In eight years’ time new car owners could start saving at least €340 a year in fuel costs at current prices, under a European Commission proposal to lower carbon emissions for passenger vehicles and vans.

Average emissions from new cars will have to be cut to 95 grams of carbon dioxide (CO2) per kilometre from 2020, according to the proposal, which has yet to be approved by the European Parliament and member states.

An interim lower level of emissions has also been established for new cars put on the European market from 2015, reducing emissions to 130 grams per kilometre from the current average of 135.7g.

A Commission impact study shows that while the production of new cars under the 2020 emissions targets will cost an extra €1,100 per car, this will be outweighed several times over by fuel savings over the lifetime of the vehicle.

In all, EU consumers will save €27billion per year in fuel costs, rising to €36 billion in 2030.

The proposals will also save €160 million tonnes of oil, worth about €70 billion at today’s prices, in the period to 2030.

Over the past decade, new car prices have fallen by an average one per cent a year, while fuel consumption and carbon emissions have also fallen every year.

Asked whether the measure will have any impact on older vehicles, a Commission spokesman said the rules would only apply for cars bought from that year onwards.

The Commission’s latest proposals represent a further contribution towards meeting the EU’s goal to cut overall greenhouse gas emissions to 20 per cent below 1990 levels by 2020 and move towards decarbonising the transport sector, in line with the EU’s climate change policy.

“With our proposals we are not only protecting the climate and saving consumers’ money, we are also boosting innovation and competitiveness in the European automotive industry and creating more jobs,” EU Climate Change Commissioner Connie Hedegaard said.