German Social Democrats in government push for CO2 price contribution by landlords

Landlords should pay half of the extra costs for heating oil and gas once Germany’s new CO2 price comes into effect in January 2021, the ministries for finance, environment and justice demand in a paper seen by Rheinische Post, Jan Drebes reports. The three ministries are led by Social Democrats (SPD) who criticise that, according to existing plans, tenants would pay the raised price for fossil heating fuels alone because landlords can just pass on the costs.

In Germany it is common that flats in a block of apartments are supplied with heat through a central boiler for which the landlord buys fuel and then charges these costs depending on the size and consumption of the flat to every individual tenant. The SPD-led ministries reason in their paper that both parties can influence CO2 emissions from heating:  the landlord by changing to a modern, efficient boiler system and the tenants by heating their flats efficiently. If only tenants were paying the CO2 price, landlords would have no incentive to make the heating system more efficient which is why they should pay half of the emission costs.

The German government has decided to put a price on greenhouse gas emissions in the transport and building sectors from 2021 as a key instrument to help reach its climate targets. As of 1 January 2021, one tonne of CO2 will cost 25 euro in these sectors which translates to around 8 cents per litre for heating oil and around 0.5 cents per kilowatt-hour for gas.