EU warns Germany as car coolant row heats up

(BRUSSELS) - The EU warned Germany Thursday it risks court action for breaching environment rules unless it forces luxury automaker Daimler to use a new air-conditioning coolant deemed less likely to cause climate change.

The warning is the latest salvo in a row that has seen Daimler claim the new refrigerant is too flammable, and has caused tensions with France which briefly banned some Mercedes cars that used the substance.

The European Commission, the powerful executive branch of the 28-member EU, said Germany had "infringed EU law" by allowing Daimler to keep using an older, more polluting coolant in defiance of Brussels rules.

It said it had sent Germany a "formal request" -- the second official stage in possible infringement procedures after an earlier written warning in January -- and gave it two months to comply.

"If they fail to do so, the Commission may decide to refer the matter to the European Court of Justice," it added.

Germany could face heavy fines if the case goes to court.

Since last year, EU norms demand that car makers use a refrigerant called R1234yf on the grounds that it produces far less greenhouse gases than older coolants.

But Daimler, which makes Mercedes-Benz, is sticking to an older substance, called R134a, as it claims studies show the new one catches fire more easily and puts cars at a greater risk of explosion in case of a crash.

The makers of R1234yf, US chemicals giants Dupont and Honeywell, reject Daimler's claims.

In Germany, the auto giant was given special permission to keep using the older coolant, despite initial approval of the new one by the German Automakers Association, VDA, of which Daimler is a member.

The commission took Germany to task for having "decided not to impose any remedial measures on this manufacturer," it said.

The case has caused tensions between Germany, Europe's biggest car maker, and other countries on the continent over the way that the auto-industry is regulated.

France's government controversially banned the sale of the latest models of some top-end Mercedes cars in July 2013 because they contain the old coolant.

The EU initially backed France and other countries supported an EU-wide block on the cars, but a French court overturned the ban a month later.