EU's car regulator warns against car diesel ban in cities

Banning diesel cars in European cities could hamper

automakers' ability to invest in zero-emission vehicles, the European

Union's commissioner for industry has warned the bloc's transport

ministers.

In a letter seen by Reuters, Commissioner

Elzbieta Bienkowska said there would be no benefit in a collapse of the

market for diesel cars and that the short-term focus should be on

forcing carmakers to bring dangerous nitrogen oxide emissions into line

with EU regulations.

"While I am convinced that we

should rapidly head for zero-emission vehicles in Europe, policymakers

and industry cannot have an interest in a rapid collapse of the diesel

market in Europe as a result of local driving bans," Bienkowska said.

"It would only deprive the industry of necessary funds

to invest in zero-emissions vehicles," she said in the letter, dated

July 17.

Germany's three major carmakers have

invested heavily in diesel technology, which offers more efficient fuel

burn and lower carbon dioxide emissions than gasoline-powered cars.

But

since Volkswagen admitted in 2015 to cheating on U.S. emissions tests,

worries about vehicle pollution have left the entire auto industry under

scrutiny. A particular concern is emissions by diesel cars of nitrogen

oxide, which is blamed for causing respiratory diseases.

In the letter, Bienkowska told ministers she was

concerned that the latest emissions violations at Audi and Porsche were

discovered by prosecutors and not Germany's vehicle and transport

authorities.

Bienkowska's letter also called for all

cars with excessively high levels of nitrogen oxide emissions to be

taken of European roads, but said carmakers should act on a voluntary

basis. The commissioner did raise the prospect of an EU testing agency

if national regulators failed to spot more emissions-test cheats.

Munich,

home to carmaker BMW, has become the latest German city to consider

banning some diesel vehicles. Environmental groups say diesel bans in

cities can cut nitrogen oxide emissions and force automakers to design

cleaner vehicles.

Experts who have seen the letter to ministers say the commissioner appeared to be bowing to carmakers' demands.

"Her

letter contained some important statements that we believe show the

industry's lobbyists have scored a big win," Bernstein analyst Max

Warburton said in a report.

"They have likely argued

that castigating or banning diesel would harm the industry's earnings

and employees, harm efforts to reduce carbon dioxide and harm owners of

current vehicles."