The European Commission has proposed tough new legislation to force car manufacturers to cut CO2 emissions produced by their vehicles or face heavy fines.
The draft directive is intended to help Europe meet its commitments to tackle climate change, however it will face intense opposition from EU states with big car industries.
German chancellor Angela Merkel declared the plan "not economically viable". Her environment minister Sigmar Gabriel called it a "competition war" against the German car industry to benefit French and Italian rivals, who produce lighter, more fuel efficient cars.
The proposed directive, which must still be debated and amended by EU member states and MEPs, sets a limit on emissions for new passenger cars at 120g of CO2 per kilometre by 2012. Companies that do not reduce emissions to these levels will face graduated fines, starting at €20 per new car for each excess gram per kilometre in 2012 on average over the whole fleet, and rising to €95 per excess gram per kilometre by 2015.
Emissions figures provided by manufacturers show BMW would face fines of €900 per new car if it failed to achieve any emissions reduction by 2012, while Renault would face average fines of €400 per car.
The commission predicts that new car prices will have to rise by an average of 6 per cent or about €1,300 due to the measures but that car owners will make average savings of €2,700 over the lifetime of a vehicle due to lower fuel consumption.
The average emissions level from cars in the EU was 163g of CO2 per kilometre in 2004 and the commission recently judged that earlier voluntary commitments by car manufacturers to reduce emissions were simply not being met. The proposed directive places the major burden to reduce CO2 emissions on car manufacturers, although at least 10g per kilometre reduction in emissions should be met by tyre and other car component manufacturers.
"This will send a strong signal to the world about the determination of the EU to take bold measures on climate change," said environment commissioner Stavros Dimas, who fought a long and difficult battle within the commission to gain agreement on the plan.
Industry commissioner Gunter Verheugen attacked the proposal at a commission meeting yesterday along with several colleagues. He later boycotted the official press conference. He is concerned German manufacturers such as Porsche, BMW and Mercedes-Benz, which produce heavier luxury cars that generate more emissions, would face stiff EU fines that would increase operating costs and threaten thousands of jobs.