Grocery Prices Set to Rise Soon

by Chief Editor

The German government has approved the 2027 federal budget, introducing four new taxes to fund planned expenditures of 555.4 billion euros and 118.7 billion euros in new debt. Among these measures is a plastic tax on non-recycled packaging that will be passed to companies and potentially to consumers starting in 2027, according to the cabinet decision.

How will the new plastic tax affect consumers?

The tax is set at 80 cents per kilogram of non-recyclable plastic. While companies bringing the plastic into the market are not required to pass this cost to consumers, it is considered likely that many will do so. For a 30-gram package, this would result in a price increase of approximately two cents.

How will the new plastic tax affect consumers?
Did You Know? Germany has paid 1.4 billion euros annually since 2021 for approximately 1.7 million tons of non-recycled plastic to the EU, according to Plastics Europe.

The environmental association BUND states that the average plastic consumption per person in Germany is 40 kilograms per year. Based on this figure, the annual tax burden per person could reach 32 euros.

Why is the government introducing these taxes now?

The measures are designed to counter-finance the 2027 federal budget. In addition to the plastic tax, the government will raise alcohol and tobacco taxes. A sugar tax is also planned, though it has not yet been included in the budget.

The plastic tax is an EU levy that member states have been required to pay since 2021. Revenue is directed to the EU budget to fund climate protection and the promotion of a circular economy. While Germany previously paid this from the national budget, the government is now shifting the cost toward the companies that market the plastic.

Expert Insight: The shift from a state-funded levy to a corporate-passed tax represents a strategic move to reduce the federal budget’s burden. However, the effectiveness of this “steering” mechanism is contested, as the financial pressure may lead to material substitutions that aren’t necessarily more sustainable.

What are the potential consequences for the industry?

Plastics Europe argues that the tax will not have a positive steering effect. The association cites a 2023 study by the Federal Environment Agency, stating that companies often switch to alternative materials that are more resource-intensive or harder to recycle. The association specifically highlighted fiber-based, plastic-coated composite packaging as problematic.

The Plastic Packaging Tax Explained

Consumers may be able to lower their individual costs by avoiding single-use plastics. This includes choosing products without plastic packaging in supermarkets, using reusable bags for produce, and opting for cosmetics without microplastics.

What happens next for the 2027 budget?

The government’s plan to pass the plastic tax to companies is a reversal of previous policy. In 2024, the “Ampel” coalition considered this move, but the effort failed during budget negotiations. Now, Germany may join Spain and Portugal, the two EU members that have already passed the plastic tax on to consumers.

What happens next for the 2027 budget?

Frequently Asked Questions

What is the cost of the plastic tax per kilogram?
The tax is 80 cents per kilogram of non-recyclable plastic.

Which other taxes are increasing in 2027?
The government is raising taxes on alcohol and tobacco, with a sugar tax planned for the future.

How much does Germany currently pay the EU for plastic waste?
According to Plastics Europe, Germany pays 1.4 billion euros annually for roughly 1.7 million tons of non-recycled plastic.

Do you think higher prices for plastic packaging will change your shopping habits?

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