and environmental protection regulations. Furthermore, environmental impact assessments will be reduced. In addition, planning approval procedures will be conducted entirely digitally in the future. "This represents a real breakthrough for infrastructure," explains Pakleppa. "Planning and approval processes will now receive the boost they urgently need, thanks in part to the legally enshrined overriding public interest in priority transport projects."

Pakleppa also views the strengthened authority of road construction agencies positively: "Every month a procedure takes longer is a month in which the condition of a structure deteriorates further. We are now eliminating precisely these delays from the system. What we don't need now is a law from the Federal Ministry for the Environment that unnecessarily slows down this priority for infrastructure. We are committed to environmental protection, no question. But it must be practical and strike a reasonable balance between ecological, economic, and infrastructural interests."

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