The European Commission is expected to announce new regulations today that will see carmakers forced to cut the amount of carbon dioxide released by their vehicles.
The new legislation will see car emissions reduced to 120g per km by 2012, down from the current EU levels of 161g per km.
Carmakers will not have to bear all of the responsibility for cutting emissions with manufacturers also expected to be required to reduce emissions from new vehicles through improved technology.
The additional 10g per km reduction will come from the use of biofuels and other related technologies, such as better tyre technology.
New legislation covering the emission cuts is set to be revealed to the EC today and is expected to be passed by members.
The proposal initially intended to force carmakers to bear the entire reduction in emissions. However, the proposal was met with opposition from German car manufacturers, which claimed the emission cuts would drastically increase car prices.
Some environmental groups have criticised the new proposal, claiming that it is letting carmakers off lightly for not meeting the current voluntary targets for reducing CO2 emissions.
A voluntary target of a reduction in emissions to 140g per km by 2008 has been in place for ten years and car firmslook set to miss this target.
"Now they have failed to do the job they agreed to do, it makes no sense to let them off the hook," said Aat Peterse of Transport and Environment.
Friend of the Earth transport campaigner Tony Bosworth says the group welcomes measures to legislate a reduction in CO2 emissions but is disappointed that the commission has "watered down" its long-agreed target.
"Climate change is the biggest threat the planet faces. The EU must show it is serious about cutting emissions by setting the motor industry tough targets to build and sell greener cars," said Mr Bosworth.
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