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German cities face driving bans for diesel passenger cars in order to meet European Union air quality limit values.

By Joern Kassow

The German Federal Administrative Court recently made a fundamental ruling stating that diesel driving bans are generally admissible. German cities may consider general off-limit areas for diesel fueled cars, as well as partial driving bans on certain heavily used streets.

Currently, approximately 70 German cities do not meet the EU’s nitrogen dioxide air quality limit values. To tackle…

A coalition government would likely focus on energy, transportation, and the automotive industry to meet Paris Agreement targets.

By Joern Kassow and Patrick Braasch

Background

After the 2017 German parliamentary elections, the conservative Christian Democrats (CDU/CSU) and the Social Democrats (SPD) faced difficulties in forming a new government. However, the parties have now agreed on preliminary key terms for the government’s 2018-2021 policy in a 28-page memorandum. The key terms will serve as the basis of formal coalition negotiations, which the parties likely will conclude in February or March 2018. Whether the parties will form a new government at the end of these negotiations still remains to be decided, however, based on the current election results, a so-called “grand coalition” between the two largest parliamentary groups is the most probable outcome. Therefore, the key terms will likely form the cornerstones of the next government’s political agenda.

The memorandum provides insight into German environmental policy, which will have significant impact, particularly on the energy and automotive industries. This blog highlights two key terms of the memorandum, and considers the potential outcome for German energy and automotive industries.

By Joern Kassow and Patrick Braasch

Latham has previously written about the Lliuya v. RWE AG case, in which a Peruvian farmer has sought damages from German energy giant RWE for climate change effects in his home country. The Higher Regional Court of Hamm indicated during oral hearings that it would likely proceed to take evidence. The court has since issued its decision, providing further insight and analysis of the case.

RWE claimed that it could not be held liable for damages, as the company held valid environmental permits under emission control regulations relating to the operations of its material CO2 emitting plants — and therefore the emissions were legal. However, the court rejected RWE’s claim, noting that Mr. Lliuya did not seek to shut down or limit RWE’s operation of business. The court further explained the fundamental legal principle that anyone who causes damages to third party property — even through lawful acts — generally may be liable. That RWE obtained, and presumably complied, with all required permits under German environmental law would therefore not preclude liability for the potential damage caused by the company’s lawful emissions.

By Jörn Kassow and Patrick Braasch

A German appeals court has indicated in a groundbreaking civil action that major CO2 producers may be directly liable for global environmental damage caused by climate change.

Mr Saúl Luciano Lliuya, a Peruvian farmer, has alleged that RWE AG, Germany’s second-largest electricity producer, is responsible for the impact of climate change in the Peruvian city of Huaraz — even though RWE does not operate in Peru. His claim invokes German civil law rules, according to which, property owners may claim damages from the person responsible for causing the pollution to the extent that the pollution in question would constitute unlawful interference. These rules generally correspond to the “polluter pays” principle that polluters should bear the costs of managing pollution to prevent damaging human health or the environment. Although the relevant legal principles are firmly established in German case law, the courts have not yet applied them to hold a single emitter of fossil fuels financially responsible for climate change impacts.

By Jörn Kassow and Eun Kyung Lee

Germany’s increasing shortage of natural resources and the corresponding mounting cost of extracting raw materials signals the need for alternative and innovative ways of collecting and recycling secondary raw materials.

One promising method of securing potential secondary raw materials is “urban mining”, which aims primarily at reclaiming raw materials in urban areas through the reuse of the materials and resources contained in disused products and buildings. Countries with a high demand for resources, but with limited natural resources of their own, can potentially benefit from urban mining.

The German Federal Environment Agency (Umweltbundesamt) recently published a comprehensive briefing titled “Urban Mining”. The briefing highlights the fact that while Germany is a large consumer of raw materials, it is also heavily dependent on imports of major industrial materials, a situation that generates economic and/or political dependencies, strong price fluctuations, and questionable environmental and social standards (such as inhumane mining conditions).

By Paul Davies, Joern Kassow and Alexander Wilhelm

In early July 2017, operators of German nuclear power plants initiated the next step in the process of decommissioning by transferring €24 billion to the new state-owned fund for nuclear power plant waste disposal.

The German state established the Fund for the Financing of the Nuclear Waste Disposal (Fonds zur Finanzierung der kerntechnischen Entsorgung) to transfer the nuclear waste management liabilities from the plant operators to the state. In return for their release from these liabilities, the operators agreed in a public law contract to make a significant cash payment to the fund. The total payment includes a base amount already set aside for this purpose by the operators in their accruals, plus a risk premium aimed at covering the risk of cost increases for the disposal in the future. The operators now benefit from long-term legal certainty, taking into account that the amount paid to the fund was based on the best cost estimates currently available and that the German federal legislators (Bundestag and Bundesrat) have not yet decided on a location for the final repository for nuclear waste.