German court defers ruling on banning diesel cars in cities

By FRANK JORDANSMarketsAssociated Press

A German court has deferred a decision on whether to allow a ban on diesel cars in cities to lower air pollution, a move that could have drastic consequences for the country's powerful auto industry.

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The Federal Administrative Court in Leipzig began hearing the case Thursday and had been expected to issue a verdict within hours.

But judges said the process had taken longer than expected and set a date of Feb. 27 for a ruling.

The court is hearing an appeal by two German states against lower court rulings that suggested driving bans for particularly dirty diesel cars would be effective and should be seriously considered as a means of protecting public health.

If judges reject the appeal, dozens of cities would have a few months to enact measures to remove heavily polluting diesel vehicles from the roads — an administrative nightmare for local authorities and a heavy blow to drivers who bought cars they were promised met emissions standards.

The original court cases were brought by the group Environmental Action Germany, which accuses the government of putting automakers' interests before people's health.

Juergen Resch, who heads the environmental group, said he was optimistic the court would find in their favor.

German car manufacturer Volkswagen was found three years ago to have used in-car software to cheat on U.S. diesel emissions tests. The discovery resulted in large fines and costly buybacks for Volkswagen in the United States, but the German government has refrained from punishing the company, a major employer that's partly owned by the state of Lower Saxony.

On Thursday, prosecutors investigating alleged diesel emissions cheating at Audi — a VW subsidiary — searched several premises including two associated with former members of the company's board.

Apart from hitting Volkswagen and other German carmakers, officials warn that a ban could paralyze bus companies, garbage collection services and tradespeople who rely heavily on diesel vehicles.

The European Union is also putting pressure on Germany and other countries for failing to rein in air pollution.

In a bid to avoid punitive action by the EU, German officials recently proposed a series of steps to reduce harmful emissions, including making public transport free on days when air pollution is particularly bad, and requiring taxis and car-sharing companies to use electric vehicles.

Automakers are particularly worried about another government proposal: forcing them to physically upgrade millions of vehicles that don't conform to emissions limits.

Resch, the environmental campaigner, said the car industry's arguments against hardware upgrades would likely vanish if the only other option is to banish diesel vehicles from the roads.

"If driving bans are confirmed we'll see technical solutions within a few days to prevent driving bans for as many people as possible," he said.

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Kerstin Sopke in Leipzig, Germany, contributed to this report.