German liberals delay plans to cut CO2 price for tenants

The Local
The Local - [email protected] • 20 Oct, 2022 Updated Thu 20 Oct 2022 09:02 CEST
image alt text
A man warms himself on the sofa. Photo: picture alliance/dpa | Patrick Pleul

A debate has erupted in Germany's traffic-light coalition over plans to split the cost of the CO2 tax on heating between tenants and landlords.

Looking to move? Find your next rental apartment here.


According to reports in Handelsblatt, the pro-business Free Democrats (FDP) are currently trying to postpone the change, arguing that landlords shouldn't face further financial headwinds in the wake of the energy crisis. 

"It is not a question of whether and how the sharing of CO2 costs will come, but when," Daniel Föst, spokesman on building and housing policy for the FDP parliamentary group, told Handelsblatt. "In the current situation, however, we wonder whether we can burden small private landlords in particular with the additional expense. We are discussing this openly in the coalition right now."

Largely driven by the centre-left Social Democrats (SPD) and Greens, the traffic-light coalition had planned for the CO2 tax to be divided between tenants and landlords.

READ ALSO: German tenant groups see sharp increase in people who can’t pay utility bills


The green tax, which was introduced by the previous CDU/CSU and SPD government, is currently shouldered entirely by tenants. Currently, the CO2 price is set at €25 for every tonne of carbon emissions, adding additional costs onto heating bills in particular. This is set to be raised by €5 to €30 per tonne in 2023. 

Back in May, the cabinet voted through plans to split this burden between renters and their landlords, with landlords paying a larger share for less energy-efficient rental accommodation.

However, the coalition has struggled to move forward with the plans, which were originally set to come into force on January 1st, 2023. Ministers had intended to produce a draft law for the Bundestag by September, which was then pushed back by a month and looks set to be postponed yet again.

"Delaying laws again and again, as the FDP is currently doing, is not an acceptable political style in a winter of crisis," Christina-Johanne Schröder, housing policy spokeswoman of the Green parliamentary group in the Bundestag, told Handelsblatt on Wednesday. 

Poor residents 'doubly affected' 

The Greens argue that the new cost-sharing model agreed on by the cabinet would particularly help residents who live in poorly insulated, low-quality housing.

"Those who live as tenants in flats with poor windows, doors, insulation and heating often do not have a high income and are thus doubly affected by the price increases for heating energy," said Schröder. 

According to calculations by Tagesspiegel, the change would save tenants between €12 and €72 per year. The homeowners' association Haus und Grund estimates that residents of a poorly insulated three-room flat currently pay €140 in CO2 costs per year.

But the FDP says that forcing landlords to shoulder additional costs is inconsistent with the government's pledge to reduce tax burdens at a time when inflation and energy costs are soaring. 

"We should now, as agreed in the traffic-light coalition, avoid everything that causes unnecessary expense," Föst stressed.

A man turns up the thermostat on a radiator.

A man turns up the thermostat on a radiator. Photo: picture alliance/dpa | Hauke-Christian Dittrich

Under the plans voted through by the cabinet earlier this year, a ten-stage model for sharing the costs between tenants and landlords is set to apply from next year.

In the case of buildings with very high greenhouse gas emissions per square meter, landlords would pay 90 percent of the CO2 price, while tenants with very low emissions would have to bear the costs alone. This is intended to encourage landlords to carry out energy-saving renovations and offer an incentive for tenants to save energy.

However, with energy prices and other costs soaring in the wake Russia's invasion of Ukraine, housing industry lobbyists have called on the government to suspend the CO2 tax entirely.


Energy prices are so high that a CO2 price would not have any incentive effect to encourage additional energy-saving behavior or investment in energy-efficient buildings, said Axel Gedaschko, president of the German Housing Association (GdW). 

READ ALSO: Is it legal for German landlords to turn down heat this winter?



The Local 2022/10/20 09:02

Please keep comments civil, constructive and on topic – and make sure to read our terms of use before getting involved.

Please log in to leave a comment.

See Also