Das Kartell: Collusion claim halts the ‘clean’ diesel comeback

An attempt at a ‘clean’ diesel comeback in Germany this month has been wrecked by claims that the country’s carmakers ran a cartel to bring down the cost of various components and technology – including on cutting emissions.

With the iconic homes of Daimler and BMW, Stuttgart and Munich respectively, considering diesel bans to bring down NOx pollution, German federal and regional governments struck back earlier this month and partnered with the country’s car industry to promote diesel as clean. Bavaria agreed an anti-pollution programme with BMW, Audi and MAN, to pave the way for new tax breaks for diesel vehicles while the Merkel government announced the creation of a new National Diesel Forum, with the task of cleaning up Euro 4, 5 and 6 standard diesels already on the road.

The intention was to force cities to accept ‘cleaned up’ diesels and curb local restriction measures. Germany also announced the establishment of a new national testing institute to measure NOx and CO2 in real-driving conditions. However, T&E member DUH said the new body’s funding comes from the car industry, which will have significant influence over how the institute conducts its tests, what is tested, and what is published.

The German car industry also stepped up its efforts to rebrand diesel as “clean” following the Dieselgate scandal. In July: Daimler, which owns Mercedes-Benz, said it will voluntarily recall 3 million diesel cars in Europe to improve their emissions performance. Meanwhile, Audi launched a recall of up to 850,000 diesel cars to update software controlling emissions in a bid to avoid the city driving bans.

However, the German governments’ and car industry’s efforts to clean up diesel’s image went up in smoke last Friday with news that a carmakers’ cartel was being investigated.

Weekly magazine Der Spiegel reported that Volkswagen and Daimler turned themselves in, telling German and EU competition authorities that they, along with BMW, Audi and Porsche, met regularly to agree joint approaches to the development of cars as well as costs, suppliers and markets.

It’s alleged that some 60 working groups of carmakers’ representatives discussed technologies ranging from convertibles to diesel after-treatment systems dating back to 1990s. Crucially, it’s reported they agreed on an AdBlue tank that was less than half the size required to cut emissions in line with the EU limits. AdBlue is a liquid used in selective catalytic reduction systems to reduce NOx from diesel engines.

Of the alleged cartel companies, only BMW has refused to recall any vehicles since the Dieselgate scandal broke and continues to deny any wrongdoing.

The allegations will give pause for thought to those inside and outside Germany who are attacking the proposed city bans on diesel vehicles and continue to defend diesel’s future. In a letter to national transport ministers, EU industry commissioner Elżbieta Bieńkowska said the bans risk backfiring by frustrating consumers and hindering the investment into zero-emission vehicles. She said that if such bans are unavoidable, they should follow similar criteria across the EU single market.

However, Commissioner Bieńkowska also said that car owners had “relied on the industry’s ‘clean diesel’ promise”. She added that she was very concerned about the recent discoveries of defeat devices in Audi and Porsche vehicle, and the slow progress to fix the highly polluting vehicles in circulation across Europe. She’s even flagged the idea of an EU Agency if national regulators continue to fail in their vehicle enforcement roles.