The European Commission is expected to soften its original proposal to limit carbon dioxide emissions for cars produced in Europe that was originally set at 120g/km by 2012. A source from the EU has told Reuters the restriction will instead be set at 130g/km, but the Commission would still target an overall cut in emissions to 120g/km to be achieved through biofuel use and other technology in addition to improved standards from carmakers themselves.

The current industry average remains at 161g/km, however, the new restrictions are being pushed towards binding legislation. This is because until now, European carmakers have failed to come even close to voluntary standards that were set at 140g/km by 2008. The compromise comes after the vocal outcry from the CEOs of most of Europe’s carmakers and even German Chancellor Angela Merkel, who deemed the changes were a threat to the automotive industry, which employs roughly 12 million people across Europe.

"It's balancing the three things: climate change, innovation and a competitive industry," the source said, adding "I would expect to see the target of 120 grams per km is agreed, of which the car manufacturers will contribute 130." The EU is set to impose the new standards on Wednesday, bringing an end to the two-week long dispute between the heads of the automotive sector and the 27-member college of Commissioners.