Court rejects additional climate responsibilities for German carmakers beyond existing legislation

Germany’s Federal Court of Justice (BGH) has ruled that carmakers BMW and Mercedes can continue selling combustion engine cars beyond 2030. With the ruling, the court dismissed an appeal by NGO Environmental Action Germany (DUH), which had argued that the companies violate Germany’s Climate Action Law by placing additional fossil fuel-powered vehicles on the market.

According to the court, car manufacturers cannot be forced to refrain from selling combustion engine-powered cars before the deadlines set by the EU passenger car emissions regulation have expired. The NGO had argued that the two companies consume a disproportionate share of the country’s “remaining carbon budget” – the amount of carbon dioxide that can still be emitted while limiting global warming to a certain level – by placing internal combustion engine cars on the market after 31 October 2030. However, there is no international agreement on national carbon budgets, and the German government has repeatedly argued against the use of such budgets. 

DUH had said that companies must be held legally accountable for contributing to the carbon budget’s depletion, as this would limit the scope for political action and necessitate far-reaching measures to reduce CO2 emissions for future generations. The logic was based on a landmark 2021 ruling, which tasked the German government with increasing its climate ambition to avoid shifting an excessive mitigation burden into the future.

The BGH, however, said that the companies act in line with EU rules and are not obliged to go beyond this. “An emissions budget can be derived from the Paris Agreement and the Federal Climate Action Law only in global terms and for the Federal Republic of Germany as a whole, but not for individual actors or even just the transport sector,” the court concluded. The lawsuit had already been rejected by two lower courts. 

Spokespeople for Mercedes and BMW had stated that legal requirements regarding climate targets and how to achieve them should be set in parliament, not by courtrooms, news agency dpa reported in an article in newspaper Freie Presse.

The German government played a key role in watering down an already agreed de facto ban on the registration of new combustion engine vehicles in the EU after 2035. Carmakers and their suppliers are one of the country’s most influential industry lobbying groups, and they still rely heavily on combustion engine technology, despite plans by Germany’s government to quickly ramp up the share of electric vehicles. 

Germany is a leading production location for electric vehicles, but the automotive industry is struggling in its traditional heartlands due to weak sales, challenges in global trade regimes, and intensifying competition from China in electric mobility.