The KBA has opened an investigation into whether a software update for 1.2-litre engine cars, including the popular Polo, enabled them to cheat emissions tests.
Morrison, who is to the right of Turnbull, said the proposal to help the government meet its Paris Agreement pledge was "dead."
A court has scheduled a series of hearings starting on Sept. 10 in a case combining claims by some 4,000 shareholders demanding 9 billion euros in compensation.
Merkel said the EU would do better to meet existing emissions targets rather than set new ones.
Daimler said it’s talking to the KBA about a function in the onboard diagnostics system that prevents overdosing of the AdBlue fluid in non-standard operating conditions, such as the use of biofuels.
Shipping currently accounts for 2.2% of world CO2 emissions.
Volkwagen has admitted in 2015 to equipping about 11 million cars worldwide with "defeat devices", which emits up to 40 times the permissible levels of harmful nitrogen oxide during actual driving.