The new emission targets are set at 120 grams per km and come into effect by 2012. In four years time European manufacturers will be fined 20 euros ($34) for each excess gram per kilometre.
The system works on average emission ratings of all cars built per manufacturer - for example BMW can average out its emission by selling smaller cars that fall below the 120g/km target to compensate for its high-performance M series. Fines will increase to 95 euros ($160)g/km by 2016.
Going by current CO2 emissions the penalties seem harsh and the targets seem almost unreachable. A brand new BMW 320i puts out 178g of CO2/km, and thats just from a 2.0-litre engine! Holden's 3.6-litre engine in the VE Commodore puts out 260g/km.
Manufacturers still have the hope of lobbying member states and the European Parliament to vote against the legislation.
The decision will mostly affect German luxury producers such as BMW, Mercedes-Benz and Porsche which on average make heavier vehicles and their emissions are rising. MMass-market European makers Peugeot, Renault and Fiat will benefit from their fleet of small cars with shrinking emissions.
And suddenly, Volkswagen’s “New Small Family” of light, small, Up! concept cars starts to make sense. Volkswagen Australia spokesman Jon Dawe confirmed cars besed on the Up! and Space Up! concepts would go into production in Europe by the end of the decade.
The new laws also give incentive to manufacturers that produce compliant cars by allowing carmakers to team up and pool their CO2 emissions to meet the EU targets. This effectively means makers of heavier cars will be able to buy emissions credits from manufacturers whose fleet is below the limit.
With the US Government currently debating a similar move, it seems the future of motoring is green.