The European Parliament has pushed through legislation forcing car makers to reduce the CO2 output of new cars within four years.
The move is a blow to European car makers, who had expected the EU proposals to be toned down before coming into effect.
In particular, the influential German car lobby had been placing significant pressure on MEPs to 'water down' the controversial proposals. But European lawmakers dismissed their arguments out of hand.
"The German car lobby... has been sent away with its tail between its legs," Liberal Democrat MEP Chris Davies told the BBC.
Politicians on all sides believed a deal had been brokered to look again at the stringent CO2 legislation, as part of an effort to safeguard jobs within the motor industry.
But socialist MEPs - worried about their green credentials - are reported to have voted against the party line, pushing the 130g/km proposals through without revision.
Average CO2 emissions currently stand at 160g/km with manufacturers continuing to explore new technology in an effort to bring this down.
The car makers could now have just four years to achieve this or pay heavy fines, if the proposals are passed in the last law-making phase at the European Parliament.
These tough proposals have sent shockwaves through the already beleaguered European motor industry.
August's new car sales figures were significantly down year-on-year in Britain and elsewhere. This has led to car production being scaled back across Europe. In the UK alone, around 200,000 jobs rely on the motor industry.
"I know the (sales) figures in September are even worse," Conservative MEP Martin Callahan told the BBC. "So it won't be long before we see lay-offs. We have to be very careful. The vote today makes lay-offs, a loss of jobs more likely. There's no question".
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Re: EU CO2 law survives
I was actually talking about road tax. I know that tax on diesel fuel is higher and that diesel cars cost more to buy. Personally I think we should be moving away from diesel fueled cars.
Re: EU CO2 law survives
1. For heaven's sake, let's not do the CO2 debate here again.
2. Car manufacturers have been their own worst enemy when it comes to legislation for years and years. Whether it comes to safety, recyclability or C02, they continually argue that it can't be achieved, at least without adding £1,000s to the price of each car they sell - and then they manage to do it without any noticeable effect on the price whatsoever once the law is passed. And when they had a voluntary agreement - the 130g/km CO2 EU one - they ignored it. You can see why legislators are cynical.
Re: EU CO2 law survives
These limits are not that difficult to achieve as the recent wave of economy specials has shown. Recent Porsche 911 updates show that manufacturers can do a lot to cut emissions even on performance models
Had manufacturers thought about weight reduction rather than NCAP ratings and extra equipment many more models would already comply with the limits. By prohibiting manufacturers from selling performance the legislators have perversely created an obesity problem with our cars.
I believe that by setting them these targets competent manufacturers will quickly adapt and provide lower emission vehicles people will want to buy. Without this legislation they will do virtually nothing.