Germany Delays Sugar Levy and Drops Plastic Packaging Tax for 2027

Germany's governing coalition has postponed its planned levy on sugar-sweetened soft drinks, dropped a national tax on plastic packaging for 2027 and left households still waiting for a promised cut in electricity tax. The decisions were agreed by the CDU/CSU and SPD on the evening of Wednesday 11 November, hours before the Bundestag's budget committee met for its final "clean-up" session on the 2027 federal budget, as reported by The Local Germany on 12 November and by regional German papers including the Weser-Kurier.

The sugar levy was due to start on 1 July 2027. It will now begin on 1 January 2028 and, according to the coalition groups, be phased in over three steps instead of two. Depending on sugar content, it is set at between 26 and 32 cents per litre and covers colas, lemonades, energy drinks, iced teas and fruit nectars with added sugar. Pure fruit and vegetable juices and sugar-free drinks made with sweeteners are exempt. German coverage reports that the CDU/CSU side pushed for the later start date. Supporters of the levy point to the United Kingdom, where a similar tiered charge led manufacturers to roughly halve the sugar in their drinks.

The plastic packaging tax has fared worse. The government's draft would have charged 550 euros for every tonne of plastic used in packaging from July 2027, adding roughly one to two cents to a plastic bottle depending on its size and weight. Its purpose was to refinance the plastic own resource that Germany pays to the European Union on non-recycled plastic packaging waste, a contribution currently met from the federal budget. The tax was expected to raise about 500 million euros in 2027 and around 1.5 billion euros a year from 2028. Business associations criticised the speed with which the plan had been introduced and warned of heavy administrative costs, and the CDU/CSU sided with industry. For 2027, the tax is off the table.

The electricity tax cut was promised in the coalition agreement: lowering the tax for all consumers to the EU minimum would save an average family about 80 euros a year but cost the federal budget around 5.4 billion euros. No source of funding has been found. Coalition sources said the cut was not formally dead and could still be financed in the committee session, but German coverage widely expects no reduction in 2027. Meanwhile, the budget for the electric-car purchase bonus has been raised to about 1.72 billion euros for next year because of strong demand, although the overall three-billion-euro pot is unchanged, which means the scheme is likely to close sooner than planned.

Other measures go ahead. Tobacco tax rises gradually from the start of 2027, and the taxes on spirits and alcopops increase by 20 per cent, worth about 300 million euros next year. The SPD also secured the reversal of several planned social cuts, including to the immediate supplement for children in low-income families. Finance Minister Lars Klingbeil's draft budget foresees spending of around 555 billion euros, and the Bundestag is due to debate and adopt it in the week starting 23 November.

Taken together, the package shows how fiscal pressure is shaping Germany's health and environmental policy. A measure aimed at reducing sugar consumption has been delayed, a tax that would have placed the cost of plastic packaging on producers has been set aside, and an energy price relief for households remains unfunded.

Why it matters

The plastic packaging tax was meant to shift the cost of Germany's EU plastic contribution, with expected revenue of around 1.5 billion euros a year from 2028, from the general budget onto the companies that put plastic packaging on the market. Without it, taxpayers keep covering the bill for non-recycled plastic, and producers lose a direct price signal to use less packaging or switch to recyclable materials.