As part of its campaign to avoid mandatory limits, the UK's Society of Motor Manufacturers and Traders (SMMT) has published figures that show that average CO2 emissions from new cars sold in the UK are falling.

The average new car sold last year emitted 167.2 g/km, an improvement of 1.3% on 2005 figures and 11.9% down on average CO2 of 189.8g for the 1997 market.

The average of 167.2g last year (169.4g in 2005) is still well below the 140g/km voluntary target that the automotive industry has agreed to for 2008.

SMMT chief executive Christopher Macgowan has called for an end to the 3% company car tax surcharge for new diesel cars to allow further improvements to be made.

"Reductions in the fleet sector slowed to just 0.6% last year and the 'diesel disincentive' is one of the reasons why the UK still lags behind the rest of Europe on diesel market penetration (38.3% vs 50.6% in 2006)," said the SMMT in a statement.

Macgowan also called for E85 bioethanol to become more available to allow further improvements to be made, and for incentives to boost sales of the lowest carbon cars, following the shelving of the low carbon car fund, after the government concluded that there was no evidence that grants drive demand for cleaner cars.

On a positive note, the SMMT said that the motor industry can take credit for last year's CO2 reduction in the private sector (2.1%) following introduction of its colour-coded CO2 label. This has been displayed in showrooms since September 2005, giving buyers more information at the point of sale, allowing simple car-by-car comparisons.

Macgowan supported calls for an integrated approach to carbon emissions from vehicles, instead of mandatory limits. "This thing we call an integrated approach is not about empty words; we are calling for practical measures, based on the principle that working together will deliver the greatest benefits for the environment, without crippling the European car industry with unrealistic targets and disproportionate costs. This approach was endorsed by the European CARS21 group last year and we in the UK fully support it."

An integrated approach was planned until it became clear that vehicle manufacturers were not likely to meet voluntary CO2 requirements set for 2008. European environment commissioner Stavros Dimas is a signatory to the CARS21 agreement but has been incensed by the failure of vehicle manufacturers to make significant progress.

An announcement to force vehicle manufacturers to cut carbon dioxide emissions from new cars to 120g/km by 2012 was due to be presented today, but has been delayed in the face of contradictory proposals from the industry directorate.

The UK's Guardian newspaper reported massive rifts not just between the EU comissioners but within the German government which currently holds the EU presidency. The proposed limits would affect Germany luxury car makers most, threatening the very existence of companies like Mercedes-Benz, BMW, Porsche and Audi, and this would be unacceptable to German politicians.

Commission president, José Manuel Barroso is seeking a consensus within his commission and, according to the Guardian, has said that proposals for binding legislation to enforce the 120g target by 2012 would be presented "very soon" - possibly next week. But Dimas's proposals to legislate on engine technology alone will now be complemented by other measures such as greater use of biofuels.

According to the newspaper, industry commissioner Günter Verheugen is believed to have persuaded Barroso that full legislative proposals can come only after an "impact assessment". He wants Dimas to recommit to their jointly agreed policy that the cars package embraces alternative fuels, tyres and lubricants, measures to ease congestion, and even driver behaviour, or adopting policies to encourage car owners to switch to greener vehicles, the so-called integrated approach favoured by the SMMT and European trade association, ACEA.

The Guardian also reported that there is no consensus on how the 120g target would be applied. An option favoured by German ministers is to set targets according to the class of vehicle, with tougher ones for smaller cars.