Germany’s lower house of parliament has approved a new law that will require companies to make energy savings in all economic sectors. The Energy Efficiency Act, introduced by the Greens-led economy ministry, is part of Germany’s efforts to combat climate change and reduce the dependence on imported fossil fuels. The law includes regulations for energy savings in public buildings, industry, and fast-growing data centers across the country. The goal is to achieve a 26.5% reduction in energy consumption by 2030 compared to 2008.

Last year, the German government implemented some initial energy-saving measures, including banning heating for private swimming pools and promoting remote work to reduce energy consumption. However, the new law will go further by making energy savings compulsory for companies. While there will not be binding measures, companies will be required to develop plans for energy savings.

The German Energy Efficiency Initiative, a network of companies advocating for an ambitious energy efficiency policy, believes that the law does not go far enough. They express doubts about whether the law will meet EU regulations or help Germany achieve its 2030 climate goal of reducing CO2 emissions by 65% compared to 1990.

Germany has already made progress in reducing energy consumption. In 2022, the country’s energy consumption reached its lowest level since 1990, according to the Federal Environment Agency. However, Germany missed its target of a 20% reduction by 2020 compared to 2008. The new law is seen as a step towards further improving energy efficiency.

The European Union also has its own targets for energy consumption reduction. In March, the EU agreed to reduce final energy consumption across the bloc by 11.7% by 2030, compared to energy consumption forecasts made in 2020. The approved German law was modified from its original draft, with targets for industrial companies and consumption beyond 2030 being scrapped due to pressure from industrial lobbies.

Critics of the new law argue that it lacks positive incentives for companies to save energy and that it may lead to legal uncertainty and restrict growth. They claim that the standardized savings targets set by the law cannot be realistically achieved without endangering economic growth in the country.

Despite the concerns, Berlin is hopeful that the recently passed incentives to encourage more efficient and environmentally friendly heaters, along with rising carbon pricing, will contribute to improved energy efficiencies.