Faced with a construction crisis and housing shortage, the German government has postponed the tightening of new building efficiency rules planned for 2025, sparking criticism from climate activists. The suspended "EH 40" standard aimed to limit new buildings to 40% of the primary energy needed for a reference building. Climate NGOs argue that this decision hampers national climate targets. Green Minister Robert Habeck defended the move, citing the need to focus on affordable housing amidst high interest rates and inflation.

The government also plans to extend favourable credit conditions for homebuyers and top up subsidies for climate-friendly heating. The construction sector's business climate recently hit its lowest since 2009, according to the ifo institute.

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