EU agrees to cut car emissions

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By Pete Harrison and Ilona Wissenbach

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

"This deal represents a balance between the needs of the environment and the car industry across Europe, which is suffering massively at the moment," British Conservative lawmaker Martin Callanan told Reuters late on Monday.

But the compromise was attacked by environmentalists, who said it was tailored too neatly around big auto's demands and undermined EU efforts to lead the world in fighting climate change.

Carbon dioxide emissions from new cars will be cut to 130 grams per km (.6 mile), with auto makers' fleets phased into the new regime between 2012 and 2015.

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

The European Commission, which originates EU laws, had envisaged the full emissions cuts by 2012, mindful of climate change and the droughts, violent storms and rising sea levels it is expected to bring.

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.

A moderate system of fines means manufacturers may prefer to miss targets and pay up rather than throttle back on horsepower.

"The car industry has been driving negotiations all along and EU politicians have been happy to sit in the passenger seat," Greenpeace campaigner Franziska Achterberg said.

ROUGH DEAL

France and Germany had sketched out a rough deal in May, which Britain signed up to in October after winning special treatment for luxury brands 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.

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

But the economic crisis added weight to manufacturers' demands, and lawmakers accepted the phased-in deal after winning assurances that carmakers would have to meet more ambitious targets further down the road.

"This is a huge disappointment," said British Liberal member Chris Davies. "Tough carbon curbs would have led to lower driving costs, but the consumer seems to have been largely forgotten."

Emissions will have to be cut around 40 percent to 95 grams per km by 2020, a goal expected to boost sales of electric cars and hybrids. But Davies said such an ambitious goal would be difficult, given the watered-down mid-term cuts.

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 of between 5 and 25 euros.

"It's a proper compromise," said German Conservative member Angelika Niebler. "That's acceptable because of the difficult situation of industry now."

(Editing by Dale Hudson and Michael Roddy)

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