Agricultural diesel - what will change in 2026

Agricultural businesses consume a lot of diesel for the farm and the field. Exactly how much varies depending on the type and size of agriculture. Even though agriculture forms an economic area in the EU, diesel prices vary significantly from state to state. Some countries tax agricultural diesel different from diesel or offer tax refunds for example, others pay the CO₂-Price back, others nothing of both. We'll explain to you the background of agricultural diesel and which changes there are from 2026 on.

Shortly in advance:

• The term agricultural diesel comes from the tax relief for diesel consumption on farms that is not available for diesel on the market
• Following the gradual abolition of agricultural diesel rebate by the last government, this is 2025 6.4 cents per liter of diesel
• From 2026, it should be completely omitted
• On September 10, 2025 it was decided that the tax refund for agricultural diesel will be extended from January 1, 2026 again to be paid in full (21.47 cents/liter)

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What role does agricultural diesel play in agriculture?

Diesel consumption is very high in agriculture. An average of 120 liters per hectare per year for farming is needed. Working on the farm itself can result in even more consumption. This results in around 10,000 liters of diesel per year - if not more. The agricultural diesel refund should relieve companies and amounts to 5370 euros starting from an annual consumption of 25,000 liters. After the relief has been reduced by 60 percent and should be completely abolished from 2026, the full refund possible again from 2026, as decided by the Cabinet on September 10, 2025.

What distinguishes agricultural diesel from diesel?

The diesel price (EU name: gas oil) includes a fixed energy tax, also known as petroleum tax. For 1000 liters diesel in Germany, does it amount to 470.40 euros. The legal basis for this is the tax rates for energy products under customs §2 Paragraph 1 EnergieStG with gas oil as a tax object 4.b), which is considered sulfur-free with a sulphur content of not more than 10 mg/kg. In other countries, the energy tax may be different.

In fact, in the EU, states are able to set different prices for agriculture. For example, some countries set the tax to zero. In retail, the regular rate of 470 euros per 1000 liters of diesel is charged, the rate for agricultural diesel is lower, namely 342 euros; farmers can have this difference reimbursed upon request. This means that they first pay the normal diesel price in stores and can then recover the relief in the following year.

‍What is the price of diesel?

• Fuel price - currently around 77 cents
• CO₂-Price - currently approx. 14 cents
• Energy tax - currently around 47 cents
• 19 percent vat
• Agricultural diesel refund

What do we learn from this? More than half of the diesel price, i.e. around 92 cents, consists of tax duties. As a result of the different pricing and taxation, the conditions of competition are very different. Flat-rate companies make use of the small business regulation so that they have no sales tax distract, but also none input tax be able to deduct. This means lump sum payment because it is possible regardless of the size of the company.

The average price of agricultural diesel in the EU is 1040 euros per liter per year, above which Germany is significantly higher. Since there are countries that are significantly lower in the same economic area, the cost structures for farms are very different in competition. In Austria, for example, it is not the gas oil tax that is refunded, but the CO₂-Price.

How high is the agricultural diesel refund?

• The full tax rate It currently amounts to around 47 cents/liter.
• Up to February 2024, the relief was 21.48 cents
• By December 2024, it had been reduced to around 12 cents per liter
• 2025 it has just been 6.44 cents
• On September 10, 2025 the Federal Cabinet has decided to reintroduce agricultural diesel subsidies, which were originally to be completely abolished in 2026, at 21.48 cents.

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How is the application for AgrAre diesel rebate provided?

In Germany, the customs is responsible. Until now, the application could also be submitted on paper. Since 2024, the two forms have been included in the online application. The application is therefore submitted exclusively digital at customs. To do this, you register on the customs portal, where you sign up with the ELSTER certificate enrolls. Because it is a tax refund. This therefore also requires registration in the ELSTER portal.

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What is the role of tax relief?

• Financial support for farmers who spend a lot on diesel
• ‍Distortion of competition: Some countries do not differentiate between diesel and agricultural diesel when it comes to energy tax, so farmers do not receive any special tax relief as the price remains the same. The EU therefore allows the individual member states considerable room for manoeuvre regarding the pricing and taxation of agricultural diesel concerns. This results in a inconsistency that is being criticized. In other countries, taxes on the price of diesel are lower, so agricultural businesses produce significantly more cheaply Can. Without the tax refund, this creates a distortion of competition. Because the only country in the EU with even higher diesel prices than Germany is the Netherlands.
• ‍‍‍Climate-damaging subsidies: There is criticism that these are climate-damaging subsidies that promote and reward the climate-damaging economies of agricultural enterprises.
• Instead, it makes more sense to attach subsidies to conditions that serve environmental protection or benefit. For example, when farmers buy electric-powered machines.
• Farmers who do not control weeds with plant protection products but remove them mechanically consume more diesel. This reduced use of chemical agents also contributes to environmental protection and biodiversity. Indirectly, the tax relief is therefore also environmentally friendly.
• Die Relief costs the state around 430 million euros, which, however, will probably only be noticeable from 2027.
• Agricultural diesel rebate is intended to ensure the planning security and competitiveness of farms: The relief of 21.48 cents/liter ensures less expenditure of between 2000 and 5000 euros per year - depending on type, size and type of farming

Conclusion

The distinction between diesel and agricultural diesel consists in the type of consumption and tax duties. The reliefs should farms competitiveness and planning security give. After the agricultural diesel rebate has been reduced by 2025, the funding is again continued in full from January 1, 2026 with 21.48 cents per liter. This is also controversial because it is a climate-damaging funding act. However, farmers with regional direct marketing also benefit from it, of course.

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