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The European Union (EU) has warned Germany it might face legal action regarding Daimler’s refusal to stop using a banned refrigerant in its new vehicles, after France began blocking the sale of Mercedes Benz motor vehicles.

The EU confirmed yesterday, that France has blocked registrations of Mercedes models which use the banned air conditioning coolant.

This is the latest move in an ongoing debacle between Germany and other countries regarding the direction of industry policy and regulation surrounding vehicle air conditioning systems.

An investigation is underway into Daimler's refusal to comply with EU regulation which bans the air-conditioning coolant R134a.

EU Commission spokesman Carlo Corazza told Reuters if the breach is confirmed, Brussels “may take necessary action including where appropriate infringement procedures” against Germany.

Daimler said that France blocked new registrations for the Mercedes SL sports car and A- and B-Class subcompacts, which account for more than 50 per cent of the automaker’s sales in the region.

France banned Mercedes vehicles manufactured from June 12,  which has already hurt the automaker’s sales.

Daimler refuses to phase out the R134a coolant due to safety concerns, it says that the available replacement refrigerant, the Honeywell R1234yf, emits toxic hydrogen fluoride gas when it burns.