BERLIN, April 13 (Reuters) - Germany's coalition government on Monday announced a package of measures nL6N40W0EC to cut fuel costs, allow a tax-free worker bonus, set a timeline for overhauling the
Germany Announces Fuel Relief, Tax Cuts, and EU Auto Policy Measures
Key Measures from Germany's Coalition Government
BERLIN, April 13 (Reuters) - Germany's coalition government on Monday announced a package of measures nL6N40W0EC to cut fuel costs, allow a tax-free worker bonus, set a timeline for overhauling the statutory health insurance system and push changes to EU car emissions rules.
The following are key points from the coalition paper:
Fuel Price Relief
Energy Tax Reduction
- Cut Germany's energy tax on diesel and petrol by about 0.17 euros per litre for two months, relief worth around 1.6 billion euros ($1.87 billion). Cost to be offset by competition- or tax-based measures targeting oil companies.
Antitrust Measures
- Tougher antitrust: expand powers of Germany's federal Bundeskartellamt competition watchdog to collect data across the motor-fuel supply chain and pursue remedies, including clawing back excess profits after sector probes, to ensure wholesale price drops are passed on to consumers.
Longer-Term Energy Strategy
- Longer term: expand domestic energy supply, including by tapping selected German gas fields, accelerating renewables and strengthening cross-border power grid links.
Worker Relief
Tax-Free Worker Bonus
- 2026: Employers may pay a one-off, tax- and social-contribution-free bonus of 1,000 euros. Lost tax revenue to be offset by a tobacco tax hike this year.
Income Tax Overhaul
- 2027: Major overhaul of income tax to permanently reduce the burden on lower- and middle-income households.
Statutory Health Insurance (GKV)
Funding Gap and Goals
Germany's statutory health insurance system, covering most residents and backed by payroll contributions from employers and employees, faces a funding gap https://www.reuters.com/business/healthcare-pharmaceuticals/german-special-commission-health-insurance-proposes-measures-cap-costs-2026-03-30/ that could reach 40 billion euros in 2030.
- Goal: curb spending growth, align outlay with revenue and stabilise contribution rates, with all stakeholders required to contribute.
Legislative Timeline
- Cabinet to approve a draft law on April 29, with passage targeted before the summer parliamentary recess.
Auto Industry - EU Rules and German Position
Response to European Commission Proposals
The European Commission https://www.reuters.com/sustainability/climate-energy/factbox-whats-european-commissions-proposals-reverse-2035-combustion-engine-ban-2025-12-16/ has opened a new lawmaking process. Germany is responding to the Commission's draft:
Technology-Neutral Approach
- Germany supports a "technology‑neutral" approach, which would still allow new combustion‑engine cars to be registered after 2035 if they meet EU rules.
Plug-In Hybrid and Renewable Fuels Policy
- Germany will seek to pause the tougher 2027 formula for plug‑in hybrids ("Utility Factor"). It will push for vehicles that run exclusively on renewable fuels, including advanced biofuels, to be credited as zero‑emission without delay.
Opposition to Bonus Credits and Preferential Treatment
- Germany rejects the Commission's proposed bonus compliance credits for small https://www.reuters.com/sustainability/climate-energy/factbox-whats-european-commissions-proposals-reverse-2035-combustion-engine-ban-2025-12-16/ electric vehicles and any size-based preferential treatment.
Banking and Borrowing Mechanisms
- "Banking and borrowing": Germany backs letting carmakers carry over excess CO2 reductions or bring some forward in the 2025–2029 and 2030–2034 periods, with three‑year compliance periods for the 2030 and 2035 targets to allow flexible compliance and avoid penalties.
($1 = 0.8550 euros)
(Reporting by Kirsti Knolle, Marianda Murray, Maria Martinez and Andreas Rinke; Editing by Kirsten Donovan)
