A top German court on Tuesday ruled that cities can impose diesel driving bans to combat air pollution, a landmark decision that plunges millions of drivers into uncertainty.

The Federal Administrative Court in Leipzig found that local authorities can legally ban older, dirty diesels from certain zones as part of their efforts to improve air quality ─ a drastic move that could reshape inner-city travel and upend the auto industry.

The court did not impose any bans itself, leaving that up to city and municipal authorities. The judges did however urge them to “exercise proportionality” and said any curbs should be introduced gradually and allow for certain exemptions.

While the legal battle centred around the smog-clogged cities of Stuttgart and Duesseldorf, it could have nationwide repercussions.

The ruling is a major blow to the government and the nation's mighty automakers who are strongly opposed to driving bans, fearing outrage from diesel owners whose lives stand to be disrupted and whose vehicles could plummet in value.

Eager to reassure anxious car owners, the government insisted that nothing would change right away and stressed that bans were not inevitable.

“The court has not issued any driving bans but created clarity about the law,” said Environment Minister Barbara Hendricks.

“Driving bans can be avoided, and my goal is and will remain that they do not come into force,” she added.

Chancelor Angela Merkel also weighed in, saying the ruling concerned only “individual cities”. “It's really not about the entire country and all car owners,” she said.

But the outcome marks a huge victory for the environmentalist group Deutsche Umwelthilfe (DUH), which sued Stuttgart and Duesseldorf to force them to take action against the toxic nitrogen oxides and fine particles emitted by older diesel engines.

'Great day for clean air'

Lower-level judges had already backed their demand for driving bans, but the states of Baden-Wuerttemberg and North Rhine-Westphalia appealed the rulings, saying such curbs should be decided at the federal level.

But judges at the nation's top administrative court again sided with the environmental campaigners.

“It's a great day for clean air in Germany,” said DUH chief Juergen Resch.

In a nod to concerns about the affected cars' resale values, judge Andreas Korbmacher said “certain losses will have to be accepted”.

He also urged city and municipal authorities to avoid “a patchwork” of local measures.

Critics had earlier argued that any bans would be complicated to enforce and cause confusion among drivers.

Analysts at EY consultancy said drivers of all but the latest diesel models that adhere to the strictest Euro 6 standards “can no longer be certain of being allowed to drive at any time, 365 days a week”.

It estimates that some 10 million vehicles will be affected across the country.

Ahead of the closely-watched court decision, the German transport ministry signalled it was already preparing for possible bans, floating plans to update traffic regulations to include the option of city-ordered diesel exclusions.

Mounting pressure

Concerns over the harmful effects of diesel have soared since Volkswagen admitted in 2015 to installing cheating devices in millions of cars that allowed them to secretly spew far more nitrogen oxide than legally allowed.

The poisonous gases have been linked to respiratory illnesses and heart problems, and are responsible for thousands of premature deaths each year.

Other carmakers have since also come under suspicion for curbing or shutting off emissions controls.

Some 70 German cities including Munich, Stuttgart and Cologne recorded average nitrogen dioxide levels above EU thresholds in 2017, according to the Federal Environment Agency.

Industry giants such as Volkswagen, BMW and Daimler have responded to “dieselgate” by offering software upgrades and trade-ins for newer, cleaner models, but have resisted costly hardware fixes.

DUH chief Resch however said Tuesday's ruling could finally put real pressure on automakers to retrofit older engines with properly functioning emissions controls.

“I now expect the auto industry to deliver,” he said.

Markus Lewe, president of the Association of German Cities, urged Berlin to do more to force the auto industry to clean up its act.

“Cities don't want driving bans,” he said.

The government, long accused of going too easy on the crucial auto sector, has so far offered a billion-euro fund, partly paid for by industry, to improve public transport and upgrade fleets to electric buses.

Such measures are intended at least as much for eyes in town halls as those in Brussels ─ where Germany and a slew of other EU member states risk legal action after sailing past a deadline to reduce air pollution.

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