German interior ministry calls for tax incentives for climate-friendly home renovations

The German Ministry of the Interior, Building and Community is in favour of introducing tax incentives for homeowners who want to renovate parts of their homes to increase energy efficiency, reports dpa in an article carried by newspaper Merkur. Tax incentives are "enormously attractive" if they are not too bureaucratic, said the ministry's state secretary, Anne Kathrin Bohle. Looking into home heating systems, insulation and water heating should be possible even if a full renovation is too demanding, she proposed. The ministry calculates that such climate protection incentives would mean at least 1 billion euros less in tax revenues. Previously, the CSU, the Bavarian sister party of Chancellor Angela Merkel's conservative CDU, has proposed that the government issue climate bonds with a guaranteed interest rate for citizens who want to invest in climate-friendly renovations. CDU party head Annegret Kramp-Karrenbauer also proposed a scrappage premium for old oil heating systems, saying it could give a push to the "urgently needed heating transition".

Federal interior minister Horst Seehofer had previously proposed making the climate-friendly renovation of older buildings tax deductible, after having cancelled plans to set up a commission that was supposed to propose ways to cut carbon emissions in the sector. Emissions from buildings in Germany must be reduced by at least 66 percent compared to 1990 levels (2018: -44 percent), according to the government's Climate Action Plan 2050.