German Government Passes Law to Reduce Bureaucracy and Enhance Energy Efficiency in Businesses

On June 24, 2026, the German Federal Cabinet approved a new law aimed at easing energy efficiency requirements for businesses and public entities, especially targeting energy-intensive operations. The legislation, introduced by Economics Minister Katherina Reiche, not only expedites the implementation of the EU Energy Efficiency Directive but also raises the annual energy consumption threshold for mandatory energy or environmental management systems to 23.6 GWh.

Significantly, the obligation to use waste heat has been abolished, and data centers receive extended compliance deadlines—from two to four years—with the renewable energy sourcing requirement postponed until January 1, 2030. These changes seek to reduce bureaucratic burdens and costs, potentially saving the economy over three billion euros while enhancing supply security and competitiveness.

Peter Adrian, President of the German Chamber of Industry and Commerce (DIHK), welcomed these reforms, highlighting the reduction and elimination of numerous thresholds and requirements from earlier regulations. However, Adrian emphasized the need for further cutbacks in bureaucracy, advocating for harmonized reporting obligations to better support business growth.

These legislative adjustments reflect Germany's commitment to aligning national policies with European energy efficiency goals while fostering a more business-friendly regulatory environment.