German cities will be allowed to ban older diesel vehicles from some areas following a landmark court ruling.
The Federal Administrative Court in Leipzig said the cities of Stuttgart and Duesseldorf could legally ban more older, more polluting diesel cars from zones worst affected by pollution.
The government had opposed the bans, which set a precedent for the country, arguing they would cause disruption.
Analysts said the decision could lead to similar action across Europe.
The ruling by the country’s highest federal administrative court came after German states had appealed against bans imposed by local courts in Stuttgart and Duesseldorf, in cases brought by environmental group DUH.
The group said bans were necessary after about 70 German cities exceeded European Union nitrogen oxide (NOx) levels limits last year.
Diesel emissions containing nitrogen oxide can cause respiratory disease.
What happens next? Theo Leggett, Business correspondent, BBC News
The likelihood now is that the German government will rush to introduce some sort of national policy, to ensure at least some level of consistency across the country.
It’s not just about Germany either – cities across Europe are struggling to meet EU air quality standards, and may well see the German ruling setting as a precedent.
New diesel cars won’t be affected, but that’s not really the point. Consumers are already moving away from the technology – and the prospect of city bans will only accelerate that process.
So diesel’s decline is likely to gather momentum.
That’s a problem for the industry, because while diesels produce high levels of nitrogen oxide – a major urban pollutant – they emit relatively low levels of carbon dioxide, a greenhouse gas.
So moves to control one environmental problem may end up undermining efforts to combat another – unless we all start driving electric cars very soon.
Diesel vehicles have faced greater scrutiny since VW’s “dieselgate” scandal.
In September 2015, the car maker admitted it had used illegal software to cheat US emissions tests. Some 11 million cars worldwide ended up being affected by the scandal.
DUH said it hoped the bans in German cities would end the industry’s “resistance” to refitting older, more-polluting cars to meet the latest EU standards.
ClientEarth, an environmental law firm that worked on the case, said the win was “a tremendous result for people’s health in Germany and may have an impact even further afield”.
Lead clean air lawyer Ugo Taddei said: “This ruling gives long-awaited legal clarity that diesel restrictions are legally permissible and will unavoidably start a domino effect across the country, with implications for our other legal cases.”
However, German Chancellor Angela Merkel said emissions levels in most German cities were only slightly above EU limits, and further measures were only needed in a few cities.
“We are examining the ruling and will discuss with municipalities and the communes how to proceed,” she said.
The impact on German drivers could be marked, with millions being forced to leave their cars at home on days when harmful emissions are particularly high.
It could also depress the value of diesel cars affected by the ban.
Of the 15 million diesel cars on Germany’s roads, only 2.7 million meet the latest Euro-6 standards, according to data from Germany’s automotive watchdog.
Car companies could also incur huge costs to refit vehicles at a time when consumer interest in diesel is falling.
The market share for diesel vehicles in Germany fell from 48% in 2015 to around 39% last year.
Seeking to avert bans, German car makers have pledged software improvements for millions of diesel cars and offered trade-in incentives for older models.
The German government meanwhile has floated alternatives, such as making public transport free in cities suffering from poor air quality.
Paris, Madrid, Mexico City and Athens have all pledged to ban diesel vehicles from city centres by 2025, while the mayor of Copenhagen wants to ban new diesel cars from entering the city as soon as next year.
Carmakers including VW-owned Porsche and Toyota have also signalled they will move away from diesel technology.
Analysts at Evercore ISI said the latest German ruling had “set a strong precedent for similar action across Europe”.
“Note, the judge previously commented that the EU has clear rules on emissions and cities have a ‘duty’ to meet pollution targets.”