German government proposes retrofits and scrappage schemes to reduce pollution

The German government has proposed a programme of retrofits and manufacturer scrappage schemes to get older diesel vehicles off the road, as cities in the country introduce bans to improve air quality.

Reuters reports that diesel vehicles in the 14 German cities with the poorest air quality would be eligible for a hardware upgrade, or owners would be offered a trade-in incentive, similar to the scrappage schemes recently offered in the UK.

The country’s car industry was more receptive to the latter option, however, given the potential sales boost of the move, rather than having to shoulder the cost of the maintenance. 

Mercedes' parent company, Daimler, backed the government’s proposals, giving the retrofit the green light and offering up to €10,000 (£8900/Rs 851,812) discount on a new car under the scrappage scheme. BMW will offer €6000 (£5300/Rs 507,200) in scrappage schemes, while Renault will also offer €10,000 (Rs 846,609). 

The PSA Group was less supportive of the retrofit part of the plan but supported the scrappage allowance. Company boss Carlos Tavares told Reuters: “Who’s going to pay is not clear. We believe it’s not the car makers’ responsibility, because at the time when those cars were sold, they met all legal requirements.”

Costs to Germany’s car industry for the retrofitting could range from €6.3-12.5 billion (Rs 53,362 crore- Rs105,877 crore), on the assumption that 2.5 million vehicles would be affected, costing between €2500 (Rs 211,756) and €5000 (Rs 423,512) each to fix, according to Stefan Bratzel, director of Germany’s centre of automotive management. 

The UK has already had a round of scrappage schemes offered by manufacturers aiming to clear older diesels from UK roads, although government intervention hasn’t yet taken place, with road tax changes penalising drivers of new diesel cars only.