Germany Makes One Last Effort To Rescue Diesel From City Driving Bans

The German government has called an emergency summit in Berlin with the chief executives of VW, Daimler and BMW in order for them to convince ministers and state leaders of the diesel technology’s future, despite the steady negative press on the technology.

The car makers will offer further upgrades of existing diesel vehicles in return for political support to avoid driving bans, Bloomberg reports.

At this point German car makers need diesel as a stop-gap technology in order to buy time to catch up with electric cars. Chancellor Angela Merkel on the other hand, who’s facing a federal election in less than two months, has to ward off criticism that her government goes too easy on the car makers while also not endanger Germany’s 800,000 jobs.

“The manufacturers will play their part to improve air quality in cities and make diesel fit for the future,” said Matthias Wissmann, head of German auto lobby VDA, proposing reduction in nitrogen-oxide emissions of at least 25 percent on average. “Diesel is enormously important for climate protection as well as prosperity in Germany.”

The two sides are expected to agree on a range of measures in order to lower the nitrogen oxide emissions of diesel vehicles. Car makers are haggling with the government over software fixes and much more expensive hardware changes that could lift the final bill to around 5 billion euros ($5.9 billion), with most of it to be paid by the companies.

“I think this is a result that is achievable today because everyone knows that it will otherwise be legally enforced, so this part is clear,” Armin Laschet, member of Merkel’s party, said when asked if carmakers will bear the full cost of diesel modifications.

“The significance of the car industry is extremely high. VW is more important to Germany’s economy than Greece,” said Carsten Brzeski, Frankfurt-based chief economist at ING-Diba AG. “The industry has to find a solution together with government over how to face the big questions head on around the structural transformation.”

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