The European Commission today published it proposed legislation to reduce average CO2 emissions from passenger cars to 120g/km by 2012.

Its press release said: "The draft legislation defines a limit value curve of CO2 emissions allowed for new vehicles according to the mass of the vehicle. The curve is set in such a way that a fleet average of 130 grams of CO2 per kilometre is achieved.

"A manufacturer must ensure that by 2012 measured fleet average emissions are below the limit value curve, when all vehicles manufactured and registered in a given year by the manufacturer in question are taken into account. This means that the level of emissions by heavier cars will have to be improved proportionately more than lighter cars compared to today.

"Manufacturers will still be able to make cars with emissions above the limit value curve provided these are balanced by cars which are below the curve as long as the fleet average remains at 130 grams.

"Manufacturers' progress will be monitored each year by the member states on the basis of new car registration data.

"The proposal will provide manufacturers with the necessary incentive to reduce the CO2 emissions of their vehicles by imposing an excess emissions premium if their average emission levels are above the limit value curve. This premium will be based on the number of grams per kilometre (g/km) that an average vehicle sold by the manufacturer is above the curve, multiplied by the number of vehicles sold by the manufacturer.

"A premium of EUR20 per g/km has been proposed in the first year (2012), gradually rising to EUR35 in the second year (2013), EUR60 in the third year (2014) and EUR95 as of 2015. Most manufacturers are expected to meet the target set by the legislation, so significant penalties should be avoided."

The proposals have been criticised by both vehicle manufacturers and environmentalists. Ivan Hodac, secretary-general of the European automobile manufacturers association (ACEA), told Reuters that the proposals were unbalanced and the the level of fines was "totally unacceptable".

Volkswagen cirticised the proposals for not giving German manufacturers in particular enough time to develop new products, according to Reuters. VW welcomed the fact that the EU proposes to phase in penalities over four years but said this is not really much time compared to the amount of time it takes to develop new car models.

French PSA Peugeot Citroen complained to Reuters that the plans to reduce emissions with fines were a disappointment as they were essentially a "ticket to pollute". A spokesman told Reuters that: "These plans are anti-ecological, anti-social, anti economical and anti-competitive in relation to non-EU carmakers."

Environmentalists say that by relating the CO2 emissions to weight, vehicle manufacturers will still be able to build heavy high emission vehicles.

European lobby group, T&E, said: "In the United States, where fuel efficiency standards have been linked to weight in the past, car weight has increased even faster than in Europe." Existing American fuel efficiency standards for light trucks and forthcoming standards for cars (CAFE standards) will be based on the vehicle's floor-plan area or 'footprint', and T&E has argued for Europe to follow the new North American strategy of footprint, rather than weight-based standards.

T&E also said that "the failure to include targets for 2020 and 2025 means carmakers will fail to invest longer term in fuel efficiency."