CHRISTIAAN HETZNER

German diesel summit must succeed in restoring confidence in fuel

Christiaan Hetzner is Germany correspondent at Automotive News Europe.Christiaan Hetzner is Germany correspondent at Automotive News Europe.
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What Volkswagen Group's emissions fraud failed to achieve, Stuttgart Mayor Fritz Kuhn may accomplish: turn Germans against their diesel cars.

Kuhn’s plan to ban most cars powered by diesel engines from entering the city – the cradle of Germany's auto industry – has grabbed headlines in Germany and paved the way for other cities to do likewise.

Stuttgart’s municipal authorities back a ban but the state government, which is run by Baden-Wuerttemberg Premier Winfried Kretschmann, has opposed the measure. Like Kuhn, Kretschmann is a member of the Greens, but has broken party ranks by backing diesels.

Germany's transportation minister, Alexander Dobrindt, has said the city’s planned introduction of a diesel ban "has opened Pandora's box", effectively telling Germans that opting for a diesel could be the worst decision they make when purchasing a new car.

The furor over diesels cars, blamed for poor air quality in cities, appears already to be turning buyers against the fuel. In the first six months of 2017, diesels amounted to 41.3 percent of Germany’s new car market versus 46.9 percent in prior year’s period, according to figures from the KBA motor transport authority. The last time diesel take-rates were consistently this low were the years prior to 2004.

Summit

The leaders of Germany's auto industry will meet with Dobrindt and other interested parties on Wednesday for a diesel summit, which automakers hope will avoid the need for diesel bans in cities with poor air quality.

The expectation is that the summit will agree to more recalls of diesel cars for software updates instead of expensive and labor intensive measures such as retrofitting cars with new emissions cleaning systems. Though they have no obligation to do so, carmakers like Daimler have voiced their willingness to roll out these updates free of charge to customers not just in Germany, but throughout Europe.

There are five important things to understand when it comes to the summit.

1. A common misconception, even in Germany, is that the diesel ban is being imposed because Stuttgart and other cities are missing their targets for permissible concentrations of fine particulate matter in the air. In reality the problem is nitrogen oxides, much of which comes from road transport from diesel vehicles, both cars and trucks.

2. Another is that the ban is a political consequence of the industry’s diesel scandal first triggered by VW Group's fraudulent defeat devices. Stuttgart is actually acting to prevent heavy fines that the EU could impose for missing clean air targets.

3. A third is that carmakers are aiming to make older diesels compliant with current Euro 6 standards. This is neither necessary, nor perhaps even sufficient. There are new diesels that exhibit higher NOx emissions on the road than some older Euro 5 models. It is proving tough enough to make a policy argument in Germany that cities have the power to impose bans. There is no legal basis for banning cars that meet current emission norms on the test bench.

4. Another mistake is that the goal of the summit is to salvage diesel technology. While that may be the desired consequence, especially for carmakers, technically the summit is supposed to find a workable solution for cities to meet EU’s clean air requirements without imposing bans. Assuming a software update for most if not all diesels is the preferred choice, it must be effective enough for Stuttgart to fulfill its commitments – no more and no less.

5. Even if the federal government and industry claim to have found a solution tomorrow, it is highly likely that the issue will be resolved by the justice system. A lower circuit court judge in Stuttgart ruled against Baden-Wuerttemberg’s attempt to block the ban on legal grounds, deciding that a software solution would not guarantee a sufficient reduction in NOx emissions. Worried about the risk to assembly line jobs at companies like Daimler, Porsche and Bosch, the state has now taken the issue to the Germany’s highest administrative court.

It's vital for Germany's automakers that confidence in diesel is restored among car buyers. Time will tell whether Wednesday's summit comes up with a successful solution.

You can reach Christiaan Hetzner at christiaan.hetzner@gmail.com.

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