More EU states could block Daimler sales in coolant row

by Reuters
Wednesday, 17 July 2013 18:09 GMT

* Governments agree to take action against German carmaker

* EU executive says steps could include registration bans

* Talks planned between Germany, France to resolve issue

BRUSSELS, July 17 (Reuters) - More European Union countries could join France in blocking registrations of new Daimler AG vehicles using a banned coolant, after EU governments agreed on Wednesday to take action against the German carmaker.

France has halted registrations of Mercedes A-Class, B-Class and SL cars assembled after June because of Daimler's refusal to stop using the refrigerant R134a, which was banned throughout the bloc from the start of this year.

The European Commission said on Tuesday that some Daimler models were being sold in breach of EU rules, and according to its preliminary assessment the French ban could be justified.

At a technical-level meeting in Brussels on Wednesday to discuss the issue, national officials from the 28 member states agreed steps should be taken to bring all vehicles sold in the EU within the rules, the Commission said.

"Member states acknowledged that, regarding the vehicles which do not conform with EU law, corrective measures shall be taken to bring the vehicles into conformity including the withdrawal of those vehicles already sold on the market, as it has already been done by a member state," the Commission said in a statement, referring to the French registration ban.

One EU official briefed on the meeting said the Commission would organise further talks with the French and German authorities in the coming weeks to try to find a solution.

The dispute centres on Germany's decision to allow Daimler to continue using R134a - a potent global warming agent 1,000 times more powerful that carbon dioxide - after all other European carmakers switched to a replacement made by Honeywell International Inc and Dupont.

Daimler says the replacement, known as R1234yf, can emit toxic hydrogen fluoride gas when it burns. Honeywell has said there is no significant risk from the coolant, and that it is the most cost-effective and environmentally-friendly alternative.

The Commission has given the German government until Aug. 20 to explain its decision - the first step before possible EU infringement proceedings.

Based on 2012 deliveries, Daimler has said the French registration ban could affect about 2 percent of its global sales, or 29,000 cars.

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