UK cars are currently averaging 170g/km so the fall to 120 is going to be hard to achieve. Large car makers - 4x4s, sports cars, luxury vehicles, etc wil find things tough. It could send the cost of a new car through the roof, possibly adding £3,000 to the price. Many models will be stopped and some car companies could go to the wall.

Motor industry representatives have pledged to fight the new limit which they see as severely restricting the choice of cars to consumers. But, with climate change occupying the minds of policitians these days, one can see the new limits getting an easier passage than might have been the case otherwise.

Data for January 2007 from the Society of Motor Manufacturers & Traders shows that new cars are averaging 167.2 g/km at the moment. Downward progress is slow, but steady. In its latest report, the SMMT calls for removal of the 3% tax on company car tax surcharge for diesel cars which are 30% lower in CO2 emissions than their petrol equivalents.

Latest - A consensus to move to 120 g/km by 2012 has not been reached by European decision-makers. There is now a firm rift between those who see a legally-binging reduction as likely to cause problems, and those who favour the sharp cut. The compromise target is not 130 g/km by 2012 as an average standard.

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