Obama fuel standards lag behind EU effort

"As a result of this agreement we will save 1.8 billion barrels of oil over the lifetime of the vehicles sold in the next five years," said the president announcing the measure.

According to a White House official, the programme will reduce greenhouse gas emissions by 900 million tonnes - the equivalent of taking 177 million cars off the road.

The proposed fuel economy and CO2 emissions standards marks the first time the US has regulated greenhouse gas emissions, and for this reason many people in the environmental community are cheering the move.

"Today's announcement is one of the most significant efforts undertaken by any president, ever, to end our addiction to oil and seriously slash our global warming emissions," said Carl Pope, the executive director of the Sierra Club, one of America's oldest and largest environmental groups.

"The speed with which the Obama administration is moving to build the clean energy economy has been breathtaking," he added.

But when compared to European Union standards, those of Japan or even China, the lower level of ambition becomes apparent.

China currently enforces an average fuel efficiency standard of 35.8 miles per gallon (mpg) and Japan demands 42.6 mpg.

Europe meanwhile requires vehicles achieve 43.3 mpg and by 2016 - the deadline of the Obama scheme - vehicles in the 27-country bloc will have to meet an efficiency standard of 50 mpg.

Despite Washington's lower target, the development remains vital because the US accounts for roughly half of all CO2 emissions in the world that are produced by cars.

This is the case even though America is home to just 30 percent of the planet's cars because of the size of the country - people drive further in cars with larger engines.

EU's own targets criticised

And behind the headline targets, the European Union is far from the car emissions angel it appears to be.

Last December, the EU reached a tentative agreement, yet to be approved by the European Parliament, on cutting car emissions.

Using a slightly different measuring stick to that of the US, the EU would require that the average carbon emissions from all new cars be reduced by 18 percent to 130 grams per kilometre by 2015.

However, green groups at the time slammed the deal as a capitulation to the car lobby, particularly from Germany, as the initial proposals from the European Commission would have seen all new cars required to meet the 130g/km standard by as early as 2012 as an average across a company's fleet - which was already a step back from previously stated ambitions.

Instead, firms were allowed to phase in their adherence to the standards - with 65 percent of a car company's fleet having to meet the requirement by 2012, 75 percent by 2013, 80 by 2014 and 100 percent by 2015.

Fines for breaching the standard were also watered down. Originally to have been €20 per excess gramme, they are now to be only €5 per gramme.

Finnish Green MEP Satu Hassi has suggested that the EU rules are weaker than what is likely to result simply from market demand. Consumers are increasingly prefer more fuel-efficient vehicles, she has argued, a trend that will drive down emissions from cars faster than the EU legislation.