CO₂ price 2027: what landlords in Germany must pay towards heating costs

The short answer

Germany’s CO₂ price is set to stay in the same corridor in 2027 as in 2026, at €55 to €65 per tonne. For landlords, though, the price matters less than the building’s tier: the more CO₂ it emits per square metre, the more of the CO₂ costs stay with the owner, up to 95 per cent in the worst case.

What a kilowatt hour of heat costs overall and how much of that is CO₂ price is covered in the guide to heating costs per kilowatt hour. This piece is about who pays that share.

What applies to the CO₂ price in 2027, and what is still open?

The Fuel Emissions Trading Act currently in force only sets the corridor for 2026: a minimum of €55 and a maximum of €65 (§ 10(2) BEHG). At the first auction on 1 July 2026 the price cleared at the top of the range, at €65 (DEHSt).

For 2027 the federal government has introduced a bill for a Third Act amending the BEHG (Bundestag document 21/7869). It keeps the €55 to €65 corridor for another year. According to the Bundestag, the reason is the postponement of the European emissions trading system for buildings and transport (ETS 2) to 2028. Without the change, the 2027 price would have been derived from the fluctuating average of EU ETS 1 auctions. The Bundesrat raised no objections. As of 13 October 2026, the Bundestag has yet to pass it.

From 2028 the price will be set by the market in ETS 2. Nobody can seriously put a figure on it today. For planning purposes: 2027 is predictable, the years after are not.

How does the tier model work?

Since 1 January 2023 the CO₂ costs of heating have been split between landlord and tenant (§ 11(2) CO2KostAufG). For residential buildings, the landlord calculates the building’s CO₂ emissions in kilograms per square metre of living space and year with every heating cost statement (§ 5(1)). Suppliers must state the fuel emissions on their invoice (§ 3).

CO₂ emissions in kg/m² per year	Tenant’s share	Landlord’s share
below 12	100 %	0 %
12 to below 17	90 %	10 %
17 to below 22	80 %	20 %
22 to below 27	70 %	30 %
27 to below 32	60 %	40 %
32 to below 37	50 %	50 %
37 to below 42	40 %	60 %
42 to below 47	30 %	70 %
47 to below 52	20 %	80 %
52 and above	5 %	95 %

Source: annex to the CO2KostAufG.

If the building is listed, in an area with mandatory connection to a heating network or covered by a conservation statute, the landlord’s share is halved; the landlord must prove this (§ 9). Commercial premises have no tier model: the tenant bears at most half (§ 8).

What does it cost an apartment building? A worked example

Assumptions: 12 flats, 900 m² of living space. Gas option: 180,000 kWh as billed. Oil option: 16,000 litres. Emission factors under Annex 2 of the EBeV 2030: natural gas about 0.181 kg CO₂ per billed kilowatt hour, heating oil about 2.68 kg per litre. CO₂ price €55 to €65 plus 19 per cent VAT.

	Gas	Oil	Gas after retrofit (−25 %)
CO₂ per year	32.7 t	42.8 t	24.5 t
kg CO₂ per m²	36.3	47.6	27.2
Landlord’s tier	50 %	80 %	40 %
Total CO₂ costs, gross	€2,137–2,526	€2,803–3,312	€1,603–1,894
of which landlord	€1,069–1,263	€2,242–2,650	€641–758

Two things stand out. First, with oil the owner pays more than twice as much as with gas, even though consumption in kilowatt hours is comparable. Second, cutting consumption by a quarter almost halves the landlord’s share, because the building emits less CO₂ and drops into a cheaper tier at the same time. Every tier down works twice.

Even at a constant price, the landlord’s share for the oil-heated building adds up to €22,000 to €26,500 over ten years, none of which can be passed on. That belongs in every investment calculation.

What changes from 2028 for new gas and oil heating systems?

The CO2KostAufG now refers to the Building Modernisation Act (GModG). For heating systems under § 43 GModG in rented flats, a separate rule applies from 1 January 2028 (§ 5a CO2KostAufG): landlord and tenant then split the CO₂ costs equally, regardless of tier, and the same goes for gas network charges. From 2029 the extra cost of the fuel share that must be used is added, for a share of up to 30 per cent. The same applies to new buildings (§ 5b).

For owners, this means anyone planning a new fossil heating system now should factor in not only the CO₂ price but also this cost split.

What happens if the statement is wrong?

In the heating cost statement the landlord must show the tenant’s share, the tier and the basis of calculation (§ 7(3)). If that is missing, the tenant may reduce their share of heating costs by 3 per cent (§ 7(4)). Where tenants heat their own flat, for example with a gas boiler per flat, they must claim reimbursement in text form within twelve months of the supplier’s bill (§ 6(2)).

What landlords should do now

1. Find the latest fuel invoice and divide the stated CO₂ emissions by the living space. That gives the tier.
2. Check that the heating cost statement openly shows tier and calculation, otherwise the 3 per cent reduction applies.
3. Budget the landlord’s share for 2027 at €65 per tonne, not €55. The first auction cleared at the cap.
4. For 2028 onwards, plan with an ETS 2 market price whose level is open, and run several price scenarios.
5. Judge measures by how many tiers they gain. Insulating the top floor ceiling, hydraulic balancing or replacing the heating system pay off twice for the landlord.
6. Before installing a new gas or oil heating system, factor in the equal cost split from 2028 under § 5a CO2KostAufG.