Germany's coalition splits over plastic tax days before final 2027 budget session

Germany's governing coalition is split over a planned tax on plastic packaging three days before the Bundestag's budget committee meets to finalize the 2027 federal budget. Thorsten Frei, who leads the CDU/CSU group in the Bundestag, said on Sunday: "We are not doing the plastic tax." His Social Democratic counterpart, Matthias Miersch, said the measure is "not off the table." On Monday, Environment Minister Carsten Schneider of the SPD said the Union must now propose how to fill the hole in the budget if the tax is dropped.

The budget committee's final "clean-up session" (Bereinigungssitzung) is set for Thursday, November 12, a Finance Ministry spokesperson told reporters on Monday. At that session, budget lawmakers make the last changes to the 2027 budget before the full Bundestag votes on it.

What the plastic tax would do#

Under a preliminary draft based on a cabinet decision in July, companies would pay 550 euros for every ton of plastic in packaging from July 2027, tagesschau reported. The aim is to cut plastic waste.

The tax is tied to an EU requirement. So far, Germany has paid the related costs out of the federal budget. The plan was to pass that cost on to plastic manufacturers, Deutschlandfunk reported.

Finance Minister Lars Klingbeil of the SPD has already counted the money in his plans. The budget expects 805 million euros in extra revenue in 2027 and almost 1.5 billion euros a year from 2028, according to a dpa report carried by news.de. Deutschlandfunk and tagesschau put the relief for next year's budget at about 670 million euros. The reports did not explain the gap between the two figures.

Frei: "economically and ecologically wrong"#

Frei spoke on ZDF's "Berlin direkt" program on Sunday evening. "We are not doing the plastic tax, because it would have a wrong effect, not only economically but also ecologically," the CDU politician said, according to tagesschau. Tagesschau said the Union had raised doubts for weeks about whether the tax could be carried out as planned. It added that doubts about the tax's effect, given the paperwork it would require, exist even inside the SPD.

Frei backed other planned tax increases. He said revenue from a tax on sugary drinks would go to the health fund to ease pressure on statutory health insurance. He said the alcohol tax would also rise: "That is fine, the way it has been designed and done so far." The tobacco tax increase has already been passed, he said. Tagesschau noted that the CSU had called for a later start for the higher alcohol tax and an end to plans to raise the tax on sparkling wine.

The sugar tax is not settled either. ARD's capital studio reported that more than a dozen Union lawmakers had signed a list against a tax on sugary drinks, and that the Union wants to delay its start by six months, to January 1, 2028, according to tagesschau. Frei said the sugar tax would have a steering effect, meaning people would likely consume less sugar.

Miersch: a draft exists, and talks continue#

SPD group leader Miersch was more cautious on ARD's "Bericht aus Berlin." "There is a first draft, and in that sense it is all not off the table," he said. He said such a tax must have a steering effect. "But of course, as parliamentarians, we have a duty to look at whether all of this is going in the right direction, and so we are discussing it too."

Asked whether the project would be postponed, Miersch said talks were still going on. "That there are doubts there is public. So let's see where we end up," he said, according to dpa. Tagesschau said CDU finance expert Middelberg had spoken in similar terms.

Schneider: the Union must say how to fill the gap#

On Monday morning, Schneider told Deutschlandfunk that the Union had an obligation to come up with alternatives. "Sound financial policy, especially in these years and these days, is crucial, and so the Union also has an obligation to make other proposals," he said, tagesschau reported. By Thursday, he said, the Union must offer ideas on "how they close the hole in the budget that we have."

"The plastic tax was an agreement from the coalition committee in the spring and served both ecological steering and, above all, securing our budget," Schneider said. Deutschlandfunk said he could accept dropping the tax. If CDU and CSU reject it outright, that must be taken very seriously, he said. But they would then have to say how to make up the lost revenue.

His ministry repeated that line at the federal government press conference. A reporter recalled Schneider's estimate that dropping the tax would cost 800 million euros next year and 1.5 billion euros from the year after. Ministry spokesperson Zimmermann said: "His proposal is on the table. If it is not wanted, a plan B must come from another side. It is not our job now to organize a replacement for our own proposal," according to the FragDenStaat transcript.

A reporter then asked the Environment Ministry to explain why the tax would make ecological sense. Zimmermann declined to go into detail because talks were ongoing. He said the ministry had set out the case for the tax publicly in recent days and weeks.

The chancellery: "We will find a solution"#

Deputy government spokesperson Meyer did not say whether Chancellor Friedrich Merz supports the plastic tax. "Our goal is to present a constitutional budget," he said. He said talks were continuing, especially between the parliamentary groups, which he said are "in charge of the process" on the budget. "We as the federal government are contributing, and over the next few days and until the clean-up session we will find a solution," he said.

He said a constitutional budget matters because it secures what he called political priorities "cast in finances" for the coming year. He named investment, budget consolidation and further structural reform as the government's focus.

Asked again whether Merz wants to keep the tax or delay it, Meyer said intensive talks were under way. He said anyone who wants to change items must find matching funding or other changes "so that it fits together in the end and the budget is constitutional."

Asked whether the Union would have to tap reserves if the tax fails, Finance Ministry spokesperson Ernoult called the question hypothetical. "I would not want to pre-empt parliament," the spokesperson said, adding that the government was still discussing individual points.

The electricity tax adds pressure#

The plastic tax dispute comes as Merz pushes for a broad cut in the electricity tax. Cutting the tax for everyone would cost the federal government about 5 billion euros a year and save the average German household roughly 5 to 10 euros a month, tagesschau reported. Last week Merz said a cut for all now takes priority, as 567politics reported.

Asked on Monday whether Merz still thinks a cut at the start of 2027 is possible, Meyer said those talks were taking place now. "The political will is clearly there," he said. Fritz Güntzler, the Union group's finance spokesman, told ARD: "Since the chancellor has set this out, I am fairly sure that we will find a way."

Reporters also asked whether lower spending on renewable energy support could free up money. The Finance Ministry said the cost of that support depends heavily on wholesale power prices. It said the July draft budget sets aside 16.5 billion euros for it, and it would not speculate on possible savings. An Economy Ministry spokesperson said a bill to reform the Renewable Energy Sources Act, now before the Bundestag, aims to lower system costs over time.

How the budget got here#

Meyer described the dispute as part of the normal end game. "We started many months ago with a really very, very large gap," he said. "That means we already have a longer process behind us and are now close to really concluding it with a decision in parliament."

"It is quite clear that in the last hours and days before concluding such a really challenging budget, which will move our country forward in many areas, there are simply intense discussions," he said. "I think that is normal and also right."

Tagesschau described the final days differently, as a period of bargaining in which some players block, some undermine and some try to tear things down again. Güntzler told ARD: "We still have a few construction sites there."

Where the main tax items stand#

Based on Sunday's and Monday's statements, as reported by tagesschau, dpa and Deutschlandfunk:

The coalition#

The CDU, its Bavarian sister party the CSU and the SPD govern together. 567politics did not find statements by the opposition Greens, AfD or Left on the plastic tax dispute by publication time.

What to watch#

The key date is Thursday's clean-up session. The open questions are whether the plastic tax survives, is delayed or is replaced, what fills the gap if it goes, whether the sugar tax start moves to 2028, and whether an electricity tax cut for all households is funded for 2027. For how 567politics reports on budget figures that differ between sources, see our editorial standards.

Differing perspectives

Should Germany's 2027 budget keep the planned tax on plastic packaging?

Each position is summarized as its supporters make it, with equal weight and in alphabetical order. A summary is not an endorsement; the evidence for each is weighed in the story above.

• A constitutional budget first, details by Thursday

  Who holds it: Federal government spokesperson Meyer

  The government says its goal is a constitutional budget that secures its priorities of investment, consolidation and structural reform. It says the parliamentary groups lead the process and talks are running at high pressure. Anyone who wants to change items must find matching funding elsewhere so the budget still fits, and the government says a solution will be found before the clean-up session.

  In their words: FragDenStaat ↗

• Drop the plastic tax

  Who holds it: Thorsten Frei, CDU/CSU parliamentary group leader

  Frei says the coalition will not introduce the plastic packaging tax because it would have the wrong effect, not only economically but also ecologically. He backs other planned increases: a sugary drinks tax whose revenue would ease pressure on statutory health insurance, and a higher alcohol tax, which he says is fine as designed. He notes the tobacco tax increase has already been passed.

  In their words: tagesschau ↗

• Keep it on the table and test it

  Who holds it: Matthias Miersch, SPD parliamentary group leader

  Miersch says a first draft of the tax exists, so it is not off the table, and that any such tax must have a real steering effect. He says lawmakers have a duty to check whether the plan goes in the right direction, and that doubts about it are public. Asked about a delay, he says talks are continuing and the coalition will see where it ends up.

  In their words: news.de (dpa) ↗

• Whoever drops it must fill the gap

  Who holds it: Environment Minister Carsten Schneider (SPD)

  Schneider says the plastic tax was agreed in the coalition committee in the spring, both to steer behavior and above all to secure the budget. He says sound finances are crucial, so the Union has an obligation to propose alternatives. By Thursday's budget session, he says, it must explain how it would close the hole in the budget that dropping the tax would leave.

  In their words: tagesschau ↗

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