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Car manufacturers need to be encouraged to bring more CO2-saving technology to market according to Alistair Darling, who is calling for the EU to set tighter targets for average emissions.
The Chancellor wants a 100g/km cap introduced for 2020, compared to the current 130g/km by 2012.
"I am asking the European Comission today to set a tighter target which reduces the cap on emissions from cars," said Darling in his Budget speech.
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