The European Parliament environment committee has voted in favour of supporting the European Commission's proposal that average CO2 emissions from new cars should not exceed 130g/km by 2012. MEPs also demanded a longer term target of 95g/km by 2020.

Earlier this week the European Parliament industry committee recommended that the deadline for compliance be extended to 2015. This approach had been strongly backed by vehicle manufacturers. The German and French governments also backed the extended deadline. That recommendation was rejected by MEPs today.

"This is a big blow for corporate lobbying," Chris Davies, a UK member of the environment committee, told Bloomberg.

The MEPs also agreed with European Commission on imposing penalties on vehicle manufacturers that exceed the limits. Penalties would amount to 95 euros per gram exceeding the limit, multiplied by the number of vehicles sold. Calls had been made to lower the limit to 50 euros.

The vote still needs to be approved by the full European parliament and by Member States. The 95g/km target for 2020 is subject to review in 2014.

A raft of concessions had been proposed to help ease the legislation through parliament. "In the dark hours of last night, the members added up all the loopholes and the various percentages and realised this wasn't good enough for the environment," Swedish liberal Lena Ek, told Reuters.

The European automobile manufacturers trade association, ACEA, expressed disappointment at the vote.

"The  MEPs missed the opportunity to help shape a realistic framework for  the  car  industry enabling manufacturers to continue contributing to the  CO2  reduction objectives of the EU to the best of their ability and with  all  the  innovative  might  they  possess",  said  Ivan Hodac, Secretary  General  of  the  European  Automobile Manufacturers' Association (ACEA).

"The   European  car  industry  calls  on  legislators  to  refrain  from  threatening  the  future  of  car  production  in Europe. The Environment  Committee  has  given  a wrong signal today. This is bad news for Europe,  especially   with   the   overall  economic  circumstances  deteriorating  already."

ACEA said that It is now up to  the  plenary  session  of  the European Parliament, and to the Member  States  to strike a balance between environmental protection and economic
 growth and employment, all of which are of equal interest to the European society.

"The  car  industry  fully supports a European policy on the reduction of  CO2 from cars, but it is essential legislators address the restraints the  manufacturers  face in fulfilling the requirements. They should take into  account  the  nature  of  car  manufacturing  and  recognise  the need to  influence  consumer  demand", said Hodac. "The auto industry has a lot to offer and its huge efforts should be encouraged, not opposed."