The European Commission adopted a new legislation which has as main aim to boost the investments in new technologies that reduce CO2 emissions from new cars. Motor manufactures will receive recognition for CO2 savings by fitting new cars with approved "eco-innovations" which reduce emissions.

The European Commission adopted a new Regulation which encourages the automotive industry to invest in new technologies that reduce CO2 emissions from new cars. The CO2 savings will help the industry meet the European target of limiting CO2 emissions from new cars to an average of 130 grams/km by 2015. Eco-innovations will count for up to 7 g CO2/km towards the target. This initiative comes together with a greater investment on eco-innovation by the European Commission. In fact, the 2010 Competitiveness and Innovation Programme (CIP) funded 42 eco-innovation projects under the 2010 call for proposals.

Under the EU legislation, CO2 emissions from all new cars registered in the EU should not exceed 130 grams/km, around one-fifth below 2007 levels by 2015. The target will be gradually phased in: in 2012 65% of each manufacturer's newly registered cars must comply, rising to 75% in 2013, 80% in 2014 and 100% by 2015. Manufacturers whose fleet average exceeds the limit from 2012 will have to pay a penalty for each car registered.

With the new Regulation adopted by the Commission, a technology can qualify as an eco-innovation if it is new to the market, contributes to significant CO2 savings and is not otherwise taken into account in determining the level of CO2 emissions from vehicles. The technology should also aim at improving vehicle propulsion or the energy consumption of devices that are mandatory, without compromising vehicle safety.

The Commission will assess applications submitted by car manufacturers and component suppliers and adopt decisions approving generic eco-innovations. The actual CO2 savings from the eco-innovations for each specific car will be certified as part of the vehicle type approval procedure. Moreover, the Commission will develop detailed technical guidelines on how companies should prepare applications to have their eco-innovations recognised.