German Parliament convenes this week

Germany Proposes Sweeping Legislative Changes

Germany is pushing forward with a series of legislative proposals aimed at addressing climate change, energy security, and digital transformation. Here's a rundown of some key proposed changes:

Emissions Trading

Germany is considering an amendment to the Fuel Emissions Trading Act, with the aim of expanding the national emissions trading system (ETS) to cover the combustion of waste and coal. The bill also relaxes limits on noise and shadow flicker, allowing for potential power generation during night and morning/evening hours. However, as of August 2025, there is no direct information about a bill specifically amending the German Fuel Emissions Trading Act to cover all fossil fuels.

Tax and Duties Exemption

The coalition factions are introducing a law to implement the tax and duties exemption for inflation compensation payments made by employers to their employees, valid until 31 December 2024.

Youth Welfare

The federal government is abolishing cost recovery in youth welfare, aiming to support and motivate young people.

Legal Services

The draft bill aims to centralize the registration and oversight of persons registered under the Legal Services Act at the Federal Office of Justice. It also creates a comprehensive administrative fine regime for any form of unauthorized commercial legal services.

Civil Status

The draft bill aims to optimize and adapt various procedural aspects and individual regulations in the field of civil status to ensure electronic access for citizens to administrative services by the end of 2022.

Trade Regulation, Crafts and Trades, and Agricultural Organizations and Supply Chain Acts

The federal government proposes amendments to these acts, with the draft bill to be discussed in its final second and third readings this week.

Energy Security

The Energy Security Act facilitates the fuel switch within power generation plants, allowing temporary deviations from operational safety regulations to accelerate the fuel switch. The package of laws will also accelerate the expansion of the power grid and increase capacities in the existing power grid.

VAT Reduction on Gas Supplies

Germany is considering a law to reduce the VAT on gas supplies from 19% to 7%, with companies required to pass on the tax reduction in full to consumers.

Sanctions Violations

The European Union is expanding the catalog of serious criminal areas where it can set minimum penalties to include sanctions violations.

Waste Incineration and Coal Plants

Waste incineration has already been included in the German Emissions Trading Act since 2019. Coal burned in plants already subject to the European Emissions Trading System is not included in the new bill.

Whistleblower Protection

A new Whistleblower Protection Act aims to improve protection for whistleblowers, implementing the EU directive on the protection of persons who report breaches of Union law.

Short-Time Work Allowance

The draft bill adjusts ordinances on short-time work allowance to ensure planning security for employees and companies. The adjustment ensures that special regulations for short-time work allowance can be quickly implemented even after September 30, 2022.

Licensing Procedures

Existing licensing procedures will also benefit retroactively from these procedural simplifications. The draft bill provides for accelerated licensing procedures for plants required for fuel switching, including the possibility of operating provisionally before the permit is issued.

CO2 Emissions Certificates

The bill sets out conditions for the purchase of emissions certificates for the combustion of waste and coal. A special provision applies to the marketing of coal not covered by the ETS: as long as it is used tax-free, no CO2 price applies.

Removal of COVID-19 from Special Infection Protection Rules

The draft bill includes an article to implement the change to § 34 of the Infection Protection Act agreed with the federal states, removing COVID-19 from the list of diseases subject to special infection protection rules.

These proposed changes reflect Germany's commitment to addressing climate change, energy security, and digital transformation. For the latest legislative status, checking the German Bundestag or Federal Ministry for the Environment websites might provide more direct updates.