Impending Demise of Housing Sector: Warnings Issued by Building Materials Industry in Federal Budget 2026
The German federal government is facing criticism for its 2026 budget, particularly for a significant reduction in funding for energy-efficient building renovations. This move, according to environmental NGOs and industry experts, undermines a key pillar of climate action and threatens the viability and expansion of sustainable housing construction and renovation industries in Germany.
Between 2024 and 2026, funds for renovation in the building sector are set to decrease from 17 billion euros to 12 billion euros. This reduction weakens efforts to make housing more climate-friendly, while billions are instead funneled into projects like liquefied natural gas terminals and oil refinery investments.
The housing construction and renovation industries are heavily reliant on government incentives and subsidies to drive renovation projects that reduce emissions and improve sustainability. Cutting these funds risks slowing down renovations, limiting market growth, and hindering Germany’s progress toward climate targets in the housing sector, where emission reductions have been too slow.
The Federal Association of Building Materials - Stones and Earth (bbs) has been vocal in its criticism of the budget, warning of an impending collapse in housing construction due to the lack of new investments. The association's head, Luke Voutta, urges the federal government to ensure the possibility of using funds from the previous year for infrastructure investments. Voutta also advocates for a readjustment of the renovation subsidy in the building sector and the need for an ambitious promotion policy to avoid social dynamite due to the urgently needed increase in the renovation rate.
Production in the wall building materials sector has stagnated at a low level since the first quarter of 2025, with a reduction of around 50 percent from 2022 to 2024. The bbs suggests a subsidy program following the EH55 model could ensure the realization of a large part of the construction backlog, with a potential subsidy of up to 30,000 euros per housing unit.
The federal government aims to create more affordable housing, but the draft budgets for 2025 and 2026 show a lack of new investments. Existing programs are shifted from the regular budget to a special fund without any significant financial increase. The Infrastructure Special Fund is crucial for modernizing Germany, according to Voutta.
For press inquiries, contact Luke Voutta, Head of Politics & Communication at Bundesverband Baustoffe - Steine und Erden e.V., at Tel.: +49 30 7261999-23, Email: [email protected], or visit www.baustoffindustrie.de for more information.
[1] German federal government facing criticism for 2026 budget cuts to energy-efficient building renovations. (n.d.). Retrieved from https://www.baustoffindustrie.de/en/press-service/press-releases/german-federal-government-facing-criticism-for-2026-budget-cuts-to-energy-efficient-building-renovations/
The German federal government's 2026 budget has come under fire for its reduction in funding for energy-efficient building renovations. This move undermines a key pillar of climate action and threatens the viability and expansion of sustainable housing construction and renovation industries in Germany. The budget shift, which funnels billions into fossil fuel infrastructure instead, is causing concern among environmental NGOs and industry experts. The Federal Association of Building Materials - Stones and Earth (bbs) has been vocal in its criticism, warning of an impending collapse in housing construction due to the lack of new investments. The association's head, Luke Voutta, is urging the federal government to take immediate action to implement all housing policy measures agreed upon in the coalition agreement. The bbs also suggests a subsidy program following the EH55 model to ensure the realization of a large part of the construction backlog. The federal government aims to create more affordable housing, but the draft budgets for 2025 and 2026 show a lack of new investments, causing concern among industry experts. For more information, please contact Luke Voutta at Tel.: +49 30 7261999-23, Email: [email protected], or visit www.baustoffindustrie.de.
[1] The German federal government's budget reduction for energy-efficient building renovations in 2026 is facing criticism, as it undermines sustainable housing construction and renovation industries.[2] Luke Voutta, head of the Federal Association of Building Materials - Stones and Earth (bbs), is urging the government to take immediate action to implement all housing policy measures, suggesting a subsidy program similar to the EH55 model to ensure the realization of a large part of the construction backlog.
