Manufacturers selling their cars in the EU could be fined if newer models do not reduce carbon dioxide emissions, if a controversial new proposal by the European Commission becomes law.
Under its drive to reduce CO2 emissions, Brussels wants all new cars being made in or imported into Europe to have a CO2 limit of 120g/km by 2012.
Under a voluntary code, the car industry has only managed to reduce emissions from 186mg/km in 1995 to 163g/km by 2004.
The new measures will be mandatory and are likely to hit manufacturers of big cars but makers of smaller cars will have less distance to go to meet the targets.
At present, passenger cars account for 12% of all carbon dioxide emissions in Europe and road transport is the EU's second biggest emitter of greenhouse gases.
The Commission's proposal foresees a combination of improvement in car technology and complementary measures acting to reduce emissions to the 120g target.
Companies that fail will face fines of €20 per g/km for the first year in 2012, rising to €35 in 2013, €60 in 2014, and €95 in 2015.
The new limits are average targets so that a manufacturer's entire fleet will have to, on average, come into line, thus allowing companies to continue making powerful gas guzzlers so long as their smaller car output pulls them into the average.
Car makers can also pool their brands so that a combination of two or three companies can group together so that they all come in under or at the 120g target.
The move has already been harshly criticised by some of Europe's big manufacturers, who have waged a relentless campaign against the measures.
Peugeot said the plans are anti-ecological, anti-social, anti-economical and anti-competitive in relation to non-EU carmakers.
The proposals will now have to be agreed by all 27 member states and are likely to face stiff opposition from car producing countries like Germany, France and Italy.
