European Union (EU) Commission legislation on CO2 emissions limits due to be published on Wednesday will allow vehicle manufacturers to team up to share the burden of meeting the limits.

According to a draft EU document obtained by Reuters, emissions could be traded between manufacturers of smaller lower emission cars and manufacturers of heavier cars.

Vehicle manufacturers will be required to achieve an average of 120g/km CO2 emissions from the cars they sell in 2012. 130g/km should come from engine technology alone with the remaining 10g coming from other factors such as tyres, infrastructure improvements and biofuels.

Target levels were agreed earlier this year, but there has been much discussion about how the emissions requirements might be applied. The European Union has never imposed legislation like this on companies before. It is usually up to national governments to enforce legislation.

"In order to provide flexibility for manufacturers, manufacturers may agree to form a pool on an open, transparent and non-discriminatory basis for the purposes of meeting their targets under this proposal," the draft said, according to Reuters. "Where manufacturers form a pool, (they) should be deemed to have met their targets under this regulation provided that the average emissions of the pool as a whole do not exceed the target emissions for the pool."

The document added that the targets should encourage reductions from all manufacturers, but recognised that bigger cuts could be made from heavy cars. It also said that independent manufacturers who produce only a small volume of cars could receive special treatement.

Manufacturers that do not meet the targets would be fined, although the draft seen by Reuters did not say how much the fines would be. It did say that penalties would increase over time.

German manufacturers of luxury cars are expected to be particularly hard hit by the legislation, but the proposals are reported to have the support of industry commissioner Guenter Verheugen of Germany, who has sympathised with the German manufacturers in the past.

The German government has been lobbying on behalf of its luxury car manufacturers in an effort to ensure that they do not have to reduce their emissions by proportionately more than smaller cars.