Germany loses court case to Brussels in EU diesel emissions dispute

The European Commission emerged victorious from its court case against Germany, after the EU’s highest tribunal found on Thursday that the German government was in breach of clean air laws.

Germany had violated the EU Air Quality Directive “by systematically and persistently exceeding” the annual limit for nitrogen dioxide (NO₂) emissions during the years 2010 through 2016, according to a ruling by the European Court of Justice.

The verdict settles a long-running dispute and gives Brussels the legal ammunition to now demand Berlin take action against a harmful gas found to be carcinogenic to humans.

For its part, the country aimed to prove its transgressions were actually the fault of the European Commission for not properly legislating emissions limits for diesel vehicles, the main cause of the problem, through the so-called type approval process.

The argument failed to convince justices, however.

“Apart from the fact that motor vehicles subject to EU-level standards are not the only cause of NO₂ emissions, EU rules applicable to type approval of motor vehicles cannot exempt member states from their obligation to comply with the limit values established by the directive,” the court said in a statement.

What further steps might now be taken against the EU’s biggest member state are now at the discretion of the Commission and its German President, Ursula von der Leyen.

However, any attempt to impose punitive measures such as stiff fines would likely end up with both sides in front of the court once more.

Fortunately for both, they will likely be able to avoid any escalation, given the country has substantially reduced ambient NO₂ concentrations in subsequent years, ironically thanks in part to the Dieselgate scandal.

Uncovered in the U.S. in September 2015, Volkswagen’s emissions fraud helped reveal a broader industrywide practice in Europe. To reduce diesel fuel consumption, numerous carmakers designed their exhaust gas aftertreatment systems to often switch off automatically under a clause meant to protect engines from excessive wear and tear.

Regulations have since been phased in to clamp down on this practice, and the legal loophole has now been fully closed since the start of this year.

“New exhaust gas standards for diesel passenger cars ensure more and more cars are clean on the road and not just in a laboratory,” German environment minister Svenja Schulze said in a statement sent to Fortune.

Whereas 90 German cities and metropolitan areas exceeded annual nitrogen dioxide concentrations of 40 micrograms per cubic meter, that number dropped to 25 in 2019. Last year it fell to just six, although this sharp drop is likely linked to pandemic-related shutdowns.

The EU Commission, which filed the petition in October 2018, could not be reached for comment.