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German ministry rejects calls for modern diesel tax incentives

Reuters

BERLIN (Reuters) - The German environment ministry has rejected calls from two of the country's states for tax incentives to promote the sale of low-emission modern diesels and electric cars.

Representatives of Germany's federal government, states and major automakers will meet on Wednesday to discuss ways to avert driving bans on diesel cars which have drawn public attention since Volkswagen's <VOWG_p.DE> emissions test-cheating scandal broke almost two years ago.

The head of Lower Saxony, where VW is based, has proposed financial incentives for drivers of older diesel cars to switch to more efficient models, while the premier of Bavaria, home to BMWG <BMWG.DE>, wants car tax to be lowered for owners of diesel models designed to meet the latest Euro-6 emission standards.

But the environment ministry, one of the hosts of the August 2 diesel summit, is rejecting the proposals.

"We are not particularly interested in supporting a technology that in the foreseeable future no longer belongs on the roads anyway," a spokeswoman for the Berlin-based ministry said on Saturday.

Instead, carmakers and politicians have worked on a plan to tackle diesel pollution and improve air quality by updating engine management software on some older vehicles to make exhaust filter systems more effective.

However a German court ruling on Friday backing a push to ban diesel cars from Stuttgart, home to Daimler <DAIGn.DE> and VW's Porsche sports-car division, is raising doubts as to whether software modifications will suffice to bring cities' emissions levels into line with European standards.

(Reporting by Markus Wacket; Writing by Andreas Cremer; Editing by Andrew Bolton)