A new air conditioning refrigerant used in cars poses no material risk to occupants even if it is more dangerous than an older alternative now being phased out to meet environmental rules, German officials said in a closely watched report.

The report by Germany's Federal Motor Transport Authority (KBA) comes after France banned the sale of most of Daimler's new model Mercedes cars using the older refrigerant, saying it did not meet new European environmental standards.

Ever since Daimler warned last year that the new chemical known as HFO-1234yf poses a greater fire hazard than previously believed, a dispute has raged in the auto industry over a component that few car owners regularly think about -- the refrigerant in their air conditioners.

The KBA recommended further examination of the new refrigerant - whose global supply is controlled by Honeywell and its partner DuPont - to limit risks as much as possible.

At stake is not just carmakers' reputation for safety or the billions of dollars that Honeywell could reap in sales, but the definition of 'acceptable risk', a notion that few carmakers relish addressing in public.

Were fears over the Honeywell product to spread outside Germany, justified or not, the auto industry risks being confronted again with the need for a costly search for a new chemical that meets an EU directive on A/C refrigerants in cars.

KBA carried out tests using three different levels of severity and concluded that while the new substance was more hazardous than the old, it did not comprise a serious danger.

"No sufficient proof was found with the cars tested that would have hardened the suspicion of a serious danger as defined by the product safety law," the KBA said in its report.

Its most severe test, Stage 3, showed 1234yf was more dangerous than refrigerant 134a, which is currently used, but conceded that it was not entirely clear what conditions were necessary for the Honeywell product to become a serious hazard.

"Due to the comparisons with the previous refrigerant 134a in Stage 3, one can ascertain that the safety level of cars tends to deteriorate when 1234yf is used," it explained.