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Chairman of the Free Democratic Party (FDP) Christian Lindner, leader of the Christian Democratic Union of Germany (CDU) Angela Merkel, leader of the German Green Party Katrin Goering-Eckardt and Chief of Staff of the German Chancellery Peter Altmaier are seen on a balcony of German Parliamentary Society offices during the exploratory talks about forming a new coalition government held by CDU/CSU in Berlin, Germany, October 30, 2017. REUTERS/Axel Schmidt


By Thorsten Severin and Andreas Rinke

BERLIN (Reuters) - Germany's Greens said on Wednesday that any coalition government they join would have to agree to make carmakers introduce mechanical changes to engine and exhaust systems to cut toxic emissions.

Transport is among the policy areas being thrashed out in talks taking place between Chancellor Angela Merkel's conservatives, the pro-business Free Democrats (FDP) and the Greens, who are aiming to form a coalition by Christmas.

The parties are discussing all policy areas before launching detailed negotiations. While the atmosphere has improved in recent days, there have been few actual deals, with immigration and climate change among the biggest sticking points.

The Greens' demand on carmakers would go further than software fixes so far agreed between politicians and German car bosses to help repair the industry's badly damaged reputation.

The future of Germany's mighty car industry, the country's biggest exporter and provider of some 800,000 jobs, is a tricky area as it tries to recover from the diesel emissions testing scandal which broke at Volkswagen <VOWG_p.DE> two years ago.

Despite public concern and planned diesel bans in countries including France and Britain in coming decades, German lawmakers have not yet dared ask the same of its carmakers, such as BMW, VW, Daimler and Porsche who have invested heavily in diesel.

In August, politicians and car bosses agreed to overhaul engine software on 5.3 million diesel cars to cut pollution and avoid bans on polluting vehicles but they stopped short of committing to more expensive hardware modifications.

That may have to change if the Greens share power.

"We won't meet our targets of getting cleaner air in city centres with software upgrades alone," Cem Ozdemir, a leader of the Greens, said as he headed into the talks.

"There must also be hardware solutions."

Ozdemir said the auto industry was going through the biggest transformation process in its history and the car had to be reinvented to make it emission-free and more automated. Public transport must also be expanded, he added.

The conservative bloc, comprising Chancellor Angela Merkel's Christian Democrats (CDU) and Bavaria's Christian Social Union (CSU), oppose any demand to ban the combustion engine from 2030.

(Reporting by Thorsten Severin and Andreas Rinke; Writing by Madeline Chambers; Editing by Alexander Smith)

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