Who pays the CO2 costs of heating?
Since 2021, every tonne of CO2 from natural gas and heating oil carries a price from the German national emissions trading system (BEHG), often called a "CO2 tax" colloquially. Until the end of 2022, tenants bore this price alone through the heating costs. Since 1 Jan 2023, the Carbon Dioxide Cost Allocation Act (Kohlendioxidkostenaufteilungsgesetz, CO2KostAufG) splits it between landlord and tenant.
The idea: whoever lets a poorly insulated building should pay more than someone who has retrofitted. For residential buildings, the CO2 emissions per square metre of living area therefore decide the split. Non-residential buildings such as offices or shops split 50:50.
The law covers the landlord's central heating, district heating and heat contracting, and tenants with their own flat heating. It takes precedence over the tenancy agreement and the Heating Costs Ordinance: an agreement that burdens the tenant more is ineffective to that extent (§ 6(1)).
The tier model for residential buildings
The law has ten tiers. Below 12 kg CO2 per m² per year, the tenant pays everything because the building is efficient. With each further tier of 5 kg, the landlord's share rises by 10 percentage points. From 52 kg, the landlord pays 95 % and the tenant only 5 %.
The lower boundary always belongs to the higher tier: 12.0 kg is in tier 2, 52.0 kg in tier 10. Round the emissions per m² to one decimal place first (§ 5(1) CO2KostAufG). It sounds petty, but at a boundary it decides a whole tier.
Tier model for residential buildings
| Tier | Emissions | Tenant | Landlord |
|---|---|---|---|
| 1 | under 12 kg | 100.0% | 0.0% |
| 2 | 12 to under 17 kg | 90.0% | 10.0% |
| 3 | 17 to under 22 kg | 80.0% | 20.0% |
| 4 | 22 to under 27 kg | 70.0% | 30.0% |
| 5 | 27 to under 32 kg | 60.0% | 40.0% |
| 6 | 32 to under 37 kg | 50.0% | 50.0% |
| 7 | 37 to under 42 kg | 40.0% | 60.0% |
| 8 | 42 to under 47 kg | 30.0% | 70.0% |
| 9 | 47 to under 52 kg | 20.0% | 80.0% |
| 10 | from 52 kg | 5.0% | 95.0% |
How to calculate the split
Emissions per m² = CO2 emissions in kg ÷ living area, rounded to one decimal place
- Read the CO2 emissions of the billing period from the supplier's invoice, e.g. 15,000 kg.
- Divide by the total living area of all supplied flats: 15,000 kg ÷ 600 m² = 25.0 kg per m².
- Look up the tier: 25.0 kg is in tier 4 (22 to under 27 kg), the landlord pays 30 %.
- Work out the CO2 costs: 15 t × €55 (2025 price) = €825.00 net, €981.75 gross with 19 % VAT.
- Split: landlord 30 % = €294.53, tenant €687.22. The landlord deducts their share from the heating costs and allocates only the rest under the Heating Costs Ordinance (§ 7(1)).
If the billing period is shorter than a year, for example after a change of owner, reduce the table boundaries pro rata (§ 5(1)). Do not extrapolate the emissions. CIRO reduces by days ÷ 365.
Which CO2 price applies in which year?
Up to 2025 a statutory fixed price applied; 2026 has a price corridor of €55 to €65, and the midpoint of €60 counts for the split (§ 4(1) CO2KostAufG). From 2027, under current law, the average auction price from 1 July to 30 November of the previous year applies. The Federal Environment Agency publishes it no later than ten working days before the year starts.
The supplier states the CO2 price component net, plus VAT. As a private landlord without input tax deduction, you split the gross amount. Gas and district heating had 7 % VAT from 1 Oct 2022 to 31 Mar 2024, 19 % before and after; heating oil stayed at 19 % throughout. If your invoice shows a different amount, for example because heating oil comes from older tank stock, use the invoice amount.
CO2 price per tonne
| Billing year | Basis | Price |
|---|---|---|
| 2023 | Fixed price | €30.00/t |
| 2024 | Fixed price | €45.00/t |
| 2025 | Fixed price | €55.00/t |
| 2026 | Midpoint of the €55 to €65 corridor | €60.00/t |
| 2027 | Average auction price July to November 2026, published by the Federal Environment Agency | still open |
Reading the emissions correctly: the calorific value trap
Since 2023, the fuel or heat supplier's invoice must state the CO2 emissions in kg, the emission factor, the energy content and the CO2 price component (§ 3 CO2KostAufG). Always use this kg figure. An estimate is only a fallback when it is missing.
If you estimate yourself, it is easy to fall into the calorific value trap: gas invoices usually state kWh on a gross calorific basis (Hs), but the emission factor of about 0.201 kg per kWh applies to the net calorific value (Hi). Multiplying the two puts you about 11 % too high and quickly one tier too high.
- Natural gas: about 0.20088 kg CO2 per kWh net calorific value. Divide gross calorific kWh by 1.11 first.
- Heating oil: about 0.2664 kg CO2 per kWh net calorific value, about 10 kWh per litre. What counts is consumption in the billing period: tank level at the start + deliveries − tank level at the end.
- District heating and contracting: no standard value, only the invoice value counts.
- Heat pump, pellets, solar thermal: no CO2 price, nothing to split.
Example: 133,200 kWh gross calorific value correctly give 24,106 kg CO2 and, at 600 m², tier 7 (60 % landlord). Multiplied directly by the net calorific factor, it would be 26,757 kg, tier 8 and 70 %.
Special cases: heritage protection, flat heating, district heating
- Non-residential buildings: landlord and tenant split 50:50 (§ 8). A tier model for commercial buildings has been announced but not yet issued.
- Heritage protection, social preservation areas or mandatory connection: if such a requirement blocks a retrofit of the building or the heat supply, the landlord's share is halved (§ 9(1)). If requirements block both, there is no split (§ 9(2)). In both cases the landlord must prove the circumstances.
- Flat heating with the tenant's own gas contract: the tenant pays the CO2 costs to their supplier and claims the landlord's share back, in text form, no later than twelve months after the supplier's bill (§ 6(2)).
- District heating and heat contracting: covered in principle. Only buildings first connected after 1 Jan 2023 to a plant in the EU emissions trading system are exempt (§ 2(4)).
- Buildings that do not have to bill by consumption under § 11 of the Heating Costs Ordinance (e.g. very low heat demand) are not covered, unless billing has been agreed (§ 2(7)).
- Mixed-use buildings with flats and commercial units: which rule and which area applies is not conclusively settled in law.
Common mistakes in the statement
The heating cost statement must show the tenant's share of the CO2 costs, the building's classification and the calculation basis (§ 7(3)). If the calculation or the disclosure is missing, the tenant may reduce their share of the heating costs by 3 % (§ 7(4)).
- Rounding the emissions per m² to two decimal places: 11.95 kg then becomes tier 1 instead of 12.0 kg and tier 2.
- Using the heated area instead of the living area.
- Multiplying gross calorific kWh by the net calorific factor.
- Using the wrong year's price or forgetting the VAT.
- Deducting the landlord's share but not stating the classification and calculation in the statement.
What changes from 2027 and 2028
The CO2 price for 2027 has not been set yet. A draft bill in the Bundestag would continue the €55 to €65 corridor, but it has not been passed. From 2028, the European emissions trading system for buildings (ETS 2) is to set the price on the market.
From 2028, special rules also apply to gas and oil heating systems newly installed under § 43 of the Building Energy Act (§§ 5a ff. CO2KostAufG). This calculator does not cover them.