Agriculture: Federal Council is not yet dealing with agricultural diesel subsidies

Tomorrow the Federal Council will not deal with the federal government’s planned and controversial cancellation of diesel tax breaks for farmers. The budget financing law, which contains the measure, is not on the agenda of the state chamber, as a spokesman for the Federal Council said.

The next regular meeting of the Federal Council is scheduled for March 22nd. This means that the so-called Standing Advisory Council did not agree to any shortening of the deadline for the Budget Financing Act. The law is expected to be passed by the Bundestag tomorrow and will then be forwarded to the Bundesrat and discussed in specialist committees.

The Federal Council does not have to agree to the law, but could object and appeal to the mediation committee. However, in many states there are coalition governments with traffic light parties – and if a state government disagrees, the state must abstain from the Bundesrat or cannot agree.

The sticking point

The traffic light coalition plans to gradually reduce subsidies for agricultural diesel. So far, companies have been able to get a partial refund of the energy tax for diesel – with a reimbursement of 21.48 cents per liter. This should be reduced gradually. There will no longer be any subsidies for quantities consumed in 2026.

The cuts are highly controversial and have triggered a wave of protests from farmers.

The SPD-led states of Mecklenburg-Western Pomerania, Lower Saxony and Saarland have submitted a motion for a resolution to the Federal Council, which will be discussed on Friday. It says that the agricultural sector is being burdened disproportionately.

There should be a significantly longer period for the dismantling of the agricultural diesel tax refund in order to enable the development and switch to alternative fuels, as well as practical and economically viable alternative drive technologies.