Scholz has faced renewed pressure to hand the weapons system over to Ukraine, after US President Joe Biden gave Kyiv the green light to use US missiles against military targets in Russia itself.
Kyiv has repeatedly urged Germany to send it Taurus missiles, which have a reach of more than 500 kilometres (310 miles) -- a plea Berlin has steadfastly refused.
"I have explained very clearly why I do not think it is right to supply Taurus cruise missiles," Scholz said on the sidelines of the G20 summit in Brazil.
Scholz said it was important to support Ukraine's defence against Russia's full-scale invasion while acting "prudently".
The missiles could only be used if "responsibility for targeting" was shared, Scholz said, a move he has previously stressed would risk drawing Germany directly into the war.
"That is something that I cannot take responsibility for," Scholz said Monday in Rio de Janeiro.
"We have a clear understanding that the powerful weapons we have supplied so far, the long-range artillery, the rocket launchers, cannot be used to penetrate deep into the Russian hinterland."
But Britain's former defence minister Ben Wallace urged Scholz to "now reconsider his rather stubborn and clumsy opposition to using Taurus, which just makes him look odd compared to the French and British".
The German leader "clearly doesn't understand deterrence", Wallace told Britain's Times Radio.
The Conservative ex-minister added many will be relieved once Germany's elections are over -- the country will go to the polls in February after Scholz's coalition collapsed, with the chancellor's party trailing in opinion surveys.
"Olaf Scholz is probably better suited to running a subcommittee of a planning committee in a local council than one of the biggest nations in Europe," Wallace said.
Berlin has been the second-biggest supplier of military aid to Ukraine in its fight against Russia's invasion and said earlier Monday it would supply Kyiv with 4,000 AI-guided drones.
Defence Minister Boris Pistorius told reporters at an event in the German state of Bavaria that the drones being provided could "take out the enemy's electronic drone defences".
The drones "can be delivered very quickly" and could be "deployed 30-40 kilometres (19-25 miles) behind the front line and hit combat posts, logistics hubs among other targets", Pistorius said.
Along some parts of the front line in Ukraine, such a distance would reach into Russian territory.
Despite the unmanned aerial vehicles being nicknamed "mini-Taurus" by the German media, the government was careful to point out they do not have the same range.
"These are tactical drones with a restricted range," defence ministry spokesman Natalie Jenning told reporters at a press conference on Monday.
"There is no connection to the Taurus (system) as has been sketched out in some of the media coverage," she added.
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