Germany plans law to speed diesel filter adoption

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Germany’s government promised on Wednesday to present draft legislation before the summer to speed the introduction of diesel engine particle filters after air pollution levels in two major cities broke new EU limits.

The government said in February it planned to propose tax breaks to people buying cars fitted with diesel filters or adapting older vehicles, but did not put a timetable on any law after some of Germany’s 16 states rejected the idea.

“The government assumes the states, who are responsible for road tax, will react positively to the proposal. The government will present a corresponding draft law before the summer,” the government said in a statement on Wednesday.

Tackling air pollution has surged to the top of the political agenda in Germany after two large cities—Munich and Stuttgart—admitted this week they had already exceeded new annual limits on air pollution set by the European Union.

An official list compiled by Germany’s environmental protection agency (http://www.env-it.de/luftdaten/trsyear.fwd ) shows many cities are likely to follow suit in the coming weeks.

Under the government’s plans, new car buyers would be offered a 350-euro ($453) reduction in road tax if their vehicle is fitted with a diesel filter. Those converting older cars would get 250 euros.

Analysts say the move could benefit French manufacturers such as Peugeot Citroen, which has fitted diesel filters for years and also owns stake in a leading filter maker, Faurecia. But German manufacturers are also now rushing out new models fitted with filters, set to become standard from 2008.

There is anecdotal evidence the issue is prompting some consumers to postpone purchasing new cars until next year, when the tax breaks would take effect.

Sueddeutsche Zeitung cited unnamed experts on Tuesday as estimating some 30,000 Germans were waiting on purchases.

The popularity of diesel cars in Germany has surged in recent years because the government has increased taxes on other fuels in an effort to curb pollution. They now account for more than 40 percent of all new registrations.

But a swift agreement is far from certain.

The tax break plan falls against the backdrop of stalled talks over which level of government should be responsible for road taxes.

A cross-party commission looking at the issue as part of a wider reform of the country’s federal system is due to resume talks next month. 

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