Most large German cities planning farewell to natural gas supply, reject new heating energy rules

Germany’s cities plan to largely exit natural gas use in the coming years and instead bet on district heating, heat pumps and other low-carbon solutions to heat homes. An analysis by consumer magazine Finanztip of the municipal heating plans of 16 German cities, including Berlin, Hamburg and Munich, showed that all of them expect a significant decrease in natural gas use in the near future. 

“Our analysis clearly shows where we are headed: Away from fossil gas and towards more climate-friendly alternatives,” said Finanztip energy efficiency expert Sandra Duy. Germany’s larger cities were required to submit their municipal heating plans by the end of June, while smaller towns and villages have until mid-2028 to submit a decarbonisation plan for the sector.  

The recent adoption of new heating rules by Germany’s parliament, which allow the continued installation of fossil gas boilers as proposed by the government earlier this year, had not been reflected in municipal planning for future gas demand, Finanztip found. Instead, several city administrations warned that the controversial new heating rules in the Building Modernisation Act, which scrap a minimum renewable energy share for new installations, could lead to delays, higher costs and general uncertainty. “Many cities do not regard the changes as a new opportunity, but rather as an additional risk to implementation,” Duy said.  

At least ten cities in the analysis formulated a clear transformation path, including an orderly decommissioning of their gas networks, which in most cases would be replaced with district heating in more densely populated areas and heat pumps and other decentralised systems in less densely populated areas. Biofuels, which the government’s heating rules require to help decarbonise gas- and oil-based heating systems by 2045, “only play a minor role” in the analysed plans, Finanztip said. This is due to expected higher costs, uncertain availability and possible risks to supply security, it added.

“Those who install a new fossil heating system today are really running a risk,” Duy said, pointing to rising fuel costs, higher CO2 prices, rising grid fees and the uncertain supply of biofuels as factors that could cause costs to spike for remaining users. 

Finanztip pointed out that more than two thirds of the analysed cities had clear plans to become climate neutral by 2045, and many of have an earlier 2035 goal. “This is another reason why municipalities are worried that additional uncertainty regarding the choice of heating systems will threaten their schedule,” the magazine said. 

While most cities' plans outline pathways to achieve climate-neutral heating, the depth and detail among these plans vary considerably, researcher Martin Ammon told Clean Energy Wire ahead of the June deadline. Ammon also said the government's law changes could slow the transition but added that a larger reversal of the plans remains unlikely.