Federal government announces plans for Agradiesel funding restoration
The German government has announced a series of measures aimed at strengthening the catering industry and providing relief to both citizens and businesses. According to reports, these measures are expected to save approximately 3.6 billion euros annually.
One of the key components of this relief package is a reduction in the Value Added Tax (VAT) rate for catering and food services, excluding the sale of beverages. From January 1, 2026, the VAT rate will be reduced from 19% to 7%.
This reduction is not the only financial relief that the catering industry will receive. From 2026, they will also benefit from a relief of 21.48 cents per liter of diesel. A similar relief will be extended to HVO fuels, with a refund of 21.4 cents per liter.
The relief measures are not limited to the catering industry. Farmers will also feel the benefits starting from 2027. The federal government has decided to fully reintroduce the tax relief for agricultural diesel from 2026, providing around 430 million euros in relief to farmers per year. Agricultural operations will receive the full diesel premium again, with the reimbursement of the energy tax on diesel for tractors and other agricultural machinery being restored.
These measures are part of the coalition agreement and the "Immediate Program for Germany", and have been extended beyond their original expiration date on January 1, 2026.
Max von Elverfeldt, chairman of Family Farms Land and Forest, welcomed the decision, stating that it sets an important signal for the competitiveness of domestic agriculture. The President of the German Farmers' Association, Joachim Rukwied, also considered the reintroduction of the agricultural diesel refund a significant achievement of the farmers' association's work.
Albert Stegemann, deputy of the Union parliamentary group, also expressed his support, stating that the political change in agriculture is now a reality. He believes that these measures will contribute significantly to stabilizing agricultural production and securing jobs in rural regions.
In addition to these financial relief measures, the federal cabinet has also decided to increase the volunteer allowance from 840 to 960 euros and the coach's allowance from 3,000 to 3,300 euros from 2026.
These measures are expected to benefit a wide range of businesses and services, including farm cafés, bakeries, butchers, food retailers, providers of catering services, as well as Kita, school, and hospital catering. The relief will extend to various establishments such as these, providing a much-needed boost to the industry and the economy as a whole.
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