The proposals, which still require approval by the European Parliament as well as the leaders of the EU's 27 member nations, would force automakers to reduce average fleetwide CO2 emissions from 135.7 grams/km in 2011 and a planned 130 grams/km in 2015.
The Commission's proposals follow an earlier EU agreement to implement the reduction. They provide a framework for the way in which the targets should be achieved.
Connie Hedegaard, EU climate commissioner, said the cuts are "one more important step towards a competitive, low-carbon economy."
She also indicated that the 2020 target may not be the last for the auto industry. "More CO2 reductions beyond 2020 need to be prepared and these will be considered in consultation with stakeholders," she said.
The European auto industry has opposed the stringent CO2 legislation because it threatens the competitiveness of European carmakers, targets just one industry and fails to look at other, major sources of CO2 in Europe. However, the auto industry is well on its way to meeting the 2015 target of 130 grams/km.
Ivan Hodac, secretary general of the European automaker association, ACEA, noted the strong progress the industry has made in cutting CO2 emissions.
“It is clear that CO2 levels from vehicles have to continue on their downward trend and the industry is committed to deliver on this,” he said in a statement.
But Hodac also called on Brussels to assure a competitive framework that would help the auto industry cope with strong competition and a declining European home market.
“These are tough targets - the toughest in the world,” Hodac said, adding that the European targets are more stringent than those in the US, China or Japan.