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No, that's a bleed line (vent) for one of the vacuum solenoids. It's located there because the air behind the front firewall is supposedly a little cleaner. I put a little filter (small gasoline fuel filter) on mine.
The '96 E300 is smart enough to know if the vacuum solenoids, including the EGR solenoid, are not working. You can test the EGR system by blocking the valve with a solid gasket but the electrical connection must remain in place. Later models are even more sophisticated and can tell if air is flowing through the EGR valve!
Additionally, the "throttle" flap in the intake pipe just before the EGR valve is partially closed by the EGR system to reduce the air pressure in the intake so that more dirty exhaust is sucked into your clean engine (diesels normally run with intake wide open so little or no intake manifold vacuum). The '96 E300 has a pressure sensor at the rear of the engine compartment (driver's side) connected by a rubber tube to the intake manifold. When the throttle flap is told to close down, the sensor should see a drop in air pressure; if not, a code like the one you're seeing is set.
Jeremy
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"Buster" in the '95
Our all-Diesel family
1996 E300D (W210) . .338,000 miles Wife's car
2005 E320 CDI . . 113,000 miles My car
Santa Rosa population 176,762 (2022)
Total. . . . . . . . . . . . 627,762
"Oh lord won't you buy me a Mercedes Benz."
-- Janis Joplin, October 1, 1970
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