Receive free German economy updates
We’ll send you a myFT Daily Digest email rounding up the latest German economy news every morning.
US and European engineering companies have warned that a German bill to replace gas boilers with heat pumps contains provisions that violate the principles of the EU single market.
Manufacturers are concerned about a clause in the draft law allowing the government to prohibit the use of a refrigerating gas — hydrofluoroolefins — in heat pump systems.
This provision in what is being billed as one of Germany’s most ambitious pieces of climate legislation was “counterproductive”, said Julien Soulet, a senior executive at Honeywell Advanced Materials, and it “violates the principles of the EU internal market”.
“The unintended consequences of removing HFOs from the market in Germany would be far-reaching in terms of adverse impacts on energy efficiency, energy security and financial cost to citizens.”
A spokesperson for Germany’s economy ministry, which is responsible for the unpopular boiler ban, said it was “important” to switch from HFOs to “natural refrigerants” such as propane or carbon dioxide in heat pumps that have a “lower greenhouse gas potential”.
But she added that “what matters much more in climate policy terms is to stop using fossil fuels in heating”.
The boiler ban has become one of the most hotly contested German laws of recent years, badly denting the popularity of Olaf Scholz’s coalition government. The planned Buildings Energy Act, which is expected to be passed by the Bundestag in the autumn, stipulates that from next year all heating systems installed in new buildings in Germany must be at least 65 per cent powered by renewables.
But the bill contains a provision granting the government the authority to stipulate that only natural refrigerants can be used in heat pumps. That would exclude HFOs, which are compounds of hydrogen, fluorine and carbon developed to enable heat transfer in appliances.
The government said heat pumps currently use fluorinated gases, so-called f-gases, which do not occur naturally and contribute to climate change. It said they have a “strong greenhouse gas effect that can be significantly greater than CO₂“. It added that it was “envisaging” a requirement that only less-polluting natural refrigerants such as propane or CO₂ should be allowed in heat pumps.
The government said a new EU directive, which is being negotiated in Brussels, will probably ban newly installed heat pumps that use f-gases such as HFOs.
Yet industry groups say the provision could have a chilling effect on the sector, since many of the pumps sold in Germany use HFOs. According to the VDKF, a German refrigeration and air conditioning trade group, propane-based heat pumps make up less than 5 per cent of the market.
The German Heat Pump Association (BWP) said it supported moves to update the European f-gas directive, which would establish uniform rules for the whole of the EU single market.
But the provision in Berlin’s heating bill had stoked fears that Germany was pursuing a “national solution”, with deadlines and restrictions on which gases can be used that might diverge from EU rules.
“Uncertainty about what refrigerants are allowed could lead to a situation where the owners of buildings decide to install a gas or biomass heating system — which would lead to much greater emissions,” it said.
Kai Schiefelbein, chief executive of Stiebel Eltron, one of Germany’s leading heat pump manufacturers, said a more liberal approach was needed to address the issue of which refrigerants can be used.
“Politicians, companies and tradesmen all agree that we have to really ramp up the installation of heat pumps,” he said. “But to do that we need to take all heat pump segments into consideration.”
He said up to 40 per cent of heat pump products in the European market still had “no safe and scalable solutions based on natural refrigerants”.
