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VW dodges bullet in two ‘dieselgate’ court cases, leading to jump in share price

Volkswagen shares gained on the Frankfurt stock exchange Friday, as two favourable court decisions related to the car giant's long-running "dieselgate" emissions scandal comforted investors.

VW dodges bullet in two 'dieselgate' court cases, leading to jump in share price
Photo: DPA

Shares in the group added 0.9 percent just after 0900 GMT to trade at €126.50 ($150.50), against a DAX index of leading German shares up 0.5 percent.

In the United States, a federal judge in San Francisco ruled Thursday against the state of Wyoming, which had claimed billions of dollars from VW for its diesel vehicles' infringement of environmental laws, newspaper Frankfurter Allgemeine Zeitung reported.

Judge Charles Breyer found that VW's settlement of the case with federal authorities made compensation to individual states unnecessary.

Some 600,000 of VW's 11 million vehicles worldwide fitted with software designed to cheat regulatory emissions tests were sold in the US.

The Wolfsburg-based group has already agreed to pay around $22 billion (€18.5 billion) in fines and compensation in the US to settle the diesel scandal, with some of the cash flowing to the states where the cars were used.

“Volkswagen is pleased with the court's decision to dismiss Wyoming's claims,” a spokesman told AFP.

“Importantly, the court recognised that any environmental harm in Wyoming or similarly-situated states has been fully mitigated by settlements with the federal government,” he added.

The group will immediately seek to have similar suits from nine other states dismissed, the spokesman said, filing motions as early as Friday against Illinois, Minnesota and Ohio.

In VW's home country Germany, a court in Brunswick rejected a case from a driver who had asked that the full €41,000 purchase price of his diesel-fuelled Eos car be reimbursed.

The case was backed by US law firm Hausfeld and German firm Myright, which aimed to establish a precedent in favour of around 100,000 clients with similar complaints.

A lawyer for the driver in the Eos case said he planned to appeal the judgement.

POLLUTION

‘Infringement on air quality’: EU court slams Germany for pollution in cities

The EU's top court ruled on Thursday that Germany continually violated upper limits for nitrogen dioxide, a polluting gas from diesel motors that causes major health problems, over several years.

'Infringement on air quality': EU court slams Germany for pollution in cities
Cars sit in traffic in Stuttgart's Hauptstätter Straße in July 2020. Photo: picture alliance/dpa | Sebastian Gollnow

Germany infringed air quality rules “by systematically and persistently exceeding” the annual nitrogen dioxide limit in 26 out of 89 areas from 2010 to 2016, the European Court of Justice (ECJ) said in its ruling.

The European Commission, the EU’s executive arm, referred the matter to the ECJ in 2018 after almost a decade of warnings that went unaddressed.

The decision against Europe’s top economy echoes a ruling targeting France in October 2019 after the commission stepped up its anti-pollution fight in the wake of the so-called “Dieselgate” scandal that erupted in 2015 with revelations about Germany’s Volkswagen.

The motors caught up in the scandal — in which automakers installed
special emission-cheating devices into their car engines — are the main emitters of nitrogen oxides that the European Environment Agency says are responsible for 68,000 premature deaths per year in the EU.

READ ALSO: Five things to know about Germany’s dieselgate scandal

Nitrogen dioxide is toxic and can cause significant respiratory problems as one of the main constituents of traffic-jam smog.

Under EU rules, member countries are required to keep the gas to under 40 micrograms per cubic metre — but that level is often exceeded in many traffic-clogged European cities.

The judgement opens the way to possible sanctions at a later stage. However the air quality throughout much of Germany has improved in the last five years, particularly during the shutdowns in the pandemic.

The environment ministry said that 90 cities exceeded national pollution limits in 2016 — the final year covered by the court ruling. By 2019, the number had fallen to 25 and last year, during the coronavirus outbreak, it was just six.

The case involved 26 areas in Germany, including Berlin, Hamburg, Munich and Stuttgart as well as urban and rural areas in North Rhine-Westphalia, Mainz, Worms/Frankenthal/Ludwigshafen and Koblenz/Neuwied.

“Furthermore, Germany infringed the directive by systematically and
persistently exceeding, during that period, the hourly limit value for NO2 in two of those zones” — the Stuttgart area and the Rhine-Main region.

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