The German government has approved a draft law to relax energy-saving obligations for companies and authorities, aiming to bolster the economy amid rising energy costs.

The cabinet’s decision to amend the Energy Efficiency Act will reduce reporting requirements, extend transition periods, and focus energy-saving measures on larger energy-consuming companies. This move is expected to relieve the economy by over three billion euros, according to Federal Minister of Economics Katherina Reiche.

Under the new regulations, the obligation for companies to implement energy or environmental management systems will only apply to those consuming 23.6 gigawatt-hours of energy annually. Additionally, the transition period for new data centers to comply with efficiency standards will be extended from two to four years, and the previous requirement for companies to utilize waste heat will be eliminated.

While the Ministry of Economics argues that these changes will reduce bureaucracy and enhance competitiveness, some industry groups have criticized the draft as a setback. The Federal Association of Sustainable Economy highlighted the untapped potential of waste heat and energy efficiency measures. Conversely, the German SME Association welcomed the law as a positive step but called for further reforms to address energy consumption caps, while the President of the German Chamber of Commerce urged the government to advocate for a simplified and growth-oriented legal framework at the EU level.