Replacing an Oil Heating System in 2026: When You Must, and When It Merely Pays

The short answer

You do not have to replace a working oil heating system in 2026. Under the Building Modernisation Act (GModG), §§ 71 to 73 of the old heating law have lapsed — and with them the age-based replacement duty and the operating ban that had been planned for 2045. You may keep repairing it. The question is therefore no longer “am I allowed to”, but “does it pay” — and that sum is drawn up not by the legislator, but by the CO₂ price.

What a kilowatt-hour of heat really costs by source is set out in the guide to heating costs per kilowatt-hour. Here the focus is the legal position and the question of what holding on to oil costs each year.

Do you have to replace your old oil heating?

No. The former heating law knew two duties that had unsettled owners for years: replacing constant-temperature boilers after 30 years of operation, and a complete operating ban on oil and coal boilers from 2045. Both stood in §§ 71 to 73. In the current GModG those sections are expressly marked “(weggefallen)” — lapsed. So you may keep running and repairing a working oil heating system, regardless of its year of manufacture.

That is not a free pass but a shift of responsibility. The legislator no longer compels; it prices. The longer the oil heating runs, the more strongly the CO₂ price bears on every delivery you order. For landlords there is the added point that part of these CO₂ costs stays with the owner under the staged model — the worse the building, the more (see CO₂ price 2027 and cost allocation).

Are you still allowed to install a new oil heating system in 2026?

Yes, but with a condition that only bites in a few years. § 42 GModG lists ten permissible options for replacing a heating system in an existing building; an oil-fired system stands as option 1, on an equal footing with heat pumps, heat networks, biomass and hybrid solutions. Anyone installing a new oil heating system into an existing building after 29 July 2026 falls, however, under § 43: a growing share of the heat produced must then come from climate-friendly fuels — bio heating oil, biogenic LPG, or green hydrogen and its derivatives.

From	Minimum share of climate-friendly fuels
1 January 2029	10 %
1 January 2030	15 %
1 January 2035	30 %
1 January 2040	60 %

That is the catch in the oil heating that seems, at first glance, to be open again: you may install it, but from 2029 you must feed it a fuel that today is dearer than fossil heating oil and not available everywhere. The quota for the period after 2040 is not yet fixed — § 42a GModG merely instructs the federal government to regulate it, with a deadline of 1 December 2026.

What does the oil heating you keep actually cost?

Worked example, freely chosen building size: an apartment building with 12 flats, 900 m², oil heating with around 120,000 kWh of heat consumption a year. At a calorific value of about 10 kWh per litre, that is roughly 12,000 litres of heating oil.

Item	Value (as at 20 October 2026)
Heating oil price (national average, incl. VAT)	~€1.74 per litre
Consumption	12,000 litres
Annual fuel cost	~€20,900
of which CO₂-price share	~€1,800 to €2,100

On 20 October 2026 the heating oil price averaged around €174 per 100 litres nationwide (HeizOel24) — after a sharp rise over the year. Of that, the CO₂ price alone accounts for around 15 to 17 cents per litre in 2026 (net: 2.68 kg CO₂ per litre under the EBeV 2030, times 55 to 65 euros per tonne under § 10 BEHG). That share keeps growing, because the corridor rises and because from 2028 the European emissions trading scheme ETS 2 is to replace national pricing. So the replacement duty is gone, but the annual burden remains — and it is rising in a predictable way. That is exactly the difference from the old legal position: the decision is yours, the cost curve is not.

Does the municipal heat plan force a replacement?

No. Municipal heat planning continues — municipalities with more than 100,000 inhabitants were to submit their plan by 30 June 2026, smaller ones by 30 June 2028 (§ 4 Heat Planning Act). What has been decoupled is the former link: a published heat plan no longer obliges you to install a particular heating system within a deadline. It is information, not an order. For an oil heating that means, in practice: look at your municipality’s plan to see whether a heat network is coming to your area. If one is, connecting is often the calmer alternative to a costly standalone replacement; if none is, the choice between a heat pump and continued fossil operation stays with you. What the heat plan means for owners with gas heating is covered in the guide to municipal heat planning.

What to do if the oil heating fails?

The most expensive moment for a decision is total failure in winter. If the system fails beyond repair, § 43(7) GModG governs the replacement — and then the bio shares apply with no long grace period. Anyone who only starts calculating with a cold building decides under time pressure and usually overpays. It is wiser to prepare the alternative while the old heating still runs: a quote for a heat pump, information on a possible heat-network connection, a full-cost calculation over the expected remaining life. The funding landscape here draws a sharp line between owner-occupiers and landlords (see heating funding: landlords vs. owner-occupiers).

What owners should do now

1. Check whether the system is safe and repairable. You do not have to replace a working oil heating — the pressure to replace comes from the price, not the law.
2. Look at your municipality’s heat plan (deadline 30 June 2026 or 30 June 2028). It compels nothing, but it shows whether a heat network is coming.
3. Carry forward the annual fuel bill and build in the rising CO₂ share: 2.68 kg per litre, times the annually rising CO₂ price.
4. Plan any new oil installation with your eyes open: from 2029 a bio share under § 43 GModG is mandatory, and bio heating oil is today dearer than the fossil kind.
5. Make the decision before a breakdown (§ 43(7)), not during it — obtain quotes while the old heating is still warming.
6. Weigh the full cost of the alternatives against the remaining life of the oil heating before you invest, rather than comparing only the purchase price.