Germany earmarks up to $14 bln to make buildings more energy-efficient

The German government plans to earmark 13 billion to 14 billion euros ($13.17 billion-$14.18 billion) per year in subsidies for renovations to make buildings more energy-efficient, the economy ministry said on Tuesday. As Germany prepares to become climate neutral by 2045, Berlin has been stepping up subsidies for renovations, with the government funding refurbishments worth about 9.6 billion euros so far this year.

But rising energy prices and gas supply bottlenecks triggered by Russia’s invasion of Ukraine have pushed Germany to further accelerate the pace towards more energy efficiency. “Consuming less energy is the cheapest and most efficient contribution to more independence and climate protection and helps to save on energy costs,” Economy Ministry Robert Habeck said in a statement.

Over the next few years, some 12-13 billion euros per year will be allocated to subsidise renovations to old buildings and installing more energy-efficient windows, doors and heaters, the ministry said. Around one billion euros will be allocated for new construction. Financing for the programme will come through state-lender KfW and from a “climate fund” which the centre-left governing coalition approved last year to speed up the transition towards a green economy.

Earlier this month, the government presented an emergency plan for the construction sector that would oblige all newly installed heating systems in Germany to be operated with 65% renewable energy from 2024. Even with renovation subsidies of 8 billion euros last year, Germany’s construction sector emitted 115 million tonnes of CO2 equivalents, missing its target of 112 million tonnes.

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