Merkel: Germany Will Double Diesel Cleanup Fund to €1 Billion

Chancellor Angela Merkel has confirmed earlier reports that the German government intends to double a fund to clean up diesel pollution in cities to €1 billion.

Merkel says the federal government will double its contribution to the fund to €500 million. She adds that the German auto industry, which pledged last month to provide €250 million to the effort, may be asked to do the same.

The 11th hour effort aims to avoid plans by several municipalities to ban diesels in their city centers. Carmakers have argued that, until they can hike sales of electrified vehicles, diesels will remain a key pathway to meeting EU carbon dioxide emission limits.

Merkel, who faces re-election later this month, has been accused of being too lenient with Germany’s powerful auto industry. Her campaign has been marked by a notably tougher push to hold carmakers accountable for diesel pollution.

The risk of diesel bans cut consumer demand for such vehicles 14% year on year in August, according to the country’s KBA vehicle agency. EU auto trade group ACEA says diesels powered fewer than 38% of new car sold in Germany in 2016, their lowest share since 2009.

Last month BMW, Daimler and Volkswagen agreed to recall 5.3 million older diesels and update their emission control software to cut nitrogen oxides emissions.