By Jorn Madslien
Business reporter, BBC News
The car industry has responded to calls from Brussels' for cleaner low emission cars - saying that they already exist.
Transport produced 28% of the EU's CO2 emissions in 2004
However chief of industry body SMMT, Christopher Macgowan, said the problem was "that motorists do not buy them."
The European Commission has proposed forcing carmakers to make an 18% cut in carbon dioxide (CO2) emissions from new cars by 2012, by improving technology.
SMMT said this would result in less choice for the motorist and higher prices on the dealer forecourt.
"While the motor industry accepts that it has an important part to play in the climate change debate, it has grave concerns over the impact of proposals made," said SMMT in a statement.
Each car could be 3,000 euros more expensive to make if the industry is to meet the Commission's proposed requirement, according to a Renault spokesman.
However, in the history of environmental legislation manufacturers have tended to exaggerate the cost of new legislation, according to BBC environment analyst Roger Harrabin.
"Often when new laws are passed, they unveil cleaner models already on the drawing board but held back to squeeze maximum profit out of existing models," he said.
In the long-run consumers should be better off according to environment commissioner, Stavros Dimas.
"Our analysis holds that the extra capital cost of making cars more fuel efficient will be more than offset by the fuel savings over the car's lifetime," he said.
"More fuel efficient cars are good news for consumers.
"Not only will people be reducing their contribution to climate change that threatens us all, they will also pay less in fuel bills."
Car industry officials insist they have already done much to improve efficiency.
"We already have a model that emits less CO2 than the EU proposal with the A3 1.9 litre TDI," an Audi spokesperson said.
While PSA Peugeot Citroen's chief executive, Christian Streiff, insisted: "We have an advantage in low-CO2-emission cars. We will do everything we can to keep that advantage."
In 1996, the car industry agreed to reduce emission output by 25% to 140g per kilometre by 2008.
In return, the European Commission agreed to delay a tougher 120g per kilometre target till 2012.
"We have proven that we are doing our bit by hitting interim targets of our voluntary agreement," Mr Macgowan said
But industry analysts point out that despite such lofty talk the industry does not stand a chance.
"The European Automobile Manufacturers Association will miss the target," according to Lehman Brothers analyst Christopher Will.
By 2005, the car industry had achieved a 14% fall in average CO2 emissions to 160g per kilometre, he observed.
However, he said going forward would be much tougher.
"The easy improvements are behind us, and progress is now at an even slower rate."