Car manufacturers only reduced their CO2 emissions by 1.7% over the past year – a far cry from the average 17% cut they will have to achieve within the next four years to comply with planned European legislation, according to data published today by Transport & Environment, a green NGO.

German carmaker BMW made the largest step forward, recording a 7.3% cut in its fleet's emissions last year alone, while Japanese manufacturer Honda's average CO2 emissions actually increased by 1.1%.

Overall, French and Italian manufacturers remain in the best position to meet the 130 grammes of CO2 per kilometre target by 2012, which was proposed by the European Commission last December. But, with average cuts of less than 2% last year, they are being caught up by Japanese, US and German brands.

According to T&E, the progress made by BMW is testimony that carmakers are capable of making the necessary emissions cuts when threatened with regulations and fines. "With the threat of legislation looming, BMW has shown that even premium carmakers can seriously reduce CO2," said T&E Director Jos Dings. He therefore rejects industry demands for lengthy phase-in periods to cope with the costs of new technologies and calls on the EU to "keep up the pressure with challenging, long-term CO2 targets".

The green NGO is angry that the EU appears to be watering down a fourteen-year-old target to cut CO2 emissions from cars to 120g/km on average and that governments are backing down to pressure from industry.

In June, German Chancellor Angela Merkel and French President Sarkozy, who currently holds the EU Presidency, shook hands over a backdoor deal that would allow a "substantial" phasing-in period car manufacturers, as well as more leniency on fines for deviations of up to eight grammes (EurActiv 10/06/08).

"German carmakers want CO2 targets to only apply to the cleanest cars in the early years. It's the equivalent of demanding that a smoking ban should only apply to non-smokers," laments Dings.

He hopes the European Parliament will toughen up the draft regulation when its Environment Committee votes on the proposals on 8-9 September. But a draft report by Guido Sacconi, the MEP in charge of steering the text through Parliament, would back the Commission's so-called 'integrated approach', whereby manufacturers only have to reduce their fleet's average emissions to 130g/km and further cuts are to be achieved by complementary measures, such as biofuels or fuel-efficient tyres. It would, however, also lay down a 95g/km target by 2020.

But carmakers argue that they have made huge progress. They insist that while they are producing more efficient cars, the public just isn't buying them due to their preference for larger, more comfortable, safer and faster models, which simply emit more than smaller models.

This appears particularly true in Sweden, where T&E figures highlight Swedes' attachment to high-consuming domestic brands Volvo and Saab, with emissions of new cars sold in 2007 averaging at a massive 180g/km – way above the EU average of 158g/km.