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An engine coolant temp sensor is one possibility, but a far more common failure would be an engine thermostat that is out of calibration (opening too soon resulting in a colder than normal engine temperature).
The computer is responding normally to a cold engine temperature by richening fuel mixture, since it "thinks" the engine is still warming up untill it reaches it's designed 195 degree F operating temperature.
Check your engine's actual operating temp using a non-contact thermometer, or try installing a new thermostat; this will likely resolve all of the issues you are experiencing.
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Normal operating temperature for this engine is 195 degrees; if it is only reaching 180 degrees it is not up to normal temperature and will run rich. This is not normal. I do not know the exact temperature at which the blue indicator is turned off, but if you are only getting to 180F there is a problem somewhere. It could either be the thermostat or the coolant temp sensor (since that is where youa re getting the scanner reading).
You can confirm which part is causing the problem by taking a manual engine temperature reading with a temp gun. I can tell you from experience that I have never had to replace a CTS on a VW beetle, but ahve had several failed thermostats over the years.