The European Commission has come under intense pressure from the car industry over its plans to penalize the sale of inefficient vehicles, namely vans and minibuses. Automakers say they want a chance to recover from the financial crisis before cutting down on carbon emissions.

But after delaying its plan for four years, Brussels is trying yet again to force them to stop producing so much carbon. The EU's environment commissioner, Stavros Dimas, admits that the new legislation has been watered-down.

"What we have adopted today is not the initial proposal, and the level of ambition was not as high as it was initially," Dimas said.

New EU rules for auto-makers

The new legislation involves carbon emissions cuts for commercial vehicles of 14 percent between 2014 and 2016 - to 175 grams for every kilometer driven. The EU average today is 203 grams. The goal is to get van makers to reduce that to 135 grams by 2020.

Europe's biggest car-making countries, France, Italy, and Germany had wanted the deadline for emissions cuts extended to 2017. The EU Commission's original proposal had sought cuts by 2012.

Dimas rejects the claim that the deadline pushback sends the wrong signal to the car industry. He says it will make little difference in terms of emissions saved.

"We have a proposal on the table, and a proposal for a decision, and of course it's up to the other institutions to improve on this proposal. If we didn't have a proposal today, whether we would have one in the near future or not is uncertain," said Dimas.

Carmakers that fail to make the targets will then face hefty penalties. Up until 2018, the fine will be five euros ($7) per van for the first excess gram, and will sharply increase for every excess gram after that. From 2019, the first excess gram will cost offending car-makers 120 euros per vehicle.

The EU's environment chief believes the fines will serve as a strong incentive for European auto manufacturers to get serious about clean technology.

Global competition

Stavros Dimas warned that carmakers risk losing the 'first-mover advantage' and called on them to grab the chance to innovate.

"Otherwise other regions of the world will get ahead of us, for example, the United States is investing a lot in green technologies; China is investing a lot; South Korea - almost 70 percent of its recovery plan is going to green technology investment," he said.

Not to mention Japan, which leaves the European Union trailing on innovation, and whose new government has now set its emissions cuts target at 25 percent. The Commission says those targets will provide the Japanese auto-sector fresh incentives to innovate.

But Dimas says he's had a tough time persuading the car industry to make emissions cuts.

The best the Commission can hope for is that Europe's car industry wakes up to the need to innovate fast. If manufacturers do not start producing cleaner cars, they threaten to undo all the work the EU has done so far to cut greenhouse gas emissions.

Author: Nina-Maria Potts in Brussels/vj
Editor: Chuck Penfold