The European Parliament has voted in favour of tougher CO2 targets for new cars.
The EU Commission recommended that new cars emit 30% less CO2 by 2030, but MEPs on the Parliament's Environment Committee wanted the target increased to 45%.
In the end, MEPs backed a compromise to set the target at 40% less emissions by 2030.
Sinn Féin MEP Lynn Boylan, who sits on the committee, welcomed the move towards tougher CO2 targets.
"It will make a huge difference. We know that transport is a big part of emissions," she said.
Ms Boylan also called for member states to show political will on climate change initiatives.
"It comes down to political will. We don't have time to waste on climate change, " she said.
Fine Gael MEP Sean Kelly also welcomed the move, saying the car industry can adapt quickly.
He also acknowledged it would be difficult to get national governments to agree to the new target, in particular Germany which houses large car manufacturing.
"I expect there will be a compromise," Mr Kelly said.
However he added that it would now be closer to the target that the European Parliament has set.
The Director General of the Society of the Irish Motor Industry Alan Nolan said while the targets would be a challenge for manufacturers, they would ultimately lead to better environmental solutions for customers in a shorter timeframe.
"With car manufacturers focused on delivering cleaner transport at a faster rate than previously planned, as a result of this vote, we should be in a position to deliver even better environmental solutions earlier than would otherwise have been possible."