EU agrees to cut car emissions in climate fight

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.