Why the German diesel summit matters for climate and energy

Germany, the birthplace of the automobile, hits road bump after road bump in the quest to transform mobility to create a green transport future.

Diesel technology - the “boon and bane” for German carmakers -, has been subsidised by the government and has earned manufacturers a lot of money in the past. But the emissions scandal and the need to decarbonise transport in order to reach climate targets have raised serious questions about the future of diesel technology, and VW, Daimler, and BMW now appear to be bound to shift gears in developing alternatives.

The current crisis weighs heavily on the makers of the most striking symbols of the country’s post-Second World War rise to being an economic powerhouse – the Mercedes-Benz, BMW, Porsche, or Audi luxury cars ‘Made in Germany’. But the government also wants to safeguard the economic strength of a sector whose 1,300 companies employ more than 800,000 people, with sales totalling more than 400 billion euros in 2015, and create the basis for some of Germany’s wealthiest regions.

What will the national diesel summit be about and who participates?

The “National Forum Diesel” will first meet on 2 August. This forum was set up by Germany’s transport and environment ministries to agree on measures to reduce diesel pollution. The Forum aims to bundle the different community, state, and federal-level activities to reduce pollution from diesel vehicles at federal level, according to the German government. Transport Minister Alexander Dobrindt has indicated that a fund worth over one hundred million euros, jointly financed by the industry and the government and aimed at creating master plans for modern mobility, was one of the measures on the table.

The forum’s four working groups will discuss retrofitting; alternative fuels and drives; mobility concepts for cities; and digitalisation.

The federal transport ministry (BMVI) and the environment ministry (BMUB) have invited the premiers of German states particularly affected by the emissions scandal, as well as the CEOs of VW (Audi, Porsche), BMW, Daimler, Ford, and Opel, the German Association of the Automotive Industry (VDA), the German association of cities and towns, and workers’ unions. Chancellor Angela Merkel does not plan to participate, according to a government spokesperson.

The summit will take place against the backdrop of the diesel cheating scandal, which broke two years ago after US authorities had found that VW was cheating on emission tests, and which has engulfed most German carmakers by now. In addition, a number of German cities are considering driving bans for diesel cars in order to reduce air pollution. Pressure on the industry mounted further after a magazine reported, on 22 July, that the country’s main carmakers had allegedly colluded for years on a number of technological issues.

After the cartel allegations surfaced, the government made it clear that it expected concrete “actions and movement by the industry”. Environment Minister Barbara Hendricks said the summit will not address the cartel allegations, “but of course this burdens the talks.”

Transport Minister Dobrindt’s recent announcement of the mandatory recall of almost 30,000 Porsche Cayenne models across Europe has added fuel to the fire. The recall was decided after authorities had found potentially illegal emissions controlling software in the affected vehicles.

Daimler and Volkswagen have already announced their readiness to retrofit diesel engines at their own cost. This fix would include software updates, but no hardware changes. “The diesel summit will produce only the first steps by agreeing on a software update,” said Environment Minister Hendricks during her summer press tour of Germany. “But mere software updates won’t suffice to avoid driving bans. We need ‘real’ retrofitting.”

With the announcement by the British government that it plans to ban the sale of new petrol and diesel cars and vans by 2040, the debate over an end to the combustion engine in Germany hovers over the summit.

What is the VW diesel emissions scandal about?

The 2015 VW diesel emissions scandal was first and foremost about nitrogen oxide (NOx) emissions, which are harmful to human health, but not to the climate.

In September 2015, the US Environmental Protection Agency (EPA) announced that it was investigating Volkswagen’s alleged use of software to evade clean air standards in the United States. Research by the NGO International Council on Clean Transportation (ICCT) had revealed that certain VW models had far greater NOx emissions during on-road tests than in the laboratory. 

VW later admitted that in about 11 million cars worldwide it used a so-called “defeat device”, which is activated to prevent an engine’s emissions control system from working properly under real-world conditions. As a result, the actual emission levels are higher than in a test situation, where the defeat device is inactive.

What does a driving ban mean?

As nitrogen oxide and particle matter emission levels in German cities such as Berlin, Munich, and Stuttgart have exceeded legal limits, many see inner city driving bans for certain types of diesel cars as the easiest, if not the only, short-term solution to protect citizens’ health.

Introducing driving bans is the prerogative of Germany’s states, with the federal government possibly acting as facilitator. However, the transport ministry has long opposed the introduction of a “blue badge”, which would give cities a legal basis for banning older diesel cars in order to bring harmful nitrogen oxide emissions within EU limits.

Over the past months and years, non-profit environmental and consumer protection association Environmental Action Germany (DUH) has filed several lawsuits on pollution and has raised the possibility of driving bans.

The latest decision by a court in Stuttgart has paved the way for a diesel ban in the city. The judge argued that safeguarding health is more important than the right to property and the general liberty of the car owners affected by such a ban.

What does diesel have to do with climate and energy policy?

The VW scandal over NOx emissions has called into question the carmakers’ honesty regarding emissions data in general, and has highlighted the discrepancy between passenger cars’ climate-harmful CO₂ laboratory type-approval values and the real-world values.

In order to limit the negative effects of climate change, the European Union has set itself the target of reducing greenhouse gas emissions by 80-95 percent by 2050, compared to 1990 levels. This means that CO₂ emissions in the transport sector must also be reduced significantly. The ICCT issued an analysis already in 2012 (with follow-up papers the following years), which looked at passenger cars’ CO₂ emissions and found a gap between test and real-world values. The transport ministry analysed several German passenger cars’ CO₂ emissions in 2016-2017 as part of its investigations into the VW scandal, and found that most models adhered to European limits.

The German government has in the past been accused of protecting the country’s automobile industry by opposing tougher EU limits. In 2013, manufacturers successfully used their strong political influence to prevent the introduction of stricter emissions limits at EU level. This meant that they could continue to sell their main money-spinners, the powerful combustion engines, as revealed by internal government papers published by Süddeutsche Zeitung.

The emissions scandal also influences climate and energy policy in indirect ways. Health worries, especially in inner cities, could lead to diesel bans, which would effectively devalue the technology and lead to a push for the development of alternatives to diesel engines. The past months have seen a significant drop in the sale of diesel cars in Germany.

The VW emission scandal has dealt a heavy blow to German carmakers’ claim to global technological leadership. Companies have bet strongly on diesel in the past, which many industry observers say has blocked their own innovation paths and stymied to a certain extent the development of alternative technologies. This left  the market wide open to competitors like Toyota.

“Due to the emissions scandal, the 'blocking role' of diesel has begun to crumble and manufacturers are now forced to look at alternative drives, and to catch up very fast”, says Peter Mock, European managing director at the International Council on Clean Transportation (ICCT).

Is diesel needed for climate protection?

Until now, carmakers have tended to stress that diesel technology is the most efficient available, has a better climate footprint than petrol-based technology, and is needed to be able to reach climate targets. Without modern diesel engines “it will get difficult [to reach] the climate targets in the medium term,” VW CEO Matthias Müller told Rheinische Post in a recent interview.

Politicians, including Chancellor Angela Merkel, have repeatedly supported this claim. “The diesel engine has always been a good option” to lower CO₂ emissions, Merkel said at a hearing before an inquiry committee of the federal parliament in March 2017.

However, data released by the Federal Motor Transport Authority (KBA) suggest that the diesel advantage regarding CO₂ emissions has turned to be negligible over the past years. In 2015, the average petrol-driven passenger car emitted 129.4 grams of CO₂ per kilometre, while the average diesel car emitted 130.4 g CO₂/km, says the KBA.

“For a long while, diesel vehicles have emitted about 15 percent less CO₂ than petrol cars on average. This is not true anymore,” says ICCT’s Peter Mock.

A recent ICCT study has found that efficiency gains from the diesel engine are often offset by a higher engine power and higher weight for diesel cars. The growing popularity of fuel-intensive diesel engine-equipped heavy sport utility vehicles (SUVs) in Germany counterbalances the theoretical 15-percent-advantage over comparable petrol engines, agrees the Federal Environment Agency (UBA) in a press release.

Will Germany ban the sale of combustion engine cars?

The German debate is in full swing, after France and the UK have announced plans to ban all new petrol and diesel cars and vans by 2040. The federal government has said that a ban on diesel or petrol car sales is not currently on its agenda.

However, last year Germany approved its Climate Action Plan 2050, which includes an ambitious greenhouse gas emissions reduction target for the transport sector - about 40 percent by 2030, compared to 2014 levels (which are almost the same as in 1990). This will require “a significant contribution by the electrification of new cars and should have priority”, the document states.

Peter Mock from the ICCT says that a “considerable share of e-vehicles” is needed already in 2025 to reach the European and German climate targets. Mock does not believe that a straight-out ban on the sale of new diesel cars is the right solution. Instead, he banks on setting CO₂ targets in a technology-neutral way. “I wouldn’t call it a ban, but the government must make it clear that it is serious about its climate goals; that manufacturers must rearrange their portfolios accordingly; and that the share of electric vehicles must dramatically increase over the coming years,” says Mock.

The car industry sees a future for the combustion engine for many years to come. Matthias Wissmann, head of the German carmakers’ association VDA, says: “Petrol and diesel still have a significant potential. We expect to increase the efficiency of classic engines by at least 10 to 15 percent in the years ahead.”

The industry is researching synthetic fuels that are “practically climate neutral”, he said, adding that with fuels like these, diesel and petrol cars would have a long life expectancy.

Where do I find more background on the German car industry, the transport sector as a whole, and its impact on climate and energy policy?

Check out CLEW's background documents:
Interview: “Diesel summit comes two years too late”
Factsheet: The debate over an end to combustion engines in Germany
Article: Reactions to allegations over German carmaker cartel
Dossier: The Energiewende and German carmakers
Dossier: The energy transition and Germany’s transport sector