EU agrees to cut car emissions in climate fight

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By Pete Harrison and Ilona Wissenbach

BRUSSELS (Reuters) - European carmakers must cut emissions of global warming gases from new vehicles by 18 percent within the next six years, the EU agreed, after a long battle between environmentalists and industry.

A provisional deal in closed-door negotiations late on Monday will need approval by the European Parliament and all 27 European Union nations before becoming law, but is not expected to change much.

Carbon dioxide emissions from new cars will be cut to 130 grams per kilometer in a phased approach starting in 2012 and with full compliance by 2015, three EU lawmakers told Reuters.

The European Commission, which originates EU laws, had envisaged the full cuts to carbon dioxide by 2012, mindful of droughts, violent storms and rising sea levels foreseen with climate change.

But Germany fought hard for BMW and Mercedes, which will now be able to produce their biggest, luxury gas-guzzlers until 2014, protecting jobs and export earnings.

France and Germany had already sketched out a rough deal in May, which Britain signed up to in October after winning special treatment for specialist marques Aston Martin and Jaguar.

Europe's other big car-making nation, Italy, joined the trio last month after winning concessions for Fiat and its Maserati and Ferrari sports cars.

"This deal represents a balance between the needs of the environment and the car industry across Europe, which is suffering massively at the moment," said British Conservative member Martin Callanan.

Environmentalists had held the power during negotiations in the European Parliament, throwing out an earlier compromise that they saw as too soft on big automakers.

But they accepted the phased-in deal proposed by EU nations after winning assurances that carmakers would have to meet more ambitious targets further down the road.

Emissions will have to be cut by around 40 percent to 95 grams per kilometer by 2020, a goal expected to boost sales of electric cars and hybrids. A review in 2014 will decide how strictly that target is defined.

"It's a proper compromise," said German Conservative member Angelika Niebler. "We do something against climate change but we give at the same time the industry a chance to adjust in the medium term."

Monday's deal sees tough fines of 95 euros ($119.80) per gram per car sold for automakers that miss their target by a long way, but those that overshoot by less than three grams face modest sanctions.

(Editing by Dale Hudson)

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