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Transport secretary Ruth Kelly has launched a UK consultation on the upcoming compulsory CO2 targets for new cars set by the EU.
The proposed target of 130g/km average for car manufacturers will come in from 2012.
The Government is also urging the EU to adopt targets of average emissions of 100g/km for manufacturers by 2020.
"It will be good for the environment and for the motorist, as more fuel efficient cars could mean reduced running costs of about £500 for new car buyers," Kelly claimed.
Provisions in the proposals mean that different targets will be set for manufacturers with low production numbers. The UK Government is also pushing for a provision for manufacturers of niche vehicles.
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