The compromise was slightly lower than the 40 percent cut pursued by the EU parliament. Germany's auto industry has warned that the move could damage Europe's standing in the auto market and endanger jobs.
The deal represents a compromise, as Germany sought a cut of 30 percent and the European Parliament had pursued a reduction of 40 percent.
Austria, which currently holds the rotating EU Council presidency, made the announcement just two days after the COP24 summit concluded in Poland, where reducing emissions featured as a sore point for the participating nations.
Vehicle exhaust fumes make up a large share of the emissions linked to climate change.
A compromise
EU member states have been divided for months over cutting CO2 emissions from vehicles. Car-producing nations such as Germany and others, such as Netherlands and Denmark, sparred over how strict the limit should be.
"With this legislation in place, we are setting the right targets and incentives to tackle emissions from the transport sector," said European Commissioner for Climate Action and Energy Miguel Arias Canete.
"It will help our industry to embrace innovation towards zero-emission mobility and further strengthen its global leadership in clean vehicles."
'We're running out of time' on climate change
Thousands of protesters hit the streets of Katowice to sound the alarm on climate change. They want world leaders meeting at the nearby climate conference to repeat the historic Paris agreement.
Image: DW/J. Collins
Time is running out
The protesters' symbol was a clock to signal to those meeting at the United Nations climate change conference (COP24) that time is running out if the world is to limit global warming to within 2 degrees Celsius (3.6 degrees Fahrenheit). Negotiations at the COP have been tough, with disagreements on financing for developing countries and on how states should report their emissions cuts.
Image: DW/J. Collins
Sending up Bolsonaro
Some marchers made giant puppets, including of Brazil's president elect, Jair Messias Bolsonaro, to protest the leader's climate policies. Bolsonaro has threatened to follow US President Donald Trump and withdraw his country from the Paris climate agreement. Bolsonaro has also talked about loosening protections for the Amazon rainforest — the Earth's green lungs.
Image: DW/J. Collins
Air pollution woes
About seven million people worldwide die prematurely due to air pollution every year. Poland's air quality is particularly bad because of the country's dependence on coal for electricity and heating. Some protesters decorated pollution masks to make a statement about Poland's coal policy. During the COP, the country's president said there was no intention to phase out coal.
Image: DW/J. Collins
'Don't nuke the climate'
Some groups, like the International Atomic Energy Agency, are promoting nuclear energy as an alternative to fossil fuels. It would provide a stable and greenhouse gas-emission-free energy source, says the IAEA. A number of protesters turned up to advocate against nuclear, because there is no good way to deal with the radioactive waste it produces and because it is potentially unsafe, they say.
Image: DW/J. Collins
A sustainable Christmas
Sustaina Claus arrived at the climate march with his Christmas elves to preach the message of sustainability. The environmental activist says we need to stop overconsumption if we are to stop climate change and protect the planet's resources. Instead of buying mountains of gifts for your loved ones at Christmas, "you should give the gift of you."
Image: DW/J. Collins
Activists held at the border
NGOs said a number of environmental campaigners were refused entry at the Polish border or deported from the country, having been deemed a "threat" to national security. Climate Action Network, an umbrella group of climate groups, called the actions worrying. A spokeswoman for Poland's border guards said she could not say whether the refusals were connected to the COP, according to Reuters.
Image: DW/J. Collins
Cycling for the climate
Climate activist Lander Wantens cycled over 1,000 kilometers from Belgium to Katowice for the protest and to deliver a message to delegates to do more to combat climate change. He hopes that if the negotiators see "four guys from Belgium are crazy enough to bike to the climate summit in Poland in winter, maybe that's a signal that they have to work on an ambitious climate agreement."
Image: DW/J. Collins
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Carmakers object
German carmakers decried the EU's 2030 target, calling it restrictive and unrealistic. "The regulation demands too much while promoting too little," the German Association of the Automotive Industry (VDA) said in a statement.
"Nobody knows today how the agreed limits can be achieved in the time given," the VDA added, noting that nowhere else in the world had such strict regulations.
The association also warned that the move would damage Europe's standing in the international car market and endanger jobs.
The 2030 target will apply to car manufacturers' fleets as a whole, meaning that high-emission models would have to be offset with sales of low-emission or zero-emission vehicles, such as battery-run cars.
As a result, car manufacturers will face the challenge of having to sell an ever greater proportion of clean vehicles, as compared to diesel- and petrol-powered cars.
