Just as carmakers in the U.S. are faced with tough new fuel consumption regulations, over in Europe the same companies have to deal with reducing the CO2 emissions of their vehicles by a much earlier deadline of 2012. Europe is looking to force carmakers to maintain a fleet-average CO2 emissions rating of between 120 and 130g of CO2/km, but the new rule will allows smaller carmakers to group their emissions together with their respective parent companies.

In this way Ferrari’s high emissions can be absorbed by Fiat, and Lamborghini emissions can be absorbed by Volkswagen Group. Volvo’s emissions would be tied up with Ford but with growing suggestions the two carmakers could be split in the near future Volvo is becoming increasingly concerned about its own emissions levels.

Volvo’s management has now made reduced fuel consumption and emissions top priority, and plan to speed up the advancement of new green technologies and powertrains, reports Auto Motor and Sport. In the pipeline are two new models that will reduce C02 emissions greatly, a new 1.6L turbocharged V70 that emits just 119g of CO2/km when running on E85 fuel, as well as a new C30 ‘Efficiency’ model (pictured) that emits just 104g of CO2/km.

Some of the new measures include the roll-out of more efficient yet more powerful 2.0L and 2.5L turbocharged engines that are set to debut in the new S60 next year and will eventually filter across to more of Volvo’s lineup.

Other plans include the addition of a new eight-speed gearbox sourced from ZF and the development of a plug-in hybrid model. However, these developments are still several years from production.